View source for NLS9000308, Forwards Info to Demonstrate Util Ability to Obtain Funds for Payment of Deferred Insurance Premiums.Supporting Documentation Encl

{{Adams
| number = ML20081E107
| issue date = 08/01/1990
| title = Forwards Info to Demonstrate Util Ability to Obtain Funds for Payment of Deferred Insurance Premiums.Supporting Documentation Encl
| author name = Trevors G
| author affiliation = NEBRASKA PUBLIC POWER DISTRICT
| addressee name = 
| addressee affiliation = NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
| docket = 05000298
| license number = 
| contact person = 
| document report number = NLS9000308, NUDOCS 9008060158
| document type = CORRESPONDENCE-LETTERS, INCOMING CORRESPONDENCE, UTILITY TO NRC
| page count = 89
}}

=Text=
{{#Wiki_filter:--       -
i                 k'O jj
               ';X ll
                    !       N m
GENERAL OFFICE -
                                      ; Nebraska Public Power District                    "
                                                                                              " "T & a*nSe aT at "'*"
 ,1 i
NLS9000308
                                ' August 1, 1990-
 )
U.S. Nuclear Regulatory Commission Attention: Document Control Desk Washington, DC 20555

==Subject:==
Licensee Guarantees of W yment of Deferred Premiums Cooper Nuclear Station 31 NRC Docket No. 20-298. DPR-46 Gentlemen:
In accordance with the- requirements of 10 CFR Part 140.21, relativc- to si              ,
deferred insurance premiums, the Nebra ska public Power District submits the following information which, we believe, demonstrates our ability to _ obtain funds in the amount of - $10. million for payment of such premiums within- the specified three' month period.
      -                            Iowa Power,-under the terms of a power purchase contract, has acknowledged its
_1 responsibility to t asume 50% of the retrospective premium requirements in ;an
              '                    amount not to exceed $5 million in one year. Iowa Power has chosen to-utilize the type of guarant(e defined in 10 CFR 140.21(e). Therefore,'as enclosures-i          g'
                                  .to this-letter, we ar3 submitting the following documents in support of 50% of the require $10 millitn premium.
        +                               1. . Iowa Power & L.ght Company - 1989 Annual Report to the Securities and Exchange Commission -. Form 10-K
: 2. Iowa Resources - Uniform Foreca6t Form for Security Analysts The; Nebraska Public Power District has renewed a Credit Agreement, which :is
                                  . included as:an enclosure, with the American National Bank and Trust Company of Chicago which' indicates that said bank will lend the District funds, not to exceed'' $5 million as' si pecifically required to pay public liability claims
                                  -arising from nuclear incidents.       This Credit Agreement is valid through July 31, 1991, at which time the District will submit the appropriate documentation to verify the guarantee requirements for the following year.
                                          , c.
9008060158 900801               '
PDR d
ADOCK 05000298 PDC h
Q\

        -.i  " i: _U.S. NuclC::r R:gulatory Commission August /1, 1990' Pcg3 2 3
i
                  'Wo believe that - the enclosed information is ' suf ficient to demonstrate our ability to generato the necessary funds-required by . the ~ deferred premium; however, should you require additional information, please do not hesitate to     .
contact me.                                                                      !
Sincerely;                                                                        <
G. A. Prevors Senior Staff Advisor Nuclear Power Group
                   /jw Enclosure
                  'cc:   U.S.'' Nuclear Regulatory Commission w/o encl.
Regional Office - Region IV Arlington; TX Ira Dinitz Insurance Indemnity Analyst office of State Programs U.S. Nuclear Regulatory Commission Washington, DC 20555                                                       :
                                                                                                  .)
1 f
1 7$7
         ').
l '. -

i -i   <
CREDIT AGREEMENT CREDIT AGREEMENT, dated as of August 1, 1990, between NEBRASKA                      ,
PUBLIC POWER DISTRICT (herein called the " District") and AMERICAN                         ~
NATIONALLBANK AND TRUST COMPANY OF CHICAGO (herein called the " Bank").                   t The' District desires to provide for future borrowings, and the
* Bank'is willing to commit to lend to the District, upon the terms and conditions herein set forth, the aggregate sum of up to                               -
         $5,000,000,. in such installments and at such times as hereinafter                        ,
provided, to be evidenced by notes of the District therefor.
                    -In consideration of the foregoing and the covenants and-conditions herein~ contained,-the parties thereto agree.as follows:
: 1. Definitions. The following terms shall, for all l purposes of this Credit Agreement, have the following meanings:
                      "Act" shall mean the Public Power and Irrigation District Law, constituting Article 6 of Chapter 70 of the' Revised Statutes of Nebraska, as amended-and supplemented.
                     " Electric Resolution"    shall mean the' resolution entitled                 i
         " Electric System Revenue Bond Resolution" adopted by the Board of Directors.of-the District'on August 22, 1968, as supplemented or amended in-accordanceLwith tho terms thereof.
                     " Electric System Bonds"    shall mean, Electric System Revenue Bonds.of the. District authorized to be issued.under:the Electric                         !
Resolution.                                                                               !
                    '" Electric System General Reserve' Fund" shall mean the
        ' Electric System. General Reserve Fund established in-Section 502
        - of the Electric-Resolution.                                                              +
                     " Loans"  shall mean the loans provided for.in this credit
        -Agreement.                                                                               4
                     " Note or Notes"   shall mean any note or notes, as the                       ;
case may be, issued pursuant to this Credit Agreement by the s
District to' evidence any Loan.                                                          ,
i
                     " Note Resolution"   shall mean the resolution of the District entitled " Resolution Authorizing $5,000,000 Bank Credit of 1990," adopted August 2,.1990 authorizing the issuance of the Notes: and authorizing the' execution and delivery of this Credit Agreement, a true and correct copy of which resolution is annexed hereto as Annex A.
: 2. Commitment to Lend. The Bank hereby agrees, upon the terms and conditions herein set forth, to make one or more Loans to the District, in accordance with the provisions of this Credit Agreement, on or before July 31, 1991 in an aggregate principal up to, but not exceeding $5,000,000, each Loan to be in the princi-pal amount of not less than $250,000.
: 3. Borrowings. The District shall give the Bank at least two (2) days prior notice of the date and amount of each borrowing hereunder. Each borrowing pursuant thereto shall take place at the principal office of the Bank at LaSalle and Washington Streets, Chicago, Illinois. Not later than 11:00 a.m. on the date of each borrowing, the Bank shall, subject to the terms of this Credit Agreement, make available to the District, Federal Reserve or other immediately available funds in thf principal amount being borrowed, upon delivery to the Bank of a Note in such principal amount.
: 4. The Notes. Each Note shall be designated as " Electric
          - System Note, Series NRC of 1990," shall be payable to the order of American National Bank and Trust Company of Chicago, shall be dated the date of its delivery, shall be payable one year from its date of issue-(subject to optional prepayment as provided in Section 8 hereof) , and shall bear interest (payable on the first day of each January, April, July and October) on the unpaid principal amount thereof from its date fluctuating at the rate per annum equal to 87%'of the rate of interest announced or published publicly from time to time by the Bank as its base rate or equivalent rate of interest. Such interest rate shall be computed on the basis of a-365/366-day year.
The Notes shall be executed on behalf of the District by
          ' the manual signature of its Chairman, Vice Chairman, President, Treasurer or Assistant Treasurer and its ccrporate seal-shall be effixed,-imprinted, engraved or otherwise reproduced thereon and attested by the manual signature of its Secretary or any Assistant Secretary and shall be otherwise in substantially the form annexed hereto as Annex B.
: 5. Commitment Fee. The District shall pay to the Bank as a commitment fee contemporaneously with the execution of this Credit Agreement the sum of $5,000.
: 6. Tax Indemnification.
(i)  The parties intend that the Bank shall receive in respect of the Notes amounts equal to the principal thereof and' interest thereon as provided hereunder, when due, without deduc-tions, penalties, charges, or withholdings as a result of the imposition of any federal income or similar federal tax imposed on the Bank as a holder of any of the Notes (collectively " Taxes").
p                                                          ,
     -4       p' -
s .i

     .. v Any such Taxes shall be paid by the District.                                                  The District will payLthe Bank the amounts necessary such that the net amount of the principal and interest received and retained by the Bank is not lens than the amount payable under this Agreement had such Taxes l--        not-been imposed.                                                                                                    <
If, notwithstanding the previous two sentences, the Bank pays any such Taxes, the Bank will furnish to the District official tax                                                     (
receipts or evidence of payment of all such Taxes and the District                                                  '
will promptly reimburse the Bank therefor.
(ii)  If the Internal Revenue Code of 1986, as amended, p           (the " Code"), or any other federal income tax law, rule, regulation, U
or governmental interpretation thereof hereafter enacted, adopted a          or issued, other than any such change mentioned in (iii) below, when affecting the Bank as a holder of the Notes or compliance by                                                    ;
   ,       the Bank as a holder of the Notes with such,                                                                     '
(a) subjects the Bank to any tax, duty, charge, or withholding due on the principal of or interest on the ENotes or changes the basis of taxation of payments to the Bank in respect of the principal of or interest on the Notes, including, without limitation, the effect of any limitation on the deductibility of interest on the funds obtained to purchase or carry the Notes; or p
(b)   imposes any other condition or circumstance the result of which is-to-increase the cost to the Bank of pur-chasing, funding or carrying the. Notes, or reduces _any amount-                                             '
receivable by the Bank.in connection with the principal of or interest on the Notes or requires the Bank to make any-payment calculated by reference to the amount of the Notes-or interest received by it in an amount deemed material by the Bank; then,-within thirty days of demand by the: Bank, the District                                                        !
_shall pay the Bank an amount which will be equal, on an after-tax basis to +.he Bank (taking into account any taxes payable- by the                                                   4 Bank on such amount) , to.(a) that portion of such increased cost
         . incurred or (b) the amount or reduction in an amount received which the Bank determines is attributable to purchasing, funding or carrying the Notes to the extent of the_ principal amount there-of outstanding'from time to time. The effect of any such increased cost which is imposed on the Bank generally may be allocated to the Notes-on any reasonable basis in_the discretion of the Bank.

(iii)      If at any time or times while the Bank is the Holder of the Notes there is a change in the maximum marginal tax rate (the " Tax Rate") at which the Bank could be taxed for federal income tax purposes, the interest rate on the Notes shall be de-creased (in the case of a decrease in the Tax Rate) to an interest rate equal to the product of (1) the interest rate on the Notes in effect immediately prior to a change in the Tax Rate times (2) a fraction (expressed in decimals) the numerator of which is the number one (1) minus the applicable Tax Rate after such change and the denominator of which is the number one (1) minun the Tax Rate which had been in effect prior to such change in the Tax Rate.
(iv) Notwithstanding any of the other provisions of this Agreement, if the. District has paid the additional amount specified in (ii) and (iii) above, the District shall not be obligated to pay or reimburse the Bank for any tax on the income of the Bank to the extent that such income tax is attributable to the inclusion in the gross income of the Bank for federal tax purposes of interest on the Notes as if such interest had been timely reported and timely paid.
: 7. Conditions Precedent to Loans. The Bank shall not be obligated to make any loan unless at the date specified for the making thereof the District delivers to the Banks (a) The opinion of the General Counsel-to the District, dated as of such date, to the effect that:
(i)      There is no litigation pending in any court, either State or Federal, questioning the creation, organization or existence of the District or the validity of this Credit Agreement or the Note being issued to evidence such Loans and (ii)      The District has the power to borrow the
: q.                 amount being loaned; to execute and delivor: this J                  Credit Agreement;-to evidence the Loans by-ite Notes 9                   to be made and delivered in accordance herewith, and to perform and observe all of the terms and conditions of this Credit Agreement on its part to be performed and observed; and (b) A certificate of the Chairman, President, Treasurer or Assistant Treasurer of the District, dated as of such date, to the effect that the representations and warranties of the District contained in Section 14 of this Credit Agreement are true and correct as of such date; and (c) A certificate of the Chairman or President or Treasurer or Ascistant Treasurer of the District, dated as of such date, setting forth the aggregate amount of bonds and notes of the District that will be outstanding immediately
:#~
F after the issuance of the Note then being, issued and stating that no_ default has occurred in the payment of. principal of or interest on any indebtedness for borrowed money of the District which remains uncured; and                              -
(d) The opinion of Mudge Rose Guthrie Alexander & Ferdon, Bond Counsel to the District, dated as of such date, substanti-ally in_the form annexed thereto as Annex C; (e)   A certificate as to Arbitrage, dated as of such date, in accordance with the provisions of Treasury Regulation Sections 1.103-33, 1.103-14 and 1.103-15 or other applicable Treasury Regulations in effect on such dater and (f) Such additional certificates, instruments and other documents as the Bank or its counsel may deem necessary to effect good delivery of the Note being delivered on such date or evidence the due performance by the District of the condi-tions precedent hereunder.
: 8. Optional Prepayment. The District may prepay any L         Note as a whole or in part, at any time or from time to time, with-I out penalty or premium, by paying to the Bank all or part of the principal amount of the Note to be prepaid, together with the un-paid interest accrued on the amount of principal so prepaid to the date of such prepayment. Each prepayment of a Note shall be made on such date and in such principal amount as shall be specified l        :by the District in a written notice delivered to the. Bank not less L         than 10 days prior thereto. Notice having been given as aforesaid, 1 I         the principal amount of the Note stated in such notice or the whole thereof, as the case may be, shall become due and payable on the prepayment date stated in such notice, together with interest ac '
crued and-unpaid to the prepayment date on the principal amount then being paid; and the amount of principal and interest then due and payable shall be paid (i) in-case the entire unpaid balance of the principal of any Note is to be paid, upon presentation and surrender of such Note to the District or its representative at the principal office of the Bank, and (ii) in case.only part of the unpaid balance of principal of any Note is to be paid, upon presentation of such Note at_the principal office of the Bank for notation theron by the Bank of the amount of principal and interest on such Note then paid. If on the prepayment date moneys for the payment of ,the principal amount to be prepaid on such Note together with interest to the prepayment date on such principal amount, shall have been paid to the Bank as above provided and if notice of prepayment shall have been given to the Bank as above provided, then from and after the prepayment date int 3 rest on such principal amount of such Note shall cease to accrue. If said moneys shall not have been so paid on the prepayment date, such principal amount of such Note shall continue to bear interest until payment thereof at the rate provided for in Section 4 of this Credit Agreement.
: 9. Application of Note Proceeds. The proceeds of the Notes shall be used to pay amounts required to be paid by the District as a result of one or more nuclear incidents, as provided in the Price-Anderson Act, as amended (Pub. L. 94-197, as amended and as compiled in.42 U.S.C. Section 2210 and pertinent subsections of 42 U.S.C. Section 2014, as amended) and certain regulations of the Nuclear Regulatory Commission (10 C.F.R. Part 140, as amended in particular by 42 Fed. Reg. 46-54 (January 3, 1977)) or any act or regulation supplemental thereto or amendatory thereof.
: 10. Payment.              The obligation to pay the principal of and interest on the Notes and'the other amounts payable hereunder is a special obligation of the District payable solely from such amounts in the Electric System General Reserve Fund as may be available therefor under the District's bond resolutions then outstanding:
provided, however, that such obligation to pay the principal of and interest on the Notes and the other amounts payable hereunder from amounts in'the Electric System General Reserve Fund shall be subject and subordinated in all respects to the pledge of the Revenues (as defined in the Electric Resolution) , moneys, securities and funds created by the Electric Resolution and, provided, further, that the obligation to pay the principal of and interest on the Notes and the other amounts payable hereunder from amounts in the Electric System General Reserve Fund shall be subject and subordinated to
               .any payments which shall at any time be required to be made from Electric System General Reserve Fund pursuant to Section i ' of the District's Power Supply System Revenue Bond Resolution,                                                      -pted by the Board of Directors of the District on September 29, .972, as supplemented and amended in accordance with the terms thereof. The District shall duly and punctually pay or cause to be paid from the Electric System General Reserve Fund, in Federal Reserv. or other immediately available funds, the principal of.the Notes, the inter-est thereon and the other amounts payable hereunder at the dates and place and in the manner provided herein and in the Notes according to.the true intent and meaning thereof.                                         If the principal of the Notes becomes due and payable on a Saturday or Sunday or a day which is a Bank holiday, such payment shall be made on the next succeeding Bank business day and the extension of time for payment shall be in-cluded in computing interest in connection with such payment,
: 11. Rate Covenant. The District covenants and agrees with the Bank that so long as any credit shall be available here-under or any Note or interest thereon is unpaid it shall comply for the benefit of the Bank with requirements of Section 712 of the Electric Resolution.
                                                                                =, _.      . _ . . . . . . . .  .
                                            . .. . . , ,, . ., -                     .          ./
: 12. Negative Covenants of the District. The District, if and so long as credit shall be available hereunder or any Note or interest thereon is unpaid, will not alter, amend or repeal the Note Resolution, or take ail action impairing the authority thereby or hereby given with respect to the issuance and payment of the Notes.
: 13. Tax covenant. In order to maintain the exclusion from gross income for " purposes of federal income taxation of interest on the Notes, the District shall comply with the pro-visions of the Code applicable to the Notes, including without limitation the provisions of the Code which prescribe yield and other limits within which the proceeds of the Notes and other amounts are to be invested and require that certain investment earnings on the foregoicg be rebated on a periodic basis.to the Treasury Department of the United States of America. In fur-therance of the foregoing, the District shall comply witn the letter of instructions as to compliance with the Code, tc. be delivered by Mudge Rose Guthrie Alexander-and Ferdon, Boad Counsel to the District, at the time the Notes are .asueC. as such letter may be amended from time to time, as a source of guidance for achieving compliance with the Code.
The District shall not take any action or fail to take any action, which would cause the Notes to be " Arbitrage Bonds" within the meaning of Section-148(a) of the Code.
: 14. Representations and Warranties. The District repre-sents and warrants that:
(a) The District has the power to borrow the amount                        ;
provided for in this credit Agreement; to execute and deliver this Credit Agreement; to evidence.the Loans by its Notes to be made and delivered in accordance with the provisions hereof,                 E and to perform and observe all of the terms and conditions of this Credit Agreepent on its part to be performed and observed; (b) The making and performance by the District of this Credit Agreement will not violate any provision of the Act, or any bond or note resolution of the District, or any regulation, order or decree of any court, and will not result in a breach of any of the terms of the petition for creation, as amended, of the District or eny agreement or instrument to which the District is a party or by which the District is bound; and i
  ;c .
(c)   The District, by the Note Resolution has duly authorized the borrowing of the amount provided for in this Credit Agreement, the execution and delivery of this Credit Agreement, and the making and delivery of the Notes to the Bank as herein provided: and to that end the District war-runts that it will taku all action and will do all things which it is authotized by law to take and to do in order to fulfill all covenants on its part to be performed and to provide for and to assure payment of the Loans as herein provided.
: 15. Acceleration of Due Date Upon Default. If one or more of the follcwing events of default shall occur and be continuing:
(a) Dufault shall occur and be continuing in the payment when due of any principal or interest on any Note; (b) Any representation or warranty made herein or pur-suant hereto shall prove to be untrue in any material respect; (c)   Default shall occur in the performance of any of the other covenants or agreements of the Listrict contained herein, and the act or omission creating such default shall continue for a period of 30 days after Writ. ten notice thereof shall have been given to the Districts or (d)   Default shall be mad 9 An the payment of the principal of or interest on any Electric System Bonds when due, and as a result of such default, the riaturity of such Bonds is accelerated:
then, and in any such event, the Bank shall have the right to declare the principal of and all interest then accrued on all Notes to be due and payable immediately, and upon such declaration the Notes and the interest accrued thereon shall become due and payable, anything in this Credit Agreement or in the Notes contained to the contrary notwitustanding.
: 15. Defeasance. If the District shall pay or cause to be paid, or there shall otherwise be paid, to the Ban'.c the principal of and interest on the Notes at the times and in the manner stipu-lated herein, then the covenants, agreements and other obligations of the District hereunder shall thereupon cease, terminate and be-come void and be discharged and satisfied. If moneys sufficient to pay the principal amount of the Notes and interest thereon until maturity or a date fixed for repayment shall have been paid to the Bank for application to such purpose, the Notes and the interest theresa shall be deemed to have been paid within the meaning and with ae effect expressed in this Section. Amourts so set aside and held may be invested in obligations of, or guaranteed by, the

mr.-
Uniteo States of Amei1~a, provided, however, . hat said obligations shall mature not later than the maturity date of the Notes. All earnings from such investments shall be paid over to the District, as received, free and clear of any trust, lien or pledge.
: 17. Notices. All notices under this Credit Agreement shall bc. in writing and written notices shall be deemed to have been duly given if uelivered or mailed by registered mail, in the
{~                              cane of tse Dist ict, at Box 499              Co.l utubu r , Nebraska 68601, Attention:      President, a t:d in the case of the Bank, at ite prin-cipal office at Lasalle and Washington Streets, Chicagu, II.linois 60690, At ten t 2,on      S t ev e n 11. Abbey.
!                                            18. Counterparts.          This credit Agreement may be executed in any number of counterparts, and all such countarparts executed and delivered, euch as an original, shall constitute but ono and the
_                               same instrument.
IN n 1 TNESS WiiEREOl', the District a r' d the Bank have caused this Credit Agreement to be duly signed on their respective behalf by their officera thereunto duly authorized, all as of the date and year first above written.
NEBRASnA PUBLIC POWER DISTRICT
[ SEAL) 6                                                                              By ~    M              / ~
                                                                                                          /              #
As si u~tatif Treasu r o' l
  =
Atteat:
sps rm                  '
                                       ,// ,k p'<' i    '
Assistant Secretary
_                                                                          AMERICAN NATIONAL 13ANK AND "'HUS'I COMPANY OF CillCAGO
[ SEAL}
7 m'                ,
W Vice PrJsidi h Attest:
(        W A' Amu wa,                                        %; % ~
pNotaD i ,R, ?
flomQ         ya,,,, , ,
v       ,,
s

p3. ih.--...    ..
l ANNEX A Resolution Authorizing $5,000,000 Bank Credit of 1990 Be it Resolved, by the Board of Directors of Nebraska Public Power District, as follows:
Section 1. Pursuant to the Public Power and Irrigation District Law, Article 6 of Chapter 70 of the Revised 3tatutes of Nebraska, as amended and supplemented (herein called the "Act"),
Nebraska Public Power District (herein called the " District")
shall be authorized to enter into a credit agreement 'herein called the " Credit Agreement *)  for one or more loans '.n an aggrc~
gato principal amount up to, but not exceeding, $5,000,000 from American National Bank and Trust Company of Chicago ;herein called the " Bank") in substantially the form submitted at tlis meeting, to which shall be annexed, as Annex A, a copy of this resolution adopted by the District. Each loan shall be mado in the principal amount of not less than $250,000 on any date on or before July 31, 1991   provided that the District shall give the Bank tao (2) days prior notice of the date and amount of each borrowing and shall be evidenced by an Electric System Note, Series NRC of 3390 (herein called a "Ne' ;" all Notes made under the Ctedit Ac.eement are herein collmstively called the "NoteL") of the District in the aggregate principal amount of each loan, which Note shall be issued and delivered by the District to the Bank in the principal amount and on the date of the loan evidenced thereby. Each Note shall bo payable to the order of the Bank from the sources set out in Section 10 of the Credit Agreement, shall be dated the da':e of ite delivery, shall be payable one year from its date of issue (subject to optional prepayment as a whole or in part, at any time or from time to time, without penalty or premium, as provided in the Credit Agreement) and shall bear interest (payable on the first day of each January, April, July and October) on the unpaid principal amount thereof from its date fluctuating at the rate per annum equal to 87% of the rate of interest announced or published publicly from time to time by the Bank as its Base rate or equivalent rate of interest. Interest is to be computed on the basis of a 365/366-day year. Each Note shall be in substantially the form set forth in Annex B to the Credit Agreement.
Section 2. The proceeds of the Notes shall be applied by the District to the purpose and in the manner provided in Section 9 of the Credit Agreement.
Section 3. The President, any Vice President, and the Assistant Treasurer of the District are each hereby authorized to execute the Credit Agreement and the Secretary, or any Assistant Secretary, are each hereby authorized to affix the seal of the District on the Credit Agreement A                                                         . . .

Section 4. The Chairman, Vice Chairman, President, Treasurer or Assistant Treasurer of the District are each hereby authorized to execute the Notes by manual signature and the Secretary or any Assistant Secretary are each hereby authorized to cause the seal of the District to be affixed, imprinted, en~
graved or otherwiso reproduced on the Notes and to attest the same. Any of the foregoing officers are hereby authorized to deliver the executed Notes in accordance with the provisions of the Credit Agreement.
Section 5. The Chairman, Vice Chairman, President, Treasurer or Assistant Treasurer of the District and the Secretary or any Assistant Secretary are, and each of thern hereby is autho~
rized to do and perform all things and to execute all papers in the name of the District or otherwise, as they deem aditisabic, and to make all payments, necessary or convenient in their respective opinions, to the end that the District may carry out the objects of this resolution and its obligations under the terms of the CreCit Agreement and of the Notes.
A~2~

ANNEX B (FORM OF NOTE)
NEBRASKA PUBLIC POWER DISTRICT ELECTRIC SYSTEM NOTE, SERIES NRC OF 1990 NO.                                                     $
FOR VALUE RECEIVED, the undersigned, NEBRASKA PUBLIC POWER DISTRICT (the " District"), a public corporation and political sub-division organized and existing under and by virtue of the laws of the State of Nebraska, hereby promises to pay to the order of American National Bank and Trust Company of Chicago (the " Bank")
on             , 19    upon presentation and surrender of this Note at the principal office of the Bank, the principal sum of Dollars ($        ), in lawful money of the United States of America, and.to pay interest (payable on                  , 19 and quarterly thereafter on the first doy of each January, April, July and October) on said principal sum at said office in like money from the date
    . hereof fluctuating at the rate por annum equal to 87% of the rate of interest announced or published publicly from time to time by the Bank as its base rate or equivalent rate of interest. Such interest shal2 to computed on the basis 'of a 365/366-day year.
This Note is a special obligation of the District and is one of a duly authorized issue of notes of the District (the " Notes")
issued and to be issued under and pursuant to the Public Power and Irrigation District Law of Nebraske. as amended and supplomonted (herein called the "Act"), and under and pursuant to a resolution of the District, adopted August 2, 1990, entitled Resolution Authorizing $5,000,000 Bank Credit of 1990 (the " Note Resolution"),
and under and pursuant to a Credit Agreement (the " Credit Agrooment"), dated as of August 1, 1990 by and between the District and the Bank.
The obligation to pay the principal of and interest on this Note is a special obligation of the District payable solely from such amounts in the Electric System General Reserve Fund (as de-fined in the Credit Agreement) as may be available therefor under the District's Bond resolutions then outstanding; provided, however, that such obligation to pay the principal of and interest on this Note from the Flectric System General Reserve Fund is subject and subordinated in all respects to the pledge of the revenues, moneys,
    . securities and funds created by the Electric Resolution (as defined B
in the Credit Agreement); and, provided, further, that the obliga-tion to pay the principal of and interest on this Note from the Electric System General Reserve Fund is subject and subordinated to any payments whics shall at any time be rcquired to be made from the Electric System General Reserve Fund pursuant to Section 713 of the District's Power Supply System Revenue Bond Resolution, adopted by the Board of Directors of the District on September 29, 1972, as supplemented an6 amended in accordance with the terms thereof.
This Note is subject to the '.erms and conditions contained in the Note Resolution and the Credit Agreement, copies of which are on file at the principal office of the District, and reference is made thereto tor a complete statement of such terms and conditions.
The District shall have the right to prepay this Note as a whole or in part, at any time or from time to time, without penalty or premium, in accordance with the terms of the Credit Agreement.
The prepayment date and the principal amount of the Note to be prepaid shall be specified by the District in a written notice to the Bank not less than 10 days prior to any prepayment.          If on the prepayment date moneys for the payment of the principal amount of this hote to-be prepaid, together with interest to the prepayment date on such principal amount, shall have been paid to the Bank as above provided, then from and after the prepayment date interest on such principal amount of this Note shall cease to accrue. If said moneys shall not have been so paid on the prepayment date, such principal amount of this Note shall continue to bear interest as provided above until payment thereof.
This Note is not an obligation of the State of Nebraska and the Act provides that the State of Nebraska shall never pledge its credit or funds, or any part thereof, for the payment or settlement of any indebtedness whatsoever of the District.
IN WITNESS WilEREOF, Nebraska Public Power District has caused this Note to be signed in its name and on its behalf by its President or Treasurer or Assistant Treasurer, and its offi-cial seal to be hereunto affixed and attested by its Secretary or any Assistant Secretary, as of the                      day of
                               , 19 .
NEBRASKA PUBLIC POWER DISTRICT By Assistant Treasurer
[ SEAL)
Attest:
Assi stant Secretary                                                i B 
    . . 4 1
1 ANNEX C
                                                                              , 19 1
P Nebraska Public Power District                                             I Columbus, Nebraska                                                        I American National bank and Trust Company of Chicago Chicago, Illinois Gentlemen:
We have examined the record of proceedinge relating to the            !
issuance of the $                Electric System Note, Series NRC of 1990, No.                , dated                     , 19 (the " Note"),   ;
of Nebraska Public Power District-(the " District"), a body                !
corporate and politic, constituting a public corporation and political subdivision of the State of Nebraska.                            j The Note is issued under and pursuant to Chapter 70, Article 6,       ,
of the Revised Statutes of the State of Nebraska, as amended (the          '
              "Act"), and under and pursuant to a Credit Agreement (the " Credit Agreement"), between the District and American National Bank and           .
             . Trust Company of Chicago- (the " Bank"), dated as of August 1,1990,     'I authorized.by a resolution (the " Note Resolution") of the District adopted and entitled " Resolution Authorizing $5,000,000 Bank Credit of 1990."
The Note is payable to the order of the Bank, matures on
                            , 19     (subject to prepayment in accordance with the terms.of.the Credit Agreement), and bears interest (payable on
                            , 19    and quarterly thereafter en the first day of
            -January, April, July and October) from its date fluctuating at the          '
rate per' annum equal to 87% of the rate of interest announced or published publicly from time to time by the Bank as its base rate or-equivalent rate of interest. Such interest rate shall be.com-
            - puted on the basis of a 365/366-day year.                                  '
The obligation to pay the principal of and interest on the-           ,
            - Note is a special' obligation of the District payable solely from such amounts in the Electric System General Reserve Fund (as defined in the Credit Agreement) as may be available therefor under-the District's bond resolutions then outstanding; provided, however,=that such obligation to pay the principal of and interest on the-Note frora the Electric System Reserve Fund is subject and subordinated in all respects to the pledge of the revenues, moneys, securities and funds created by the Electric Resolution (as defined         !
C                                                              . - .

1 in the Credit Agreement); and provided, further, that the obliga-tion to pay the principal of and interest on the Note from the Electric System General Reserve Fund is subject and subordinated to any payments which shall at any time be required to be made from the Electric System General Reserve Fund pursuant to Section 713 of the District's Power Supply System Revenue Bond Resolution, adopted by the Board of Directors of the District on September 9, 1972, as supplemented and amended in accordance with the terms thereof.
We are of the opinion that:
: 1. The District is duly created and validity existing under the provisions of the Act, with power to adopt the Note Resolution, to enter into the Credit Agreement, to issue the Note thereunder and to make and perform the covenants contained in the Credit Agreement.
: 2. The Note Resolution has been duly adopted by the District, is in full force and effect and is valid and binding on the District and enforceable in accordance with its terms, and the Credit Agreement has been duly authorized and executed by the District, is in full force and effect, is valid and binding upon the District and enforceable in accordance with its terms.
: 3. The Note has been duly authorized oc" issued by the District in accordance with law and in acccrl;.nce with the Note Resolution and the Credit Agreement, and is a valid binding and direct obligation of the District enforceable in accordance with its terms and entitled to the benefit of the Act and of the Credit Agreement.
: 4. The Internal Revenue Code of 1986 as amended (the " Code")
acts forth certain requirements which must be met subsequent to the issuance and delivery of the Note for interest thereon to be and remain excluded frvm gross income for purposes of federal income taxation. Noncompliance with such requirements may cause interest on the Note to be included in gross income retroactive to the date of issue of the Note. The District has covenanted to comply with such requirements.
In our opinion, under existing law, and assuming compliance with the aforementioned covenant, interest on the Note is excluded from gross income for federal and State of Nebraska income tax purposes. The Note is a not "specified private activity bond" within the meaning of Section 57(a) (5) of the Code and, therefore, l
C                     .

the interest of the Note will not be treated as a preference item for purposes of computing the federal alternative minimum tax imposed by Section 55 of the Code, flowever, for taxable years beginning after December 31, 1986, a portion of the interest on the Note may be subject to the federal alternative minimum tax, which is based in part on adjusted not book income or adjusted current earnings.
Except as stated in the preceding two paragraphs, we express no opinion as to any federal or state tax consequences of the ownership of, receipt of interest on, or disposition of the Note.
The opinions contained in paragraphs 2 and 3 above are qualified to the extent that the enforceability of the Note Resolution, the Credit Agreement and the Note, respectively, may be limited by any applicable bankruptcy, moratorium or similar laws relating to the enfor.ement of creditors' rights.
We have examined the Note, as executed, and, in our opinion, the form of said Note and its execution are regular and proper.
Very truly yours, C                               - . . . . . - _ _ _ _ . . _ . _ _ _

      " DWA RESOURCESINC.
FIVE-YEAR FINANCIAL FORECAST 1990-1994 Company Contacts Philip G. Lindner       J. Sue Rozema Charlene A. Osler Vice President- Finance Treasurer     Assir, tant Treasurer 515 242 4303           515-281-2250  515-281-2382 isddress 666 Grand Avenue RO Box 657 Des Moines, Iowa 50303 Release Date February 1990

  . OPERATING FORECAST                                                                                             .
Iowa Power Inc.
19941994-FORECAST Actual 1989           1990          1991      1992      1993    1994 5.203          5,380         5,488     5,597     5,709   5,823 RettiSales(Milhonoof kWh)
Annualsales growth rate (%)                                     0.1            3.4           2.0       2.0       2.0    2.0 Customers (Thousands-Year end)                                    249            252           254       257       259     262' Arviualcustomer growth rate (%)                                 1.3            0.9           0.9       0.9       0.9     0.9 P;ak Load (MW-Summer)                                           1,358           1,372        1,387      1,403    1,423   1,445 Annualpeak growth rate (%)                                    (1,1)            1.0          1,1        1.2      1.4     1.5 Av:.llable Generating Capability (MW)
Baseload-coal                                                  733            733           733       733      733     733
                     -nuclear (Note 1)                                 389            389           389       389      389     389 Intennediate-coal                                              134            134           134       134       134     134
: Peakload-oil / gas                                             275            345           345       345       345     345 Net purchases (sales)                                          102        _ 43               83         83       83      83 Total Not Capability (Note 2)                                   1,633          1,644         1,684     1,68_4    1,684   1,684
   ' Fuel Sources for Energy /Insialled Capacity (%)
Coal                                                        46/57          51/54         51/54     44/54     50/54   52/54 Nucloar(Note i)                                             38/25          41/24         39/24     48/24     39/24   40/24
       . Oil / Gas                                                     1/18           1/22        -1/22       1/22     1/22    1/22 Other,notpurchases                                          15/-             7/~ ,        9/-        7/-     10/-     7 /-
Total                                                         100/100 100/100 100/100 100/100 100/100 g/_1_00
    ' FuelCost-Cents per kWh Coat                                                          1.27 -          1.16         1.13      1.16      1.17    1.22 Nuclear                                                       0.80           0.62          0.59      0.55      0.54    0.53 NOTES (1) The cornpany has a long-term power purchase contract with the Nebraska Public Power Distnct for ono-half the Capacity of the Cooper Nuclear Statort The *tation went ento serva                                     =
in 1974 and has generated segruhcant amounts of energy for the myty since that timo.
(2) Not capatulity at time of peak.

FINANCIAL FORECAST lowa Power Inc.
1990 1994 (DonarsinMeans)
FORECAST Actual ~                                                                                      Total 1999            1990          1991                  1992       1993             1994       1990 1994 Capital Requirements Capitalexperdtures
                                                                         $ 75           $ 69           $ 65                 $ 51       5 46             $ 50          $281 Construction                                                                                                                                             62 12              16                13               11         11                11 Capitalimprovements NPPD
                                                                                                                                                          ,_(2)        ,(16)
AFUDC.                                                    _{4)           ,_L5)          J)                   _13)       _{2) 83              80               74                59         55                59         327 Totalcaptat expenditures 7              1                  9                1           1                1           13 i4aturities & Sinking Funds (Note 3)
                                                                         $ 90            $y            Sg                    $ 60       $ 56             $ 60         $3J T(talCapitalRequi 3ments Sourcesof Capital Intemalsources Depreciation and amortization                           $ 38           $ 43           $ 45                 $ 47       $ 49             $ 50        .$234 Amortization of capitallmprovements 13              10                  9              12          12               13           56 and nuclear fueladvances 2               1                 2                1           1                -            5 Deferred taxitems-not(Note 4)                                                                                                                          '10 4                4           5                6
                '.Other (excludes AFUDC)(Note 61                            J              _19)
                                                                                                                                                          $ 69         $305 Subtotal .                                          $ 46           $ 45            $ 60                 $ 64       $ 67 51 %            56 %               72%            107 %        2 %
120               115%         _90%
Percunt of Total Capital Requirements ExtemalSources                                                                                                                                          $ 40 long term debt                                         $-             $-             S 40                 $-         $-               $-
    . a -_                                                                      -               -                -                 -           -                -            -
Prefoned stock
   ! ,;             C ammon stock (capital contribution)                        -               -                 -                -           -                 -           -
v--
Short term debt, net (Note 5)                             44              36               11 7)            J          ,(11_)           _19)          _LS)
Subtotal                                            $ 44            $ 36          $ 23                  $3         $g               $3           $3 TotalSources of Capital                                       $ 90            $ 81           $ 83                 $ 60       $ 56             $ 60         $3J4 NOTESCONTINUED (3) Reflects tmng of sirkng funds, rebrements and maturttes.
(4) loctudes deterred federalincome taxes and 6nvestment tax credits, both net of flowback.
(5) 1989 includes $33 mAon of remainsng proceeds from long term detd issued h 1988.
I
      -                                                       n

fr     .
n I        RNANCIAL HIGHLsGHTS l
lowa Resources Inc. Consolidated Percent incrosse 1989                1988      (Decrocee)
Financial Revenues (000)                                         $ 360,570            $ 348,469           3.5%
Netincome(000)                                          $ 41,703            $ 32,939         26.6 %
Retum on average common equity                                     11.9 %           9.3%     28.0 %
Eamings por average share                               $          1.90     $     1.49       27.5%
Common stock dividend rate at year end                  $          1.70     $     1.66          2.4%
Stock price range-                                                                                          <)
Low                                                  $            17     $     15 %         11.5 %
Hgh                                                  $            22     $        22           ~%
Average shares outstanding (000)                             21,902             22,078      (0.8)%
Totalassets(000)                                        $1,204,169          $1,167,942          3.1%
Capitalexpenditures(000)                                $ 90,069            $ 64,611          39.4 %
Utility Opemtions Revenues (000)                                         $ 349,815           $ 343,914           1.7%
Retailsales-millions of kWh                                      5,203          5,196          0.1%
Totalsales-millions of kWh                                       5,242          5,289       (0.9)%
Peakload-megawatts                                               1,358          1,373       (1,1)%
Cooling degree days (normal- 1,019)                                983          1,415     (30.5)%
Heating degree days (normal-6,554)                               6,715          6,281          6.9%
Average annualresidentialuse-kWh                                 8,832          9,150         (3.5)%
m Average annual residential revenue per kWh                         8.25C           8.11C         1.7%
N DWA RE80tBCESINC.
Smart service...
13right ideas.""
m,.       ..   .-            .

    , FINANCIAL FORECAST
  . lowa Resources Inc. Consolidated 1990-1994 (Donars m Mdions)
FORECAST
* Actual                                                            Total 1989          1990         1991        1992   1993   1994     1990 1994 Capital Requirements lowa Power capitalexpenditures                              $ 83          $ 80         $ 74        $ 59   $ 55   $ 59        $327 Nonutilityinvestrnents                                            3            3            -          -
1       1        5 Maturities and sinking furds (Note 3)                           14             5          13            1     2        1       22
  - TotalCapital Requirements
                                                                    ${03          $3           $,8J        $ 6Q   $ 58   $ 61        $354   !
Sources of Capital Intemalsources Depreciation and amortization                          5 53          $ 53         $ 55        $ 60   $ 62   $ 64        $294 l            Deferred tax items net (Note 4)                              5            3           (1)        (1)    (1)      -         -
           . Other (excludes AFUDC)(Note 6)                           ,_(3)        _13)             7          7      8        7       26 Subtotal                                               $y            $_53         $y          $_6_6  $_69   $_7_1 1     $320   ,
Percent of Total Capital Requirements                              55 %         60 %         70%       110 %  119 %  116 %        90 %
Extemalsources Long-term debt                                         $-            $-           $ 40        $-     $-     $-          $ 40 Preferred stock                                              -            -            -          -      -       -         -
Common stock                                                (7)           -            -          -      -       -         -
Short-term debt, not(Note 5)                               52           35         11 4)       _{6)   11,1)  11 0)       _16)
          - Subtotal                                                $ 45          $ 35         $ 26        $_(6)  $111)  $11_0)      $2     !
TotaiSourcesof Capital                                         $100          $ 88         $ 87        $ 60   $ 58   $ 61        $354
  - Year end Balance Short term (inveetments) debt, net                          $-           5 35          $ 21        $ 15   $4     $ (6)
Capitalization Ratios (Year-end)
Long-term debt                                                 51 %          47%          48%        48 %   47%      47%
Preferred stock                                                   3%           3%           3%         3%     3%      2%
Common equity                                                  46%           50 %         49%        49%    50 %     51 %
Interest Covera 9e Ratio
/       Pretax with AFUDC                                           3.11          3.16         3.01        3.12   3.26   3.46 Supplemental, pretax with AFUDC (Note 7)                    2.75          2.74         2.65        2.76   2.89   3.08 f    NOTES CONTINUEC (S) In:fudos let charg ' in working Capdal and other assets.
(7) Inck&s interest on o inpany detA and the intorest cornponent of payments to the Nobraska                                           l Put*c Power Distnet.

;                ASSUMPTIONS AND COMMl!NTS e The number of electric customers willincrease 0.9% annually through 1994; salos will increase 3.4% in 1990 and 2.0% annually 1991 1994
* The peak demand of 1,358 MW during 1989 was 15 MW below the record 1988 peak of 1,373 MW. Peak load growth averaging 1.2% per year is forecasted for 19901994, e Combustion turbines with a summer generating capacity of 70 MW are scheduled to be placedin servicein May 1990.
e The Construction Forecast for 1990 through 1994 includes $166 million for transmission and distribution plant improvements.
* Rate increasos are reflected for the period 1990 through 1994. These increases will be in the 2% to 3% range each year -less than the inflation rate.
e The inflation rate for operations and maintenance, excluding fuel, is projected to average 5% per annum.
Note - Ths tcrocast is attyst to change W actual cordtiore vary from asstwmd cordtions.

s     .e
\     ,
FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTIF ' SR 15 (d) OF THE SECURITIES EXCilANGE ACT OF 1934                                          IFEE REOUIRED1 For the fiscal year ended               December 31. 1984 OR
[ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934                                    INO FEE REOUIREDI For the transition period imm                             to Commission file number 1 7830 10WA RESOURCES INC.
(Exact name of registrant as specified in its chaner)
IOWA                                              42 1116204 (State or other Jurisdiction of                                (1.R.S. Employer incorporation or organization)                                 Identification No.)
666 Grand Ave.. P.O. Box 657. Des Moines. Iowa                                  50303 (Address of principal executive offices)                               (Zip Code)
Registrant's telephone number, including area code                          515 281 2900 Securities registered pursuant to section 12 (b) of the act:
Name of each exchange Title of each class       ,
which recistered COMMON STOCK, WITHOUT PAR VALUE                        NEW YORK STOCK EXCilANGE PACIFIC STOCK EXCHANGE Securities registered pursuant to Section 12 (g) of the Act:     b'QHL Indicate by check mark whether the . gistrant (1) has filed all reports required to be Eled by Section 13 or 15 (d) of the Securities ExCsige Act of 1934 during the preceding 12 months (or for such shoner period that the registrant was required to file such repans), and (2) has been subject to such filing requirements for the past 90 days.
Yes    X        No The aggregate market value of voting stock held by non affiliates of the registrant was $421.217,982 as of February 25,1990, when 21,622,725 shares of common stock, without par value, were outstanding.

                                                                                                                  . '. i I
10WA RESOURCES INC.                                                         ;
g                                  't989 Form 10 K Annual Repon TABLE OF CONTENTS i
P.au EacL1 Ite m 1    Business Oc! ictal .......................,.........                                    3 Capital Expenditures and Financing . . . . . . . . . . . . . . . .             5 Rate M atters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      5 Electric Operations . . . . . . . . . . . . . . . . . . . . . . . . . .        6 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . .          8 Regulation     ...............................                                 8 Employees     ...............................                                  9 Item 2     Prope nt es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Item 3     Legal Proceedings     ...............................                                  9 Item 4     Submission of Matters to a Vote of Security Holdens . . . . . . . . .                 11' Ea[Lil item 5     Market for the Registrant's Common Stock and Related Security Matters . . . . . . . . . . . . . . . . . . . . . . .        11 Item 6     Selected Financial Data , , . . . . . . . . . . . . . . . . . . . . . . . . .         11 Item 7     Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . .             I1 Item 8     Financial Statements and Supplementary Data . . . . . . . . . . . . . .               11 Item 9     Disagreements on Accounting and Financial Disclosure . . . . . . . .                  I1 EAILill item 10    Directors and Executive Of0cers of the Registrant              ...........            12 Item 11    Executive Cotapensation ...........................                                   17 Item 12    Security Ownership of Cenain Beneficial Owners and Management          ...........................                           20 item 13    Cenain Relationships and Related Transactions , . . . . . . . . . . . .               21
                                                                                                                         ]
EatLIE                                                           i Item 14    Exhibits. Financial Statement Schedules, and                                                           i Repons on Form 8.K .......................,                                   22 Signatures  ...........................................                                          29              )
1 Exhibits                                                                                                         !
Index    ................................ ..........                                          66              i 2
1

l FORM 10 K                                                                      1989 ANNUAL REPORT IOWA RESOURCES INC,                                                     4 PARTI Item 1      Pusiny,s OENERAL lowa Resources Inc. (lowa Resources or IOR) is an Iowa corporation which became the owner of all of the outstanding common stock of lovca Power Inc. (lowa Power or IPk), fonnerly lowa Power and Light Company, on November 1,1979, pursuant to a merger and corporate restructuring plan appmved by the shareholders of IPR. Effective as of knuary 1,19M, IPR transferred all of its gas business and propenies to lowa Oas Company (IOC) and distributed the capital stock of IOC to lowa Resources as a dividend on the common stock of IPR. On December 31,1985, Iowa Resources sold LOC to Midwest Energy Company. Iowa Resoum reponed IOC as discontinued operations for the                      ,
year ended December 31,1985, Iowa Resources conducts no business and owns no propenies other                   l than the comaon stock of its subsidiary companies: ENERCOR, Inc.; IOR Capital, Inc.; IOR Telecom Inc.; lowa Computer Resources. Inc.; IPR; Middlewood, Inc.; Middlewood Mall, Inc. and UNITRAIN, Inc.
On March 15,1990, IOR and Midwest Energy Company (MWE) signed a definitive agreement to                    j merge into Midwest Resources Inc., a newly created holding company,                                            j i
MbTi, headquartered in Sioux City, Iowa, is a holding company with major interests in electric and naturd gas utilities and additional investments in diversified businesses. MWE's principal subsidiary, Iowa Public Service Cornpany, provides electric service through its IPS Electric division to 156,000          .
cushmers in Iowa and southwestem South Dakota. The IPS natural gas division, Midwest Gas, se:<lces 347,000 customers in Iowa, Minnesota, South Dakota and Nebraska.
l                The merger is subject to approval by the shareholders of IOR and MWE and cenain Federal and i             State regulatory agencies. The merger will be accounted for as a pooling of interests.
At the time of the merger, Midwest Resources Inc. will issue its own stock to the IOR and MWE shareholders. IOR shareholders wih receive 1.235 shares of common stock in the new company for each share of common stock currently held For MWE, the exchange ratio is 1.080 shares of new common stock for each one share of common stock currently held.
ENERCOR, Inc. (ENR), an Iowa corporation and a wholly-owned subsidiary of Iowa Resources, invests in energy related ventures. ENR owns 1,280 acres of land in the Powder River Basin in Campbell County, Wyoming, for possible future coal mining development. Coal mining development on this propeny is subject to the acquisition of leaschold rights from the federal govemment. In 1984 ENR entered into a three year oil drilling partnership.
IOR Capital, Inc. (IOR Capital), an Iowa corporation and a wholly-owned subsidiary of Iowa Resources, provides financial and investment services for Iowa Resources and its non utility subsidiaries.
During 1985,1986 and 1987, IOR Capital (formerly ENSERCO, Inc.) entered into several direct financing leases for over the-road transponation equipment. In 1986 IOR Capital entered into a               '
leveraged lease transaction under which an Arizona utility sold and leased back a coal fired power plant. IOR Capital has a seven percent interest in this $707 million facility.
3-

i LOR Tclecom inc. (formerly Industries of Iowa), an Iowa corporation and a wholly-owned subsidiary of Iowa Resources, installs, leases and maintains fiber optic and other communication systems in central lowa.
l Iowa Computer Resources, Inc., an Iowa corporation and a wholly-owned subsidiary of Iowa Resources, is involved in the development and sale of computer data entry software.
IPR, the principal operating subsidiary of IOR, is an Iowa corporation which has been and is engaged in the generation, purchase, transmission, distribution and sale at retail and wholesale of electric energy and capacity, all in the State of Iowa. In January 1987, Redlands incorporated (Redlands), former subsidiary of Iowa Resources, became a wholly owned subsidiary of IPR. Redlands, an town corporation, owns approximately 3,700 acres of land near Des Moines, Iowa. This land is being held for use as a generating station site and water impoundment area when the electric load requires expansion or replacement of existing IPR capacity. 'Ihe land is cunently being used for            ,
farming operations.
IPR's service territory includes some of the most fertile and pmsperous farm land in the United States. Agricultural products include com, soybeans and other grains, livestock and dairy products.
Des Moines is the capital of Iowa and the largest city in the state, it is an insurance center, one of the largest printing and publishing centers in the middle west and the major retail and jobbing point in the state. Some of the more imponant goods produced in the Des Moines area are building materials, steel products, farm machinery, tires, livestock feeds, meats and food products. Council Bluffs, which is located across the Missouri River from Omaha, Nebraska, is the second largest city                     '
served by IPR.
Approximately 79% of IPR's 1989 operating revenues were derived from electric service fumished in the Council Bluffs and metropolitan Des Moines areas. As of December 31,1989, IPR had 249,234 customers, of which 86.6% were residential,13.0% commercial and industrial and 0.4%                         .
Other. The Company recognizes that conservation practices by some of its customers will restrict                        '
growth but has no reason to believe that the availability of other forms of energy will have a significant effect on its business in the foreseeable future.
i Middlewood inc., an Iowa corporation '.nd a wholly-owed subsidiary of Iowa Resources, owns dlrectly and through pannership investments ir. Iowa real estate propenies primarily in the Des Moines area. Middlewood, Inc, owns one pmpeny '<hich is leased to IPR.
Middlewood Mall, Inc=, an Iowa corporation and a wholly owned subsidiary of Iowa Resources, holds majority pannership interest in a ccmmercial real estate project in downtown Des Moines.
Middlewood Mall was formed in 1984.
UNITRAIN, Inc., an Iowa corporation and a wholly owned subsidiary of Iowa Resources, owns and leases unit coal trains, manages unit train operations and maintenance activities and coonlinates coal hauling services for several utilities, including IPR.
r s
j
                                                       -a-                                                                  l l
1

    ,     .                                                                                                             l CAPITAL EXPENDITURES AND FINANCINO                                              1 IOR's consolidated capital expenditures, including Cooper Nuclear Station capital improvements and allowance for funds used during construction and accrued on advances (AFUDC), for the five years ended December 31,1989, were $351 million. IPR's plant additions for those five years were $199 million, and retirements were $29 million. In addition, $14 million of Des Moines Power Station Utility Plant was transfened to Unrecovered Plant as required by the Iowa Utilldes Board (IUB) order issued pursuant to Docket No. RPU 8810. The effect of this activity was a net increase in utility plant of 17%.
IOR's estimated consolidated capital expenditures for 1990 are as follows:
Capital Exocnditures                     AFUDC      Iglal     i (In Millions) lowa Power                                         $ 80                       $$          $ 85 Industries Group (all other subsidiaries)                                       3                       2             3 111                       1A          M IOR estimates that funds for its 1990 consolidated capital expenditures will be met imm the following sources:
1990 (In millions)
Depreciation and Amonization . . . . . . . . . . . . , . . . . . . . . . . .             $ 43 Amonization of Cooper Nuclear Station Advances               , , , , , . . . . .           10 Debt Retirements anil Sinking Fund Requirements . , , , . . . . .                           (5)
Deferred income Taxes and Investment Tax Credit, net . . . . , , , ,                         3 Shon te rm Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          35 Working Capital and Other Changes , , , , , , . . .            , , , , , , , , ,             2 M
IOR's projected consolidated capital expenditures for 1991 through 1994 arc $260 million, in addition, a requirement of approximately $17 million is projected for maturities of long term debt and bond sinking fund requirements, it is anticipated that approximately 90% of the capital requirements      '
for 1990 through 1994 will be met by funds generated fmm intemal sources, IPR's Anicles of incorporation and indentures under which its First Mongage Bonds are issued contain cenain carnings and capitalization tests and other conditions that must be satisfied prior to the issuance of additional IPR prefened stock or cenain types of IPR debt securities. At December 31,1989, about $180 million of preferred stock, $173 million of First Mongage Bonds and $139 million of unsecured sion term debt could have been issued in compliance with the most restrictive of such tests and conditions.
RATE MA'ITERS For information relating to IPR's Rate Matters reference is made to Note 2 of " Notes to Consolidated Financial Statements."
5 l
t I

I                                                                                                            .
n                                                                                                              .     .
t ELECTRIC OPERATIONS The property owned by IPR is entirely within the State of Iowa. IPR's electric generation is supplied by plants widch utilize fuel as set forth below:
Urdt Capacity Egg                                    ifah   Bagl            at 12 3189(MW)
Base Load Units:
Cooper Nuclear Station Power Purchase Contract ................                     1   Nuclear                 389.0 (1)
Council Bluffs Energy Center . . . . . . . . . .         3   Coal                    315.2 (2)
Neal Generating Station . . . . . . . . . . . . . .      3   Coal                    118.5 (3)  '
Ottumwa Generating Station . . . . . . . . . . .         1   Coal                    101.3 (4)
Louisa Generating Station        ............            1   Coal                __1981 (5)
L122.2                      ,
Intermediate Load Units:
Council Bluffs Energy Center . . . . . . . . . .         1   Coal                     46.0 Council Bluffs Energy Center . . . . . . . . . .         2   Coal                   _BLQ
_ 134.0 Peak Load Units:
River lillis Energy Center . . . . . . . . . . . .       18 Gas /Oll                 127.2                   ,
Sycamore Energy Center . . . . . . . . . . . . .         12 Gas / Oil             ..148.0                    t 2112 Total    .........................                                               MM Deactivated Units:                                                                                             '
Des Moines Energy Center . . . . . . . . . . . .         67 Coal                     188 0 (6)
(1)       Cooper Nuclear Station is owned by Nebraska Public Power District (NPPD) and the amount shown is IPR's entitlement (50%) of Ccoper's accredited 778 MW capacity               i under a power purchase agreement extending to 2004.
(2)       IPR's portion (46.7%) of this joindy owned 675 MW facility.
(3)       IPR's portion (23%) of this joindy-owned 515 MW facility.
(4)       IPR's portion (15%) of this jointly owned 675 MW facility.
(5)       IPR's portion (30.5%) of this jointly owned 650 MW facility.
(6)       Ursts deactivated in 1985, with planned teactivation in the late 1990's, IPR is interconnected with certain Iowa and neighboring utilities and since 1972 has been one of 43 utilities involved in an electric power pooling agreement krcwn as Mid Continent Area Power Pool (MAPP). The purpose of MAPP is to coordinate the plarr6,g, construction and operation of generation and transmission facilities, including the purchase and sale of power and energy among members. IPR and four other lowa investor owned utilities formed ENEREX, a general partnership, on January 1,1984. ENEREX, coordinates the purchase and sale of electric energy among the partnrs and handles the daily unit commitment function.
Cocoer Nuclear Station. Reference is made to Note 3 of Notes to Consolidated Financial Statements for a discussion of IPR's long term power purchase contrac. with NPPD for one half of the output of Cooper Nuclear Station.
6 1
h

a       ,
l     .
I Neal Station. Under a joint ownership agreement with lowa Public Service Company (IPS),
lov a Southem Utilities Company (ISU) and towa-Illinois Oas and Electric Company (IA ILL), IPR owns 23%, or 118.5 MW of the 515 MW coal fueled Unit 3 at Neal Station located near Sioux City, Iowa.
Council Bluffs Encrev Center. Under a joint ownership agreement with 1A.lLL, Cedar Falls Municipal Electric Utility, Central lowa Power Cooperative (CIPCO), Com Belt Power Cooperative, and Atlantic Board of Water Works and Electric Light and Power Plant Trustees, IPR owns 46.7% or 315.2 MW of the 675 MW Unit 3 at the Council Bluffs Energy Center located near Council Bluffs, Iowa.
Ottumwa Unit 1. Under a joint ownership agreement with IPS, ISU, Iowa Electric Light and Power Company and IA ILL, IPR owns 15%, or 101.3 MW of the 675 MW coal fueled Unit I at the Ottumwa Generating Station located near Ottumwa, Iowa.
Louisa Unit 1. Urdet a joint ownership agreement with IA ILL, Interstate Power Company, CIPCO, IPS and the cities of Eldridge, liarlan, Waverly, and Tipton, Iowa, IPR owns 30.5% or 198.2 MW of the 650 MW Louisa Unit 1, located near Muscatine along the Mississippi River in southeastem lowa.
Peak Lond. The annual hourly peak load occurs during the summer period, principally as a result of air conditioning. IPR's highest hourly peak load in 1989 was 1,358 megawatts,15 megawatts below the IPR record peak load of 1,373 set in 1983.
Enerev Reauirema. In 1989 IPR'It system requirements, net of sales to other utilities, were supplied by purchases fmm Cooper Nuclear Station 38%, IPR's generation 47% and purchases from other sources 15%, For 1990, IPR estimates it will obtain appiuximately 41% of its electric n quirements from Cooper Nuclear Station and the balance from its own generation and other purchases.
Cooper Nuclear Station is unavailable periodically for refueling and maintenance during which times IPR is required to increase its use of fossil fuels and may be required to purchase energy. IPit has sufficient power capacity available from its own generation and MAPP to pluvide for the anticipated requirements of its customers.
Fuel Sources. In 1989 the fuel used to produce IPR's net kilowatt hour requirements was 45%
nuclear, $5% coal and a minimal amount of gas and oil. Cooper Nuclear Station operated at about a 70% capacity factor during 1989. IPR expects that the fuel used to produce its net kilowatt hour requirements for 1990 will be approximately 44% nuclear,56% coal and a minimal amornt of gas and oil, assuming that Cooper Nuclear Station operates at approximately a 75% capacity factor for such year, Cgg. IPR's average deliveird costs of coal bumed for the indicated periods were as follows; Year Ended December 31 s
1989        19,$.B.,   .,12$L        12EL       191L Cost per million blu , . . . . , , .     .  $ 1.15      $ 1.19       $ 1.23      $ 1.37      $1.40 Cost per ton . . . . . . . . . . . . . . . $19.06       $20.38       $21.02      $23.33     $23.77 IPR generally maintains a supply of coal at Courwil Bluffs Energy Center sufficient for approximately 90 days of generation, and units in which it has a joint ownership interest maintain supplies of coal sufficient for approximately 90 days of operation. IPR estimates that coal supplies for its units and those in which it has a joint interest will be adequate for its needs in the foreseeable future.
7

                                                                                                                                       ,      l l
                                                                                                                                       ,      l Omi. Natural gas is available for peak load electric generation at IPR's River Hills and                   j Sycamore Energy Centers.                                                                                                               ,
j Qil. IPR's use of middle distillate oil has been minimal; however, if gas is unavailable for                !
electric generation, oil is essential for peaking and standby purposes. IPR has available storage capacity for 9.1 million gallons of oil. IPR's oil in storage at its peaking unit locations is sufficient to satisfy its needs.                                                                                                                            ]
1 Nuclear. Approximately 25% of the fuel used by Cooper Nuclear Station must be replaced                     i annually during the life of the station.
ENVIRONMENTAL MA'ITERS IPR is subject to regulation with regard to air and water quality and other envienental matters by various federal, state and local authorities and is also subject to r.oning and other regMnns                               i by local authorities. IPR is currently in compliance with all applicable environmcatal standards,                                      i IPR is puticipating with over 600 other companies in the cleanup of a haza dmes waste site formerly operated by Manha C, Rose Chemicals, Inc. (" Rose Chemicals"),in Holden Mi=ouri. During 1983 arxi 1984 IPR contracted with Rose Chemicals for disposal of approximately 291,';00 pounds of                                   ,
polychlorinated biphenyls (''PCB's") at the site. Rose Chemicals, now insolvent :iandoned the site in March 1986. De ' Environmental Protection Agency in 1986, pursuant to the Comprehensive Envimnmental Response, Compensation and Liability Act of 1980, has initiated a cleant:p of the site.
IPR estimates its share of the cleanup costs will be approximately $500,000,-
REGULATION The IUB regulates IPR's electric rates, service territory, accounting and services, in addition, Iowa law regulies that a certificate of convenience and necessity be obtained from the IUB prior to construction of a proposed electric generation station with a total capacity of 100 or more megawatts,                                i Need for the station rnust be establWd and approval of the proposed site obtained befo:e :t certificate can be issued. IPR is subject to tlw jurisdiction of the Federal Energy Regulatoly Commission under the Federal Power Act with respect to the issuance of secut: ties and other matters, in Iowa, non-exclusive franchises which cover the use of streets and alleys for pnbile utility 1    - facilities in incorporated communities att granted for a maximum of 25 years by city coenctis, subject
: i. to ratification by a majority vote of local qualified residents. De IUB has jurisdictinn md grants franchises for the use of public highway right of way for electric facilities, and th: power of                                      l condemnation of rights of way for transmission purposes, outside of incorporated commwlties, in the City of Des Molnes IPR obtained a 25 year franchise during 1987. Outside Dcs Moines, electric operations are conducted under franchises (expiring in various years from 1990 to 2014),
pennits and licenses obtained from state and local authoritle';.
De Iowa General Assembly enacted legislaion in 198-8 wMch changed the method of utility rate regulation in Iowa, ne legislation requires the IUB to disa!!ow any equity camings on generating c.spacity which exceeds that " reasonably necessary to provide adequate and reliable service." De IUB's rate case decisions have indicated its intention to disallow equity etnings on the average investment in generating capacity which exceeds 125% of p utility's peak electric demand. IPR has no such excess generating capacity, f
                                                                                                                                         }

   ,   ,                                                                                                          }
I IOR is exempt from the Public Utility Holding Company Act of 1935. IOR's exemption is based upon its filing with the SEC in April 1979, an Initial Statement by liolding Company Pursuant       i to Regulation 250.2 of the Public Utility Holding Company Act of 1935. IOR maintains its exemption       l by filing a Fonn U 3A-2 widi the SEC cach year.
l EMPLOYEES                                                .
De number of employees of the subsidlary companics of Iowa Resources at December 31,
,        1989, was 1,258 full. time and 45 pan time and temporary for a total of 1,303 employees. Of this total,471 arc IPR physical work force employees and 217 are IPR clerical work force employees represented by the International Brotherhood of Electrical Workers, Local 499. The contract for the l        physical work force employees expires August 1,1990 and the contract for the clerical work force employees expires February 1,1991.
Jtem 2 Pmg,@ji                                                                                            1 l                  IOR conducts no bus! ness and owns no pmpenics other than the common stock of its               l subsidiary companies.
1 Reference is made to page 6 herein " Business . Electric Opmdous," for a description of the facilities utilized by IPR ta generate electricity, item %1.enal Proceedines
                                                                                                                  ]'
i I
IOR and hs subsidiaries have no materiallegal proceedings (other than ordinary routine damage   i
!        claims and sim!!ar items incidental to its business which are not dMrned material and for which both      i an injuries and damage reserve and insurance have been provided) ex:cpt for the following:
1 a)        In tr'   lowa Power and 1.lcht Comogly, before the Iowa Str.te Utilities Boani, Docket No.
RPU 8810.
On August 5,1988, IPR made a : ite filing whh the IUP, requesting a $33.0 million, or 10.7%,    i annualized increase in elecuic rates. On October 7,1WB, the IUB approved an annualized interim rate      i increase of approximately $17.8 million, based primanly on a rewm on equity of 13 percent. The            l Increased interim rates were col'.ccted on salcs ' rem Oc*cher 7,1988 through August 31, 1989. On July 19,1989, the IUB issued a final order whien appmved a total annualized rate increase of             '
approximately $24.7 million. The rates autterimd include approximately $0.5 million armually related to the normalized treatment of contributions in a.d of construction which are being collected subject to refund pendini; an appeal by lowa Pown:' to the Polk County District Court. For funher detail regarding disposition of this legal proceedhg, please refer to the Notes to Consolidated Financial       q Statements section of this repon, at Note 2.
b)        John Carev Oil Comnany. Incorrorated vs. ENERCOR. Inc. and towa Resources Inc.. No. CL-41635 in the Iowa District Coun of Polk County.
On June 12, 1987. John Carey 011 Company, incorpomted (John Carey Oil) filed suit in the Iowa District Coun for Polk County against ENERCOR, Inc. (ENERCOR, a wholly owned subsidiary t        of IOR), and towa Resources. The lawsuit arises out of a joint venture pannership agreement entered into between John Carey Oil and ENERCOR effective March 1,1984. De partnership was formed for            1 the general purpose of acquiring leases and other interests in oil and gas propenies in certain counties in the southem half of Illinois and to drill, develop and operate such leases in order to produce and    I market the oil and gas from the project. The explorntion and development project was for a three year period, through February 28,1987, with the partnership continuing beyond that date for oil production    j u         operations. John Carey Oil was the man 1gina psr:ner, with a 50% interest in revenue, receipt of l         revenues arxi ownership of parmership assets.                                                            1 9                                                  1

l               e p                                                                                                                                        ,
p                                                                                                                      ,
John Carey Oil has sued ENERCOR (and 10R, as the parent of ENERCOR), alleging breach of contract, asking for damages of $36,468,784 and alleging tortious interference with business                                               _.
relationships, asking for damages of $10,000.000, plus unspecified punitive damages.
ENERCOR and 10R have filed an answer to the lawsuit, denying the claims of John Carey Oil and have filed counterclaims against John Carty Oil, alleging that John Carey Oil misrepresented the project, breached its fiduciary duty as managing parmer to ENERCOR and breached the pannership ugreement. %c counterclaim is for an unspecified amount to be determined by the trier of fact.
On June 30,1989, John Carey Oil filed a p:tition for storgardration under Chapter 11 of the Bankruptcy Code in Federal Bankruptcy Coun in f,pringfield, niinois. As a result, a February 5,1990                                      .
M date for John Carry Oil Company, Incorporated v. ENERCOR, Inc. and towa Resources Inc., was cancelled and the case was icmoved to U.S. Bankruptcy Coun for the Southem Distnct of Iowa.
On AuFubt 25,1989, defendants filed a Motion for Rcmand from Federal Bankruptcy Coun                                          ;
to the Iowa District Coun. On October 19, 1989, the U.S. Bankruptcy Coun Judge issued rat order                                           5-recommending that the U.S. District coun remand the case to the towa District Court. The Iowa                                            (
District Coun for Polk County has tentatively s:heduled a new trial date for October 1,1990. On                                          i:
February 1,1990, the U.S. Bankruptcy Coun for the Central District of rlhrvfs entered an order lifting                                       !
the automatic r.tay, thereby gning the Iwa District Coun full authority to rule on these proceedings.
On February 8,1990, ENERCOR and Iowa Resources filed a Motion for Leave to Amend Counterclaim, alleging fraud in the inducement of the pannership sgreemera on the pan of John Carey Oll. On February 20, 1990, the Coun entried a ruling sustaining the Motion, resulting in the amendment to the counterclaim teing deemed Aled as of February 20,1990. At this stage, it is not possible to predict the ultimate impact of John Carey Oil's bankrupey iliing on the case, c)         San Dieno GatA.,' Electric Comgly.y Alamito C.rsnaga FERC Docket No. EL8917 000; Arizona Comoration C2gpission v. Alagp.,,Comoany. FERC Docket No. EL8918 000 (consolidated proceedings).
On December 31, 1986, IOR Capital acquired an approximate $50 million equity interest in Unit No. I of the Springerville Ococrating Station, a coal fired electric generating station in Arizona,                             ,
t tiuough a sale / leaseback transaction with the Century Power Corporation (Century), formerly the Alamito Company, IOR Capital owrs, an approximate 7% undivided interest in the generating station, the balance being owned by other equity participants.
Tucson Electric Power Cornpany (TEP) purchases the output of the plant under a 28 year power sales agreement with Century. The payments roade by TEP pursuant to a rate formula under the power                                           ~
l sales agree. ment are used by Century to meet its lease obligations.
On February 15, 1989, and February 17, 1989, respectively, San Diego Oas and Electric Company (SDO&E) and the Arizona Corporation Commission (the ACC) filed separate complaints with the FERC pertaining to the tale / leaseback transaction and the rates that Century is charging to SDO&E and TEP for power. SDOkE asks the FERC to reduce Century's rates by amortizing against rates its gain fmm the sale of Alam!!o. The ACC complains that inclusion of the lease payments in the rate formula results in excessive tutes for service from Springerville. De ACC requests that the FERC onier Century to refund to TEP all amounts tibove a reasonable rate level and set new rates for the futurei Century filed its answer in opposition to the Complaints, and LOR Capital and the other equity participants have intervened, also in opposition to the Corppininti. The FERC has schedaled the Complaints for hnrmg daring 1990, and a final FERC decMon is not expected prior to early 1992.
10 F f                          55

          .      d)         Reference is made to the second unnumbered paragraph under the section entitled
* ENVIRONMENTAL MA*!TERS," found on page 8 of this repon.
Item 4. Submission of Matters to a Vote of Security Holders No mauers were submitted to a vote of ;OR becurity holders during the fourth quaner of 1989.
EXEC 11TIVE OFFICERS OF Tile REGISTRANT See Part 111.
PART 11 Item 5 Market for the Renistrant's Common Stock and Related ftockholder Matters lowa Resources had 29.012 shareholders as of F-bruary 25, 1990. Common stock of Iowa Resources is traded on the New York and Pacific Stock Exchanges under the ticker symbol "!OR".
Daily newspapers carry quotes on the stock. H'@ and low stock prices and dividends declared per share for each quaner in the year ended December 31,1989 and 1988 were as follows:
Dividends                            Price Range Declared                      },Hgl1           h 1989 Fourth Quaner . . . . . . . . . . . . . .        $.425                         $22              $19 Third Quaner . . . . . . . , , , , , .            .42                            20 5/8           18 7/8 Second Quaner , , . . . . . . . . , , ,           .42                            197/8            17 1/8 First Quaner . . . , , . . . . . . . . . .        .415                           18 1/8           17 1988 Founh Quaner . . , , , , , . . . .        4      $.415                          $18 5/8         $17 Thin! Quaner . . . . , , , . . . . . , ,           .415                          18               15 1/2 Second Quaner , , , . . . . . . . . .             .415                          20 3/4           15 1/4 First Quaner . , , . . . . . . , , , .            .415                          22               18 7/8 11CUL.6 jplected Financial Data Reference is made to Pan IV of this repon.
Item 7 Mananement's Discussion and Analysis of Financial Condition and Results of Operations Reference is made to Pan IV of this report.
Iteti 8. Financial Statements and SutmlementarLQgg For the information required by item 8 for IOR, including the (1) Consolidated Statement of
_ income and Retained Eamings (11) Consolidated Balance Sheet, (iii) Consolidated Statement of Long-Term Debt,(iv) Consolidated Statement of Cash Flows,(v) Notes to Consolidated Financial Statements and (vi) Repon of Independent Public Accountants, reference is made to Pan IV of this repon.
Item o Disacreements on Accountinc and Financial Disclosure None.
11-

PART !!!
11gm 10 Directors suLgsecutive orncers of the Recistrant and Subsidiaries 1rtfonnation relating to each director who is a nomince for election as a director at towa Resources' 1990 Annual Meetir.g of Shareholders and to each executive officer of IOR and its                  i subsidiaries is as follows:
4 a) Identification Served in       Served as Present        Director NEDs                           Agg    Present Position             Position Since       Since Mark W. Putney                 61     Chaltman President                    1987           1974 and Chief Executive Office.r                                                   ;
i F+rt A Bumett                  62     Director                                 -           1984               l Gordon P. Eaton                60     Director                                 -           1986               I l
Nolden Gentry                  52     Director                                 -           1989 Richard C. }{artsuck           57     Director                                 -           1989 Gordon C. liurlbert            65     Director                                 -           1984 Gerald M. Kirke                46     Director                                 -           1986 Richard L. Lawson              60     Director                                 -           1989 Susan M. Phillips              45     Director                                 -           1987 Ralph F. ScD.kcr               61     Senior Vice President                 1988           1975 and Director John R. Taylor                 62     Director                                 -           1985 Lynn K. Vorbrich               51     Executive Vice President              1987           1989 and Director Jack C. Osbome                 62     Senior Vice President                 1988              -
Philip O. Lindner              46     Vice President                        1989              -
Keith D. llanje                40     Secret.try                            1985              -
J. Sue Rozema                  37     Treasurer                             1987              -
12-

Served in                        Served as Present                            Director Position Since                                Since M                              6EE.    }l resent Position James R. Bull                  48      Vice IWsident                                                1988                                          -
(Engineering and Power Production) of Iowa Power James B. Fleming               63       Vice President                                              1986                                     -
(Special Project 0 of Iowa Power William W. Fletcher, Jr.       42       Vice President and                                           1987                                    -
General Manager of Iowa Computer Resources, Inc.
James W. llamilton             48      Controller of Iowa Power                                     1983                                    -
Loyd R. Ilomback               59      Vice IWsident                                                 1985                                    -
(Westem Division) of Iowa Power Roland M. Johnsen              49       Vice President and                                           1987                                    -
General Manager of IOR Telecom Inc.
Joe A. Judge                   56       Vice fwsident (Central                                        1988                                    -
Operations) of Iowa Power Robert L Lester                48      Vice President (Marketing                                     1986                                    -
and Customer Senice) of Iowa Power Timothy A. Will                39      Vice President and General                                    1984                                     -
Manager of UNITRAIN, Inc.
Each director and executive officer serves an annual term of office. There are no family relationships between the foregoing executive officers and directors of IOR.
(b) Business Experience Durine the Last Five Yeatji Mark W. Putney                          Chairman, President and Chief Exceutive Officer of IOR and Chairman and Chief Executive Officer of IPR since 1989.
Chairman, President and Chief Executive Officer of IOR and                                                ;
IPR from 1987 to 1989. President and Chief Executive Officer of IOR and Chairman and Chief Executive Officer of IPR from                                                l 1984 to 1987. Chairman and Chief Executive Offlect of IGC from 1984 to 1985. President and Chief Operating Officer of IOR, Chairman of IPR and Chairman and Pretident of IOC in                                                  i 1984. Director of Norwest Bank lowa, N.A. Allied Ins'. ance Group and affiliated companics; Chairman of the Des Moines Development Corporation; Director of the Iowa Utllitics
                                                                                                                                            . . . . . . . . . . . . _     . _ _ _ _ _ _ _ _ _ _ _ _ . ~ . . . ,

Association, the Associatica of Edison Illuminating Companies, Greater Des Moines Committee, Greater Des Moines Chamber of Commerce and the University of Iowa Foundation, Member of Board of Governors of Living History Farms Foundation; Trustee of the Hoover Presidential Library Association.
Roben A. Bumett      Chairman of Meredith Corporation (media); joined the Boant in 1984. Director of Dayton Hudson Corporation, Whirlpool Corporation, Norwest Bank lowa, N.A., ITF Corporation, the Business Committee for the Ans, Greater Des Moines Committee, til lowa Business Council and the Des Moines Art Center; Member of the Board of Trustees of Grinnell College.
Gordon P. Eaton      President of Iowa State University; joined the board in 1986.
Director of Bankers Trust Company of Des Moines; formerly Associate Chief Geologis', U. S. Geological Survey.
Nolden Gentry        Partr.er in the law firm of Brict, Seckington, Bowers, Swanz
                          & Gentry, P.C.; served on the Board of Iowa Power from 1984 to 1989, joined the Iowa Resources Boaid in 1989. Director of Valley National Bank, Greater Des Moines Chamber of Commerte, Omater Des Moines Cctrmunity Foundation, Iowa Public Television Foundation and Delta Dental Plan of Iowa:
Member of the Board of Trustees of Simpson College and the "I" Club.
Richard C. Hansuck    Pla'11 Manager of the Des Moines Plant of Pire!11 Armstrcag Tire Corporation (manufacturing); served on the Board of lowu Power fmm 1985 to 1989, joined the Iowa Resources Board in 1989. Director of the Greater Des Moines Commince, Greater Des Meines Chamber of Coinmerce and Civic Music Association: Member of the Iowa Environmental Protection Commission.
Gordon C. Hurthert    Chairtuan and Chief Executive Officer of GCH Management Services (management consuaing); joined the Board in 1984.
Retired as President of Westinghouse Ek.aic Corporation Power Systems Company; Chairman of the Board of CSC (Copperweld Steel Corporatio#, Director of Carolina Power and Light Company; Weinon Steel Corpora: ion, Kere Glass Corpor : ion and URENCO         .
Gerald M. Kirke       Chairman and Chief Executive Ohicer of Kirke-Van Orsdel, incorporated (insurance); joined the Board ui 1986. Served on the Board of Iowa Power from 1984 to 1986 Director of Bankers Trust Company of Des Moines, Merry Hospital, Dowling/St. Joseph Foundation 171 Greater Des Moines Committee; Member of the Board of Trustees of Drake University.
                                        --                                     w                                                  -

Richard L. Lawson   President of the National Coal Association (coal production);
joined the Board in 1989. Serves as a mernber of the National Coal Association's Board of Directors and Executive Committee.
Retired from the United States Air Force in 1986 as a four star general. Served as Deputy Commander in Chief of the U.S.
European Command from 1983 to 1986; Chief of Staff, Supreme Headquaners Allied Powers, Europe, from 1981 to 1983.
Susan M. Phillips    Vice President of Firance and University Services of the E                                        University of Iowa: joined the Board in 1987. Chairman of the Commodity Futures Trading Commission from 1983 to 1987; "7f                                      Director of the Futures Induury Association, State Farm Mutual e                                        Automobile Insurance Company and the Johnson County Youth Services Foundation; Pub!!; Govemor of the Chicago Mercantile Exchange; Member of the Board of Trustees of Agnes Scott College.
Ralph F. Schlenker   Senior Vice President of IOR and Vice Chairman of IPR since 1989. Senior Vice President of IOR and IPR from 1987 to 1989. President Industries Group from 1985 through 1986.
Senlar Vice President of IOR and IPR from 1983 to !985.
Director and Vice Chairman of lawa Methodist Medical Center, Treasurer of th J. N. " Ding" Darling Foundation; Chahman of the Iowa Committee for Employer Suppon of the Guard and Reserve; Trustee of Simpson College, John E. Taylor       Chairman, J and E Associates (consulting); joined the Board in 1985. Retired Chairman of The Pnncipal Mutud Life Insurance Company and The Principal Financial Group (financial services);
Director of the Principal Mutual Lift Insurance Company and Capp Street Project; Chairman of the National Leadership Coalition on AIDS, Member of Advisory Council of the College of Letters and Science of the Universtly of Idaho; Past President of the Greater Des Moines Chamber of Comruerce and the Des Moinas An Center.
Lynn K. Vorbrich     Executive Vice President of IOR and President and Chief Operating Officer of IPR since 1989. Er.ecutive Vice Plesident of IOR and IPR from 1987 to 1989. Execuuve Vice President of IPR in 1986. Senior Vice President of IPR in 1985. Vice President, General Counsel and Secreta.ry of IOR and IPR,1983 to 1985. Director of Bankers Trust Company of Des Mohtes; Director and Member of the Executive Committee cf the Greater Des Moines Chamber of Commeren Chaitman of the Greater Des Moines Bureau of Economic Development and of the Citizens Ad';%ry Committee for the Ste.te Trt.ining School for Boys.
Jack C. Osbome       Senior Vice Presidem of IOR and IPR tince 1989. Senior Vice
        .                                   President and General Counsel of loft and IPR from 1988 to 1989. President of Indutnes Group since 1987. Senior Vice President and General Counsel of IOR and IPR from 1986 to 1987. President of Iowa Gas Company (IGC) from 1984 to 1985.
                                                                                                               =
15-
      =

Philip G. Lindner       Senior Vice President of IPR since 1990 and Vice President of IOR since 1989. Vice President of IPR in 1989. Prior to
                                               -joining IOR and IPR in 1989, Mr. Lindner served as Vice President and Chief Financial Officer for MacNeal Hospital from
                                               - 1987 to 1989, and as a partner with Anhur Andersen & Co.
from 1981 to 1987.
Keith D. I!artje         General Counsel and Secretary of IPR since 1990. General Attorney and Secretary of IPR from 1987 to 1989. Associate Counsel and Secretary of IPR,1985 through 1986. Secretary of IOR since 1985. Secretary of Redlands Incorporated, since 1984. Secretary of ENERCOR, Inc., IOR Captial, Inc., IOR Telecom inc., Iowa Computer Resources, Inc., Middlewood, Inc.,
Middlewood Mall, Im., UNITRAIN, Inc. from 1984 10 1989.
J. Sue Rozema            Trease er of IOR since 1987. V cc President and General Manager of ENERCOR, Inc., IOR Capital,-Inc., Middlewood Inc., and Middlewood Mall, Inc since 1989. Vice President.
                                                - General Manager and Treasurer of IOR Capital, Inc. from 2087 '
to 1989. Treasurer of IPR since 1985. Treasmer of Redh dis incorporated since 1984. Treasurer of ENERCOR, Inc., IOR Capital, Inc., IOR Telecom lac., Iowa Computer Resources, Inc.,
Middlewood, Inc., Middlewood Mall, Inc., and UNITRAIN, Inc.
from 1984 to 1989. Treasurer of IGC,1984 to 1985.
James R. Bull              Vice President of IPR since 1988. Assistant Vice President of-IPR,1983 to 1987.
James B. Fleming          Vlec Paesident of IPR since 1986. Assistant Vice President of IPR,1984 through 1986.
William W. Fletcher -     Vice President and-_ Ocneral Manager of Iowa Compu'ter Resources, Inc. since 1987. Vice President of Iowa Computer Resources, Inc.,1985 to 1987.
James W. Hamilton         Controller of IPR since 1983.
                        'Loyd R. Homback            Vice President of IPR since 1985.
Roland M. Johnsen          Vice President and General Manager of IOR Telecom Inc, since 1987. General Manager of IOR Telecom Inc. .in 1987.~
Manager, Telecommunications of IPR,1983 to 1987.
m                         Joe A. Judge              Vice Pn:sident of IPR since 1988. Assistant Vice President of IPR in 1987. Manager, Des Moines Electric System of IPR,
* 1984 to 1986.
Robert L. Lester -        Vice President of IPR since 1986. Assistant Vice President of IPR,1983 to 1986.
Timothy A. Will           Vice President and General Manager if UNITRAIN, Inc, since 1984.
c                                                                                                                                                                                       !
4 w                     u

c c.
1[ ggt).1 Executive Comnensation The following table sets forth all compensation paid by towa Resources and its subsidiaries during the year ended December 31, 1989, for services rendered during the year, to each of the five most highly compensated executive ofhcers of Iowa Resources or its subsidhuies whose aggregate cash compensation exceeded $60,000 and to all of their executive officers as a group.
Cash Comoensation m lowa Resources and Name of Individual Capacities in Which                         Non Utility         Iowa or identity of Groun Cgagnsation was Received                  Subsidiaries        Power M. W. Putney             Chairman, President Chief             $ 43,050        $ 287,265 Executive. Officer and Director of Iowa Resources; Chairman, Chief Executive Officer and Director of Iowa Power
         - L, K. Vorbrich          Executive Vice President and                934           189,091
                                 ' Director of Iowa Resources; President, Chief Operating Officer and Director of Iowa Power J. C. Osbome            Senior Vice President of Iowa            57,307           121,518 Resourtes; President of Industries Group; Senior Vice President and Director of Iowa Power R. F. Se' tenker         Senior Vice President and Director        1,961           176,629 of Iowa Resources; Vice Chairman and Director of Iowa Power Vice President of Iowa Resources          4,622           121,661 P. O. Lindner (2) and Senior Vice President (Finance and Information Systems) and Director of Iowa Power 17 executive officers as a group,                             $297,072         $1,776,041 including those listed above.
           ~ (1)    Includes all cash compensation distributed or accrued during 1989 in the form of salaries and fees for services rendered during the year, and includes the value of personal benefits received, but excludes premiums paid on group life and medical insurance policies.
p
                                                                                                                           .     . l i
(2)      Pursuant to a letter agreement dated as of March 27, 1989, from lowa Resources to Mr.
Lindner, if a merger or acquisition results in a change of control of Iowa Resources, Mr.                   .
Lindner may, at his option. within a 12-month period after such merger or acquisition, resign              l
    .                    from his position with lowa Resources. If Mr. Lindner resigns or if prior to January 1,1994, he is terminated for any reason other than for cause, Mr. Lindner would be entitled to twelve months' severance pay at his base salary, ne above mentioned compensation amounts also include incentive compensation which is awarded on a 50 percent cash - 50 percent Performance Share basis pursuant to the Iowa Resources Inc Executive Compensation Plan available to cenain officers selected by the Compensation and Succession Committee of the Board of Directors. The Plan operates on a year to year basis and is designed to provide total compensation, subject to corporate performance, equivalent to the average compensation of executives in similarly sized companies in general industry. Distribution of erformance Shares, which are equivalent to shares of Iowa Resources common stock, is contingent
                  .pon continued employment for a period of four years from the date the Shares were awarded or until employment is terminated because of retirement after age 55, death or disability, whichever occurs first.
De incentive compensation included in the table above is the cash compensation awarded in 1989 for                     l performance during 1988.
Executive Deferred Compensation Plan Executive officers, at thctr option, may defer compensation pursuant to the Iowa Resources Inc.
Executive Deferred Compensation Plan, in which participation is limited to cenain key executives as determined by the Board of Directors. Under the Plan, a panicipant may defer payment of a specified ponion of future compensation, in the form of Deferred Compensation Units, until retirement, death or disability. Ech Unit is the equivalat of a $1,000 debenture paying such annual rate of interest and convertible into the equivalent of such number of shares of common stock of Iowa Resources as the Plan specifies at the time of crediting the Units. No benefits are payable under the Plan until active employment terriinates because of retirement, death, disability or upon approval of the Board                    j of Directors, Compensation deferred under the Plan during 1989 is included in the figures reponed in the cash compensation table,                                                                                         !
Stock Purchase Plan and 401(k) Plan Iowa Resources offers its employees and the employees of its subsidiaries the opponunity to acquire Iowa Resources common stock through the Employee Stock Purchase Plan (ESPP). The ESPP                           i permits each employee of Iowa Resources or its subsidiaries who has completed at least one year of service to purchase through payfull deduction, shares of Iowa Resources common stock at 85% of market price on the last business day of each month. Panicipants are entitled to designate a payroll-deduction up to the lesser of ten percent of regular annual base pay, or $21,250 annually, for purchases under the ESPP. Directors are not eligible to participate in the ESPP unless they are also employees.
Iowa Resources also offers a Salary Deferral Plan (the 401(k) Plan) to cenaln employees. The 401(k) Plan offers employees the opponunity to defer a portion of their salaries, provided such employees elect to have Iowa Resources contribute such portion to the 401(k) Plan on their behalf.
Additionally, for each three dollais of salary deferred by an employee Iowa Resources contributes one dollar. His " match" by towa Resources of employee deferrals applies to the drst six percent of salary deferred by a participant, but will rot exceed $1,000 in a 401(k) Plan year. The Plan was amended effective January 1,1989 such that the " match" by lowa Resources is now made in Iowa Resources common stocki An employee must complete one year of service with lowa Resources and be at least 21 years of age to be eligibk to participate in the 401(k) Plan.

l' The following table sets forth the amounts accrued, paid or distributed to the individuals and group identified in the compensation table, pursuant to the ESPP and 401(k) Plan based upon; (a) the difference between the purchase and market prices of 70wa Resources common stock purchased in 1989 1       by such persons under the ESPP and (b) the portion contributed by towa Resources in 1989 under the 401 (k) Plan (the executive officers' salary deferral contributions under the 401(k) Plan are not included below, but are shown in the compensation table).
Name of Individual                  Amount Accrued, or Identity of Grouo              Paid or Distributed M. W. Putney                              $ 1,529 L. K. Vorbrich                              1,000 J. C. Osbome                               1,662 R. F. Schlenker                            3,797 P. G. Lindner                                  0 17 executive officers as a group, including those listed above             $25,652 Retirement Plans -
The Iowa Resources Salaried Employees' Retirement income Plan (Retirement Plan) provides for payment of fixed pension benefits to persons who retire after a specified age and number of years of service, based on average annual salary during the five highest paid consecutive years out of the '
last ten years prior to retirement. All of the officers named in the compensation table panicipate in the Retirement Plan.
Iowa Resources has establllhed an unfunded Supplecen al Retirem;nt Plan (Supplemental Plan) to provide additional retirement bei:efits to certain officers of Iowa Resources and its subsidiaries as determined by the Board of Directors. De Supplemental Plan covers all of the officers named in the compensation table, with the exception of Mr. Lindner. . Pan A of the Supplemental Plan pmvides retirement benefits up to 65% of a panicipant's highest annual salary during the five years prior to retirement reduced by the participant's Retirement Plan benefit The percentage applied is based on years of credited service. Pan B of the Supplemental Plan provides that an additional 150% of annual
                - salary (the level of life insurance for an active employec) is to be paid out to participants at the rate of 10% per year over 15 years, except in the event of a panicipant's death, in which event the unpaid balance would be paid to the panicipant's beneficiary or estate.
Benefits from the Supplemental Plan will be paid out of general corporate funds. Iowa
                 . Resources maintains life insurance on panicipants in amounts actuarihuy 1.letermined to be sufficient to fund all of the futuir liabilities under the Supplemental Plan. Iowa Resources is both owner and beneficiary of all such life insurance. The Supplemental Plan has been designed-so that if the assumptions made as to mortality experience, policy dividend, tax credits and other factors are realized, Iowa Resources will recover fully its premium and benefit payments over the life of the Supplemental
                  ' Plan. Deferred compensadon is considered pan of the salary covered by the Supplemental Plan.
The table below shows the estimated aggregate annual benefit payable (fo-'M 15 years of retirement) under the Supplemental Plan and the Retirement Plan to persons named in h compensation
                  ~ table. We amounts exclude Social Security and are based on a straight life et et: and retirement at age 65. enounts shown are calculated on the basis of credited service. A 4 the poreans named in the compensa: ion table will have at least 25 years of credited service at we 65.
19-

                                ~
Current compenha covered by the Supplemental Plan (regular salary plus deferred compensation) for individuals named in the compensation table is as follows: hk. Pumey $325,000; Mr. Vorbrich $200,000; Mr. Schlenker $175,000; Mr. Osbome $165,000.
Estimated Annual Benefit
* Highest Annual                  Years of Service Salary in Five Years Prior to                                                 25 or
                      ,,,,831(rement        10            15                 20        Moe
                       $125,000          $ 75,000      $ 81,250       $ 87,500       $ 93.750 150,000            90,000        97,500          105,000      112.500 175,000           105,000       113,750          122,500      131,250 200,000           120,000       130,000          140,000      150,000 225,000           135,000       146,250          157,500      168,750 250,000           150,000       162,500          175,000      187,500                                     i 275,000           165,000       178,750          192,500      206,250 300,000           180,0T        195,000         210,000       225,000 325,000           195,000       211,250         227,500       243,750 350,000           210,000       227,500         245,000       262,500 375,000           225,000       243,750         262,500       281,250
            + Federal law limits the amount of benefits payable to an individual thmugh the Retirement Plan.
Retirement Plan benefits which would exceed the limitation will be payable under the Supplemental Plan.
Compensation of Directors During 1989, each director of Iowa Resources was entitled to an annual fee of $12,000, In addition, each director who was not also an officer of Iowa Resources or one of its subsidiaries was -                i entitled to a meeting fee of $600 for each board and comminee meeting attended. Under a plan                         j' adopted by the Board in 1981, directors have the opportunity to make an election, prior to the commencement of any year, to' defer receipt of all or a portion of their compensation. Deferrals under this plan, the Deferred Compensation Plan ~ for Board of Directors of Iowa Resources' inc. and Subsidiaries, 'are accomplished in the same manner as deferrals under the Executive Deferred Compensadon Plan, as previously described.
            ! .m 12 Security Ownership of Certain Beneficial Owners and Management l-lowa Resources had 21,622,725 shares of common stock outstanding on February 25, 1990.
Ihe following table sets forth information concerr.ing shares of Iowa Resources common stock which                  ,
were owned of record or beneficially held on February 25,1990, by all of Iowa Resources directors and nominees for election as directors, and by all directors and officers as a group.
l 7
20-J m

Amount and Nature Name of Director                     Of Beneficial Or identity of Groun                        Ownershio*
Robert A. Bumett'                              2.220 Gordon P Eaton                                  1,517 Nolden Gentry                                   1,001 Richard C. Hartsuck                            1,215 Gordon C. Hurlbert                             2,000 Gerald M. Kirke -                             15,220 Richard L. Lawson                                786 Susan M. P11111ps                               744 Mark W. Putney                               14,077 Ralph F. Schlenker                           13,734 John R. Taylor                        475,092**
Lynn K. Vorbrich                             2,432 31 directors and officers as a group                    567,581 " *
                    *No officer, director or nominee, other than Mr. Taylor, owns or may be deemed to own beneficially-more than 1% of any class of equity securities of Iowa Resources or any of its subsidiaries. All officers, directors and nominees of Iowa Resources as a group beneficially own 0.437, of the outstanding towa Resources common stock, excluding Mr. Taylor's shares and those of his affiliates, and 2.62% of the outstanding lowa Resources common stock, including Mr. Taylor's shares (0.004%) .
and those of his affiliates (2.19%).
Several directors, nominees and officers beneficially own a portion of their shares of Iowa Resources common stock in joint tenancy with.their respective spouses, with whom they share voting and investment powers for such shares. Messrs. Eaton, Hansuck and Lawson own all of their shares in joint tenancy with their respective spouses. Mr. Putney owns 1,938 shares, Mr. Schlenker owns 2,434 shares, and Mr. Vorbrich owns 947-shares in joint tenancy with their respective spouses.
Some directors and officers beneficially own shares of such stock by vinue of their status as trustee or co-trustee of one or more trusts which own such shares.- Messrs. Gentry (664 shares), Putney.(3,320 shares) and Schlenker (1,132 shares) fall sto this category.
                   . Some directors and officers are uemed to beneficially own a portion of their shares by virtue of their
                    ' relationship to family members who beneficially own stock. This is true of Messrs. Putney-(4,076 shares) and Schlenker (4,000 shares).
                      **Mr. Taylor disclaims beneficial ownerd.:p J 474,300 shares of Iowa Resources common stock which are owned by The Principal Mutual I"r Insurance Company, of which he is a director, and its N               affiliates.
                      ***Does not include 317,808 shares held for lowa Resources Payroll Based Employee Stock Ownership Plan by Ms. Rozema as Tnttc:.
Item 13 - Certain Relatiomhics and Related Transactions None.
                              ----___.-----m._. -   _ _ _ _ _

PART IV hEHL.14.Ethibits. Financial Statement Schedules. and Renons on Form 8-K (a)l Financial Statements (included herein):
Pane No.
Selected Consolidated Financial Data -, . . . . . . . . . . . . . . . . .           31 Consolidated Statement of Income and Retained Earnings -
For the Year Ended December 31,1989,1988 and 1987 . . . . . .                     32 Consolidated Balance Sheet - December 31,1989 and 1988 . . . . .                     33 Consolidated Statement of Long.Tenn Debt Occcmber 31,1989 and 1988 ....................................                                      35 Coruolidated Statement of Cash Flows - For the Year Ended December 31, 1989, 1988 and 1987 . . . . . . . . . . . . . . . . . . .            36 Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . .          -37 Report of Independent Public Accountants            ................                 45 Management's Discussion and Analysis , , . . . . . . . . . . . . . . . .             46 (a)2. Financial Statement Schedules (included herein):
The following schedules, for the years ended December 31,1989,1988 and 1987 should be read in conjunction with the aforementioned financial statements (schedules not included have been omitted because they are not                            -
applicable or the required data is shown in the aforementioned fm' ancial                              -
statements):
EAat.ML Consolidated Propeny, Plant and Equipment (Schedule V)                   ......      50 Consolidated Accumulated Depmeiation and Amonization of Pmperty, Plant and Equipment (Schedule VI) . . . . . . . . . . .               53 Consolidated Guarantees of Securities of Other issuers (Schedule VII) ................................                                   56 Consolidated Valuation and Qualifying Accounts (Schedule VIII) . . , . . . . . . . . . , , . . . . . . . . . . . . . . . . . 59 Consolioated Short-Term Borrowings (Schedule IX)                ..........          62 Consolidated Supplementary income Statement Information (Schedule X) ..................................                                    65
                                                                -22
    /

(a)3. Exhibits Exhibits Filed Herewith (See Exhibits Index on pace 66) 4.29 Instrument relative to the resignation of R. S. Stam as individual trustee and appointment and acceptance of J. Bartolini as individual trustee under the Indenture of Mongage and Deed of Trust between IPR and Harris Trust and Savings Bank, dated as of August 1,1943, as amended and supplemented.
10.20 Agreement and Plan of Merger among C&P Holdings Company, Midwest Energy Company and lowa Resources Inc. dated as of March 15, 1990.
10.21 Stock Option Agreement between Iowa Resources Inc. and Midwest Energy Company dated as of March 15, 1990.
10.22 Stock Option Agreement between Midwest Energy Company and lowa Resources Inc.
dated as of March 15, 1990.
10.23 Employment Agreement between Mark W. Pumey and C&P Holdings Company dated as of March 15, 1990.
10.24 Employment Agreement between R. E. Christiansen and C&P Holdings Company dated as of March 15, 1990.
13        1989 Annual Repon to Shareholders.
22.1      Subsidiaries of IOR.
24        Consent of Independent Public Accountants.
28.1       lowa Resources Inc. Payroll-Based Employee Stock Ownership Plan Annual Report on Form Il K.
28.2       lowa Resources Inc. Employee Stock Purchase Plan Annual Repon on Form Il-K.
Exhibits incorporated by Reference 3.1        Anicles of Incorporation of IOR (Filed as Exhibit 6-1 to IOR's Registration Statement, Registration No. 2-63565.)
3.2        Amendment to Articles of Incorporation of IOR dated as of April 23, 1986. (Filed as Exhibit 3.3 to IOR's Annual Renoct on Form 10-K for the year ended December 31, 1987, Commission File No.1-7830; 3.3        Amendment to Articles of Incorporation of IOR dated as of May 13,1987. (Filed as Exhibit 3.2 to IOR's Annual Repon on Form 10-K for the year ended December 31, 1987, Commission File No.1-7830.)
3.4       Amendment to Articles of Incorporadon of IOR dated as of July 1,1988.
(Filed as Exhibit 3.4 to IOR's Annual Report on Form 10-K for the year ended December 31, 1988, Commission File No.17830).

    ,e 3.10       Amended and Restated Bylaws of Iowa Resources Inc. as of July 29, 1986. (Filed i                             as Exhibit 3.3 to IOR's Annual Repon on Form 10-K for the year ended December 31, 1986, Commission File No.17830).                                                                 I 3.11       Amended and Restated Bylaws of Iowa Resources Inc. as of January 29, (Filed as Exhibit 3.2 to IOR's Armual Repon on Form 10-K for the year ended December 31, 1986, Commission File No.17830).
3.12      ' Amended and Restated Bylaws of Iowa Resources Inc. as of July 27, 1987. (Filed                   l as Exhibit 3.6 to IOR's Annual Report on Form 10 K for the year ended December 31, 1987, Commission .''.e No.17830.)
1 4.1         Indenture of Mongage dated as of August 1,1943, between IPR and Harris Tint and Savings Bank and Harold Eckhart. Trustees. (Filed as Exhibit 8(a) (1) to I?R's                 i Registration Statement, Registration No. 2 5138).
4.2         Instrument relative to appointment of W. H. Milsted as Individual Trustee under Indenture of Mortgage. (Filed as Exhibit 4 B 5 to IPR *; Registration Statement, Registration No. 2 9619.)'
4.4        Eighth Supplemental Indenture dated as of January 1,1961, between IPR and Harris Tmst and Savings Bank and W. H. Milsted, Trustees. (Filed as Exhibit 2 B 10 to IPR's Registration Statement, Registration No. 2 17274.)
4.5         Indenture dated as of April 1,1964, between IPR and Continental Illinois National Bank and Trust Company of Chicago, Trustee, under which IPR's 4 5.8% Sinking Fund Debentures duc 1989 are issued. (Filed as Exhibit 2 B-11 to IPR's Registration Statement, Registration No. 2 22099.)
4.6        Ninth Supplemental Indenture dated as of January 1,1968, between IPR and Harris Trust and Savings Bank and R. H. Long Trustee. (Filed as Exhibit 2 B-12 to IPR's Registration Statement, Registration No. 2 27681.)
4.7        Tenth Supplemental Indenture dated as of January 1,1970, between IPR and Harris                ,'
Trust and Savings Bank and R. H. Long, Trustees. (Filed as Exhibit 2 B 13 to IPR's Registration Statement, Registration No. 2 35624.)
4.8        Eleventh Supplemental Indenture dated as of December 1,1971, between IPR and Harris Trust and Savings Bank and R. H. Long, Trustees. (Filed as Exhibit 2-B-14 to IPR's Registration Statement, Registration No. 2-42191.)
                    - 4.9        Thirteenth Supplemental Indenture dated as of March 1,1976, between IPR and Harris Trtist and Savings Bank and R. H. Long,' Tmstees. (Filed as Exhibit 2-B-15 to IPR's
                                ' Registration Statement, Registration No. 2-55163.)
4.10        Fourteenth Supplemental Indenture dated as of March 1,1977, between IPR retd Harris Trust and Savings Bank and R. H. Long, Tmstees. (Filed as Exhibit 2-B 16 to IPR's Registration Statement, Registration No. 2-59339.)
e 4.12       Losn Agreement No. 2 between the City of Council Bluffs, Iowa, and IPR providing for the borrowing by IPR of the proceeds of Pollution Control Revenue Bonds issued by the City and the issuance by IPR of its Note due 2007. (Filed as Exhibit 2-B-18 to IPR's Registration Str/cment, Registration No. 24339.)
31
       < ? 1.                                                                                                                  g

f-        _4?
t 4
4.13-        Instrument' telative to the registration of R. H. Long as individual trustee and appointment and acceptance of R. S. Stam as individual trustec 'mder the Indenture of Mortgage and Deed of Trust beiween IPR and Hanis Trust and Savings Bank, dated as of August 1,1943, as amended and supplemented. (Filed as Exhibit 2 B-19 to IPR's Registration Statement, Registmtion No. 2 59339.)
y                       ~ 4.14        Fifteenth Supplemental Indenture dated as of September 15, 1977, between IPR and Harris Tmst and Savings Bank and R. S. Stam, Trustees. (Filed as Exhibit 2 B 20 to IPR's Registration Statement, Registration No. 2-59752.)
4.15          Sixteenth Supplemental Indenture dated as of December 1,1978, between IPR and Harris Trust and Savings Bank and R. S. Stam, Trustees. (Filed as FAtibit 2 B-21 to IPR's Registration Statement, Registration No. 2 63259.)
4.16         Loan Agreement dated as of December 1,1978, between the City of Chillicothe, Iowa, and IPR providing for the borrowing by IPR of the proceeds of Pollution Control' Revenue Bonds issued by the City. (Filed as Exhibit 2-B 22 to IPR's Registration Statement, Registration No. 2 63259.)
4.17         Loan Agreement dated as d December 1,1978, between the City of Council Bluffs.
Iowa, and IPR providing for the borrowing by IPR of the proceeds of Pollution Control Revenue Bonds issued by the City. (Filed as Exhibit 2 B 23 to IPR's Registration
   -                                                 Statement, Registration No. 2-63259.)
4.18         Loan Agreement No. I dated as of December 1,1978, between the City of Pleasant -
Hill. Iowa, and IPR providing for the bonowing by IPR of the proceeds of Pollution-Control Revenue Bonds issued by the City. (Filed as Exhibit 2 B 24 to IPR's Registration Statement, Registration No. 2 63259.)
4.19 = Loan Agreement No. 2 dated as of December 1,1978, between the City of Pleasant Hill, Iowa, and IPR providing for the borrowing by IPR of the proceeds of Polludon Control Revenue Bonds issued by the City and the issuance by IPR of its Note due 2003. (Filed as Exhibit 2 B 25 to IPR's Registration Statement, Registration No.2 63259.)
4.20         Guaranty Agreement dated December 1,1972, between IPR and Commerce Union Bank, as Trustee for. Pollution Control Bonds issued by the Town of Pleasant Hill, Iowa.
(Filed as Exhibit 5 F to IPR's Registration Statement, Registration No. 2-63259.)
4.11         Guaranty Agreement dated December 1,1972, between IPR and Commerce Union Bank, as Trustee for Pollution Control Bonds issued by the City of Council Bluffs, Iowa.
(Filed as Exhibit 5 G to IPR's Registration Statement, Registration No. 2-63259.)
4.22         Guaranty Agreement dated June 1,1973, between IPR, Iowa Illinois Gas and Electric Company,-lowa Southern Utilities Company and Iowa Public Service Company and Commerce Union Bank, as Trustee for Pollution Control Bonds issued by the Town of Salix, Iowa. (Filed as Exhibit 5 H to IPR's Registration Staterr.ent,- Registration No.
2 63259.)
4.23         Loan Agreement dated as of September 15, 1981, between Louisa County, Iowa and IPR providing for the borrowing by IPR of the proceeds of pol'ation control revenue bonds issued by the County. (Filed as Exhibit 4.30 to IPR's Annual Repart on Form IG K for the year ended December 31,1981, Commission File No. 3567.)
iiii        i,.. .    ...       _ _

4.24    Twentieth Supplemental Indenture dated as of May 1,1982, between IPR and Harris Trust and Savings Bank and R. S. Stam Trustees. (Filed as Exhibit 4 B 20 to IPR's RegistnSon Statement, Regulation No. 2 75121.)
4.25    Loan Agreement dated as of December 1,1985, between Louisa County, Iowa and IPR providing for the borrowing by IPR of the proceeds of pollution control revenue bonds issued by the County. (Filed as Exhibit 4.31 to IPR's Annual Repon on Form 10 K for the year ended December 31,1985, Commission File No.13567.)
4.26   Twenty First Supplemental Indenture dated as of July 1,1986, between IPR and Harris Trust and Savings Bank and R. S. Stam Trustees. (Filed as Exhibit 4.26 to IOR's Annual Repon on Fonn 10-K for the year ended December 31,1987, Commission File No.17830.)
4.27- Twenty Second Supplemental Indenture dated as of December 1,1986, between IPR and Harris Trust and Savings Bank and R. S. Stam, Trustees. (Filed as Exhibit 4.27 to IOR's. Annual Report on Form 10-K for the year ended December 31, 1987, Commission File No.17830.)
              '4.28   Twenty Third Supplemental Indenture dated as of July 15, 1988, between IPR and Harris Trust and Savings Bank and R. S. Stam, Trustees. (Filed as Exhibit 4.28 to IOR's Annual Repon on Form 10-K for the year ended December 31,'1988.
Commir*n File No. '-7830).
10.1   Power Sales Contract between IPR and Nebraska Public Power District.. dated September 22,1967. (Filed as Exhibit 4 C 2 to IPR's Registration Statement, Registration No. 2 27681.)
10.2   Amendments Nos. I and 2 to Power Sales Contract between IPR and Nebraska Public Power District. (Filed as Exhibit 4 C-2 a to IPR's Registration Statement Registradon No. 2-35624.)
10.3   Amendment No. 3 dated August 31,1970, to the Power Sales Contract between IPR and Nebraska Public Power District, dated September 22,1%7. (Filed as Exhibit 5-C 2 b to IPR's Registration Statement, Registration No. 2 42191.)
10.4    Amendment No. 4 dated March 28,1974, to the Power Sales Contract bc"veen IPR and -
Nebraska Public Power District, dated September 22,1967. (Filed as Exhibit 5 C-2c to IPR's Registration Statement, Registration No. 2 51540.)
10.5   Coal Supply Agreement between the Amax Coal Company Division of American Metal Climax, Inc., and IPR dated August 31,1973, and Amendment to Agreement between the same panies dated December 19, 1973.                 (Filed as - Exhibit 5 J 2- to IPR's'
                      ' Registration Statement, Registration No. 2-51540.
10.6   Letter Agreement dated July 30,1974, between Amax Coal Company and IPR amending Coal Supply Agreement. (Filed as Exhibit 5 J 2-a to IPR's Registration Statement, Registration No. 2 52835.)
10.7    Amendment No. 3 dated January 1,1979, to the Coal Supply Agreement between Amax Coal Company and IPR, dated August 31, 1973. (Filed as Exhibit 10.7 to IOR's Annual Repon on Form 10-K for the year ended December 31,1987, Commission File No.1-7830.)
26-

t
                 ~ 10.8'   Amendment No.' 4' and supplemental {{letter dated|date=July 1, 1982|text=letter dated July 1,1982}}, to the Coal Supply Agreement between Amax Coal Company and IPR, dated August 31,1973. (Filed as
                          - Exhibit 10.8 to IOR's Annual Repon on Form 10-K for the year ended December 31, 1987. Commission File No.1-7830.)
10.9      Agreement for Supplemental Employee Benefits, dated April 10, 1969, as amended June 27,1979 between IPR and D. H. Swanson. (Filed as Exhibit 10.19 to IPR's Annual Repon on Form 10-K for the year ended Deccmber 31,1980. Commission File No.1 3567.) -
10.10. Revised and amended Supplemental Retirement income Plan for IOR r.d Subsidiaries dated October 24, 1984. (Filed as Exhibit 10.24 to IOR's Annual Repon on Form 10-K for the year ended December 31,1984; Commission File No.17830.)
10.11 Revised and amended Executive Compensation Plan for IOR and Subsidiaries, dated July 24,1985. (Filed as Exhibit 10.21 to IOR's Annual Repon on Form 10-K for the year ended December 31,1985, Commission File No.17830.)
10.12 Revised and amended Executive Deferred Compensation Plan for IOR and Subsidiaries, dated July 24,1985. (Filed as Exhibit 10.22 to IOR's Annual Report on Form 10-K for the year ended December 31, 1985, Commission File No.17830.).
10.13 Revised and amended Deferred Compensation Plan for Board of Directors of IOR and Subsidiaries, dated July 24,1985. (Filed as Exhibit 10.23 to IOR's Annual Report on Form 10 K for the year ended December 31,1985, Commission File No.17830.)
10.14 Revised and amended Executive Compensation Plan for IOR and Subsidiaries, dated December 18,1987. (Filed as Exhibit 10.14 to IOR's Annual Report on Form 10-K for the year ended December 31,1987. Commission File No.17830.) ;
10.15 Revised and amended Executive Deferred Compensation Plan for IOR and Subsidiaries, dated December 18.- 1987. (Filed as Exhibit 10.15 to IOR's Annual Report on Form K for tne year ended December 31,1987 Commission File No.17830.)
10.16 Revised and amended Defened Compensation Plan for Board of Directors of IOR and -
Subsidiaries, dated December 18,1987. (Filed as Exhibit 10.16 to IOR's Annual Repon on Form 10 K for the year ended December 31.1937, Commission File No.1-7830.)
10.17 Amendment No. 5 (letter agreement) dated July 23, 1987, to the Coal Supply Agreement between Amax Coal Company and IPR, dated August 31,1973. (Filed as Exhibit 10.17 to IOR's Annual Report on Form 10-K for the year ended December 31, 1988, Commission File No.1-7830).
10.18 Amendment No. 6 dated December 14, 1988, to the Coal Supply Agreement between Amax Coal Company and IPR, dated August 31,1973 (edited to exclude confidential
                               'information). An unedited version of this document has been filed with the SEC under separate cover, pursuant to an OBJECTION TO DISCLOSURE OF INFORMATION AND APPLICATION FOR CONFIDENTIAL T REATMENT. (Filed as Exhibit 10.18 to IOR's . Annual Repon on Form 10 K for he year ended December 31, 1988, y                          Commission File No.1-7830).
27-

                                                                                                                                '.         l i
10.19 Form of Indemnity Agreement between IOR and its directors and officers, which became effective on July 1,1987, and which were ratified by _IOR shareholders on April 27,1988. (Filed as Exhibit 10.19 to IOR's Annual Repon on Form 10 K for the year ended December 31.1988, Commission File No.17830).
(b)       Recons on Form 8 K No reports on Form 8 K were filed by the Company during the last quaner of 1989.
(
           .i >
              ;g N- -
s
                    >n        }
                                                          ,.y

  =,       .
SiONATURES Pursuant to the requirements of Section 13 or 15(d) of tne Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by tt. undersigned, thereunto duly authorized.
IOWA RESOURGS INC Date: March 28,1990                                                         B y,,,     M. W. Putney (M. W. Putney)
Chairman, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:
Signaturt                                Igh,                                D.M.9.
Chairman, President,-              March 28,1990 and Chief Executive M. W. Putnev                                      Officer (Principal (M. W. Pumey)                                Executive Otficer)
Vice President (Principal          March 28,1990 P. G. Lindner                                      Financial Officer)
(P. G. Lindner)
Principal Accounting                March 28,1990
                         'J. W. Hamilton                                    Officer (J. W. Hamilton)
Director                          - March 28,1990 (R. A. Bumett)
Gottion P. Eaton                      Director                            March 28,1990 (G. P. Eaton)
Nolden Gentrv                         Director                            March 28,1990 (N. Gentry).
29-
        '3 1 f,,
:/                                                                                             i Director March 28,1990                       '
Richard C. Hartsuck (R. C. Hansuck)
Director Matrh 28,1990                        I l
(G, C. Hurlbert)                                                            '
l l
Director March 28,1990 Gerald M. Kirke (O. M. Kirke)
Director March 28,1990 (R. L. Lawson)
Director March 28,1990 (S. M. Phillips)
Director March 28,1990 R. F. Schlenker (R. F. Schlerier) .
Director March 28,1990 (J. R. Taylor)
Director March 28,1990 L. K Vorbrich                                                            i (L. K. Vorbrich)
E c
30-T           .-
         /; 4    p lj' ? ,                         ,
4 s        -        r                                        ,

IOWA RESOURCES INC.
SELECTED CONSOLIDATED FINANCIAL DATA                                                      I l
l

==SUMMARY==
OF OPERATIONS (000)                                       1989      __1988       1987       _ 1986        1985
                 - Revenues . . . . . . . . . . . . . . . . . . . . .            $ 360,570 $ 348,469 $ 341,519 $ 335,470 $ 341,305 Operating expenses . . . . . . . . . . . . . . .                  264.666     269.599    248.151,      221.957    233.561 Operating income . . . . . . . . . . . . . . . .                   95,9(M      78,870     93,368       113,513    107,744     !
Other income, net . . . . . . . . . . . . . . . .                   7,602       7,585      4,195          5,568     4,125     I Fixed charges-interest expense . . . . . . . .                     33,890      29,185     29,093        32,547     35,427 Fixed charges-other , . . . . . . . . . . . . . .                  (1.066)       (705)        (551)         884        782 Income from continuing operations before ir.come taxes . . . . . . . . . . . . .                   70,682      57,975     69,021        85,650     75,750 it                income taxes . . . . . . . . . . . . . . . . . . .                 28.979      25.(Qf     28.080        41.869     37.173 Income from continuing operations . . . . .                        41,703      32,939     40,941        43,781     38,577
  ~[              Income from discontinued operations . . . .                               .          .            -            -       723    )
Gain on sale of discontinued                                                                                                  )
operations    ...................                                       -          -            -            -     5.898    l Net income . , . . . . . . . . . . . . . . . . .               $ 41.703 $      32.939 $   40.941 $ 43.781 $        45.198 COMMON STOCK DATA                                                                                                             i Average number of common shares l
outstanding (000) (1) ............                               21,902      22,078     22.236        22,256     21,996 Eamings per average share of common stock (1)                                                                                                         :
,'                  From continuing operations .. ,....                          $      1.90 $      1.49 $      1.84 $       1.97 $     1.75    (
From discontinued operations . . . . . . .                              -          -            -            .        .03   l Gain on sale of discontinued                                                                                                !
                                                                                                                                          .27   I operations     . . . . . . . . . . . , , . . . .                      -          -            -            -
Total .-.....................                                $      1.90 $      1.49 $       1.84 $      1.97 $     2.05 l~                Dividends declared per share l                   of common stock (1)                ...........               $      1.68 $      1.66 $    1.645 $       1.605 $     1.55 L
BALANCE SHEET ITEMS                                                                                                         .
l Total assets (000) . . . . . . . . . . . . . . . .             $1.2tM,169 $1,167,942 $1,152.865 $1,148,846 $1,224,449 l-                Capitalization ($ Millions %)
l                   Long-term debt ................                              $ 384-51% $ 356-49% $ 30145% $ 329 47% $ 329-46%
Preferred stock equity . . . . . . . . . . . .               $ 20 3% $ 20-3% -3         20-3 % $ 20-3 % $ 47 6 %
Common stock equity . . . . . . . . . . . .                  $ 348 46% $ 350-48% $ 353-52% $ 352 50% $ 345-48%              ,
I L                 Liability under power purchase l-                  contract (000) . . . . . . . . . . , . . . . . .             $ 159.292 $ 167,282 $ 174,832 $ 181,978 $ 188,748 OTHER FINANCIAL INFORMATION L                 Average book value per share (l)                    ......     $     16.02 $     16.07 $    15.95 $       15,68 $    15.18 Retum on avenge common equity . . . . .                             11.9 %       9.3%      11.5 %        12.5 %     13.5 %    l Capital expenditures (000)              ..........             $ 90,069 $      64,611 $ 52,217 $        71,315 $ 72,925       '
l'                (1) Restated to reflect the two for one stock split in 1986.
l 1
l l
l r

CONS 0llDAll0 SlAllMt N10F INCOME AND HilAINED E AHNINGS                                                                                                                                                                                        ,
IOWA RESOURCES INCo i
                                                                                                                                                                                                                                                                                          .        4 Year Ended December 81
                  ,                                                                                                                                                                      1989                                                                   1988          _
1987 (In Thousands)
REVEllUES(lletes1 sad 2)
Elect ric . . . . . . . . . . . . . . . . . . . . . . ..... .. ... .... . . . . . .                         . . . . . . . .                                    $349,815                                                                   $343,914       $337,898             -
s; Other (Note 13) . . . . . . . ...,........ ...... . .......... .                                                           . . . . .                                        10.755                                                            4.555           3.621 lbtal..............................................                                                                        . .                                   360.570                                                                348.469         341.519            i EXPEll8ES Operations:
Purchased power nuclear (Note 3) . . . . . . . . . . . . . . . . . . . . . . .                                          . . . . .                                      72.990                                                            72.299          69,839 Interchange power. net . . . . . . . .             .. .... .. ........                                                                                                                                                                      ',433
                                                                                                                                            . . . . . .                                    (12.834)                                                                                    48 Fuelfor electric                                            .........                                                                                                   53,470                                                           43,157          40,647 Other . . . . . . . generation . . . . . . .                                       . . . . .               . . .           . . . .
                                                                                                                      . . . . . .                        .                                     64.842                                                            64,927          57,765 Maintenance . . . . . . .            . .. . ,..... .. .. . .. ...... .. . . . . .                                                                                          19,890                                                                            18,507 20.690                            ;
Depreciation (Note '1) ..                   ..... ....           ... .. ......... .
                                                                                                                                                . . . .                                        38.903                                                            36.319          35.414 Property and other taxes .                ........ . . ..... . .. .., . .. .                                                           .                                  27.405                                                            26.774          25.931            !
                       - Total ............ .. .....................
                                                    ~
                                                                                                     ... .... . . . .                              . . . .                              264.666                                                                 269.599         248,151 OPERATING lilC0hlE . . . . . . . . . . . .            .. .
95.904                                                             78.870 93368
: OTIIERINCOIAE
                    /J1owance for equity funds used during construction (Note 1) . . . . . . . . .                                                                                                            921                                                     115-           157
: Allowance for equity funds accrued on advances (Notes 1 and 3) . . . . . . . . . .                                                                                                           836                                                     570            934.       4 Interest and dMdend income . . . . . . . . . . . . . . . . . . . . . . .                                          . . . . .                                                     5,071                                                         7,737           6,921 Other. net . . . . . . . . . . .    .. ....... ,                .. . . ... . . . . . . . . , . . . . . . . .                                                                              774                                                   (837)         (3.817)
Total ..,............. ............                       ..... .... . .. ... ..........                                                                                     7.602                                                         7.585
                .                                                                                                                                                                                                                                                                  4.195 i
h              ; FIXE 0 CHARGES
               - interest expense . . . . . . . . . . . . .. ........ ..... . . . . . . . . . . . .                                                     . .                                  33.890                                                              29,185          29.093
          '         Allowance for borrowd funds used during construction (Note 1) . . . . . . . .                                                                                               (1,100)                                                             (243) l3                                                                                                                                                                                                                                                                                  (221)         q
               . Allowance for borrowed funds accrued on adutaces (Notes 1 and 3) . . . . .                                                                                                              (807)                                                    (1303)          (1,173)          !
Preferred dMdends of subs! diary                    ... ... . ...                . ..... .. ... .                                                                                         841                                                     841 843           1
                      > Total...............                 ........... .... .. . .............. .....                                                                                      32,824                                                              28.480          28.542 b4                  IllCORIE BEFOREliiColri1 AXE 8                  ....... . .... ... ..                               . .         . . . . . . .                                           70.682                                                               57.975          69.021 lilCORIE TAXE8 (llete 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.979                                                                                                                              25.036          28.000 -
uET urAAAE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      . . . . . . . . . . . .                             $ 41,703                                                                -5 32.939            8 40.941 IIETAlllED EAlullNOS
               . Beginrdv of yrar . . . . . . . . . . . . . . . .             . .. . .              ........ .. . .. ...                                                               126,977 1.ess:
130356          124.284 Premitim on reacquired preferred stock . . . . . . . . . . . . . . . .                                                . . .                                                            -                                                 -
(1,306)
Common stock dMdends declared of $1.680, $1.660 and $1.645 per share (Net of tax benefit of PAYSOP dMdends), respectively . . . .                                                                                         36349                                                                36318           36.175 r
    .j I            End of year . . . . . . . . . . . . . . . . . . . . . . . . . .       ........ . . . . . . .                                     . .                        $132331                                                                       $126.977       $130356
. o AVERAdE SHARES OF C00010011 STOCK OUTSTA110ll1021,902 t
L 22.078          22.236 i
EAllllll198 PER AVERAGE SHARE OF C004tI0ll STOCK                              .. ...                                                                        $                          1.90                                               $      1.49    $
1.84 The accompanying notes are an integrst part of this statement.
sia t-LG EA M E.
n            -                        - .        .--.____m________.._.z_                              _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . _ _ . _ _ _ _ . _ _ _ _ _ _ _ _ _ _ . _ . _ _ _ . _ _ _ _

CONSDL,lDA1FD BALANCE SHi[I                                                                                        l; IOWA ItE80URCES INC.                                                                 Page 1 of 2 December 31 ASSET 8                                                                                                                                      1sse           1ssa -          1 (in Thousands)
PROPERTY, PLANT AND E00MI5.NT AT COST (Notes 1 end 6)
Electric.....................................................................
                                                                                                                                                              $1,053.932   $1.035,352 Construction work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             58,074            25,097 other . . . . . . . . . . . . . . . . . . . . .    .................................................                                          67, 3             35.273 .
1,179,540     1,095.722            i less accumulat-d provisions for depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       394,301        383.200 Property, plant and equipment. net . . . . . . . . . . . . . . ... .. .......... .. .......                                              785.239        712,522-POWER PURCHASE CONTRACT (Note 3)                                                                                                                                             ;
            ,.      Productive capacity . . . . . . . .. ....... ....... .... ...... ... .. ... .......                                                          167,282-     .174,832           1 Admces for capital improvements and nuclear fuel . . . . . . . . . . . . . o. . . . , . . . . . . . . .
                                                                                                                                                                                 ~
                                                                                                                                                .,,               87.511        - 88.473 Total.........................,.........,,.............................                                                                  254.793 >      263.305      L l
1 OTHER INVESTMENTS (Notes 10,11,12 and 13) . . ,                            .,..... ............. .. .. ,..                                    43.720           49.550    l lli l
CURRENT ASSETS
  ,                 cash and short. term investments . , ............ ....,                .... ............, ... ...                                             11.214            52.157 Marketable securttles, at lower of cost or market .                    ........ ........ .......... ....                                         390             1,870
                - Accounts recchable. less reserves of $296 and $309 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                  51.030        - 32,416 Materials and supplies, at average cost . . ......... ...... . ............ .. .. ....                                                        11.820             8.219 3'
                 ' Electrie production fuel, at average cost . .......... ,... . ..                                   ..... ... ...... .                           7.545           '17,444 Direct financing leases rental recehable (Note 11) . ,..... . . . .. . ...........                                                             5.299             4.895 Other . . . . . . . . . . . .          . .. ....... . ... . ...... ... .... ... .. .. .......                                                  4.459             3.207 Jtotal ...... ......... ...                       ........ ..... ...... .... .... ... .. .......                                           91.757        120.208 DEFERRD CHARGE 8 AND OTHER A38ETS . . . . . . .                              .. ... .. ..            ..... . .. .....                         28.660         -22.357 a
TOTAL . . . . . . .              . ......, . . . . . . < . ..                    .. ......... .                 .......               $1.204.169   $1.167,942 4
1 l
l l
I
    ,at-The accompanying notes are an integral part of this statement.                                                               1 1
1
                    '                                                                                                                                                                             1 l

i
;.                                                                CONSTLIDATED BALANCE SHEET IOWA RESOURCES INC.                                                                                                           Page 2 of 2        '
l December 81 L
CAMTAUZAT1011 Allo L!ABluTIES                                                                                                                                                          1989          1988 L
1 (in Thousands)
COMMON STOCK EQUITY Common stock, no par; authorized 60,000,000 shares; outstanding 21,712,725 and 22.064,682 shares, respectively (Note 4 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , , . . . . . .                                                         $ 215,783            $ 222,562 Retained earnings . . . . . . . . . . . . . . .                 .. , . ...                           .... ... . .. ........ . . .                                            ,,
132,331       126,977 Tatal . . . . . . . . . . . . . . . .           . . ..              .. ...                      ..... ..... . . .                                              ..                  348,114       349,539 L         PREFERREO STOCK EQUITY (Note 5) lowa Ibwer Inc., cumulative, par value $100, authorized 800,000 shares, without sinking fund:
            - 49.850 shares,3,30% . . . . . ..                    ......... .                                    .. .                         .       . ..., .. . .                                  4,985         4,985 50,000 shares,4.40% . . , . . .                        ..... .. .                                    ...      .. .. ...... . . ...                                                     5,000         5,000 49,950 shares,4.35% .               .........                         ...           ..        . ..            .. . .                          ..... . ...                              4,995         4.995 49.908 shares,4.80% . . . . . . . . ..                      .. .. ..                             .. .. .                                  .               ,       ..                   4,991         4.991-L
,L             Total . . . .        .. ........                . ..         .. ..                           .          .                         . ..         .      .                             19,971        '19,971 1
l:        LONG TERM DEST (See accompanying ststement) (Note 8) , , , . . .                                                              . ..., ,. .                                  .            383.894 '     356.617 TOTAL CAPITALIZATION , . . . . . . .                      ... . . . .                       . .                 .... . .... ...                                 . . ..       ,, 751.979               726.127
     'r.
POWER PURCHASE CONTRACT (Note 3) . .                                   ..                       ....... .... .                                             . ,....                      159.292       167.282 l         CtmRElli LIABILITIES                                                                                                                                                                                                  1 -
Commercial paper outstandir.g (Note 7) ,                             ,              .           . ... .                       .,,. .............                                         11,400             -
Current portion of long term deat (Note 6) . . ,...                                                  ..... . .... .....                    .......                                         4,748        11,142 Current portion of power purchase contract (Note 3) , . . . . . ......                                                                              .      .      .. ..                    7,990         7,550         ,
        . Accc,unn payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                   .. ......... .... ..                                              25,112         24,757 l:         Dividends declared . . . . . , . . . . . . . . . .                          ...,, ... ....                                   ........ . .. ... .                                          9,438         9,367 Taxes accrued . . . . . . . . . , . .      ........ ,..... . ..... .                                            ....                     ,. .. .              .......                    31,986         30,481 Interest accrued . . . . . . . . . . . , , , , . . . . . . . . . . . .
                                .                                                                           ..                          .... .. ..                        .. ..,                   11.046         10,287 Other . . . . . . . . . . . . . . . . , .... .                            ..            .. .. . ., ..                                    .               .. ,            ..                8.477 -       8.888 Total . . . . . . . . . . . . , .                ..... . .                .        . . .... ..                                      .......... . ,                                -110.257       102.472 li                                   .                                                                                                                                                              .
RE8ERVE8 Als DEFERRED CREDITS l         Accumulated deferred income taxes (Notes 1 and 10)                                              .        .      .             ,,.. .. ..                        ...                     126.575       118,810 Unamorced investme.:t tax credit (Note 1) . . . . .......... . .......                                              .... . .....                                                        38,411         40,059 Other..............,..........................,                                                                              ....:.. .                       .......                    17,655         13.192 Total . . . . . . . . . .   . . . .. . ..........                                          ...... . .. ... . . .                                           . ..                    182.641       172.061 L
?'                                                                                                                                                                                                                                 t i.
I D              TOTAL. .        . ...........                           ,,        .. .             .         ......            . .. . .                             ,      .          .   $1.204.169          $1.167.942 1,
t' l'
l-1, l'
l I
         ;                                      The accompanying notes are an integral part of this statement.
ElFA NE50tflCESHC.

w                                                                                                        ___
  ,   .                   ,'..       MONSl                              EGFtDNG-TERR: TEST.lL'ic.
IOWA RESOURCES INC.
Long term debt. exclusive of (a) current sinking fund requirements of $1.694.000 at December 31,1989 and                                        jg 1988, met substantially by reacquired long t.erm debt,(b) reacquired long-term cebt in excess of these smking                                         1 fund requirements and (c)imues duc wnhn one year, is as follows-                                                                                a December 31
                                                                                                            , _j 989            1988                     =
tin Thousando                         W 30WA POWER 1980. (llote 8) hrst Mortgage bonds.
4%% Senes due 1991                                                                                1 8.550         $ 8,600 8%% Senes due 1996                                                                                   90.000           50.000 50.000           50,000               1 8%% Senes due 199" 6%% Series due 1998                                                                                   13.324          13.925                   .
13.125          13,200 9% Senes due 2000
             '%% S: ries due 2002                                                                                  13,5'5          13,650               e 6%% 5enes due 2005 'Chillicothe. Council Bluffs and Pleasant Hill. Lo'                                  9 900           9.900               J 8%% ik nes due 2000                                                                                   29.203          29.203                ]
18.000          18.000 5%% Series due 2007 (Council Bluffs. lA)*
8%% Senes due 2007                                                                                   29.400          29,400 ,              Q 10%% Senes due 2018                                                                                 '0.ol 0         t'O.000 2.000           2,000                     y Notes, matunng 2003 and 2007, average rate 6W%
Pollution control revenue bonds, guaranteed. due senally to 2003 average rate 5%%                          9.492          10,0 %               L Pollution control revenue bonds. Louisa Count ', LA -                                                                                    j      .
23.900          23,900 Floaur.g 30-day Municipal Bond Rate due 2015 .
3 ;84 2,%2 Obligate undempital leases                                                                                                               ,
Notes, due serially to 2009. at 9%%                                                                         1 011           1.030 News, due serially to 1996 a: rates arving from ~% to 's% .                                                   '2i                388 Unamortized debt discounupremium. net                                                                        (316)              (349) 10R CAPITAL.,1990.
Notes, due serially to 1992 at a rate based on 12BOR (9%% weighted average at 12 31 89).                    4100            9.800                 d MitMI A' WOOD,191C.
Indusmal development resenue bonds, due senalb to 1995, at 9h%                                                182                213 Commercial development revenue bonds, due 1993 at 9%%                                                       1,000            '.000         -g a
MIDDLEWOOO MALL,1910. (llotes 8 ml13)
Guaranteed notes, due senally to 1996, at 8%%                                                             2~.610 5,994 f '
Non recourse notes, due serially to 2017. at 3%                                                                                                   #
5'1                  -       i Notes, due senally to 2002, at 6% --                    -
                                                                             --                                                                               5 IOWA RESOURCES 1910.
                                                                                                                                                              -l Notes, due serially to 1990, at 12%                                                                          _-                   3'              }
                                                                                                                  $383.894         $356.61'                     1 TOTAL.                                                                                                                                          _-
1 1
              'Tl ese bonds are Iowa Fbwer lx. obliganons for pol'unon control revenue boais issued bv the named governmental uruts.
The accompanving notes are an integml part of this statement.                                                          ]
,                                                                     - M .-                                                                                      ,
U                                               . , -          -
m          r,                                .              ,w                 ,

                                            ~
                                          .:     ; GYhCbh                                                                             $ li ? .l , l 7                                 :
                                                                                                                                                                                            ~'
IOWA RESOliRCES INC.
3 uk g                                                                                                                            1989 Yeer Endell Decemlier 31 1988                1987 h.
CASH ROWS 9 NOM OPERATIM ACTIVlilES (ln Thous;mds)
Net incen"                                                                                            5 41,'03                    5 32,939            5 -i0.941 Adiusurt           .a rer. ,ncile net income to net can Ikprecianor and amortiration                                                                          40.114                   38,515               36,159
                          .Nnortizauon i a.!vances 'or nuclear fuel and capital improvements                                      12 '99                  14.098               10,''11 Deferred income t:aes, net                                                                               ',100                   8.9o3              11,423 A,*nottizauon on anvestrnent tax ;reda                                                                   ( 1,64 )                ( l .9'"1            (2,032)
Allowance for eqany tunds -- tre lit                                                                    (1,'5~1                     (685)            (1,091)
Oil in cestment u nie-down i Note 12)                                                                           _
                                                                                                                                                            -i,391                          -
Total                                                                                              98,31 ~                  %.194                96,116 Cash floirs impacted bv charps in E
Recen ables                                                                                       (18.614                     3,869                  2,0+4 Mater :th, si.pphes and fuel inventoried                                                               6,298                 ( a,592 i             ( 2,5 5'')
Reserve for rate retunds ( Note 2 )                                                                                                                (1,990)
                                                                                                                                        .%1              < i. 4,111 )
Accouns pay.tble                                                                                            5-6                      15            (2,681)
Taws and interest accrued                                                                               2,264                10,363                ( l .1 "2 )
1.nergy cost accruals                                                                                      160i                    Wi                5 459 Other operaung x.ttvite                                                                                i1,2 " )                  2.26'                       $71 Net cash prowled bv operating activities                                                            8",3J                   99,589                95,'90 CASH FLOWS FHOW INMTING ACTM11.'IS Utihty capnal addnions                                                                                    ( *3,287 )               t 46.928 )           (24 5'2)
Nonuutty capitu ;sidittors (2.929)                (4A80)             ( l 5.339 >
       &              Cooper Nucler Station adnances                                                                            I l0,19 4 )              ( 'i0,963i           (10,021) d            Allows.r:ce for funce                                                                                                                (2,231)
(3 b64 )                                      (2.485)
  ~ '
Total capital addnians                                                                              (90,069)                 t 64,61 t )          ( 52.21')
i    Albunce for equity funds -- credit                                                                              1,'5'                       685               1.091
        .              Remrn at investment m finanemg ienes .                                                                         5.408
* 267
                                                                                                                                                                ,                   S,83' Iteturn at mvestment in stock fun,ds                                                                           2.656                l'',95+                  6.W8 Other invesury activitie,                                                                                          261                  1,30[                     (204)
Net cash used in investing acavines                                                          _ _ 80,98')
(                        (39.402)             (40.495)
CASN R0WS FROM FSAEING hCTI'ifflES Proceeds from k'og 'erm dtbt .                                                                                         -            "O,000                   6,750
\.~                    % cqcured long e.rm debt                                                                                  (14.0 4s                 ( 18,1"6 )           ( 28,''*2)
Reacquisition of common stock .                                                                               (6,670)                    (278)              (3,463)
N.          Net acuvirpf short-term borrow'ngs                                                                            11 400               (29,900)                 16.105
           %.          Common stock d vidends paid                                                                               (36.520)                 (36 5%'              (36,450)
Other thune.tng activates                                                                                     (1,935)                (1,512)                       324 Net cash used tri fmancmg activities                                                                  (r.299)                 t .'< 6a 52 )        (415,506 >
NET LEREASE (SECRE A$E)IN CASH A 2 $@i'_YERM INVESTIAENTS
( 40,%3'                  38,'35                    9. 09 CASH AND SHORMERM INVFMMENTS AY Bf!GINAING OF YEMI                                                            52 M"                  13,422                    1633
                                         . _ . _                . _ . _ _ _          ._       =_ .._,.
CASH AND SHORY TERM inVESYhW3 AT UtB 0F YEAR                                                          s 11.214                  5 52,15'            $ 13.422
                                                                                                                                                                          ._---_=
m.;
l'he accomnancing notes an an mtegral patt of this statemerv. I Note 1)
O UWA ME!AnttsSMC.
5 l

__       _     . . .      _ . . _ _ . ~ _              .
4
         ,                 ,                                 f fl0TES 10 CONSOLIDATED FINANCIAL STATEMENT.S                                     .O             il (1)SUMAM 0F SIGNIFICANT ACCOUNTING P00C ZS                        l ing expenses on the Consolklated Statement of!n-l (a) Co!pxate Organizatlan and Principles of                       ; come include I wa Ibwerk shaie of the expenses of Consolidation                                                     : these umts.                                            -
lowa Resources Inc. (Company) is a holding com-              l (d) Depreciation pany with lowa Power Inc. (lowa Power) as its princi-
* The r rovision for depreciation as an annutj per-
  ;                           pal subsidiary. The consolidated statements include               ' centa-           f the average depreciable utility plant in .1 the accounts of all subsidiaries after elimination of sig ! service, deterrnined genera'ly by the application of .
l                             nificant intercompany accounts and transactions. Prior ' straight line rates, was 3.7% for 1989,3.8% for 1988 year amounts have been reclassified on a basis consis ' and 3.7% for 1987.
tent with the 1989 presentation.                                  :           The cost of repairs and mmor replacements is c arg    to mahnance expense. hpeg a&w I
I                              (b) Utilit} Plant .                                                       and major property replacements are charged to plant Electric plant is stated at original cost, which in-          :
accounts. Property retired or disposed of in the nor-cludes payroll taxes, pensions, msurance and other mal course of bus'iness is charged to accumulated l                             payroll benefits, admmistrative and general costs and
: provisions for depreciation, less net sah age credits.
I the allowance for funds used during construction.
I (c) Revenue and Cost Recognition (c) Joint Plant Ownership                                         :          lowa Poner recogmzes revenues based upon ser-Under joint plant ownership agreements with c,ther . vices rendered to customers during the year. This W-i lowa utilities, Iowa Power had undivided interests at ; cludes services which are not billed et mondfs end.
L1                            December 31,1989, in four electric generation umts                 i All of Iowa fumWs electric sales are currently subject I                             as follout                                                         I to an Energy Co>r Adjustment Chuse (ECM The en-                      l asumus I ergy costs to be recavered under tne ECA are charged                     i Neal         Council    Ottumwa      Louisa            to expense during the pericd in which the recoverv of          ,
l
    ,                                              Unli         Blutis        Unli       Unit     ' these costs is included in resenues.                                !
M.                                    No.3        Unit No.3       No.1
_ Nil,,, j (O Allonace for Funds Used During
                                                                                                                                                   ~
1 (Dollars in milhons except capual cost per IN) ' Constructiouand Accruedon Adwncete(AFUDQ Unlity plant                                                      :         .The allowance for fundi used during construcdon i in service       $35i.        5 161.2    -  f,58.3    $ 18i 6 ' and accrued on adumcm teptesents the cost during Year placed in                                                      ; the construction period of bortowed funh and a re-l                                service            '1973         1978         1981       1983 : turn on equiry funds u.ied for coni'ruction purposes.
Accumulated                                                        : The AITDC rate is computed in accordance with rules
                               . deprec.       _
                                                  $ 15.3     ' S 55.5        3152     -5 358 ! of the Federal Energy Regulatorv Commission, which i-                             Una capaatP                                                               haw; been' adopted by the lovn l'tilides Board (IUFO,    1
                                 ,\lW     ..          515          675          6"5        650 ; and is capitalized by Iomi Pawe; as z cost of concruc-
                             . Iowa Fowr                                                          ; tion. AFUDC rates ntre soproxanately 10% for the stare .... . 23.0 %              46.7%        15.0 %     30% ! year ended Decembu 31,1989 aad approximately 9% '
Capiuti cost                                                      : for the Years ended December 31,1988 and 1987.                     ,
perKW .< 3 299                $ 511         $ 576     $ 931      ,
suunnemusura j                                                                         ,
I             ,               L The douar amounts above represent Iowa Powerb                     l
                             . share in each joindy owned unit. Each participant has provided financing for its share of each unit. Operat-            .
  .,                                                                                              l l
f t
2 .
l
                                                                                                   ,                                                               1 i -
e                                                                y
: w.                                '
g 1                           ,                                                                     .                                                               a 1' '
                                                                                                .. a -
                        ?\ ,
           .<                ,.         ~
i$            ( ~ }- $ $        '*                                   ,        .

                                          ,y            ;~f l        ~
fl'''                                               d'.
                                                                                                                                        ' 'l fl '           3_l.            _
_l ,
t 1
(g) Federal and State income Taxes investment tax credits utihzed bv lowa kmer to re-The tems compristng tztrome tax expense are as                            doce taxes payable are being amortized over the life follows for the ver.r ende! Decerr.tw 31                                       af the propertv Woich gave nse to the credits mammamanummmamawasmaammeumer/m                                                            The total income tax expense as set forth in the 1989                1688   19f/1    precedtng column produces the effective income tax rates shown in the following schedule. These rates are
(!n Thousands >
rederal income taxes                                                           computed by dividing such tax expense by the sum of Taxes currentiv payable                                                     income before income taxes and preferred stock divi-
                                                                              $1-'29 114333 516. m Provisu n to deferred tnes                                                  dends of lowc Rmer The table beknv reconciles the net                                    o.299               --o            effecme mcome tax rate 3 to the statutorv Federal in-9.2 s*
Irnestment etx credit -                                                     come tas rates for the year enkd December 31.
amortuatic r                          (l A > (19%) <25%)                  M~ ^ ' -                 "    - '
7      I              E Tctal Federal i rome tm:s                                                                                                   1989 ~1988 1987
                                                                              $22.WO 520.330 $22.0%
j                                                                                EHecuve income tax rate as reponed               41% 0 % 40%
Stite mcome t;aAes
                                                                                                                   $ tate income taes. net of Federal Tnes currer,'h payable                 5 ; 92
* 3310 $ 3.N                           income tax beliefits                    i6>   <6)    (O Provison foi cextreo taxes                                                  /Lowance ter funds                                --
(2)      I net                                      80*               1.163  2.1 ;   :nterest capitahzed                              (1) -        -
Tot.il 5 tate ir<.ome e;xes            $ 0399 's +-'00 $ OL2s                  Vnonizanon of meestment tax crecAs -
lowa kmyr                                  2     3     3 Total FeJeral anJ Mc e ircone                                                  Difference between book and tax ta w s                                 528.9'*9 $25.036 528.080                      deprectauon for which deferred taxes MD851mWWWFNiiKffW ,1 m u .                    ;        -.a -                            have not been provided                  (3) (3) (1)
Other items. net                                     1  (1)     2
                                    , Deferred Fe %rd mcome taxes are provided m lowa Rmtr fc. ' tSe effect of liberahzed tax de-Statutory Federal income tax rate               k%M 90%
                                                                                                                                                                   ===
preciauon allov.cd oy tax laws. As deferred uixes be-                                    E-   x en come currently pa:.nble. the related accumulated gpg % .
acierrals are credited to aceratmg .ncome As di-rected by the IL'B, deterred state tocame taxes are not                                   In December 198 , the Fmancial Accourting Stan-provw:.d and amounts orenousiv provided are being                               dard3 Scad issued a new standard on accouattng for returned to income cmr the li years coding in 1993                               income taxes (SFAS 96) which the Company is cur-The nonutihty substaiaries pn mde deferred taxes tor                             rently required to adopt no later than the first quarter all aming differences between petax accounting in-                              of1992 The Company has completed a prehminarv corne and taxable :rcome                                                                nakw of the provisions of SFAS 90 and anucipates, As required be the IW. lava Power ha< not tn                               because of rate regulation, the new standard will have a significant impact on the balance sheet but an imma-cluded the income utx effect ot certain transactiens o i
income tax expense in the penod in which the trans-                              terial favoratle impact on net income.
aenons tre reported Income tax related to those                                  (h) Consolidated Statement of Cash Flows
                                     'transaccian: ts inc>ded in the penod in which the                                        For purposes of the Consolidated Statement of Cash taxes become parable. i.e . ' dow through" income tax                             Flows. the Comr:ary considers all cash and highly lio-accountmg The esttmateu cemunauve net amount of                                   und debt instruments purchased with a maturity of three deferred taxes which has not been provided as of                                 mor ths or less to be cash and short term investments.
December $1,1080t s f63 0 million 38-m aumancame.
pgpf WM /                                                           kJ.            -
                                                                                                                                                            'MM

NOTES 10 CONSOLIDATED FINANCIAL STATEMENTS Noncash transactions of the Company included ac-        l portions of the Des Moines Power Station (DPS). The quiring an additional one third interest in an office      ! Company transferred the undepreciated investment in and retail complex in 1989 (Note 13).                     : the retired portions of DPS to Unrecovered Plant, a Cash paid for interest and income taxes for the year   ,
deferred charge and began amortizing the balance in ended December 31 was:                                    ; September 1989. The remrining pcetion of the un-
: depreciated investment in DPS is classified as Utility 1989    1988    1987   ' Plant Held Fo Future Use.
:      In addition, pursuant to the Iowa Supreme Court On Thwsands)            decision of February 17,1988, Iowa Power reversed I
      $. e]f amount capitaitzed) $31,371 $24,0N $25d74 Income taxes    ,     , ,     ,
l lthe
                                      $24,075 5 8,786 $22,382 :    ustment1983 increasedrate    case 1988 net incomerefund      reserve. T by 55.8 million.
l(3) LONG TERM POWER PURCHASE CONTRACT (2) RATE MATTERS                                          :
Under a long term power purchase contract with OnJune 25,1987, the Office of Consumer Advocate j the Nebraska Public Power District (NPPD), expiring (OCA) filed a petition with the ICB seeking a $52.1           in 2004, Iowa Power buys one half of the output of the million annual reduction in Iowa Power's electric         , 778 megawatt Cooper Nuclear Station (Cooper). The rates. On August 13.1987, Iowa Power voluntarily re-      ' Consolidated Balance Sheet includes a liability for duced its revenues by 58.7 million annually. The IUB       ' lowa Power's fixed obligation to pay 50% of NPPD's final decision, issued on June 30,1988, resulted in an    , Nuclear Facility Revenue Bonds. A like amount repre-additional $18.8 million annual reduction in electric     ' senting lowa Power's right to purchase Cooper power revenues. The effect of the revenue refund, interest on       is shown as an asset.
such refund and taxes was a decrease in 1988 net in-      !      Monthly payments to NPPD cover one half of the come of $14.9 million. The lower rates were placed in         fixed and operating costs of the plant (excluding de-
]   effect on September 15,1988 and a refund of $30.6 million was made b) lowa Power to its customers in i preciation but including debt service) and lowa l Power's share of nuclear fuel costs based on energy October 1988.                                             i delivered. The debt service portion on a monthly On August 5,1988, Iowa Power filed a $33 0 million, : basis approximates $1.5 million and is not contingent-or 10.7%, annualized electric rate increase request. On ' upon the plant being in operation. Pavments also in-October 7,1988, the IUB approved an annualized in-        ! clude amounts to maintain various funds and resenes terim rate increase of approximately $17.8 million.       : which are anticipated to be available for plant decom-based primarily on a return on equity of13 percent.       i missioning costs. " Purchased power nuclear" in the The increased interim rates were collected on sales       : Consolidated Statement of income, reflects such from October 7,1988 through August 31,1989.               ; charges. The debt amortization component of Iowa On July 19,1989, the IUB issued a final order which ! Power's payments to NPPD was 57,550,000,57,242,000 approved a total annualized rate increase of approxi. l and $6,672,000, and the net interest component was mately $24.7 million based on a return on equity of       l $6,929,000,57 497,000 and 59,126,000 each for the 13.2 percent. Iowa Power implemented the new rates
* years 1989,19w and 1987, respectively. Current on September 1,1989                                       j maturities of the power purchase contract obli-As a part of itsJuly 19,1989 decision the Ibb ap-      : gation are $7,990,000, $8A55,000,58,948,000, proved a five year recovery of approximately $5.5         : 59A70,000 and $10,038,000 for 1990,1991,1992, million of undepreciated investment in the retired        i 1993 and 1994, respectively l
l l
t e
i Iowa Power's payments to NPPD representing               l loss. Currently, this is the maximum m allable cover-advances for the delivery of uranium concentrates,          l age. Iowa Power also purchases insurance coverage together with related carrying costs, are being                 from the mutual insurance company for increased amortized and recovered in rates in accordance with         ; costs of generation and purchased power resulting the refueling schedule. Certain gtal improvement            : from an accidental outage at Cooper.
costs are being deferred N are being amortized and :               NPPD purchases nuclear liability insurance in the recovered in rates over fae term of the NPPD contract. j amount of $200 million. In accordance with the Price-The equity component of carrying costs was $836,000, : Anderson Amendments Act of 1988, excess liability                             1
    $570,000 and $934,000 for the years 1989,1988 and           j coverage is provided by a mandatory industry wide 1987, respectively. The debt component of carrying          : program under which the owners of nuclear generat-costs was $807,000, $1,303,000 and $1,173,000 for the       ; ing facilities could be assessed for liability incurred years 1989,1988 and 1987, respectively.                     i due to a serious nuclear incident at any commercial NPPD has been collecting funds for costs associated : nuclear reactor in the United States. Iowa Power's 50%
with nuclear fuel disposal and expects that such funds, j share of the maximum amount of such an assessment together with additional funds to be collected, will be : would be 531.5 million per incident, payable in annual sufficient to cover costs currentiv outlined in the         : installments of not more than $5 million. However, an Nuclear Mste Policy Act of 1982.'                           l additional assessment of no more than 5% of this NPPD has primarv and excess property insurance           ' amount may be payable if the public liability claims for Cooper in the amount of $1.06 billion. In addi-         { and legal costs arising from a nuclear incident at an in-tion, Iowa Power purchases, for its own interest,            : demnified facility exceeds the Price Anderson finan-5487.5 million of excess property coverage directly         : cial protection, from a mutualinsurance company Under Nuclear                l An industry-wide policy with an aggregate limit of Regulatory Commission rules, the required excess            : $200 million for the nuclear industry as a whole, is in property insurance must be used to pay the costs of          l effect to cover tort claims of workers as a result of ra-any obligation to decontaminate the facility and re-         : diation exposure on or afterJanuary 1,1988. Iowa                   i.
move debris before any other claims for property             l Power's share of a maximum retrospective premium damage. !n the event of an accident at any of the mu         i adjustment would be approximately $1.6 million.
tual company members insured nuclear plants, Iowa :
Power would be subject to a retrospective maximum additional premium of approximately $3.9 million.           i: (4) COMMON STOCK The combination of insurance programs provide Iowa l               Common stock outstanding changed during the Power insurance for its 50% share of a 52.035 billion           years ended December 31 as follows:
1989                 1988               1987 Amount Shares         Amcuni Shares    Amount Shares (In Thousands)
Balance (beginning of year)                    .   .             $222,562 22,065 $223,002 22,080 $227,926 22,265 Changes due to:
Gain on reacquisition of preferred stod.       .
                                                                              -     -             -      -     (1,306)      -
Repurchased shares    ,            , .. . ,               ,
(6.779)    (352)         (440)   (15)   (3,618)    (185)
Balance (end ofl ear) .   .       ..                   ,,        $215.783 21,713 $222.562 22.065 $223,002 22,080 l
h NARES 0mCESnC.

[-  ,
NOTES 10 CONSOLIDATED FINANCIAL STATEMENTS The Company has purchased common stock which l(7) SHORT TERM DEBT is held for reissuance under certain stock ownership          l plans and is expected to be reissued within one year.                Interim financing of worMng capital needs and the This stock is classified as a current asset.
                                                                        ! construction    program may be obtained from the sale On October       1987, the Companys Board of Direc- , of commercial paper or shon term borrowing from
: banks. As of December 31,1989, lines of credit with torsauthorizedthe repurchase,from timetotime,ofupto ! various banks totaled $47 million. The balance of $11.4
         . 5 million shares of the Company's outstanding common stock. As of December 31,1989, the Company has reac : million of short term debt was supported by these quired 552,357 shares.                                        :: I nes of credit.
(5) CUMULATIVE PREFERRED STOCK                                 j (8) CAPITAL EXPENDITURES lowa Power's Cumulative Preferred Stock With-              l      Capital expenditures for 1989 were $90 million and out Sinking Fund may be redeemed, at fixed or pro-             ! are   planned at $88 million for 1990.
gressively decreasing prices, in whole or in part, on        ',(9) EMPLOYEES' PENSION PLANS not more than 60 nor less than 30 days' notice, at the       :
option of the Board of Directors. In all cases, the re-               The Company and its subsidiaries maintain defined demption price is in addition to dividends accrued                benefit pension plans covering substantially all em-and unpaid at the date of redemption.                        ! plovees.        Theupon based partially     plans provide vears        pension of senice          benefits that and partially         are in the case of a default in the dividend payment for                                  '
four consecutive quarters of any preferred stock issue, : upon the employees' compensation during the last 10 l        the holders of this class of securities (total Cumulauve , vears of service. The Company's funding policy for
: these plans is to contribute annually at a rate that is l        Preferred Stock) shall be entitled to elect the mini-
: intended to remain a level percenta'ge of compensa-l l
mum number members           nece:sary of lova           to constitute Power,s Board            a maiority of the i tion for covered employees (presently 5.4 percent) of Directors.
                                                                      , and make the annua! contributions re' quired, or al-g    (6) LONG TERM DEBT                                           i lowed, by arolicable IRS regulations. In 1987, the IUB l
(a) Assets Subject to Lien                                   j approved a stipulation which allows towa Power to re-lowa Power's First Mortgage Bonds are secured by         : c ver its funding contributions in rates.
a lien on substantially all property owned by lowa '         i   . Net periodic pension cost for 1989,1988 and 198,,
Power. Substantially all of the assets owned by Middle- : includes the following components for the years wood Mall,Inc. are pledged as security for th'e guaran ; ended December 31:
teed notes of Middlewood Mall, Inc,                          j (b) Debt Maturities                                          :                                     1989      1988      1987 Debt maturities and bond sinking fund require-           :
I On Thousands) ments for 1990,1991,1992,1993 and 1094, net of bonds ! Service cost benefits earned l        reacquired and on hand at December 31,1989, are
: during the period .               S 1,995 S 1,995 5 2,184
         $4.896,000, $12,982,000, 53,746,000, 53,293,000 and
                                                                      ! Interest cost on projected l        $2,105,000, respectively. In addition, Iowa Power may . benefit obligation .                         2.266    2.266      2,233 reduce the sinking fund requirements for the First
: Actual return on assets              (6,382) (1,804) (3,164)
Mortgage Bonds to the extent of 50% by cenifyin8 property additions in accordance with terms of the In ! Net amonization and
: deferral             ..               2.597   (1,280)       368 denture and its supplements; except that for the issues :
due in 2006 and 2007, the sinking fund requirements : Net penodic pension cost                         476    1,1 ~'     l.621 may be reduced to the extent of 100% by certifying           j Regulatory recognition of 1,192 property additions or, in the alternate, the sinking         j incurred cost .      .                1.951                 435 fund retirement may be doubled.                              : 9tal pension cost .               S 2.427 S 2,369 S 2.056 l
                                                                                                                                            ,       l 1
The following schedule sets forth the plans' funding                        The Financial Accounting Standards Board has is-                  l status at the measurement date and amcents recog-                    ,
sued an exposure draft of a proposed SFAS "Em-                       l nized in the Company's Consolidated Balance Sheet at : ployer's Accounting for Postretirement Benefits Other                                     I December 31:                                                                than Pensions." The Statement addresses recognition l
                                                                        .      and measurement of an employer's obligation to pro-                  !
vide postretirement benefits other than pensions. Al-1989            1988      l though it would apply to all forms of postretirement (in Thousands)            ,      benefits, the proposed Statement focuses principally Actuarial present value of benefit                                   : on postretirement health care benefits. The Company obliganons:                                                          ; has completed a prelimiary analysis of the exposure Vested benefit obligation              $ 14.815 5 13.409 draft and anticipates, because of rate regulation, that             <
                                                                         ; it will have a significant impact on the balance sheet AccumulatM benefit obligation .        $ 14.931 $ 14.047 : but an immaterial impact on net income, Projected benefit obhgation .          $ 25,019 $ 23,185             ,
(10) LEVERAGED LEASE Plan assets at fair value .                46.830          38,949
                                                                         ,        IOR Capital, Inc (IOR Capital) is an owner partici-Excess of plan assets over the                                       '
pant in a leveraged lease entered into in 1986 under projected benefit obligauon            5 21,811 $ 15,m , which IOR Capital has a $50 million undivided interest Unrecognized net gain           .
(16,407) (10,913) , in a $707 million 385-MW coal-fired electric generat-Regulatory recognition of incurred ng unit which is leased until 2014. The lessee pays all cost .                                     (1,951)
(1,192) : costs of operating and maintaining the unit. IOR Capi.
Unrecognized net asset       ,,
(3,453)         (3,659) : cal financed its interest in the unit with $36.7 million Net pension asset recognized in the                                   : of debt that provides for no recourse to IOR Capital, Consolidated Balance Sheet ,           $          0 $            0 : $6.8 million of recourse debt and $6.5 million of l equitv For Federal income tax purposes, IOR Capital Discount rates .                               9.25 %        9.00 %
received the benefit of tax deductions for deprecia-Rates ofincrease in compensation                                       ,
t on on the full $50 million and for interest expense levels .                                       5 50 %       6.00 %
on the long term debt. IOR Capital's net investment in Expected long term rate of return on                                                                                                       '
: this leveraged lease at December 31 is as follows:
assets                    ,      ,
9.25 %       9.25% :
Approximately 60 percent of the plan assets are in-                                                              -1989        1988
{
vested in fixed income securities. The balance is in-(in Thousands) vested in equity securities. The Company established a ; Rental receivable .                                        $ 23.455 $ 23,463 supplemental retirement plan for certain employees                          Estiriated sahage value ofleased in 1984. The amounts expensed in 1989,1988 and 1987                          asset                                      5,000      5,000 related to this plan were $1.314,000, $1,529,000 and (7,312)
   $741,000, respectively. The Company paid and ex-                        l Lesi: Unearned and deferred income (8.645) pensed supplemental life and health insurance pav.                      ! Im estment in leveraged lease               21,143      19,818 ments for retired employees in 1989,1988 and 198'7                      :  Im s: Deferred  taxes arising from of $1,029,000, $1,114,000 and $1,514,000, respectively.                 ! le reraged lease                           (18,550) (14.053)
{ Ne investment in leveraged lease .        5 2,593 $ 5,765 i
I                                                                           :
l h gg g3gggg3 gg, l

                                     .  .   . _  - -       --    -.              .             -        -     .     -              -      ~
    \         .
                                       %01ES 10 CONSOLIDATED FINANCIAL STATEMENTS
      ,                                                                                                                                       i
: 01) DIRECT FINANCING LEASES                                   l 03) CONSOLIDATION OF MILJLEW000 MALL, INC, IOR Capital is the lessor under several direct financ- !          Effective January 6,1989, hiiddlewood hiall, Inc.
ing leases entered into during 1987,1986 and 1985 un. ' (hth1L1 a real estate subsidiarv of the Company, in-der which transportation equipment, having estimated : creased its interest in whinut Mall Limited Partnership useful lives of 10 years, is being leased for six and         : (whinut Stall) from one-third to tw-thirds. whinut seven year terms. The lessee pays all costs of oper-           l Mall is a real estate development and management                    ,
ating and maintaining the transportation equipment             : partnership whose principal investment is the Kalei-                 !
and has guaranteed a stipulated residual value during : doscope at the Hub and Hub Tower, an office and re-and at the end of the lease term. For Federal income               tail complex in downtown Des Moines. In exchange                   l tax purposes,IOR Capital receives the benefit of tax           ,   for the additional interest, MML agreed to assume the deductions for depreciation on such equipment. LOR { indebtedness and future cash requirements associated Capital's net investment in these direct financing             : with this partnership interest.
leases as of December 31 is as follows:                        :      The consolidated financial statements of the Com-l pany as of, and for the period ended, December 31, 1989      1988     ' 1989, reflect the consolidation of MML and Vhlnut
                                                                       , Mall for operations after December 31,1988. Prior to (in Thousands)    : January 1.1989, MML accounted for its investment in Rental recen able .                      $ 18,950 $ 25,652 Mhinut Mall under the equity method. As a result of Supulated residual value of leased                             -   the consolidation, both assets and liabilities on the asset                                        7.855    8,033 i Companys Consolidsted Balance Sheet are increased less: Unearned and deferred income           (2.578)
(4.044) : 539.5 million.
Net investment in direct financing                             ,
leases                 , .             $ 24.227 $ 29.641                                                                          '
l 04) OUARTERLY FINANCIAL DATA (UNAUDITE 20                                                                 j
: 02) OIL DRILLING PARTNERSHIP                                   j                                        Ouarier Ended           ,
l1989                         Mar. 31 June 30 Sept 30 Dec. 31 ENERCOR. Inc. (ENERCOR) entered into an oil-
: j.      drilling partnership withjohn Carey Oil Company                i Revenues (000)          , S 83.826 $80.522 5109,118 S87,1(W l       Oohn Carey Oil)in 1984. As a result of the findings of        : Operating income two independent oil reserve studies, ENERCOR ex-              i      before income pensed its remaining S-i.3 million investment in the          :      taxes (000) .            20.073 18.264       38.108 19,459 oil exploration partnership in September 1988.                 l- Net income (000)             8.324     6.943    19,155   ",281 A lawsuit arising out of the partnership agreement        i Earnings per average and asking for $46 million plus unspecified punitive          :      share of common damages has been filed against ENERCOR and lowa               j      stock .                     0 38     0.32      0.88     0.34 Resources Inc. byJohn Carey Oil. ENERCOR and towa : 1988 l
Resources Inc. have denied the lawsuit's allegations          l Revenues (000)       ,     S 86,165 $65.884 5110,341 $86.079 and have filed a counterclaim against John Carey 011.         l Operating income The counterclaim states in part that John Carey Oil, as              before income managing partner under the agreement, misrepre-               l      taxes (000) ,            24.575     2.-~ 33,398 18,120 sented the project and breached its fiduciary duties to ; Net income (loss)
ENERCOR. It is management's opinion that the likeli-          :      (000).     ,, .          13,281 (2,920) 15.628        6,950 hood is remote that the ultimate resolution of this           l Earnings (loss) per lawsuit will have a material adverse impact on the            :      average share of Company's financial position or results of operations.        j      common stock .              0.60    (0.13)     0.71     0.31 l
l

1                                                                              .-    .
       ~(IS)     EVENT OCCURRING SUBSEQUENT TO REPORT OF INDEPENDENT PUBLIC                                                        3 ACCOUNTANTS (UNAUDITED)                                                                                           j On March 15, 1990, the Company and Midwest Energy Company (MWE) signed a def'mitive                                    ;
agreement to merge into Midwest Resources Inc., a newly created holding company.                                           '
MWE, headquanered in Sioux City, Iowa, is a holding company with major interests in electric and natual gas utilities and additional investments in diversified businesses. MWE's principal subsidiary, lowa Public Service Company, pmvides electric service through its IPS Electric division to 156,000 customers in Iowa and southwestem South Dakota. 'Ihe IPS natural gas division, Midwest Gas, services 347,000 customers in Iowa, Minnesota, South Dakota and Nebraska.                                                  ;
The merger is subject to approval by the shareholders of the Company and MWE and certain Federal and State regulatory agencies. The merger will be accounted for as a pooling of interests.                         !
At the time of the merger, Midwest Resources Inc. will issue its own stock to the IOR and MWE -                        i shareholders. IOR shareholders will receive 1.235 shares of common stock in the new company for                            1 each share of common stock currently held. For MWE, the exchange ratio is 1.080 shares of new                              i common stock for each one share of common stock currently held.
1 Among other provisions, the Company and MWE have given options to purchase up to 18 percent                             i of each other's share of common stock under certain circumstances.                                                         !
i Execudve leadership for Midwest Resources Inc. will be shared by IOR's chairman and chief                               !
executive officer, Mark W. Putney and MWE's chainnan, president and chief executive officer, Russell E. Christiansen Upon completion of the proposed merger, Mr. Pumey will become chairman and chief executive officer of Midwest Resources Inc.; Mr. Christiansen will serve as vice chainnan, president and chief operating officer, Christiansen will succeed Putney as chairman two years after the merger, Additionally, Christiansen will become chairman and chief executive ofFcer of all utility                         j operations, including IPS Electric, Iowa Power and Midwest Gas. Putney will also serve as chainnan                         '
l-      and chief executive officer of Midwest Capital Group, Inc., comprised of all non utility operations.
Christiansen will serve as vice chairman of Midwest Capital Group, Inc.                                                    ;
l    ,
I I
1                                                                                                                                  ;
e n'                                                                                                                                a l                                                          L i
I

   'o-   e i
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To lowa Resources Inc.:
We have audited the accompanying consolidated balance sheet and consolidated statement of long term debt of Iowa Resources Inc. (an Iowa corporation) and subsidiaries as of December 31,1989           i and 1988, and the related consolidated statements of income and retained eamings and cash flows for           !
cach of the thace years in the period ended December 31, 1989. These financial statements are the             i responsibility of the Company'c management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in acco         'ce with genemlly accepted auditing standards. Th'ose standards require that we plan and perform - audit to obtain reasonable assurance about whether the            ,
financial statements are free of material nr.sstatement. An audit includes examining, on a test basis,        4 evidence supporting the amounts and disclosults in the financial statements. An audit also includes           )
assessing the accounting principles used and significant estimates made by management, as well as             j evaluating the overall financial statement presentation. We believe that our audits provide a reasonable      i basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Iowa Resources Inc. and subsidiaries as of December 31,1989 and 1988, and           l the results of their operations and their cash flows for each of the three years in the period ended
           - December 31, 1989, in conformity with generally accepted accounting principles,                              j
                                                                                                                          +
Our audit was made for the purpose of forming an opinion on the basic financial statements            l taken as a whole. The schedules listed in the index of financial statement schedules (Item 14(a) 2)           l are presented for purposes of complying with the Securities and Exchange Commission's rules and are            i not part of the basic financial statements. These schedules have' been subjected to the auditing l           procedures applied in the audit of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth thereir. in relation to the basic financial statements taken as a whole.                                                                                    i l
l Chicago, Illinois,                                                         ARTHUR ANDERSEN & CO.
January 24, 1990                                                                                             i l
l 1
1
                                                                -45 I

                 . MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources Cap %1 resources of Iowa Resources Inc. (Company) and its subsidiaries are derived primarily                   i from funds generated fmm current operations, short term bormwings, long term bormwings and equity                       I financing. These capital resources provide the funds required for current operations, debt interest and retirement, dividends, construction expenditures and other capital requirements.-
At De(:mber 31,1989, the Company's material sources of liquidity included current assets of                    I
  $92 million and unused bank lines of credit of $36 million 'Ihe Company's utility subsidiary, Iowa                      l Power Inc. (lowa Power or IPR), also has unpledged bondable property of $289 million which can be used to support long term borrowings. The Company's financial ratio objectives are to keep long-term debt between 50% and 55% and to keep preferred and common equity between 45% and 50%.                           ,
The Company's common equity ratio was 46.3%,48.1% and 52.4% at December 31,1989,                             ,
1988 and 1987, respectively, in 1988, common stock dividends of $1,66 per share exceeded eamings per share of $1.49. In addition, long term debt of $70 million was issued. Rate action in Iowa Power's 1988 electric rate case helped to achieve camings per share of $1.90 in 1989 compared to common stock dividends of $1.68. The common equity ratio decreased during 1989 due to an increase in long term debt resulting fmm the consolidation of Middlewood Mall, Inc. (MML), a real' estate                      ,
subsidiary of the Company, with Walnut Mall Limited Parmership (WMLP), MML became a two-                             '
thirds owner of WMLP in January 1989. See Note 13 of Notes to Consolidated Financial Statements for a discussion of the increase in ownership and the consolidation.
During 1989, the Company was active in its common stock repurchase pmgram. The Company                      i invested $6.7 million in the repurchase of 351,957 shares of its outstanding common stock in 1989.
lowa Power's bond ratings, which were lowered as a result of the negative 1988 mte activity, temain in the single-A category, a rating that is considered investment grade. Refer to Note 2 of Notes to Consolidated Financial Statements for more information regarding rate matters.
Consolidated capital expenditures were $90 million for 1989 compaird to $65 million in 1988 and $52 million in 1987. The increase is the result of greater expenditures for utility plant including rehabilitation of rural systems, the addition of two work centers, system expansion due to growth in the Company's service area and, beginning late in 1988, the construction of two combustion turbines.                 ,
The Company's management annually reviews long range capital expendimre needs and based upon such a review has planned capital expenditures, including Cooper Nuclear Station (Cooper) capital improvements and allowance for funds used during construction, of $88 million for 1990 and $348
. million for 1990 through 1994. There are no material commitments Dat would prevent scaling back of these capital expenditures, if needed. In addition, approximately $27 million is projected for maturities of long term debt and bond sinking fund requirements. it is anticipated that approximately 90% of the capital requirements for 1990 through 1994 will be met by funds generated from intemal sources. The Company believes its capital resources and liquidity are sufficient, assuming adequate rate relief, to meet its current and pmjected requirements.
President Bush's proposal regarding the Clean Air Act has been the subject of hearings in Congress. The proposal is estimated to cost as much as $7.1 billion nationwide through the year 2000.

Because Iowa Power's primary energy sources are nuclear and low sulfur coal, current assessments are that lowa Power will not require significant capital expenditures in order to meet the proposed emission requirements through the year 2000, it is anticipated that under current regulatory principles, any cost incurred by Iowa Power would be recovered through rates.
Trends The Company's business is primarily dependent on use of electricity by customers in Iowa Power's service area. This usage may vary with weather, general business conditions, the state of the economy and the cost'of services. Percentage changes in Iowa Power's electric sales to retail customers over the prior year for the last three years were: 1989 up 0.1%,1988 up 8.2% and 1987 up 3.7%. The Company is forecasting a five year compound growth rate of 2.2% in electric kWh sales. The Company recognizes that conservation practices by some of its customers will restrict growth but has no reason to believe that the availability of other forms of energy will have a significant effect on its business in the foreseeable future.
SUBSEQUENT EVENT On March 15,1990, the Company and Midwest Energy Company signed a definitive agreement to merge into Midwest Resources Inc., a newly created holding company.
Refer to Note 15 of Notes to Consolidated Financial Statements.
Business Transaction Policy Statement Management is mindful of the importance of infonning its many audiences about company operations. We must also pay heed to the legally sensitive nature of certain matters, and that is particularly true about any business transaction involving an acquisition, disposition or combination of businesses which the company may be considering.
Therefore, Company management has adopted a policy to announce our consideration of any such transaction only after it would enter into a definitive agreement, or agreement in principle describing the material terms of such a transaction.
Until that point, we would respond with "no comment" to any inquiry conceming any such transaction, whether or not lowa Resources is considering, discussing or negotiating for any acquisitions, dispositions or combinations of businesses. We believe this policy is consistent both with your need for information and with concem for appropriate disclosure regarding legally sensitive matters.
Effect of Inflation The Company's electric business operates under regulatory provisions which allow increases in the cost of fuel used for electric generation and energy purchases / sales to be passed on automatically to atail and wholesale customers by means of the electric energy cost adjustment (ECA), increases in the cost of electric service, not recovered via the ECA, must be recovered through timely filings for rate relief with the appropriate regulatory body.

i a
Results of Operations
- 1989 Conpared with 1988 -
Net income of $41.7 million fra 1989 was 26.6% over 1988 while camings per share of $1.90                 :     .
were 27.5% over 1988.
Revenues of $360.6 million were 3.5% or $12.1 million over 1988. The 1989 electric revenues of $349.8 million increased $5.9 million or 1.7% over 1988 due primarily to rate activities ($11.2 -
million) and customer growth ($4.9 million), nese increases were partially offset by reduced generation services agreement revenue ($3.5 million), energy use per customer ($4.6 million) and sales to other utilities ($1.7 million). See Note 2 for the discussion of rate activities Retail kWh sales of electricity were essentially unchanged from a year ago despite a decrease in cooling degree days of 30.5%. The reduced air conditioning load was offset by customer growth and the electric heating requirements of the 1989 weather which was 2.5% colder than normal and 6.9% colder than last year.
Other revenues of $10.7 million were $6.2 million over 1988 due primarily to the consolidation of Walnut Mall and MML ($5.6 million).
The net cost of energy generated, interchanged and purchased of $113.6 million decreased $7.3 million or 6.0% compared to the same period last year. Interchange power, net reflects a 1,025 gWh                  j increase in net deliveries which decreased those costs $17.6 million. This was partially offset by an               i increase in fuel costs of $10.3 million for electric generation due to production at lowa Power                    l generating facilities being 29.8% greater than the same period last year, l -
Other operation expense of $64.8 million decreased $0.1 million. This was mostly due to the
  $4.3 million write-down of oil drilling properties in 1988 which was partially offset by the 1989 consolidation of Walnut Mall and MML.
Allowance for funds used during construction of $2.0 million increased $1.7 million due primarily to the increase in constmetion expenditures.
Interest and dividend income of $5.1 million was 34.5% lawer mainly due to a reduction of investments in commercial paper. Iowa Power's excess cash from the 1988 sale of first mongage bonds was used to fmance the constmetion program, and other cash was used to repurchase common stock.
Interest 'on long-term debt increased $5.9 million, or 21.9%, due to the issuance of $70.0 million of 30-year,101/2% First Mortgage Bonds in July 1988 and the consolidation of Walnut Mall and MML.
i Shon-term interest expense decreased $0.8 million primarily due to lower commercial paper balances after the July 1988 long-term fmancing.
Other, net income increased by recording the consolidction of Walnut Mall and MML. This was panially offset by a gain on the sale of real estate in the second quarter of 1988.
Income tax expense increased $3.9 million from last year due principally to the increase in pre-tax income.
1988 Compared to 1987 -
Net income of $32.9 million for 1988 was 19.5% under 1987 while camings per share of $1.49 were 19.0% under 1987.
l

Revenues of $348.5 million increased $7,0 million (2.0%) as a result of several offsetting            i factors.' Revenues increased $6.8 million due to the reversal of a rate refund reserve related to a 1983 rate case. This case was settled when a favorable court ruling was received in the first quaner.
Revenues decreased $22.1 million due to a rate reduction ordered during the second quarter by the Iowa Utilities Board (IUB) for revenues collected retroactive to June 1987. Revenues increased $3.8 million during the fourth quaner when the IUB allowed an annualized interim rate increase of $17.8 million (Note 2). Retail kWh sales of electricity increased 8.2% in 1988 due to an unusually warm             I summer. Temperatures during the 1988 cooling season were 18.2% warmer than 1987. Also, customer growth had a positive effect on the usage of electricity,                                                      i Operating expenses increased $21,4 million (8.6% over 1987). The $21.4 million incitase is due primarily to a $5.4 million increase in energy costs, the $4.3 million in expense associated with the write down of oil-drilling propenies (Note 12), a $2.1 million increase in distribution system maintenance, a $2.2 million increase in employee benefits and $4.4 million increase in Cooper operating costs (non-fuel). Cooper was down for refueling and maintenance during the spring of 1988.
Interest expense associated with the issuacce of $70.0 million of 30-year First Mongage Bonds in July 1988 was offset by a reduction in interest on commercial paper. Interest expense decreased-
           $3.0 million due to the reversal of accrued interest related to the order received in the 1983 rate case.
Interest expense increased $3.1 million due to the rate refund in the-1987 rate case.
Other, net income increased $3.0 million from 1987 due principally to a $2.0 million gain on the sale of real estate.
The $3.0 million decrease (10.8%) in income taxes is attributab!c to the reduction in the Federal income tax rate from 39.95% to 34% and the $11.0 million decrease in income before income taxes.
Lines of Business
                    'Ihe percentages of the Company's revenues, operating income before income taxes and net income for the years 1989,1988 and 1987 were as follows for the year endea December 32 1989           J9.81            J.9.82.
Revenues:
Electric  ..................                        97 %            99 %             99 %
Othe r . . . . . . . . . . . . . . . . . . . .        3%              1%               1%:
Operating Income Before income Tax:
Electric ..................                        103 %           108 %            100 %
Othe r . . . . . . . . . . . . . . . . . . . .      (3)%            (8)%                -
Net income:
: Electric  ..................                       102 %           107 %             97 %
Other....................                           (2)%            (7)%               3%
Approximately 79% of the Company's 1989 operating revenues were derived from electric service fumished in the Council Bluffs and Des Moines metropolitan areas.
                                                                    -49

                                                                                                                                                                                                                                                          ~           e SmengIm y YEAR EIE)ED DECEMBER 31, 1989 IONA RESOURCES-INC. AND SUBSIDIARIES CONSOLIDATED P1;')PERTY, PLANT AND EQUIPMENT (Ic Thousands)
Column A                                                                                                              Column B            Coltaan C           Columm D             Column E                   Column F Additions Retirements                   Other Chanoes at          at Original Transfers and Balance            Original'              Cost      Reclassifi-        Other           Balance Classification                                                                                                        Dg<:. 31, 1988              Cost            (Note 1)    cations'         (Note 21 Dec. 31, 1989 STATED AT ORIGINAL COST:
Electric plant                                                                                                 -
Intangibles                                                                                                              $       766           $       46        $     (10)  $       44    $              -
                                                                                                                                                                                                                                     $                    846 Production-Steam                                                                                                                    466,130                      -
(32)         217                   -
466,315 Other                                                                                                                     24,094                      -                -            -                   -
24,094 Transmission                                                                                                               131,701                      8            (841)        3,697                   -
134,565
;                       Distribution                                                                                                               284,630                6,753            (1,406)       16,555                   -
306,532 General                                                                                                                     50,614                   483           (1.975)       19,657                   -
68,779 In service, not unitized                                                                                                    30,250               33,464                  -
(40,170)                   -
23,544
                    ,   Property under capital lease                                                                                                   3,722                    -                -            -
(537)                          3,185 g     Total electric plant in service                                                                                          991,907               40,754            (4,264)            -
(537)         1,027,860 8         Held for future use                                                                                                   43,445                     59          (3,927)            -
(13,505)                   26,072 Total electric plant                                                                                             1,035,352               40,813            (8,191)            -
(14,042)          1,053,932 Construction work in progress-Electric                                                                                                                  24,254               33,062                  -            -                   -
                                                                                                                                                                                                                                                $7,316 Other property                                                                                                                  843               (322)                -            -
237                             758 Total construction work in progress                                                                                   25,097               32,740                  -            -
237                    58,074 other property                                                                                                              35,273                2,827              (483)            - '     29,917                     67,534 Total property, plant and equipment, including intangibles                                                                                             $1,095,722             $76,380           $(8,674)      $      -    $ 16,112         $ 1,179,540
( ) Denotes deduction NOTES:                                (1) The reserve for depreciation has been charged with the amount indicated on Schedule VI for the year ended December 31, 1989. The difference of $426 represents the sale of land and other property not fully depreciated.
(2) The $237 and $42,666 of'the $29,917 are the beginnimy balances of Walnut Mall T.4=4 ted Partnership which '
was consolidated with Middlewood Mall, Inc., a subsidiary of Iowa Resources Inc., in 1989. See Note                                                                                       ... !
13 of Notes to Consolidated Financial Statements. The $13,505 and a deduction of $12,639 in the $29,917                                                                               .
represent a transfer of portions of the Des Moines Power Station to unrecovered plant.
e e
_ ___        -_ _ _ - _ _ _       -__m___   _ _ ____

                                                                                                                                                                                      . .u . .
SCIRDULE V                          -
TEAR ENDED DECEseER 31, 1988 ICWA RESOURCES INC. AND SUBSIDIARIES CONSOLIDATED PROPERTY, PIANT AND EQUIPNENT (In Thousands)
Column D                 Column E             Column F Columm B          Column C Column A aMi tions Retirements              Other & =ar=a at      at Original    Transfers     and Cost         Reclassifi-                    Balance Balance           Original                                       Other . Dec. 31, 1988.
Dec. 31, 1987-                  Cost        (Note 1)      cations Classification STATED AT ORIGINAL COST:
Electric plant -                                                                                                                        72     $      -
                                                                                                                                                                       $       766
                                                                                            $           697   $       14     $     (17)     $
Intangibles Production-                                                                                                                      2,354             -        466,130
                                                                                               .463,891               46         (161)                                      24,094 Steam                                                                           23,653                -
                                                                                                                                     -             441            -
Other                                                                                                                          1,059             -        131,701 130,935                3         (296)                                     284,630 Transmission                                                                     273,035           9,073        (1,736)          4,258             -
Distribution                                                                                                    (5,118)          6,901             -         50,614 45,896           2,935                                                     30,250 General                                                                            9,986         29,143               -         (8,879)            -
In service, not unitized                                                                                              -               -
(793)         3,722 4,515                -
Property under capital lease                                                     952,608         41,214         (7,328)          6,206          (793)       991,907
  $'              Total electric plant in service 43,833               53           (18)           (423)           -         43.445 Held for future use 996,441          41,267        (7.346)          5,783          (793)     1.035.352 Total electric plant Construction work in progress-                                                                                                          -             -        24,254 15,649           8,605               -
Electric                                                                                          (1,358)              -               -            -            843 2,201                                                                     25,097 i
Other property                             .
17,850           7,247               -               -            -
l Total construction work in progress (5,783)             -        35,273 1
'                                                                                                39,936           1,660           (540)
Other property Total property, plant and equipment,                                         $1,054,227         $50,174       $(7,886)        $        -
                                                                                                                                                            $ (793)    $1,095,722 including intangibles
( ) Denotes deduction (1) The reserve for depreciation has been charged with the amount indicated on Schedule VI for the year ended December 31, 1988. The difference of $588 represents the sale of land and other property not NOTE:
fully depreciated.

i i
i                                                                                                                                                                                                                SCREDU1E Y l                                                                                                                                                                                                                YEAR E MED
!                                                                                                                                                                                                               . DECEMBER 31, 1987 IONE RESOURCES INC. A W SUBSIDIARIES CONSOLIDATED PROPERTY, PLANT AND EQUIPMENT l                                                                                                                                                              (In Thousands)
Column A                                                                                 Column B       Columm C          Column D            Columm E                  Column F Additions Retirements                Other Chances at'       at Original Transfers and Balance       Original             Cost'     Reclassifi-         Other        Balance Classification                                                                                                     Dec.~31, 1986        Cost             (Note 1)    cations           (Note 2) Dec. 31, 1987 STATED AT ORIGINAL COST:
Electric plant -
Intangibles                                                                    $        689   $            11   $       (3)    $     '-      $         -
                                                                                                                                                                                                                                 $        697 Production-Steam                                                          461,976                 48           76       1,791                 -
463,891
                                                                                    .Other                                                                23,653                  -            -            -                -
23,653 Transmission                                                                       129,556                  -
(308)      1,687                 -       130, 2 5 Distribution                                                                       261,547             8,723       (1,391)       4,156                 -
273,035 General                                                 .
46,326            2,026        (3,741)       1,285                 -
45,896 In service, not unitized                                                            6,993      11,912                   -
(8,919)                 -
9,986
                      .                                               Property under capital lease                                                              -                 -            -            -
4,515         4,515 g                                                                   Total electric plant in service                                930,740      22,720             (5,367)            -            4,515       952,608 Held for future use                                                                 43,833                  -            -            -                -        43,833 Total electric plant                                           974,573      22,720             (5,367)            -            4,515       996,441 Construction work in progress-Electric                                                                            13,653            1,996              -            -                -        15,649 73 Other prope dy                                                                                        2,128              -            -                -         2,201 Total construction work in progress                             13,726             4,124             -            -                -        17,850 Other property                                                                                          26,461                919          (80)           -
12,636           39,936 Total property, plant and equipment, including intangibles                                      $1,014,760    $27,763             $(5,447)     $      -      $17,151-      $1,054,227
( ) Denotes deduction NOTES:                                                                                (1) The reserve for depreciation has been charged with the amount indicated on Schedule VI for the year ended December 31, 1987. The difference of $83 represents the sale of land and other property not fully                               ;
depreciated.                                                                                                                          l (2) The "other" change in other property is related to DPS units 4 & 5 and was recorded in Account 121 per                               -
IUB order.                                                                                                                       .
l e-
                                                                                                                                                                                                                                                '         F

l SCHEDULE VI TEAR ENDED DECEMER 31, 1989 IONE RESOURCES INC. AND SUBSIDIARIES CONSOLIDATED ACCUMUIATED DEPRECIATION AND AMORTIZATION OF PROPERTY, PIANT AND EQUIPMENT l                                                                                  (In Thousands)
Column A                          Column B    Colume C                                             Column D                                     Coltsun E                       Coltuun F Retiramants                                     Other
!                                                  Additions l                                                  Charged to                          At                      Cost of                         Additions Transfers
;                                                  Costs and                        Original                  Removal or                       Charged to       and                                                  ,
Balance             Expenses                         Cost                      Salvage,                      Clearing     .%classi-                  Balance l
l    Description               Dec. 31, 1988        (Notes Is3) (Note 2)                                                         Net             Accounts fications      Other Dec. 31, 1989 Electric plant                  $325,823         $34,810                         $ (2,896)                $ (1,566)                          $ 404        $ (18) $        6         $356,563 l    Specific equipunent                 7,358                            199             (1,304)                                          234     1,056          18           -
7,561 i
Intangibles                         2,746                            252                            -                                   -          -          -           -                 2,998 l
Total depreciation and w      amortization electric Y     plant in service             335,927                   35,261                    (4,200)                (1,332)                           1,460           -
6            367,122 Depreciation on plant held for future use                  33,559                                -
(3,927)                                            -          -          -    (10,834)                18,798 Total electric plant depreciation and amortization                369,486                    35,261                     (8,127)              (1,332)                           1,460           -    (10,828)            385,920 other property                    13,714                           2,330                         (121)                                  -          -          -
(7,542)                 8,381 Total depreciation and amortization              $383,200           $37,591                      '$(8,248)                 $ (1,332)                          $1,460       $ -    $ (18,370)         $394,301                    ,
() Denotes Deduction NOTES:                                                                                                                                                                                                   !
(1) See Note 1 of Notes to Consolidated Financial Statements for the basis of the provision for depreciation.
t (2)  See Note 1 to Schedule v for the year ended December 31, 1989.
(3) Depreciation as shown on the Consolidated Stata-ant of Income includes $1,309 of amortization of deferred                                                                                     ,
charges. Depreciation and amortization as shown on the Consolidated Statamant of Cash Flows includes                                                                                         !
charges to clearing accounts of $1,460 and amortization of capital leases of $539.
                                                                                                                                                                                  ..,__._.-____m     _ _ _        __

SCHEDUIK VI YEAR EMDED DECEBBER 31, 1988 IOtth RESOURCES INC. AND SUBSIDIARIES CONSOLIDATED ACCtBE7IATED DEPRECIATION AND ANORTIEATION OF PROPERTY, PIANT AND EQUIP 9ENT (In Thousands)
Column A'                                                                                      Column B       Colusun C                Column D                Coltzen E                      Colum F Retiressents              Other Additions Charged to           At           Cost of   Additions     Transfers Costs and        Original       Rasmoval or Charged to        and Balance          Expenses          Cost         Salvage,   Clearing      Reclassi-              Balance Description                                                                               Dec. 31, 1987        (Notes 153) (Note 2)                Net     Accounts     fications Other Dec. 31,1988 l     Electric plant                                                                               $297,825            $34,709       $ (6,316)       $ (1,159)    $ 431         $ 333    $    -       $325,823 l     Specific equipment                                                                               6,638                   31        (862)            108      1,056          387         -
7,358 Intangibles                                                                                      2,511                  252          (16)             (1)        -            -         -
2.746 i
Total depreciation and m     amortization electric l   T     plant in service                                                                           306,974              34,992       (7,194)         (1,052)     1,487          720             -
335,927         ,
l     Depreciation on plant held for future use                                                                                33,731                     -
(18)            28          -
(182)        -          33,559 Total electric plant depreciation and amortization                                                                              '340,705              34,992       (7,212)         (1,024)     1,487          538         -
369,486 Other property                                                                                  13,833                  776          (86)              -         -
(796)      (13)         13,714 Total depreciation and amortization                                                                         $354,538            $35,768       $ (7,298)       $ (1,024)    31,461        $(258)   $ (13)        $383,200
() Denotes Deduction NOTES:
(1) See Note 1 of Notes to Consolidated Financial Statomsmts for the basis of the provision for depreciation.
(2)                                             See Note 1 to Schedule V for the year ended December 31, 1988.
                                '(3)                                                   Depreciation as shown on the Consolidated Statement of Incomme includes $182 of oil depletion expense, and $369 of amortization of deferred charges. Depreciation and ammortization as shown on the Consolidated Statement of Cash Flows includes charges to clearing accounts of $1,487, amortization of capital leases of $1,078 and oil depletion of $182.
e e      E g
o e

                                                                                                                              =
SCHEDULE VI YEAR ENDED DECEBBER 31, 1987 IONE RESOURCES INC. AND SUBSIDIARIES                                                             '
CONSOLIDATED ACCOMULATED DEPRECIATION AND AMORTIE& TION OF PROPERTY, PIANT AND EQUIPMENT (In Thousands)
Column A                        Coltnen B    Column C               Column D               Column E                       Coltsan F Retirements              Other Additions                                                                                       '
Charged to         At           Cast of Additions     Transfere Costs and      Original      Removal or Charged to        and Balance        Expenses        Cost        Salvage,   Clearing      Reclassi-              Balance Description                 Dec. 31, 1986     (Notes 153) (Note 2)              Net  _ Accounts    fications Other Dec. 31,1987 Electric plant                $264,917          $33,615       $(3,094)       $ (856)    $ 428       $(9,824) $12,639        $297,825 Specific equipment                  7,114             57       (2,257)          510        781            (2)      435          6,638          t Intangibles                         2,264            250            f.3)          -          -             -         -
2.511 d   Total depreciation and y     amortization electric plant in service            274,295          33,922        (5,354)         (346)     1,209       (9,826)   13,074         306,974 Depreciation on plant held-for future use                   34,275              -              -           -          -             -
(544)        33,731 Total electric plant                                                                                                                          ,
depreciation and                                                                                                                           :
amortization               308,570          33,922         (5,354)        (346)     1,209       (9,826)   10,530         340,705           I Other property                      3,165            857           (10)           -          -        9,326         (5)        13,633 Total depreciation and amortization             $311,735         $34,779       $(5,364)       $(346)     $1,209      L      - $12,525        $354,538
( ) Denotes Deduction                                                                    [
NOTES:
(1)  See Note 1 of Notes to Consolidated Financial Stat-ts for the basis of the provision for depreciation.
(2)  See Note 1 to Schedule v for the year ended December 31, 1987.
(3)  Depreciation as shown on the Consolidated Statement of Income includes $282 of oil depletion expense, and $353 of amortization of deferred charges. Depreciation and amortization as shown on the Consolidated Statement of Cash Flows includes oil depletion expense of $282 and charges to clearing accounts and other adjustments of $1,098.
1

SCHEDt'LE VII
'                                                                                                                                                                                                                 YEAR EBEED DECDEBER 31, 1989-i IONE RESOUIICES INC. AIW SUBSIDIARIES i                                                                                        CONSOLIDATED GUARANTEES OF SECURITIES OF OTHER ISSUERS                                                                                                         .;
Column A                            Column B                                                           Column C                    Column D             Columm E        Column F         Coltman G i
Junount in treasury of l                                                                                                                                                                                                                                                          '
Name of issuer                                                                                            Total amount                Annount            issuer of                       Nature of any i-                                 of securities                            Title of issue of                                             guaranteed and              owned by Iowa        securities       Nature of         default of I                                             auaranteed                securities cuaranteed                                                 outstandinq             Resources Inc.       quaranteed       quarantee -       securities l
City of Des Moines,                 Floating Rate Weekly                                                     $4,300,000                            None None            Guarantee               None Iowa                               Demand Cr===rcial                                                                                                                   of principal i                                                                      Development Revenue                                                                                                                 and interest s                                                      Bonds, Series 1985                                                                                                                                                                  '
             $'                                                           (Capitol Center III Project)
Capitol Center II                    8.85% Senior Motes                                                      $6,000,000                            None None            Guarantee               None Limited Partnership                 due 1993                                                                                                                           of principal                                 .
and interest
                                                                                                                                                                                                                                                         .i e
                                                                  ..wi.--                                             -                                  -. - - -
                                                                                                                                                                        <n ,-
_,__  y _ . _g__    _

             ~
m we v SCHEDUIE VII TEAR ENDED DECneER 31, 1988 IONA R2 SOURCES INC. AND SUBSIDIARIES CONSOLIDATED GUARANTEES OF SECURITIES OF OTHER ISSUERS Column A            Coltumn B                Coltuun C          Coltuun D                                                                                              Column E               Coltuun F    Column G Annount in treasury of                                                     -t Nanae of issuer                                Total amount         Amount                                                                                                      issuer of                  Nature of any.-
of securities         Title of issue of      guaranteed and     owned by Iowa                                                                                           securities             Nature of    default of quaranteed        securities quaranteed       outstanding     Resources Inc.                                                                                         quaranteed              quarantee      securities City of Des Noines, Floating Rate Weekly          $4,300,000               Mone                                                                                         None                  Guarantee           None Iowa                Demand Canumarcial                                                                                                                                                        of principal Developasmt Revenue                                                                                                                                                       and interest Bonds, Series 1985 E                     (Capitol Center.1II y                     Project)
Copittu Center II   8.85% Senior Notes            $6,000,000               None                                                                                         None                  Guarentee           None T4=4ted Partnership due 1993                                                                                                                                                                  cf principal and interest t
[
i.
e i
1

SCHEDUIR VII TEAR EIGED DECEBeER 31, 1987-IONE RESOURCES INC. AND SUBSIDIARIES CONSOLIDATED GUARANTEES OF SECURITIES OF OTHER ISSUERS
* Column A                       Coltumn B                Coltaan C                Coltaan D      Column E           Column F      Column G               I I
Amount in treasury of Name of issuer                                           Total amount               Amount       issuer of                       Nature of any           !
of securities                    Title of issue of      guaranteed and           owned by Iowa  securities          Nature of     default of quaranteed                   securities cuaranteed      outstandino            Resources Inc. quaranteed _quarantee             securities City of Des Moines,            Floating Rate Weekly          $4,300,000                 None    None               Guarantee           None              6 Icwa                           Demand Commmercial                                                                  of principal Development Revenue                                                                 and interest Bonds, Series 1985 (Capitol Center III                                                                                                       i y                                     Project)
Copitol Center II              8.85% Senior Notes            $6,000,000                 Mone    None               Guarantee           None Timited Partnership            due 1993                                                                            of principal and interest 4
t
                                                                                                                                                             -        1
                                                                                                                                                                  ^
1
                                                                                                                                                       *       *e
-___ _ _ _ _        ' _ . _ _ _ - _ _ __- e             _.
ePe-                    -r'+'' -*NI- +             e

                                                                                                                                                                                                                   .     ..c e-.
t
                                                                                                                                                                                                                                 .+
SCHEDULE VIII YEAR EBWED MN-EER 31,1989 IONA RESOURCES INC. AND SUBSIDIARIES COttSOLIDATED VALUATION AND QUELIFYING ACCOUNTS (In Thousanda)
Column A                                                               Column B                                             Coltsun C                                     Coltsun D          Column E Deductions for Purposes Balance                                            Additions (Note)                                for Which          Balance l                                                                                    Dec. 31,                                       Charged to Charged to                               Reserves           Dec. 31, Description                                                               1988                                          Income                            other         were Created           1989 l    Reserve deducted from applicable i      assets-Uncollectible accounts                                                 $                  309                         $      961 $                               -
                                                                                                                                                                                      $       (974)        $    296 Reserve included in Consolidated Balance di Sheet in " Reserves and Deferred Credits-y  Other"- Jnjuries and d===ges                                                    $ 1,144                                        $      520 $                           1,642      $     (1,883)        $ 1,423 NOTE:    The amount of additilons charged to income for " Reserves and Deferred Credits--Other" - Injuries and d===ges represents adjustments made to comply with regulatory treatment of these esgenses. The amount shown as
              " Charged to other" represents the 1989 change in the balance of the Injuries and d===ges reserve that resulted front increases in esti==ted major losses fross those esti==ted for l'988 and remaining balances that are not i==adiately recoverable due to current ratemaking treatment and are shown as a deferred credit and a deferred charge on the 1989 Consolidated Balance Sheet.
l l
l l

o d'j'' Ql
  ~ _
      .m SCHEDUIX VIII-YEAR EM)ED rameR 31,1988 IONE RESOURCES INC. AND SUBSIDIARIES CONSOLIDATED VALURTION AND QUALIFYING ACCOUNTS
,                                                               (In Thousands)
Column A                               Column B              Column C                                  Column D                                                           Column E Deductions for Purposes Balance             AMi tions (Notel                                      for Which                                                Balance                  i Dec. 31,      Charged to Charged to                                       Reserves                                                 Dec. 31, Description                              1987            Income      other                             were Created                                                         1988 Reserve deducted from applicable assets-Uncollectible accounts                 8    726      3        956 $             -
                                                                                                                           $                         (1,373) .                               $    309 Reserve included in Consolidated Balance Sheet in " Reserves and Deferred Credits--Other"- Injuries and d===< pas       $ 1,537       $        539 $      (254)                          $                                  (678)                          $ 1,144 NOTE:    The amount of additions charged to income for " Reserves and Deferred Credits--Other" - Injuries and damages represents adjustments made to comply with regulatory treatment of these expenses. The amount shown cs "Chn::ged to Other" represents the 1988 change in the balance of the Injuries and damages reserve that                                                                                         .
resulted from reductions in estimated major losses from those esti==ted for 1987 and remaining balances that .
are not i====diately recoverable due to current ratemaking treatment and are shown as a deferred credit and a deferred charge on the.1988 Consolidated Balance Sheet.                                                                                                                                        -
                                                                                                 ~
                                                                                                                                                                                                     .     .. i t
                                                                  , -     ~
                                                                                     ,.    .~~.<~_n  ___.,-___._:__.__-_ - _ _ _ _ - - _ _ _ _ _ _ . _ _ _ . _ = _ _ _ _ _ . _ _ _ _ _ _ _ .                        -

P
                                                                                      ~
h
                                                                                                                                                                                ,.      ..' g '.
                                                                                                                                                                      ~
                                                                                                                                                                                            . ~$ .
S N VIII YEAR ENDED DeQuemR 31,1987 IONA RESOURCES INC. AND SUBSIDIARIES CONSOLIDATED VAIRATION AIE) QUALIFYING ACCOUNTS (In Thousands) l 1            Column A                                   Column B-           Column C                                            Colusen D                    Colmn E Deductions for Purposes Balance           add 4tions (Note)                                  for Which                       Balance
                                                       .Dec. 31,     Charged to Charged to                                   Reserves                        Dec. 31, Description                                  1986         Income        Other                           ~ Were Created                               1987 Reserve deducted from applicable assets-Uncollectible accounts                     $    914     $       905 $                     -
                                                                                                                        $            (1,093)                  $         726 Reserve included in Consolidated a   Balance Sheet in " Reserves and Deferred Credits--Other - Injuries and d== meres           $ 2,443      $       561 $              (991)                   $              (476)                  $ 1,537 NOTE:    The amount of additions charged to inconne for " Reserves and Deferred Credits--Other" - Injuries and damages represents adjustments made to comply with regulatory treatment of these expenses. The _ annount shown as
             " Charged to Other" represents the 1987 change in the balance of the Injuries and d===ges reserve that resulted freen reductions in esti==ted major losses frosa those esti==ted for 1986 and .                                        tain balances that are not immediately recoverable due to current ratemaking treatment and are shown as a deferred credit and a deferred charge on the 1987 Consolidated Balance Sheet.
_ . _ . _ _ _ . _ . _ . _ _ _ _ _ _ _ _ _ _ _ _ _ _              _______..__.____._______.___m    _

a i
SCHEDULE IX YEAR ENDED DECEMBER 31, 1989 IOHk RESOURCES INC. AND SUBSIDIARIES                                                    ;
CONSOLIDATED SHORT-TERN BORROWINGS (NOTE 1)
(In Thousands)
Columm A         Column B            Column C        Columm D           Colt.'un E              Column F pawimann          Average                 Weighted Category of                  .
Weighted           amount _        amount                   average aggregate           . Balance           average       outstanding          outstanding           interest rate short-term          at end of           interest       during the          during the           during the.
borrowings            period              rate            period         period (Note 2)       period (Note 3)
Commercial Paper.             $11,400                8.7%        $20,900                $ 7,780-              9.2%
e                                                                                                                            l N  NOTES:
(1)   Cnemaarcial paper may be issued by Iowa Power Inc., the principal subsidiary of Iowa Resources Inc., in an amount _not to exceed 25% of gross operating revenues for the preceding twelve months and is issued with maturities not to exceed 270 days at interest rates then in effect.
At December 31, 1989, c<====rcial paper maturity dates ranged from January 22, 1990 to February 9, 1990.
(2)   The computation of the average amount outstanding during the period is based on the sum of the daily amount outstanding divided by the n>=mher of days in the year.
(3)   The computation of the weighted average interest rate for ct====rcial paper outstanding in                          i 1989 is based on the sum of the annual interest on each en===rcial paper transaction divided by the sum of the daily net amounts of ce====rcial paper outstanding.
e O

                                                                                                                                                                                                                                      .    +*
SCHEDULE IX YEAR ERWED DECEMER 31, 1988 IONE RESOURCES INC. AND SUBSIDIARIES CONSOLIDATED SHORT-TERM BORROWINGS (NOTE 1)
(In Thousands)
                                                                                                                                                                                                                                                'i Column A         Column B                    Column C              Coltman D                                                 Column E                             Column F p=wl -                                                Average                             weighted Category of                                     weighted'                                  amount                                amount                                average aggregate           Balance           . average                outstanding                                                   outstanding                         interest rate short-term        at end of                   interest         during the.                                                   during the                           during the borrowings            aeriod                      rate'                    period                                           period (Note 2)                      period (Note 3)                                                                 .j Commercial Paper            $    -
                                                       -%                      $43,200                                             $20,460                                    7.1%
NOTES:                                                                                                                                                                                                                                             i (1)    Cr===arcial paper may be issued by Iowa Power Inc., the principal subsidiary of Iowa Resources                                                                                                                                               i Inc., in an amount not to exceed 25% of gross operating revenuns for the preceding twelve                                                                                                                                                   ,
months and is issued with maturities not to exceed 270 days at interest rates then in effect.
(2)   The computation of the average amount outstanding during the period is based on the sum of the daily amount outstan<44nry divided by the number of days in the year.
(3)   The computation of the weighted average interest rate for cr====rcial paper outstanding in                                                                                                                                                  }'
1988 is based on the staa of the annual interest on each cr====rcial paper transaction divided by the sum of the daily net amounts of cr====rcial paper outstanding.
                                                                                                                                                                                                                                                     ?

SCHEDUIE 11 YEAR ENDED DECEBSER 31, 1997 IONE RESOURCES INC. AND SUBSIDIARIES CONSOLIDATED SHORT-IERBt BORROWINGS (NOTE 1)
(In Thousands)
Column A                                     Column B                              Column C                  Column D                                    Col'an E                                            Column F                                                             "
Demwimmun                                   Average                                            Neighterd                                                            l Category of                                                                            Weighted                        amount                                  amount                                              average                                                            ;
aggregate                                               Balance                     average             outstanding                                 outstanding                                      interest rate                                                                 1 short-term                                    at end of                             interest              during the                                  during the                                          during the borrowinos                                                 period                        rate                     period                      period (Note ?)                                       period (Note 3)
Comunercial Paper                                         $29,900                               7.8%                       $35,000                                    $21,131                                                          7.0%                                                   i NOTES:
4 a-3 t
(1)     Coussercial paper may be issued by Iowa Power Inc., the principal subsidiary of Iowa Resources Inc., in an amount not to exceed 25% of gross operating revenues for the preceding twelve months and is issued with maturities not to exceed 270 days at interest ratee'Oton in effect, At December 31, 1987 . ca====rcial paper maturity dates ranged frean Januarj                                                                                                                         6,           1988 to February 5, 1988.
(2)     The computation of the average amount outstanding during the period is based on the sism of the daily amount outstanding divided by the number of days in the year.
(3)     The computation of the weighted everage interest rate for c-rcial paper outstanding in 1987 is based on the sism of the annual interest on each ce====rcial paper transaction divided by the sum of the daily net amounts of ce===rcial paper outstanding.
i l
l e
e -
i I
_ _ _ _ _ . _ _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ _ _ _ _ _        _ _ _ _ _ _ _ _ = _ _ _ _ _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - - _ _ _ _ _ -

                            . . _ . _ ,  .               _   _          ._= _ , _ - . . _ . _      __        . - _ .      _
       , ' . e -
4 4
SCHEDULE X IONA RESOURCES INC. AND SUBSIDIARIES CONSOLIDATED SUPPLEMENTARY INCOME STATENENT INFORMATION (In Thousands)
Column A-                                                     Column B Charged To Cost And Expenses Year madad rec- ' + r 31 1989       1988        1987 Tames, other than payroll and income taxes - Property                                       $22,660 $22,176        $21,657                       s NOTE: Maintenance and repairs is not set forth inasmuch as the information
!                        is included in the consolidated financial statements.
Depreciation and amortisation of intangible assets, royalties and advertising are not set forth inasmuch as- such items do not azooed one percent cf total revenues as shown in the related Consolidated.
Statement of Income.
                                                                                                                                                   '1 1                                                                                                                                                    \
l                                                                                                                                                    i l
l l
l l
I l
l 1
1 o
l l
l 12         06    >
                                                                  . . .                    .-          -                                     - - -1

a-                                                                                                      . . . .
a EXHIBITS INDEX Exhibit M                                      Descriodon I
4.29-     Instrument relative to the resignation of R. S. Stam as individual trustee and r
y                 appoinunent and acceptance of J. Bartolini as individual trustee under the Indenture of E                 Mongage and Deed of Trust between IPR and Harris Trust and Savings Bank, dated                        '
as of August 1,1943, as amended and supplemented.
10.20    . Agreement and Plan of Merger among C&P Holdings Company, Midwest Energy Company, and Iowa Resources Inc dated as of March 15, 1990, 10.21     Stock Opdon Agreement between Iowa Resources Inc. and Midwest Energy Company deled as of March 15, 1990.                                                                         't 10.22     Stcct Opdon Agreement between Midwest Energy Company and town Resources Inc.
dated as of March 15, 1990.
10.23     Employment Agreement between Mark W. Putney and C&P Holdings Company dated                            l as of March 15, 1990.                                                          ,
i 10.24     Employment Agreement between R. E. Cluistiansen and C&P Holdings Company dated                        i as of March 15, 1990.
13         1989 Annual Report to Shareholders.
22.1      Subsidiaries of IOR.                                                                                  ,
24        Consent of Independent Public Accountants.
I lowa Resources Inc. Payroll Based Employee Stock Ownership Plan Annual Report on 28.1_
Form Il K.                                                                                        -
I 28.2      lowa Resources Inc. Employee Stock Purchase Plan Annual Report on Form Il K.
i 1
66-L
   ,}}