ML20062H098
| ML20062H098 | |
| Person / Time | |
|---|---|
| Site: | Callaway  |
| Issue date: | 04/16/1979 |
| From: | UNION ELECTRIC CO. |
| To: | |
| Shared Package | |
| ML19274E771 | List: |
| References | |
| NUDOCS 7904240388 | |
| Download: ML20062H098 (35) | |
Text
l HIGHilGHTS' Year Ended Annual Change December 31,1973 Current Year 10-Year Average Earnings per Average Common Share. $ 2.01 20.4 % 3.8 %
Dividends per Common Share . $ 1.40 2.9 1.6 Common Shares Outstanding (Average) . 48.260,596 7.0 7.2 Average Common Stock Equity. 5 768.297,000 9.2 10.3 Residential Kilowatt-Hour Sales . 7,670,000.000 3.8 6.4 Total Kilowatt-Hour Sales . 23.517,000,000 1.9 4.3 Price per Ton of Coal . $ 24.15 35.2 17.7 Coal Burned (Tons) . 11.866,000 -
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Interest on Debt. S 90,309.000 8.0 13.3 Total indebtedness . 5 1,273.552,000 5.1 8.0 Consumer Prices 19671978 MEDICAL CARE-UP 119%
FOOD-UP 111%
(
(, ,, HOUSING-UP 103%
CONSUMER PRICE INDEX-UP 95%
TRANSPORTATION-UP 86%
ELECTRICITY-UP 82%
0 10 20 30 40 50 60 70 80 90 100 110 120 Source: U S. Department of Commerce, except for " Electricity" which indicates Union Electnc Company's average ,==idential price per kilowatt-hour.
i 790424 033$
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TO OUR STOCHOMRS 1978 was a good year-earnings the 110-day United Mine Workers' proud of our record in fulfilling that were up, dividends were increased, coal strike, events which impacted obligation. While such task has never and our customers continued to adversely on electric service in been easy. we recognize that its enjoy dependable electric service. some other areas of the country, and achievement in the future is Common stock earnings for the by the severe ice storm that endangered by governmental year were $96.9 million, or $2.01 per struck the St. Louis area on policies on rate fixing, on share, which was a significant December 31,1978. environmental matters, and on improvement over the $1.67 per it is the nature of our business to economics generally.
share eamed in 1977. reflect in a significant manner the Of course, rate regulation and its Reflecting these record earnings, comfort standard of our customers. direct effect on our financial health the quarterly common stock And while the industnal portion of is an acknowledged fact of utility dividend was increased from 34 cents our customers-in the overall- life. For us. this is largely a State to 36 cents per share effective in showed httle progress for the year, matter. Since in last year's Annual the third quarter of 1978. bringing chiefly because of the coal stnke Report we spoke at length on the the annual dividend rate to $1.44 and the absence of new industry subject of rate regulation, we will per share. in our service area, most of our not here reiterate it. Suffice it to say customers-as represented by the that inflation has increased The high level of earnings for the significantly the frequency of the year was due primarily to the residential segment-enjoyed ,n i improved relationship between rates- 1978 a record usage of electricity. need for adequate rate increases. q Since it is obvious that no one is At the same time, this circumstance d charged and costs-incurred as a has heightened the debilitating effect asult of rate increases of approxi- required to use more electricity than he did in the past, the increased use of a regulatory policy which mately $50 million authorized in of electricity by residential customers habitually awards less rate relief 1978. Additionally, kilowatt-hour than is called for by the facts of the sales to industrial customers were up evidences a voluntary choice of the case. Such policies in the case of 1 per cent and sales to residential conveniences and comforts afforded customers were up 4 per cent. by electric energy. It is, in every Union Electnc and most utilities in sensa a sigmqcant manifestation of the country have debased the producing an overall increase in market price of common stock to a the customers recogn,i tion of the kilowatt-hour sales of value of electricity. point below its book value. Inevitably.
For our customers, the2 avail per cent}
this is a situation which is hazardous ability of reliable electric service Thus the record shows that 1978 was a good year for Union Electric's tothefuturesupplyof electricity-for in 1978 was an important asset. even capacity expansion requires capital though. understandably. the nvestors and customers. As much as we might prefer to confine our attraction and capital is not generally appreciation of such tact may have attracted to companies and industries been lessened by our fine record cf letter to that record and its good news, to do so would be incomplete suffering from impaired credit service reliability. Actually, the standings.
because in our opinion it is Customer's conscious awareness of dependability was undoubtedly essential that the currerkt state and As difficult as it has become in l trend of governmental regulations recent times we are accustomed s and attitudes be widely broadcast to rate regulation. Environmental e a sh i er f 1 and and understnM-for they pose a real regulation, on the other hand, is a and menacing threat to the future. much newer concept and lacks the The goal and objective of Union history and established principles Electric-the very purpose for which which give some assurance in the we exist-is to provide reliable rate area. As reported in previous electric service to everyone who Annual Reports it has appeared on wants it in our service area. We are many occasions that environmental regulations would be imposed on the Company without regard to their effects on economics or on service standards.
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All of the Company's generating should they not be approved, the old Today, interest rates and all money plants meet the established quality standardr would apply and it would costs are at record highs, a fact which standards for ambient air (the ground probably be necessary to shut down reflects the lessened value of money.
level air people breathe) with respect part of the Labadie and Sioux This results in an unnecessarily high to sulfur dioxide. Although our generation and purchase expensive cost for utility construction-and will Labadie and Sioux plants have not replacement power from other inevitably produce much higher met the previously established utilities electric ratec. Inflation can benefit sulf ur dioxide standards for emissions Without question, rate regulation no one.
at the top of the stack, the plants have and environmental regulation are in summary, we had a good year been operated under short-term serious matters having direct effects in 1978. The hill to the future.
variances granted by the authorities. on the future supply of electricity. however,is steeper.We believe that Recently. however Missouri officials However. in our opinion, the the time has come for everyone to approved new permanent emission unbridled inflation of our day, exert such influence as he possesses standards with which the Company although it is neither as direct nor as to correct the serious and menacing can comply by blending low-sulfur exclusive a problem for electric situations that loom ahead. We Western coal with the Illinois coal utilities, poses a much more serious pledge to do our part.
normally utilized at those plants- and pervasive threat to our future.
While the additional cost for the
- Western coal is estimated at $40 to inflation. of course. is a national roblem. More accurately, it is a i , . 550 million per year, it is well below the S175 million per year which .
N Fehl hmm would have been requires to comply it .is simply the cheapening of money.
with the prior emission standards. R is aceomplished by the over-w w/
expansion of the money supply, an /
Although, these new M.issour' event spurred on by the government's emission standards for Labadie and es 1 hgW deficit-spending habits.
U S Env n ntal Pro e o Wage and price controls , voluntary hf ut ve Officer Agency (EPA). we believe it or mandatory-cannot stop inflation ,
significant that the EPA generally because high wages and on.ces are j the effect, not the cause. In all of supported adoption of the new standards in the Missouri history-without exception-wage February 21.1979 proceedings. Moreover the approval and price controls have never St. Louis. Missouri of the new Missouri standards by the worked; nor can they. Unfortunately.
EPA is extremely important because. until the Federal Government is willing to meet the problem of money L a supply, we will continue to reel under i m A ; the accelerating pace of inflation.
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4 All of us-individually and collectively-are the victims of l
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inflation. None of us can escape its if effects. In a special way however.
D% electric utilities are particularly ,
vulnerable to the harmful effects of '
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inflation. Quite clearly, society today yj?
gs
[ .i is dependent on electricity ever-increasing to an degree-a situation which requires expansion of electric !
W h:y k utility facilities. And, significantly.
4 because the electric utility industry r
2N is the most capital-intensive business l t there is. the cost of capital to us is t- more important than it is to any
& other industry.
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i _ l l . . l. Tile YEAR 1978 ) Earnings Per Share exceptional 8 per cent increase in additional $2 million annual amount l 1977. industrial sales were up is being sought in the Company's li R i se To S2.01 1 per cent,in slightly over 7.7 rates for steam heating service. billion kilowatt-hours, and commer- Based on interim approvals of the Earnings per share during 1978 cial sales remained level at 6.3 FERC and the Iowa cases. Union were $2.01, an increase of 34 cents billion kilowatt-hours in 1978. Electric has been collecting the Residential sales, however, increased higher rates, essentially beg,nning i in i over the previous year. This was a to 7.7 billion kilowatt-hours a 4 per the second quarter of 1978, subject ; 20 per cent increase over 1977,in contrast to the 10 per cent decline cent gain over 1977.The coal miners' to refund pending final determination ; Pf01onged strike early it' the year of the cases. Also pending at year- ; in per-share earnings in 1977. end were rate increase applications obv.iously had an adverse impact on . The common stock earnings of industrial and commercial sales in of subsidiary companies aggregating !
$96.858.000 for the year primarily 1978. over $9 million in annual revenues. l I
reflected a more realistic relation- ' ship between electric rates charged The total electric heating load i to customers and actual costs connected to the Company's system i incurred by the Company. increased by 250.000 kilowatts Fuel and the Fuel 1 during the year. Electric heat was Adjustment Clause l installed in 33 per cent of all single- l { mily residential construction and C Dividends increase in 72 per cent of all multi-family Fuel costs are a major and volatile construction in the Company's operating expense of our business. j Ouarterlycommon stock dividends service area. In 1978. Union Electric's fuel bill , were increased from 34 to 36 cents These increases in electric space was $308 million.an increase of $71 ; per share effective in the third heating installations are important million or 30 per cent over the ; quarter of 1978. bringing the annual because they enable the Company previous year. Increases in the cost i dividend rate to $1.44. All dividends to utilize, during the winter months. of coal caused by the coal miners' ! paid on common and preferred the facilities which have been built strike were a key factor in the I stocks during 1978 are fully taxable to serve the high demands of the higher fuel costs. l as dividend income. summer air conditioning season. The fuel adjustment clause is the ! means by which changes in fuel l prices are reflected in customers' ! electric biiis. On February 2.1979. j Kilowatt-hour Sales Rate Increases . the Missoun Public Service - Increase Commission entered cn order I in February 1978. the Missouri ! Total kilowatt-hour sales were up Public Service Commission Generation Mix 1978 f (1 approved an increase in electric b 2 per cent in 1978. following an rates which was designed to provide additional annual revenues of approximately $33 million. This was i s slightly more than one-hatt of the
$65 million originally requested.
Also in February 1978. the Illinois i Commerce Commission authorized an annual increase in electric rates of approximately $9 million as compared with the $14M million g requested. g:ig ' :,< At the end of 1978. Company rate cases were pending before the y #M
$ h a,. Federal Energy Regulatory
,;.MS Commission (FERC) equal to $15 million in annual revenues; the Iowa !
Electric heat was installed in 33% of Coal 93,.o the new single-family construction and State Commerce Commission in 72% of the new multhf amily amounting to $2M million in annual Hydro 5% construction in tne Company's revenues; and the Missouri Public service area last year. Service Commission,where an Oil 2% 5
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establishing a new fuel adjustment in the spring of 1979. the reactor " Fuel costs are a- ' charge for Missouri electric utilities. vessel will be placed in the multi- - While changing some details.the new layered steel and reinforced fmajor and Volatile Operating expense ~ fuel adjustment charge will continue concrete containment building. The the basic concept. It will apply to all 140-foot-high walls of the structure Of Our business" ' have been completed and the dome-classes of customers and will reflect - the cost of the fuel component of like roof will be completed as . energy generated and purchased. Soon as the reactor is p! aced in '
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The Company's present fuel position. ._4 ,- rt 7 .c . . adjustment clause continues in At the end of 1978. a total of . .. .- effect until the new fuel adjustment
$453 million had been spent at - 'y.:1 ' ' 1 ' -
charge is determined following a Callaway; and the ultimate cost ' ' Commission hearing to be held later this year-for the two units is estimated at
$2.5 billion.
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4 During 1978, the Company placed
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three 55.000-kilowatt cornbustion #
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Nuclear Fuel turbines in service. bringing the s M
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system's combustion turbine capacity to 414.000 kilowatts. bg . x.
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On February 12.1979. a contract was entered into with Western Located at Jefferson City. Moberly . J '- .. . - Y ' : Nuclear. Inc. a major U.S. uranium and Mexico. Missouri, these three units represent a $21 million .. Q[ . y p-
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producer, for the supply of six million investment and provide increased / N i FN.nc -QSA.>O.O I r-pounds of uranium to be delivered reliability for the system. t f lCNhfd.y.h during the period 1984 through 1995. ' - With this contract the Company 4#j 0g..kef-[< . now has secured a sufficient supply j M($$k[,: , j g. ' M~ $ of uranium to operate Callaway Security issues ~]N- . Unit 1 through the endof thiscentury. provide Construction / I V ' '? Funds {'. ; .k'g Record Amount Spent - ' For Construction The sale or stocks and bonds '
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j n ' 9'W N ' d,' provided more than $113 million for . the Company's construction ' - i
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Construction expenditures .in 1978 # program in 1978. 2 - " . - . .
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were a record $323 million. Of that amount $230 million was spent on In August. 555 million in first y' - I'i , 4
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the Callaway Plant and 593 mortgage bonds. beanng an annual j- ?. ' million was expended for other interest rate of 9.35 per cent.were
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projects and environmental controls. sold to a group of institutional Investors. 7., n:p 9~W 7 M g#(Myc V #f 9 i' ' . Progress cont.inued on the in September, the Company a pM,Pt ap *% th' $
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- x' Callaway Plant and at year-end, q g swW g/
issued 4 million new shares of Unit 1 of the 2.300.000 kilowatt M 3 plant was 27 per cent completed. common stock a public sale which p 4 The first 1.150.000 kilowatt unit of generated $58 million. - W g ; ,
~gt 'g gV Callaway is scheduled to provide Shareholders continued to benefit ';~
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electricity for our customers in late from the Company's Dividend -
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1982,with Unit 2 scheduled for Reinvestment and Stock Purchase , .
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operation in 1987. Plan during 1978. The Plan provides m .
.j Several accomplishments high-lighted the construction year at an opportunity for shareholders to reinvest their dividends in the
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_ l, I _' - v-Company's stock and to make I Callaway. Most significant. perhaps. was enclosure of the turbine / optional cash payments in any generator building and other major month for the purchase of additinnal parts of the plant.which permitted stock. .
' The comdanyi power'psdnis burna work to proceed indoors during At the end of 1978. more than -
; ' approximately 12 mession' tons or c.
the winter. 21.000 comrnon stockholders were s during the yes.r. i',, ., m
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I { l l participating in the Plan. They customers would increase an l represent over 13 per cent of our average of 4 per cent and large I 158.000 common shareholders commercial and industrial ! and. in 1978. alone, provided more customers' rates would increase than $11 million of additional an average of 8 per cent; however, capital through the Plan. rates for small commercial and i Financing plans for 1979 include industrial customers would decrease
- a pnvate placement of up to $75 an average of 29 per cent.
I million of new preferred stock with a I group of institutional investors l during the second quarter and the New Board Member issuance of additional first mortgage bonds later in the year. At the annual meeting .in April 1978. Union Electric stocknolders elected Mr. Sam B. Cook to the Long-term Bank Loan Companys Board of Directors. Extended Mr. Cook, who is president and cnief executive officer of The Central Trust Bank, Jefferson City, Missouri. Last August, the Company issued fills the vacancy resulting from the
$75 million of unsecured bank notes retirement of Mr.W. Alfred Hayes.
1972 bank notes.The i t rest ate on the new notes is based on l multiples of the prime interest rate- Management Changes . 105% of the prime in 1979, rising to l 115% of the prime in 1984 and 1985. In April 1978, the Board of } However, the new notes, which j Directors elected H.C. Colteryahn a j matuie in 1985, can be prepaid vice president. He continues to be i without penalty after December 31, responsible for the Engineering and 1979- Construction function. j ! In October 1978, the Board i elected two vice presidents: ! Cost-of-Service Study M. E. Gatewood, who continues in
! charge of the Supply Service i function, and W. A. Sanford, who j in 1978. Union Electric completed continues to head Industrial
- a study which analyzed the costs of Relations. Effective with the providing service to various . . retirement of Vice President categories of customers in Missoun. P. J.Potts on December 1,1978, the The cost-of-service study was
. Personnel function was divided into j undertaken at the direction of the.
, Industrial Relations and Employee j Missouri Public Service Commission. Relations functions. Mr. Sanford j On the basis of the study results, heads Industrial Relations and i the Company has filed newly- R. O. Piening. formerly treasurer, designed rate schedules with the was promoted to director of Commission, which will conduct Employee Relations. C. W. Mueller hearings on the issue during 1979. was elected treasure"o. succeed j The proposed new rates would not Mr. Piening.
increase the Company's revenues. The sole purpose of the new filing
, is to restructure rates so that they L more closely reflect the actual cost l of serving the various classifications
,! of customers-which was the expressed objective of the cost-of-service study. Under the proposed new rate design, rates for residential i l \ 4
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h PLANNING AN1 CINSTRilCT IN The future ability to provide for the nuclear generating plant 1984, the new interconnections will growing electric energy demand was made because our studies provide for increased interchange of requires planning and construction showed that nuclear fuel would electricity with the Middle South
.nany years in advance of the actual provide the safest, most economical Utilities System, which includes the need. In fact. governmental red tape and efficient. and most environ- Arkansas-Missouri Power Company.
has significantly increased the lead mentally-acceptable method of Also. this will increase reliability to time required to build new electric generating the electricity which will southeast Missouri, where Missouri utility facilities-particularly be required. Our studies today come Utilities Company.a Union Electric generating plants. Therefore, our to the same conclusion subsidiary, is located. planning today must sometimes begin more than a decade before n viev suchto gI adt e the n WCOnneCMM b d b pa W ng planning process necessarily retains Expansion . as much flexibility as possible to meet changirig circumstances. In addition to the dependability of service that is derived from the Load Dispatching is the master Company's own generating facilities. control center of Union Electric's c interconnections with other systems power operations and is responsible t Generat,ng i Fac,ilit,ies and the ability they provide for the interchange of power greatly
,c, eirecting tne ,,c, c, pc e, throughout the syste. In 1978.
enhance the reliability of electric plans were completed fcr an The longest lead times are utility sen/ ice Currently, the expanded multi-mill:cn do!!ar. load required for the construction of Company has the ability to dispatching facility which w3! nuclear power plants. Thus it was interchange electric power with . provide increased reliability and that after several years of intensive more than 20 other electric utilities more economic operation of the and extensive study, the Company in to the north, south. east and west. Company's electrical power system. July 1973 announced that it was During 1978. an agreement was Among other things. the ne'n facility then beginning the process of made between Union Electric. will be able to monitor, and control building-for service in the early Associated Electric Cooperative. mere effectively. power flow and 1980s-the 2-unit nuclear power Inc. and Arkansas-Missouri Power voltages; and will be capable of plant which we now call Callaway Company to provide additional ties demonstrating the effects on the Plant. The 1973 decision to build to the south. When completed in system of alternative operating actions. In addition. expanded microwave facilities are planned to
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r.r L s. l s The Callaway Plant construction schedule calls for Unit 1 to begin operation in The 331-ton reactor vessel arrived at late 1982. the Callaway Plant in October. 9
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Researcn Instaute EN anicn N ..[ 7 st - es as a coordinator of maior researcn and development projects
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abundantly-avadable n gh-sulfur coal for conversion to a low-sulfur i d.<.M 85 - 7 r gasecus f uel that .vcuid be environ-mentany acceptable fcr power plants .
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The Ccmpany alsc continued its O$ 2\. l mser n Adh four cther midwestern - kansas '" -# l atices ano the U S Depar* ment of - dh Energ / an plans for a comoressea-ar Arage plant This unique f- .f> #(Qpf - __ _ f.,r j j
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Q oump ar pressea air . ndergrcund ' ' /, ~ , Anencema% e'eenc:ty is low -/ .i
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- entinued by the C.emoany In 1978 - Unop Electnc and ets utshty%Qg LEGENDi e%*Qg~4j g. a mere man 8100 custcmers instahea **nes, M
esoun N8"" h & 3- y J.g AreaServed insuiation is part ct me crogram and 6 ~' Conpan anpassouri utilities C6 at tose fmancea me cost on .M Extra-High-Voltage Lines i m .O'+
.n +,i r %,, r n_ _ a m Company, are pnmarily engage'd in -- -
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.- Own~ed by Union Electric strategic Center of America--a . == OwnedbyOthers
' 24.000 soudre mile area in ' ... -
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Missoun. Illinois and towa: The . '
' Company is a member of one of * .-
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the,nationi largest power pdoling [ #fA Hydro .
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_ . _ . _ _ _ _ _ _ _ __ _ _ _ .E __ ____ Responsibility For Financial Ctatements I 1 I The management of Union Electric Company is responsible for the preparation and presentation of the consoliriated financial statements included in this Annual Report. The statements. consisting of a balance sheet and a statement of long-term debt and preferred stock and the related statements of income, retained earnings. Other paid-in capital. and changes in financial position. have been prepared in accordance with generally accepted accounting principles consistently applied.
, Accounting rules used in the preparation of the financial statements conform to the accounting policies prescribed by the federal and state regulatory commissions having jurisdiction. Other financial information included in this Annual Report is consistent. where applicable, with the consolidated financial statements.
j The Company maintains a system of internal accounting controls designed, to provide reasonable assurance as to the intagrity of the financial records and
- the protection of assets. Qualified personnel are selected and an organization structure is maintained that provides for appropriate functional responsibility. Written policies and procedures have been developed and are revised as necessary. The Company maintains and supports an extensive program of internal audits with appropriate management follow up.
The financial statements have been examined by Price Waterhouse & Co.. f) independent accountants, and their report appears on page 23. We believe that such teport expresses an informed opinion as to whether management's financial statements present fairly, in conformity with generally accepted accounting principles, the Company's financial position and operating results. The Board of Directors. through its Audit Committee comprised of outside directors is responsible for ensuring that both management and the independent accountants fulfill their proper respective responsibilities relative to the financial statements. Moreover. the independent accountants have full and free access to meet with the Audit Committee. with or without management present, to discuss auditing or financial reporting matters. M v This report and the financial statements contained herein are submitted for the information of the stockholders of the Company and are not intended to induce, or for use in connection with, anysaleor purchase of any securities of the Company, or any of its subsidiaries. 12
' Con's olidated Ctatement Of Income (Thousands of Dollars)
Union Electric and Subsidiaries Year 1978 Year 1977 Operating Revenues: Electric . S844,473 $713.036 Gas. 50,150 42.784 Steam . 8,149 8.097 Water . 1,216 1.185 Total operating revenues 903,988 765.102 Operating Expenses: Operations Fuel and purchased power . 256,894 186.954 Other . 143,482 135.135 400,376 322.089 Maintenance . 68,012 61.191 Depreciation . 73,477 68.814 income taxes. 80,366 58.533 Other taxes . 105,525 95.336 Total operating expenses 727,756 605.963 ( ) Operating income 176,232 159.139 Other income: Allowance for equity funds used during construction . 15,980 8.301 Miscellaneous, net . 2,896 1.389 Total other income 18,876 9.690 income Before Interest and Other items 195,108 168.829 Interest and Other items: Interest on debt. 90,309 83.624 Allowance for borrowed funds used during construction . (15,489) (10.721) Preferred dividends of subsidiaries. 390 391 Total interest and other items 75,210 73.294 Net income 119,898 95.535 Preferred Dividend (l Requirements of Company 23,040 20.367 Earnings on Common Stock S 96,858 $ 75.168 Earnings per Share of Common Stock (based on average shares outstanding) 32.01 $ 1.67 Dividends Declared per Share of Common Stock S1.40 $ 1.36 Average Number of Common Shares Outstanding 43,260,596 45.110.245 See Notes to Financial Statements on pages 20,21and 22.
- Consolidated Balance Sheet (Thousands of Doiirrs)
December 31, December 31. Union Electric and Subsidiaries 1978 1977 Assets Property and Plant, at original cost: Electric . 62,651,602 $2,567,322 Gas . 61,609 59.611 Steam . 10,038 10,054 Water . 6,683 5.017 Other . 18,913 17,998 2,748,845 2.660,002 Less accumulated depreciation . 725,448 662,516 2,023,397 1,997,486 l i i Construction work in progress (includes
- nuclear fuel of $35,215 and 532,320,
' at respective dates) . . 517,677 293.843 Total property and plant, net 2,541,074 2,291,329 investments, at cost 3,679 3,530 l
Deferred Charges. Generating station construction abandonment . 7,114 8.893 ! Interest - 6,712 Unamortized bond defeasance cost . 5,236 5,438 l Unamortized debt expense. 2,776 2,692 j Other . 459 918 l Total deferred charges 15,585 24,653 Current Assets: Cash. 5,188 6,764 . Deposits for payment of interest, and other deposits . .. 7,342 7,533
.).
Accounts receivable-trade (less allowance for doubtful accounts of l $939 and $930, at respective dates) . 75,072 59.100 l Unbilled revenue . 38,346 32.569 l Other accounts and notes receivable . 3,520 2,643 l Materials and supplies, at average cost-Fuel . 69,198 59,426 Construction and maintenance. 25,888 23,541 Recoverable fuel costs . 9,436 5,966 Prepayments and other assets . 5,881 4.127 Total current assets 239,871 201,669
$2,800,209 S2,521,181 See Notes to Financial Statements on pages 20,21 and 22.
14
December 31. December 31. Union Electric and Subsidiaries 1978 1977 CapitalandLiabilities Capitalization: Common stock and Common stock, $5 par value, authorized retained earnings 75,000,000 and 60,000,000 shares, at respective dates; outstanding 51.909.270 and 46,811,805 shares, et respective dates (excluding 42,990 shares at par value in treasury). . S 259,546 $ 234,059
, Other paid-in capital, principally premium on common stock (see accompanying statement) . . . 328,573 280,187 Retained earnings (see accompanying
- statement) . . 247,901 218.865
( , 836,020 733,111 i Preferred stock Preferred stock, including premium of
$1,571 (see accompanying statement) . 322,447 322,473 Total capital stock and retained earnings 1,158,467 1,055,584 Long-term debt Long-term debt (see accompanying statement) . . 1,237,576 1,187,640 Unamortized premium and discount on debt . . 1,284 1,440 Total capitalization 2,397,327 2,244,664 Accumulated Deferred Taxes on income 95,507 69,410 Accumulated Deferred Investment
() Tax Credits 55,647 33.612 i Current Liabilities: Current maturity of long-term debt. 5,092 105 Accounts payable . . 79,177 46,001
, Wages payable . 13,144 11,744 Sank loans . . 14,400 9,050 Commercial paper. . 15,200 14,000 income taxes accrued . 53,691 30,667 Other taxes accrued . 13,592 13.278 Interest accrued . . 26,736 24,297 Dividends declared. . 5,833 6,135 Other current liabilities . . 24,863 18,218 Total current liabilities 251,728 173,495 S2,800,209 $2.521,181 15 9.
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t Long-Term Debt And Preferred Etock (Tnousa. ids of Doiiars) December 31, December 31. Union Electric and Subsidiaries 1978 1977 Long-Term Debt: Union Electric Company 2%% Series due 1980. S 25,000 S 25.000 First mortgage bonds- 3%% Series due 1982. 30,000 30.000 see note (a) 3%% Series due 1986. 40.000 40,000 4%% Series due 1988. 35,000 35,000 4%% Series due 1990. 50,000 50.000 4%% Series due 1991. 30,000 30,000 4M% Series due 1993. 30,000 30,000 4M% Series due 1995. 35,000 35.000 SM% Series due 1996. 30,000 30.000 SM% Series due 1997. 40,000 40.000 7% Series due 1998. 50,000 50.000 7%% Series due 1999. 35,000 35.000 8%% Series due 1999 40,000 40,000 9% Series due 2000. 60,000 60.000 7%% Series due 2001, 50,000 50.000 7%% Series due 2001. 50,000 50,000 8M% Series due 2001. 60,000 60,000 8%% Series due 2004. 70,000 70,000 10M% Series due 2005. . 70,000 70.000 5.80% Series due 1992 to 2005. 27,085 27.085 8%% Series due 2006. 70,000 70.000 O 8%% Series due 2007. 60,000 60,000 d 9.35% Series due 2008. 55,000 - Unsecured bank notes-see note (b) 12.3% Due 1985. 75,000 75.000 Missouri environmental improvement revenue bonds Series 1974, interest rates averaging 6.21% due 1989 to 2004. 16,500 16.500 Total Union Electric Company 1,133,585 1.078.585 Missouri Power & Light Company 2%% Series due 1979. - 2.000 First mortgage bonds- 3%% Series due 1984. 7,500 7.500 see note (a) 4M% Series due 1992. 6,000 6.000 10%% Series due 1994. 7,000 7.000 5%% Series due 1996. 5,000 5,000 5%% Series due 1997. 5,000 5.000 8% Series due 1999. 5,000 5,000 9%% Series due 2001. 12,000 12,000 7%% Series due 2003. 7,000 7.000 3 Total Missouri Fower & Light Company 54,500 56.500 d Missouri Utilities Company 3%% Series due 1979. - 500 First mortgage bonds- 3%% Series due 1979. - 1,000 see note (a) 4% Series due 1979. - 1.000 ! 5%% Series due 1984. 1,000 1,000 l 4M% Series due 1988. 3,000 3.000 l 5%% Series due 1991. 3,500 3,500 8%% Series due 1996. 10,000 10.000 7.95% Serie: due 1998. 4,000 4,000 9%% Series due 2001. 6,000 6,000 Unsecured notes-due in equal annual installments 6% Due 1992. 2,450 2.555 Total MissouriUtilitiesCompany 29,950 32.555 Missouri Edison Company 11M% Serie:;due 1990. 4,700 5.000 First mortgage bonds- 5% Series due 1991. 2,000 2.000 see note (a) 42'% Series due 199'i . 3,000 3.000 95% Series due 2001. 3,826 4.000 , 8M% Series due 2002. 6,000 6,000 l Unsecured notes-due in l equal annual instailments 7-74% Due 1981. 15 - l Total Missouri Edison Company 19,541 20.000 Total long-term debt $1,237,576 $ 1,187.640 16
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l . December 31. December 31. Union Electric and Subsidiaries 1978 1977 l Preference Stock: Union Electric Company Preference stock. $1 par value (entitled to cumulative dividends), authorized 7.500.000 shares-none outstanding Preferred Stock: Union Electric Company Stated value of shares outstanding. Preferred stock, without par $100 per share-value (entitled to cumulative $ 7.44 Series-550.000 shares . S 55,000 $ 55.000 dividends), authorized $ 6.40 Series-300.000 shares . 30,000 30.000 15.000.000 and 7.500.000 $4.56 Series-200.000 shares . 20,000 20.000 shares, at respective dates $4.50 Series-213.595 shares . 21,359 21.353
$4.00 Series-150.000 shares . 15,000 15.000
$3.70 Series- 40.000 shares . 4,000 4.000 t $3.50 Series-130.000 shares . 13,000 13.000 Stated value of shares outstanding.
$97.50 per share-
$8.00 Series of 1971-425.000 sh?.res . 41,437 41.43/
Stated value of shares outstanding.
$92.25 per share-3
() $8.00 Series-350.000 shares . Stated value of shares outstanding. 32,288 32.288
$25.00 per share-S2.72 Series-1.600.000 shares . 40,000 40.000
$2.125 Series-1.600.000 shares . 40,000 40.000 Total Union E!ectric Company 312,084 312.084 Missouri Power & Light Company Outstanding--
Preferred stock $100 par value 4.30% Series-20.000 shares. 2,000 2.000 (entitled to cumulative 3.90% Series-40.000 shares. 4,000 4.000 dividends), authorized 75.000 shares Total Missouri Power & Light Company 6,000 6.000 Missouri Utilities Company Outstanding-Preferred stock. $100 par value 5% Series-14.000 shares . 1,400 1.400 (entitled to cumulative 5% Series of June 1950 -1.500 dividends), autborized 50.000 shares. . ... 150 150
% shares 5% Series of September 1950-( ") 1.500 shares . . .. 150 150 5.70% Series-10.920 and 11.180
, shares at respective dates. 1,052 1.118
! Total Missouri Utilities Company 2,792 2.818
~
Missouri Edison Company Preferred stock $100 par value ' (entitled to cumulvive dividends), authorized 5.000 shares-none outstanding Total preferred stock S320,876 $320.902
!a At Decemcer 31.1978_ substantiauy al; of tne procerty and plant was mortgaged under. and subsect to tiens of, the respective indentures pursuant to which the bonds were issued (b) On August 22.1978. the Company issued $75.000.000 of unsecured bank notes due December 31.1985 to repay tne bank notes due in 1979 The interest rate on the new notes is based on 105% of the bank orime mterest rate tnrough December 31.1979.112% through December 31.1983 and 115% thereafter.
l See Notes to Financial Statements on pages 20. 21and 22. 1
l Consolidated Etatement Of Changes In Financial Position (Thousands of Doll; Union Electric and Subsidiaries Year 1978 Year 1977 Source of Funds: From operations-Netincome S119,898 3 95,535 Provision for depreciation 73,477 68.814 Provision for deferred taxes on income (net) . . 26,097 25.239 Provision for deferred investment tax credits (net) . 22,035 23,965 Allowance for all funds used during construction . (31,469) (19.022) 210,038 194,531 Dividend reinvestment and stock purchase plans . 15,793 11,899 Issue of mortgage bonds 55,000 93,085 issue of preferred stock - 40.000 issue of common stock . 58,080 75.000 issue of restructured long-term 3 unsecured notes. 75,000 - V Additional short-term bank loans and commercial paper. 6,550 - Total funds provided 6420,461 $414.515 Application of Funds: Gross plant expenditures . S323,292 $240.433 Allowance for all funds used during construction . (31,469) (19.022) Union Electric dividends on preferred stock and common stock. . 90,616 82.120 Restructured long-term unsecured notes 75,000 - Defeasance of environmental improvement revenue bonds . - 22,000 Reduced short-term bank loans and commercial paper - 43,950 Changein deferred charges. (9,068) 6.087 Net change in working capital (excluding short-term loans and current ) maturity of long-term debt) . (28,494) 42,644 Net changein other funds 584 (3.697) Total funds applied S420,461 5414.515 l l Changes in Components of
" Working Capital": Cash and deposits . S (1,767) $ 260 Receivables. net . 22,626 10,122 Materials and supplies. 12,119 18.490 Recoverable fuelcosts . 3,470 (920)
Accounts and wages payable . (34,576) 2,743 Taxes accrued (23,338) 9,365 Interest and dividends accrued or declared . (2,137) (1,463) Other (4,891) 4.047 3 (28,494) $ 42,644 See Notes to Financial Statements on pages 20, 21 and 22. 18
- . . . . . - . . --... - .. ~ - . -- . ! Consolidated Ctatement Of Retained Earnings (Thousands of ooitars)
Union Electric and Subsidiaries Year 1978 Year 1977 Balance at Beginning of Period $ 218,865 $207,190 Add: Net income . 119,898 95.535 338,763 302.725 Deduct: oreferreo stock dividends . 23,040 20,79P* Common stock dividends-$1.40 and
$1.36 per share, respectively. 67,576 61.328 Write-off capital stock expense. 246 1,740 90,862 83.860 ;
Balance at Close of Period (Under the mortgage indenture of Union Electric Company as amended, free and unrestricted retained earnings at December 31,1978 amounted to
$194.104) S247,901 $218.866
- Includes dividends of $425.000 declared in 1977 applicable to a subsequent period.
Consolidated Statement Of Other Paid-In Capital (Thousands of ooliars) Union Electric and Subsidiaries Year 1978 Year 1977 Balance at Beginning of Period S280,187 5222,038 Add: Excess of sales price over par value of 4,000,000 and 5.000,000 shares of common stock issued in 1978 and ! , ') 1977, respectively . 38,080 50,000 ' Excess of sales price over par value . of 808,379 and 615,837 shares of I common stock issued during 1978 and
- 1977, respectively, for dividend reinvestment and stock purchase plan 7,446 6,460 Excess of sales price over par value of 289,086 and 153.892 shares of common stock issued for tax reduction act stock ownership plan in 1978 and 1977, respectively . 2,860 1.591 Excess of acquisition cost over par value of 7,727 shares of common stock issued during 1977 in exchange for Missouri Utilities Company common stock. -
98 Balance at Close of Period S328.573 $280,187 See Notes to Financial Statements on pages 20. 21and 22. 1'
Notes 70 Financial Ctatements - Union Electric and Subsidiaries Note 1-Summary of Accounting Policies ' The Company and its utility subsidiaries are subject With respect to all property additions after 1974 and to regulation by the Missouri Public Service Commis- prior additions in lilinois. the reductions in taxes sion, Illinois Commerce Commission. Iowa State Com- applicable to the liberalized depreciation methods merce Commission and the Federal Energy Regulatory described above are accounted for as deferred income Commission of the Department of Energy. The taxes and amortized over the estimated useful lives of accounting policies of the companies are in accordance the related properties. In addition, the Company with the rate-making practices of the regulatory normalizes theincometax effectsof thedebtcomponent authorities having jurisdiction and, as such conform to of the allowance for funds used during construction, generally accepted accounting principles as applied 9 and taxes. pensions and other expenses capitalized. l regulated public utilities. A description of the as well as the repair allowance which has been l Company's significant accounting policies follows. Claimed for years after 1974. Principles of Consolidation The Company has elected to defer the additional The consolidated financial statements include the investment tax credit benefits resulting from the Tax
' accounts of the Company and all of its wholly-owned Reduction Act of 1975 with respect to properties in all subsidiaries. In the process of consolidation, all states, and is amortizing the deferrals over the intercompany investments and accounts and all inter- estimated useful lives of the related properties. The company sales and profits are eliminated. Company is continuing to flow-through to income the Property and Plant 4% investment tax credit on Missouri and Iowa which are not qualified progress expenditures under the l The cost of additions to and betterments of units of Tax Reduction Act of 1975.
property and plant is capitalized. Cost includes j labor, material, applicable taxes, pensions and certain Allowance for Funds Used During Construction other items. plus an allowance for funds used during The Federal Energy Regulatory Commission construction. Maintenance expenditures and renewals Uniform System of Accounts defines allowance for of items not considered to be units of property are funds used during construction (AFC) which is a charged to income as incurred. When units of non-cash item, as the net cost for the period of depreciable property are retired. the original cost construction of borrowed funds used for construction and removal cost, less salvage, are charged to purposes and a reasonable rate on other funds accumulated depreciation. when so used. Depreciation ing 1978 and 1977, the Company recorded AFC For financial state.nent purposes, depreciation is at van.ous rates, compounded semi-annually. The net provided over the est' mated lives of the various classes rates reflect the Company s policy of deferring the of depreciable property by applying composite rates on ncome tax effect applicable to the borrowed funds a straight-line basis. The provisions for depreciation in p rtion of the AFC rate.The resulting average annual ,}, 1978 and 1977 were equivalent to approximately 2.7% AFC rates were: 1978-8.65% (6.55% net); 1977-8.30%
- of the average depreciable cost. (6.00% net).
Unbilled Revenue income Taxes The Company records on its books the estimated For income tax purposes. the Company computes depreciation using the most liberalized methods amount of accrued but unbilled, revenue and also the accrued liability for the related taxes. allowed by the internal Revenue Code. Net depreciable property and plant used in this computation excludes Recoverable Fuel Costs costs (primarily the allowance for funds used during Fuel cost adjustment riders to the Company's tariffs construction. taxes, pensions and certain other items) are in effect for virtually all electric customers. Due i which are charged to property and plant for financial to the lag in application of such fuel riders. the Company statement purposes but treated as expenses when is deferring the effect. net of related income taxes incurred for income tax purposes. on costs arising from the fluctuation in the costs of fuel customers. The deferral obtains a proper matching of I costs and revenues. 20
Note 2-income Tans Note 3-Retirement Plans Total income tax expense is less than the amount The retirement plans covering employees of the
, computed by multiplying the income-before-tax by Company and its subsidiaries are financed through the statutory Federal income tax rate. The reasons for irrevocable pension trusts and group annuity contracts this difference for the years in which shown are as The policy is to fund pension costs accrued. Costs of follows(in thousands): the retirement plans for the years 1978 and 1977 were
$9.166.000 and $8.862.000, respectively, of which 1978 1977 approximately 20% wa; charged to construction ac-Tax computed at statutory rateon counts. The aforementioned amounts include prior book income-before-tax . $95,788 $73.754 service costs which are being amortized over twenty increases (Decreases)in tax from: years. At December 31,1978. the unfunded prior Additional depreciation . (1,560) (3.977) service costs are estimated to be $24.000,000 and the Allowance for equity lunds actuarially computed value of vested benefits exceedt.,d used during construction . (7,940) (4.205) the fund (valued at market) by approximately investment tax credits. (2,231) (5.843) $16.000.000.
Dismantling costs . (2,173) (1.794)
)
^ Note 4-Compensating Balances and M s eilan us n t. (1 3 8
/
Short-Term Borrowings Total. S79,659 558.118 Short-term borrowings of the Company and its subsidiaries consist of bank loans (maturities not in income tax expense components excess of 270 days) and commercial paper (maturities
-(in thousands): generally within 30-45 days). Information regarding Included in operating expenses- such consolidated short-term borrowings is as follows Taxes currently payable: (in thousandsof dollars):
Federal . S24,026 $ 685 1978 1977 State . 4,445 3.766 Amounts outstanding Deferred taxes at year end-(principallyFederal): Bank loans . S14,400 $9.050 Liberalized depreciation . 10,988 10.483 Commercialpaper S15,200 514.000 Repair allowance. 6,792 5.194 Composite interest Other(principally rates at year end-capitalized costs). 11,261 11.127 Bank loans . 11.5% 7.8% _ Provisions deferred in Commercialpaper ' 10.8% 6.9% [} prior years . (2,944) (1.565) axim*,m aggregate Deferred investment tax aniount outstanding credits net. 25,798 28.843 at any month end 80,366 58.533 during the year . S101,540 $89.900 Current provision included Average da.!'/ Short-in other income- term borrowings miscellaneous, net . (707) (415) outstanding during - Total. 379,659 $58.118 the year-Aggregateamount S42,321 $60.030 Weighted com-posite interest rate. 7.6% 5.8%
'i
! Notes Ta Financial Etatemen+.s (continued) Union Electric and Subsidiaries Note 7-Contingencies The above weighted composite interest rates were As explained in the President's letter on page 3. a calculated by dividing the applicable interest expense recent change by the State of Missouri to less stringent for the year by the average daily short-term borrow- sulfur dioxide emission standards will become ings shown above. effective if approved by the U.S. Environmental At December 31,1978. the Company and its subsid- Protection Agency. Under these revised standards, the iaries had bank lines of credit aggregating $101.670.000 Company estimates that compliance would add $40 to which make available interim financing at the prime $50 million to annual operating costs. Should the EPA rate of interest. In support of such lines of credit, the not approve the revised standards, the Company Company has unwritten agreements with the majority estimates that compliance with the more stringent of its lending banks to maintain average compensating standards, previously approved by the EPA. would add balances equivalent to 10% of the line of credit plus $175 million to annual operating costs or it may be 10% of the borrowings outstanding, as determined necessary to shut down part of the generation of two from bank records. In addition, at December 31,1978, major plants and purchase replacement power from the Company had commitments from banks aggregating other utilities.
$15.000.000. which expire August 31,1979. The C.ompany pays a fee of 0.375% on the unused portions Note 8-Selected Quarterly information ..
of thecommitments. (Unaudited) In the opinion of the Company, the summarized Note 5-Property Abandonments data as shown under " Selected Quarterly Information" In late 1974, the Company cancelled its plans to for the years 1978 and 1977 on pages 28 and 29 of this construct two electric generating units which had been report includes all adjustments, consisting only of scheduled nr completion in 1979 and 1980 and normal recurring adjustments, necessaiy for a fair announced pins to construct instead oil-fired com- statement of the results for the periods. bustion turbine peaking capacity. Negotiations of Due to the effect of weather on sales and other cancellation charges on construction contracts were factors which are characteristic of electric utility completed in 1976 and these costs, when combined operations, financial results for interim periods are with construction costs related to the cancelled units, not necessarily indicative of trends for any twelve-aggregated $8.893.000. In accordance with instructions month period. received from regulatory authorities having jurisdiction, this amount and the related income taxes ($4.446.000 Note 9-Replacement Cost Information net of such income taxes) is being amortized over a five- (Unaudited) year period beginning January 1.1978. The unamortized The impact of the rate of inflation experienced in amounts of $7.114.000 and $8.893.000 are included in Deferred Charges at December 31,1978 and 1977. recent years, along with environmental and other ), regulatory requirements, has resulted in replacement respectively. costs of productive capacity that are significantly greater than the historical costs of such assets reported Note 6-Construction Commitments in the Company's financial statements. In accordance The Company and its subsidiarie' are engaged in a with the requirements of the Securities and Exchange construction program under which expenditures of Commission, the Company has computed the estimated approximately $2.25 billion are anticipated during replacement cost of its productive capacity. and the the next five years, of which expenditures of related effect on depreciation, and this data will be 5415.000.000 and $489.000.000 are estimated to be reported in Form 10-K to be filed with the Commission. made in 1979 and 1980, respeutively. 22 _ . __ .. . ~ . _ _ . _ _ _ _ _ _ ____ _
I
; Report Of Independent Accountants t
~
- 3. CNE MEWoQfAL ORfyE St Louis wiSSOURI 63102
>-> m=
g: faterhouse&Ca February 14,1979 To the Stockholders and Board of l Directors of Union Electric Company in our opinion, the accompanying consolidated balance sheet and the related consolidated statements of income, long-term debt and preferred stock, retained earnings, other paid-in capital and changes in financial position present fairly the financial position of Union Electric Company and its subsidiaries at December 31, 1978 and 1977, and the results of their operations and the changes in their financial 3e position for the years then ended, in conformity with generally accepted accounting principles consistently applied. Our examinations of these statements were made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. h . _) i i 27 t
Consolidated Summary Of Operations (Thousands of Doirars) Union Electric and Subsidiaries 1978 1977 1976 1975 Operating Revenues: Electric . S844,473 $713.036 $635,000 $542.977 Gas . 50,150 42,784 38.636 31,388 Steam . 8,149 8,097 7,688 8.136 Water . 1,216 1.185 1.132 954 Total operating revenues 903,988 765.102 682.456 583.455 Operating Expenses: Operations Fuel and purchased power. 256,894 18ti,954 146,071 137,078 Other . 143,482 135.135 118.110 105.597 400,376 322,089 264,181 242.675 Maintenance . 68,012 61.191 54,159 39.995 Depreciation . 73,477 68.814 63,062 56,871 income taxes. 80,366 58,533 50,696 29,175 Other taxes . 105,525 95,336 86.044 77.853 Total operating expenses 727,756 605.963 518.342 446,569 Operating income 176,232 159,139 164.114 136,886 , Other income: . Allowance for funds used during construction All funds (prior to January 1,1977) . - - 12,379 23,107 Equity funds (after December 31,1976) . 15,980 8.301 - - Miscellaneous, net . 2,896 1.389 (2,554) 1,403 Tota; cner income 18,876 9.690 9.825 24.510 Income Before Interest and Other items 195,108 168.829 173.939 161.396 Interest and Other items: Interest on debt . 90,309 83.624 78,136 74.967 Allowance for borrowed funds used durin0 construction (af ter December 31,1976) . (15,489) (10,721) - - - Preferred dividends of subsidiaries. 390 391 393 394 ,h. Total interest and other items 75,210 73.294 78,529 75.361 Net income 119,898 95.535 95.410 86.035 Preferred Dividend Requirements of Company 23,040 20.367 19.640 19.640 l Earnings on Common Stock S 96,858 $ 75.168 $ 75.770 $ 66.395 Earnings per Share of Common Stock (based on average shares outstanding) . $2.01 $ 1.67 S1.86 $1.78 Dividends Declared per Share of ' Common Stock . S1.40 $ 1.36 $ 1.34 S1.28 Average Number of Common Shares Outstanding . 48,260,596 45.110,245 40,795.152 37.240.134 Return on Average Common Stock Equity . 12.61% 10.68% 12.19% 11.98% Ratio of Earnings to Fixed Charges (a) 3.18 2.81 2.79 2.51 (a) Earnings consist of net income plus fixed charges Unterest on debt. preferred civicenes of subsidiaries and an acoropriate amount of rentais enarged to operating expenses) and income taxes. Note: See pages 26 and 27 for Management's Analysis of Operations covering the period since 1976. 24
- -- - _ _. - . . - - . . - . . - ~ _ _ . - .
1 1 i i l l 1974 1973 1972 1971 1970 1969 1968
$443,044 $399,161 $357,606 $325.964 $302,687 $271,217 $249,423 17,877 14,527 13,679 11,796 10,735 9,474 8,642 7,735 4,261 3,903 3,148 3,306 3,503 3,140 468.656 417,949 375.188 340,908 316,728 284.194 261.205 116.229 78,245 90,287 72,540 54,800 46,342 42,754 75.271 76.273 66,979 61,595 57,456 53.528 50,839 191.500 154,518 157,266 134.135 112,256 99,870 93.593 41,913 35,039 31,564 25,363 22,462 22.330 19,844 53,016 49,811 44.784 43,336 38,093 34,749 32,522 3.573 6,850 560 4.535 19,200 21,655 19,053 65,653 60,471 52.863 47,105 40,452 - 35,866 31,802 355,655 306,689 287,037 254.474 232,463 214.470 196,814
.s 113,001 111,260 88,151 86,434 84.265 69,724 64,39i 3
13,696 10.521 13,377 13.457 14,092 10,084 5,267 1,154 99 578 494 (48) (4) 151 14,850 10,620 13,955 13.951 14.044 10,080 5,418 127.851 121,880 102.106 100.385 98.309 79,804 69.809 67,823 54,471 48.409 43,411 38,189 31,968 26,244 4
) 242 242 242 242 242 242 242 +
68.065 54,713 48,651 43,653 38,431 32,210 26.486 59,786 67,167 53,455 56,732 59,878 ,47,594 43,323 15,700 15,288 11.312 10.074 7,796 5,251 4,996 I
$ 44,086 $ 51,879 $ 42,143 $ 46.658 $ 52,082 $ 42.343 $ 38,327
$ 1.37 $ 1.62 $ 1.35 $ 1.61 $ 1.92 $ 1.60 $1.59
$ 1.28 $ 1.28 $ 1.28 $ 1.26 $ 1.26 $ 1.20 $ 1.20 32,187,113 31,946.291 31,249,023 29.045,701 27,162,204 26,440,670 24,170,612 8.94% 10.72% 8.89% 11.04% 13.63% 12.07% 13.16%
1.92 2.33 2.10 2.39 3.03 3.12 3.31 23
I Management'a Analysi3 Of Operations Union Electric and Subsidiaries The principal fluctuations in revenues and major categories of income and expense during the past two years are discussed below. Operating Revenues Operating Expenses The principal factors causing increases in revenues The changes in operating expenses during the during the periods set forth below were as follows: periods set forth below were as follows: Electric Variation from Fuel and Purchased Power Variation from Prior Year Prior Year 1978 1977 1978 1977 (Millions of Dolfars) (Milhons of Dollars) Rate increases . S 43.2 S 2.1 Fuel: Revenues resulting from application Variation in KWH generation . S (4.9) $11.8 of fuel cost adjustment riders and Price increases . . 73.7 the inclusion of current fuel costs in basic tariffs to reflect the higher Generating units availability. Purchased and interchange power. 2.4 32.9 10.6 ) (1.3) (14.4) costs of fuel under revised fuel riders . $69.9 $40.9 67.9 25.5 KWH sales (excluding effect of the The variations in purchased and interchange power nse s. M n c all 3.9 po s te S131.4 $ 78.0 The fluctuations attributed to KWH sales in the above Other Operations Variation from table resulted primarily from increased use of Prior Year electricity by residential customers in 1978 and by all major classes of customers in 1977. 1978 1977 t y g,,cn, ,, g,,,,,,) L 11 increases due to growth. Gas Variation from rien generating units. inflation Prior Year and annual wage increases. S8.3 $ 17.0 1978 1977 (Millions cf Dollars)
- Rate increases . S1.0 $ .9 Purchased gas adjustment nders. 2.3 6.6 MCF sales (excluding effect of the factors listed above) . 3.5 (3.4)
S7.4 $4.1 26 [ . __ _ _ _ ___ _ - _ _ _ - .. _ _ _ _ .
6 M.sintenance Variation from Interest and Other items Prior Year 1978 1977 The changes in interest and other items and in tMillions of Douars) dividends on preferred shares during the periods set Normal increases due to the addition forth below were as follows: of generating units. higher costs of Variation from repair parts and wage increases . S6.8 $7.0 Prior Year Depreciation 1978 1977 The varia'. ons in depreciation resulted from increases Wini ns of Douam in depreciable property. No changes were made in interest on debt . S6.7 5 5.6 depreciation rates during the periods. Allowance,for borrowed funds used
, during construction (after December 31,1976). (4.8) (10.7)
Income Taxes For information concerning income taxes refer to Preferred dividends of Company. 2.7 .7 Notes 1 and 2 under Notes to Financial Statements. S4.6 $ (4.6) The increases in interest and preferred dividends Other Taxes were due to the issuance of securities to finance the These increases generally reflect taxes on additional construction program and higher interest ana preferred real property and increased gross receipts taxes on dividend rates on certain of such securities. Effective greater revenues. January 1,1977, the portion of AFC related to borrowed funds has been classified as a reduction of Interest and Other items (see Other income above). Other income The changes in other income during the periods set forth below were as follows: Variation from
) Prior Year 1978 1977 (Mdlions of Dollars)
Allowance for funds used during construction (AFC) All funds (prior to January 1. 1977). S - S(12.4) Equity funds (cfter December 31, 1976). 7.7 8.3 Miscellaneous, net . 1.5 4.0 39.2 S (.1 ) Effective January 1,1977, in accordance with a Federal Power Commission Order. AFC was classified into equity funds and borrowed funds. The equity funds portion is included under Other income and the borrowed funds portion is rec %J a reduction of interest as shown under Interest and Other items. 27
. -~- - - . .- . . - . _ _
Capital Etock Information ' Union Electric Company 1978 Calendar December 31 September 30 Preferred Stock Psice Ranges Stated value of shares outstanding, (High and Low): 5100 per share-57.44 Series (1) . S82%- 75% S82 - 78
$ 6.40 Series (1) . 70 - 64 71 - 66
$4.56 Series (1) . 49 - 45% 47%- 46%
$4.50 Series (1) . 49%- 39% 48%- 46
$4.00 Series (1) . 41 - 37 43 - 41
$3.70 Series (2) . . (4) (4) 53.50 Series (1) . 37X- 32% 38 - 35%
Stated value of shares outstanding,
$97.50 per share-58.00 Series of 1971 (1) . 86 - 75 85 - 80%
Stated value of shares outstanding,
$92.25 per share-58.00 Series (2) and (3) .
Stated value of shares outstanding, (4) (4) .)
$25.00 per share-
$2.72 Series (1) . 28%- 25X 28%- 26%
$2.125 Series (issued October 1977)(1) . 23%- 20% 24% - 21 %
Preferred Stock Dividends: Composite rate . 1.887% 1.887% Total requirements (h millions) . S 5.8 S S.8 Preferred Shareholders at Year-End 23,042 Common Stock Price Ranges (High and Low) (1) S15 - 13% S15%- 13% Common Stock Dividends: Per share . 360 360 Total payments (in millions) . S18.6 S17.0 Common Shareholders at Year-End . 157,956 (1) Based on transactions recorded on the New York Stock Exchange; f all other Series are traded on the Over the Counter Market. - (2) Ba::ed on asked and bid prices recorded on the Over the Counter Market. (3) Accepted for listing on the New Yc;h Stock Exchange on December 14,1978. (4) No asked or bid prices or transactions recorded. Selected Quarterly Infarmation Union Electric and Subsidiaries Operating Revenues (in thousands) S203,494 S266,750 Operating income (in thousands) S 36,428 S 60,217 Net income (in thousands) S 24,070 S 46,156 Earnings on Common Stock (in thousands) S 18,310 S 40,396 Earnings per Common Share (a) S0.35 S0.85 (a) Based on average shares outstanding.
.28
i i I Quarters Ended 1977 Calendar Quarters Ended June 30 March 31 December 31 September 30 June 30 March 31 S81% - 79% $84 - 81 $87M- 83 588M- 86% $88%- 86 587 - 83% ; 70 - 66 72% - 68% 74%- 70M 76%- 72 75% - 70 76% - 71 51 % - 49% 52 - 51 53 - 51M 55 - 52% 53M- 504 53M- 51 49 - 45M 51 - 47 53M- 50 54% - 51 52M- 50 53 - 50 44% - 40 46%- 43M 47M- 45 48 - 44% 48 - 46 47 - 44% (4) (4) 42 - 40 43 - 40 41M- 40M 41 - 37% 38% - 35% 40 - 36% 41 - 39 414- 39% 42 - 384 42 - 384 i L
~
85M- 82M 89 - 83 91M- 87 94 - 90 91M- 86% 91M- 874
' ,' (4) (4) 91 - 87 92 - 89 90 - 87 87 - 81 T
28% - 22% 29M- 27% 29%- 28% 31 - 28% 30% - 29% 31 - 29% 23 % - 21 % 24%- 22% 25 - 24% 1.887% 1.887% 1.887% 1.840% 1.840% 1.840% . 65.8 S 5.8 $ 5.7 $4.9 $4.9 $4.9 23.356 S14%- 13% S15%- 14% $16%- 14% $16%- 15% $16%- 15 $16M- 15 340 34C 34c 24c 34C 34C 616.0 S15.9 S15.9 $ 15.8 515.7 514.0 146.588
) i i
S221,107 S212,637 $177.428 S221.379 $182.394 $183.901 S 42,060 S 37,527 $ 33.604 S 53.487 S 40.139 5 31,909 S 27,514 S 22,158 $ 18.853 $ 36.335 S 23.757 S 16.590 S 21,754 S 16,398 $ 13,216 S 31.425 $ 18.847 $ 11.680 S0.46 S0.35 $0.28 $0.68 $0.41 $0.28 29 r .-
- e
- _ = - .. . - L=_-------..-
Operating Etatistics Union Electric and Subsidiaries 1978* 1977* 1976* 1975* 1974 1968 Electric Operating Revenues (000 Omitted): Residential . S331.128 $283.124 5248,784 5220,174 S171.381 5 97,958 Commercial . 253,279 219.806 195,568 162.079 129.351 75.423 Industrial. 209,440 169.834 154.539 127,939 107.471 60.618 Other electric utilities . 31,565 24.040 21.432 19.812 23,814 9.805 Miscellaneous . 19,061 16.232 14.677 12.973 11.027 5.619 Total S844,473 $713,036 5635,000 $542.977 S443.044 $249.423 Percent of total: Residential . 39.2% 39.7% 39.2% 40.6% 38.7% 39.3% Commercial . 30.0 30.8 30.8 29.8 29.2 30.2 Industrial . 24.8 23.8 24.3 23.6 24.3 24.3 Other electric utilities . 3.7 3.4 3.4 3.6 5.4 3.9 Miscellaneous. 2.3 2.3 2.3 2.4 2.4 2.3 Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Kilowatt Hour Sales (000,000 Omitted): Residential . 7,670 7,389 6.625 6.807 5.898 4.168 Commercial . 6,332 6.331 5.823 5,554 5.249 4.368 Industrial . 7,738 7,656 7,221 6.855 6,845 5.587 Other electric uti'ities. 1,317 1.263 1.171 1,222 1,780 1.041 Miscellaneous. 460 442 519 506 474 302 Total 23,517 23.081 21.359 20.944 20.246 l 15,466 Percent of tot.ti: Residential . 32.6% 32.0% 31.0% 32.5% 29.1% 27.0% Commercial . 26.9 27.4 27.3 26.5 25.9 28.2 Industrial . 32.9 33.2 33.8 32.7 33.8 36.1 Other electric utilities . 5.5 5.5 Miscellaneous . 5.6 2.0 1.9 2.4 5.9 2.4 8.8 2.4 6.7 -] 2.0 s/ Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Electric Customers (End of year): Residential . 845,074 832.251 821.564 810,702 764 363 706.077 l Commercial . 99,751 99.105 95.248 93,848 81,477 75.731 Industrial . 5,348 5.225 5.459 5.368 5.303 4.740 Electric utilities . 24 24 24 25 23 22 Other. 2,753 2.312 1.472 1,350 1.195 962 Total 952,950 938.917 923.767 911,293 852.361 787.532 Residential Electric Customer Data (Average): Kilowatt hours used . 9,167 8.956 8.114 8.459 7,756 5.965 Annual bill . S395.74 $343.16 S304.71 $273.62 S225.37 S140.19 Revenue per kilowatt hour-cents . 4.32 3.83 3.76 3.23 2.91 2.35 i i
- Includes operations of Missouri Utilities Company, a subsidiary acquired December 31.1974. Prior to j acquisition, sales to Missouri Utilities were included as sales to electric utilities. !
30
)
. 1
. _.1 l Generation Ctatistics )
Union Electric and Subsidiaries 1978 1977 1976 1975 1974 1968 Kilowatt Hour Out >ut (000.000 Omitted): Steam generation-Rush Island . 6,141 5.926 2.603 - - - Labadie . 12,044 11.598 12.434 12.763 10.561 - . Sioux . 3,831 4.407 4.207 4.460 3.147 3.500 Meramec . 3,260 3.732 4.135 4.108 4,124 5.486 Other (net) . 196 195 523 420 885 2.726 Total steam . 25,472 25.858 23.902 21.751 18.717 11.712 Hydro generation-1 Keokuk. .,. 913 770 633 861 869 920 Osage . 407 301 268 624 766 513 Total hydro . 1,320 1.071 901 1.485 1.635 1.433 Purchased and other(net) (1,246) (1.860) (1.498) (457) 1.560 3.516
) Total output .
Less line losses, etc. 25,546 2,029 25.069 1.988 23.305 1.946 22.779 1.835 21.912 1.666 16.661 1.195 Kilowatt hour sales . 23,517 23.081 21.359 20.944 20.246 15.466 Output (in % of total): Steam generation . 99.7% 103.1% 102.6% 95.5% 85.4% 70.3% Hydro generation . 5.2 4.3 3.9 6.5 7.5 8.6 Purchased and other. (4.9) (7.4) (6.5) (2.0) 7.1 21.1 Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Thermal Economy of Steam Plants (BTU per KWH generated) . 10,360 10.325 10.393 10.202 10.289 10.696 Fuel Cost (Cents per million BTU burned) . 115.865 85.858 71.247 62.533 50.129 22.293 System Gross instantaneous "i Peak Demand (Kilowatts). 5,813,000 5.837.000 5.582.000 5.363.000 5.318.000 3.830.000 System Capability at Time of Pesk, fr.cluding Net of Firm Purchase and Sale of Capacity (Kilowatts) . 6,873,000 6.891.000 6.913.000 6.474.000 6.660.000 4.171.000 System Generating Capability at Year End (Kilowatts) . 6,850,000 6.673.000 6.361.000 5.891.000 5.921,000 3.719.000 Load Factor . 52.74% 51.70% 50 19% 51.15% 50.07% 52.54% Major Generating Units Installed (Kilowatts): 1968-Sioux . .500.000 1970-Labadie . .600.000 1971-Labadie . .600.000 1972-Labadie . .600.000 1973-Labadie . .600.000 1976-Rush Island . .600.000 1977-Rush Island . .600.000 t 31
Property And Plant (Thousands of ooilars) 1 Union Electric and Subsidiaries oecember 31, 1978 1977 1976 1975 1974 Property and Plant: i Electric . S3,169,088 $ 2,860,318 $ 2.650.958 $2,483,323 S2,334.435 i Gas . 61,715 59.715 58,275 56.934 55,769 Steam . 10,039 10,080 9.891 10.704 9,640' Water . 6,767 5,734 4,493 4,218 4,326 Other . 18,913 17.998 18.820 17.115 7,276 Total S3,266,522 $2,953.845 $2.742,437 $ 2,572,294 S2.411,146 Electric Plant: Steam production , 31,182,407 $ 1,178,235 51,048.147 S 841,772 $ 842,124 Hydraulic production . 59,614 59,403 59,220 59,205 58,761 Pumped-storage production . 45,856 45.854 45,861 45,861 45,854 j internal combustion production. 42,287 22.249 19,476 18.528 18,485 j Transmission and distribution . 1,238,093 1,183,134 1,133.955 1,067.119 i General . 83,345 78.448 73.817 67,542 1,025.494, 64,678- ] . Electric plant in service . 2,651,602 2.567,323 2,380,476 2,100,027 2.055,396 Construction work in progress . 517,486 292.995 270.482 383,296 279.039 l Total S3,169,088 $ 2.860.318 $ 2.650,958 $2,483,323 $2.334,435 l. Accumulated Electric Depreciation: Amount . S693,428 $632,027 $ 591,661 $555,964 5508,439 Percent of depreciable property 1 and plant. 26.3% 24.8% 25.1% 26.7% 25.0%
! Annual depreciaticn rate. 2.7% 2.7% 2.7% 2.7% 2.7%
l 1978 1977 1976 1975 1974 l Gross Plant Expenditures . 3323,292 $240,433 S139,868 $170,088 $199,013
; Property Retirements . S 10,615 $ 29.025 S 29,725 $ 8.940 5 9,740 .
l t l l l t Construction Forecast (Thousands of ooitars) i Union Electric and Subsidiaries 1979 i980 1981 1982 1983
. Construction Expenditures:
l Generating Facilities-
?
Combustion peaking turbines S 8.014 3 26,554 S 28,790 $ 9.909 $ 282 Callaway nuclear plant. 263.384 271,738 221,967 275.251 292,191 l
, Transmission, distribution and i other facilities . 143,427 190.350 211.397 182.468 127,755 Total 5414.825 $488,642 $462,154 S467,628 $420,228 l l
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