ITEM 1. BUSINESS.
GENERAL
The registrant, Union Electric Company (the "Company"), incorporated in Missouri in 1922, is successor to a number of companies, the oldest of which was organized in 1881. The Company, which is the largest electric utility in the State of Missouri, supplies electric service in territories in Missouri and Illinois having an estimated population of 2,600,000 within an area of approximately 24,500 square miles, including the greater St. Louis area. Retail gas service is supplied in 90 Missouri communities and in the City of Alton, Illinois and vicinity.
On August 11, 1995, the Company and CIPSCO Incorporated ("CIPSCO") entered into an Agreement and Plan of Merger, which was subsequently approved by the shareholders of both companies. The merger ("Merger") is further conditioned on, among other things, receipt of certain regulatory and governmental approvals and is expected to be consummated by the end of 1997. Upon completion of the Merger, two operating companies will continue as subsidiaries of a newly formed holding company, Ameren Corporation.
On February 21, 1997, the Missouri Public Service Commission ("MoPSC") entered a final order approving the Merger. In the order the MoPSC also approved a joint agreement dated July 12, 1996 between the Company, the MoPSC staff, the Office of the Public Counsel and others. This agreement is described in Note 3 under "Notes to Financial Statements" on Pages 30 and 31 of the 1996 Annual Report pages incorporated herein by reference. In addition, the order requires the Company to take steps to participate in or form an Independent System Operator to control the operation, pricing and planning of the Company's transmission system, as well as file a report with the MoPSC that assesses the potential ability of the merged companies to exercise vertical and horizontal market power in price deregulated retail generation. That report is due by January 1, 1998. The MoPSC's order became effective on March 4, 1997.
On March 3, 1997, the Illinois Commerce Commission ("ICC") expanded the scope of issues it will consider in connection with the Merger proceedings. In addition to market power issues, the ICC ordered that issues related to the treatment of affiliate transactions, as well as ICC jurisdictional issues, be addressed as part of the Merger proceedings.
Hearings at the Federal Energy Regulatory Commission on the Merger have concluded and the administrative law judge's proposed order is expected by April 30, 1997.
For additional information on the Merger, see Notes 2 and 3 to the "Notes to Financial Statements" on Pages 29 and 30 of the 1996 Annual Report pages incorporated herein by reference. Also, see Item 14 below for unaudited pro forma financial information for Ameren Corporation.
For the year 1996, 95.6% of total operating revenues was derived from the sale of electric energy and 4.4% from the sale of natural gas. Electric operating revenues as a percentage of total operating revenues for the years 1992, 1993, 1994, and 1995 were 95.9%, 95.5%, 96.1%, and 96.1%, respectively.
The Company employed 6,035 persons at December 31, 1996. Approximately 70% of the Company's employees are represented by local unions affiliated with the AFL-CIO. Labor agreements covering 4,132 employees expired in 1996. New agreements covering 1,061 employees
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have been negotiated and expire in 1999. Agreements covering 3,188 employes continue to be negotiated. Two agreements covering 117 employees will expire in 1997.
CONSTRUCTION PROGRAM AND FINANCING
The Company is engaged in a construction program under which expenditures averaging approximately $267 million are anticipated during each of the next five years. Capital expenditures for compliance with the Clean Air Act Amendments of 1990 are included in the construction program -- also see "Regulation", below. The Company does not anticipate a need for additional base load electric generating capacity until after the year 2013.
During the five-year period ended 1996, gross additions to the property of the Company, including allowance for funds used during construction and excluding nuclear fuel, were approximately $1.5 billion (including $325 million in 1996) and property retirements were $265 million.
In addition to the funds required for construction during the 1997-2001 period, $174 million will be required to repay long-term debt as follows: $74 million in 1997 and $100 million in 1999. Amounts for years subsequent to 1997 do not include nuclear fuel lease payments since the amounts of such payments are not currently determinable.
For information on the Company's external cash sources, see "Liquidity and Capital Resources" under "Management's Discussion and Analysis" on Page 19 of the 1996 Annual Report pages incorporated herein by reference.
FINANCING RESTRICTIONS. Under the most restrictive earnings test contained in the Company's principal Indenture of Mortgage and Deed of Trust ("Mortgage") relating to its First Mortgage Bonds ("Bonds"), no Bonds may be issued (except in certain refunding operations) unless the Company's net earnings available for interest after depreciation for 12 consecutive months within the 15 months preceding such issuance are at least two times annual interest charges on all Bonds and prior lien bonds then outstanding and to be issued (all calculated as provided in the Mortgage). Such ratio for the 12 months ended December 31, 1996 was 6.4, which would permit the Company to issue an additional $2.7 billion of Bonds (8% annual interest rate assumed). Additionally, the Mortgage permits issuance of new bonds up to (a) 60% of defined property additions, or (b) the amount of previous bonds retired or to be retired, or (c) the amount of cash put up for such purpose. At December 31, 1996, the aggregate amount of Bonds issuable under (a) and (b) above was approximately $2 billion.
The Company's Restated Articles of Incorporation restrict the Company from selling Preferred Stock unless its net earnings for a period of 12 consecutive months within 15 months preceding such sale are at least two and one-half times the annual dividend requirements on its Preferred Stock then outstanding and to be issued. Such ratio for the 12 months ended December 31, 1996 was 22.7, which would permit the Company to issue an additional $1.3 billion stated value of Preferred Stock (8% annual dividend rate assumed). Certain other financing arrangements require the Company to obtain prior consents to various actions by the Company, including any future borrowings, except for permitted financings such as borrowings under revolving credit agreements, the nuclear fuel lease, unsecured short-term borrowings (subject to certain conditions), and the issuance of additional Bonds.
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RATES
For the year 1996, approximately 83%, 7%, and 10% of the Company's electric operating revenues were based on rates regulated by the MoPSC, the ICC, and the Federal Energy Regulatory Commission ("FERC") of the U. S. Department of Energy, respectively.
For additional information on "Rates", see Note 3 to the "Notes to Financial Statements" on Page 30 of the 1996 Annual Report pages incorporated herein by reference.
FUEL SUPPLY
COAL. Because of uncertainties of supply due to potential work stoppages, equipment breakdowns and other factors, the Company has a policy of maintaining a coal inventory of 75 days, based on normal annual burn practices. See "Regulation" for additional reference to the Company's coal requirements.
NUCLEAR. The components of the nuclear fuel cycle required for nuclear generating units are as follows: (1) uranium; (2) conversion of uranium into uranium hexafluoride; (3) enrichment of uranium hexafluoride; (4) conversion of enriched uranium hexafluoride into uranium dioxide and the fabrication into nuclear fuel assemblies; and (5) disposal and/or reprocessing of spent nuclear fuel.
The Company has agreements to fulfill its needs for uranium, enrichment, and fabrication services through 2002. The Company's agreements for conversion services are sufficient to supply the Callaway Plant through 1999. Additional contracts will have to be entered into in order to supply nuclear fuel during the remainder of the life of the Plant, at prices which cannot now be accurately predicted. The Callaway Plant normally requires re-fueling at 18-month intervals and re-fuelings are presently scheduled for the spring of 1998 and the fall of 1999.
Under the Nuclear Waste Policy Act of 1982, the U. S. Department of Energy ("DOE") is responsible for the permanent storage and disposal of spent nuclear fuel. DOE currently charges one mill per nuclear generated kilowatt-hour sold for future disposal of spent fuel. Electric rates charged to customers provide for recovery of such costs. DOE is not expected to have its permanent storage facility for spent fuel available until at least 2015. The Company has sufficient storage capacity at the Callaway Plant site until 2005 and has viable storage alternatives under consideration. Each alternative will likely require Nuclear Regulatory Commission approval and may require other regulatory approvals. The delayed availability of DOE's disposal facility is not expected to adversely affect the continued operation of the Callaway Plant.
OIL AND GAS. The actual and prospective use of such fuels is minimal, and the Company has not experienced and does not expect to experience difficulty in obtaining adequate supplies.
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For additional information on the Company's "Fuel Supply", see Note 11 to the "Notes to Financial Statements" on Page 34 of the 1996 Annual Report pages incorporated herein by reference.
REGULATION
The Company is subject to regulation by the MoPSC and the ICC as to rates, service, accounts, issuance of equity securities, issuance of debt having a maturity of more than twelve months, mergers, and various other matters. The Company is also subject to regulation by the FERC as to rates and charges in connection with the transmission of electric energy in interstate commerce and the sale of such energy at wholesale in interstate commerce, mergers, and certain other matters. Authorization to issue debt having a maturity of twelve months or less is obtained from the FERC.
Operation of the Company's Callaway Plant is subject to regulation by the Nuclear Regulatory Commission. The Company's Facility Operating License for the Callaway Plant expires on October 18, 2024.
The Company's Osage hydroelectric plant and its Taum Sauk pumped-storage hydro plant, as licensed projects under the Federal Power Act, are subject to certain federal regulations affecting, among other things, the general operation and maintenance of the projects. The Company's license for the Osage Plant expires on February 28, 2006, and its license for the Taum Sauk Plant expires on June 30, 2010. The Company's Keokuk Plant and dam located in the Mississippi River between Hamilton, Illinois and Keokuk, Iowa, are operated under authority, unlimited in time, granted by an Act of Congress in 1905.
The Company is exempt from the provisions of the Public Utility Holding Company Act of 1935 ("PUHCA"), except Section 9(a)(2) relating to the acquisition of securities of other public utility companies and Section 11(b)(2) with respect to concluding matters relating to the 1974 acquisition of the common stock of a former subsidiary. When the Securities and Exchange Commission approved such acquisition it reserved jurisdiction to pass upon the right of the Company to retain its gas properties. For information on PUHCA and the Merger, see Note 2 to the "Notes to Financial Statements" on Page 30 of the 1996 Annual Report pages incorporated herein by reference.
The Company is regulated, in certain of its operations, by air and water pollution and hazardous waste regulations at the city, county, state and federal levels. The Company is in substantial compliance with such existing regulations.
Under the Clean Air Act Amendments of 1990, the Company is required to reduce total annual emissions of sulfur dioxide by the year 2000. Significant reductions in nitrogen oxide will also be required. By switching to low-sulfur coal and early banking of emission credits, the Company anticipates that it can comply with the requirements of the law with no significant revenue increases because the related capital costs, estimated at about $300 million, are largely offset by lower fuel costs. As of the end of 1996 about 84% of the Clean Air Act related capital costs had been expended.
As of December 31, 1996, the Company was designated a potentially responsible party ("PRP") by federal and state environmental protection agencies at four hazardous waste sites. Other hazardous waste sites have been identified for which the Company may be responsible but has not been designated a PRP. The Company continually reviews the remediation costs that will be
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required for all of these sites. However, such costs are not expected to have a material adverse effect on the Company's financial position, results of operations or liquidity.
Other aspects of the Company's business are subject to the jurisdiction of various regulatory authorities and, for additional information on regulations, see Note 3 to the "Notes to Financial Statements" on Page 30 of the 1996 Annual Report pages incorporated herein by reference.
INDUSTRY ISSUES
The Company is facing issues common to the electric and gas utility industries which have emerged during the past several years. These issues include: the potential for more intense competition and for changing the structure of regulation; changes in the structure of the industry as a result of amendments to federal laws regulating ownership of generating facilities and access to transmission systems; on-going consideration of additional changes of the industry by federal and state authorities; continually developing environmental laws, regulations and issues including proposed new air quality standards; public concern about the siting of new facilities; proposals for demand side management programs; and public concerns about nuclear decommissioning and the disposal of nuclear wastes, and about global climate issues. The Company is monitoring these issues and is unable to predict at this time what impact, if any, these issues will have on its operations, financial condition, or liquidity.
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OPERATING STATISTICS
The information on Page 37 in the Company's 1996 Annual Report is incorporated herein by reference.
OTHER STATISTICAL INFORMATION
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ITEM 2.
ITEM 2. PROPERTIES.
The following table sets forth information with respect to the Company's generating facilities and capability at the time of the expected 1997 peak.
In planning its construction program, the Company is presently utilizing a forecast of kilowatthour sales growth of approximately 1.9% and peak load growth of 1%, each compounded annually, and is providing for a minimum reserve margin of approximately 17% to 21% above its anticipated peak load requirements.
See "Operating Statistics", incorporated by reference in Part I of this Form 10-K, for information on loads and capability during the five-year period ended 1996.
The Company is a member of one of the ten regional electric reliability councils organized for coordinating the planning and operation of the nation's bulk power supply - MAIN (Mid-America Interconnected Network) operating primarily in Wisconsin, Illinois and Missouri. The Company has interconnections for the exchange of power, directly and through the facilities of others, with thirteen private utilities and with Associated Electric Cooperative, Inc., the City of Columbia, Missouri, the Southwestern Power Administration and the Tennessee Valley Authority.
The Company owns 40% of the capital stock of Electric Energy, Inc. ("EEI"), the balance of which is held by three other sponsoring companies -- Kentucky Utilities Company ("KU"), Central Illinois Public Service Company ("CIPS" -- a subsidiary of CIPSCO), and Illinova Generating ("IG"). EEI owns and operates a generating plant with a nominal capacity of 1,000
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mW. 60% of the plant's output is committed to the Paducah Project of the DOE, 20% is committed to KU, 10% to the Company, and 5% each to IG and CIPS.
As of December 31, 1996, the Company owned approximately 3,300 circuit miles of electric transmission lines and substations with a transformer capacity of approximately 45,497,000 kVA. The Company operates three propane-air plants with an aggregate daily natural gas equivalent deliverability of 23 million Btu and 2,688 miles of gas mains. Other properties of the Company include distribution lines, underground cable, steam distribution facilities in Jefferson City, Missouri and office buildings, warehouses, garages and repair shops.
The Company has fee title to all principal plants and other important units of property, or to the real property on which such facilities are located (subject to mortgage liens securing outstanding indebtedness of the Company and to permitted liens and judgment liens, as defined), except that (i) a portion of the Osage Plant reservoir, certain facilities at the Sioux Plant, certain of the Company's substations and most of its transmission and distribution lines and gas mains are situated on lands occupied under leases, easements, franchises, licenses or permits; (ii) the United States and/or the State of Missouri own, or have or may have, paramount rights to certain lands lying in the bed of the Osage River or located between the inner and outer harbor lines of the Mississippi River, on which certain generating and other properties of the Company are located; and (iii) the United States and/or State of Illinois and/or State of Iowa and/or City of Keokuk, Iowa own, or have or may have, paramount rights with respect to, certain lands lying in the bed of the Mississippi River on which a portion of the Company's Keokuk Plant is located.
Substantially all of the Company's property and plant is subject to the direct first lien of an Indenture of Mortgage and Deed of Trust dated June 15, 1937, as amended and supplemented. As part of the 1983 merger of the Company with its utility subsidiaries, the Company assumed the mortgage indenture of each subsidiary. Currently, the prior liens of two former subsidiary indentures extend to the property and franchises acquired by the Company from such subsidiaries. Such indentures also contain provisions subjecting to the prior lien thereof after-acquired property of the Company constituting (with certain exceptions) additions, extensions, improvements, repairs, and replacements appurtenant to property acquired in the merger. In addition, one such indenture contains a provision subjecting to the prior lien thereof after-acquired property of the Company situated in the territory served by the former subsidiary prior to the merger. Further, no debt is outstanding under the one such indenture, and the Company is in the process of extinguishing the lien of such indenture.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS.
The Company is involved in legal and administrative proceedings before various courts and agencies with respect to matters arising in the ordinary course of business, some of which involve substantial amounts. Management is of the opinion that the final disposition of these proceedings will not have a material adverse effect on the Company's financial position, results of operations, or liquidity.
_______________________________
Statements made in this report which are not based on historical facts are forward-looking and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such forward-looking statements have been made in good faith and are based on reasonable assumptions, there is no assurance that the expected results will be achieved. These statements include (without limitation) statements as to future expectations, beliefs,
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plans strategies, objectives, events, conditions and financial performance. In connection with the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Company is providing the following cautionary statement to identify important factors that could cause actual results to differ materially from those anticipated. Factors include, but are not limited to, the effects of: regulatory actions; changes in laws and other governmental actions; competition; business and economic conditions; weather conditions; fuel prices and availability; generation plant performance; monetary and fiscal policies; and legal and administrative proceedings.
INFORMATION REGARDING EXECUTIVE OFFICERS REQUIRED BY ITEM 401(b) OF REGULATION S-K:
All officers are elected or appointed annually by the Board of Directors following the election of such Board at the annual meeting of stockholders held in April. There are no family relationships between the foregoing officers of the Company except that Charles J. Schukai and Robert J. Schukai are brothers. Except for Mr. Baxter, each of the above-named executive officers has been employed by the Company for more than five years in executive or management positions. Mr. Baxter was previously employed by Price Waterhouse LLP.
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PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Information required to be reported by this item is included on Page 41 of the 1996 Annual Report and is incorporated herein by reference.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA.
Information for the 1992-1996 period required to be reported by this item is included on Pages 38 and 39 of the 1996 Annual Report and is incorporated herein by reference.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Information required to be reported by this item is included on Pages 17, 18, 19, 20, and 21 of the 1996 Annual Report and is incorporated herein by reference.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements of the Company on Pages 22 through 36, the report thereon of Price Waterhouse LLP appearing on Page 16 and the Selected Quarterly Information on Page 28 of the 1996 Annual Report are incorporated herein by reference.
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PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Any information concerning directors required to be reported by this item is included under "Item (1): Election of Directors" in the Company's 1997 definitive proxy statement filed pursuant to Regulation 14A and is incorporated herein by reference.
Information concerning executive officers required by this item is reported in Part I of this Form 10-K.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION.
Any information required to be reported by this item is included under "Compensation" in the Company's 1997 definitive proxy statement filed pursuant to Regulation 14A and is incorporated herein by reference.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Any information required to be reported by this item is included under "Security Ownership of Management" in the Company's 1997 definitive proxy statement filed pursuant to Regulation 14A and is incorporated herein by reference.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Any information required to be reported by this item is included under "Item (1): Election of Directors" in the Company's 1997 definitive proxy statement filed pursuant to Regulation 14A and is incorporated herein by reference.
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PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this report:
1. Financial Statements: *
*Incorporated by reference from the indicated pages of the 1996 Annual Report
2. Financial Statement Schedules:
The following schedule, for the years ended December 31, 1996, 1995, and 1994, 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 financial statements).
- 12 - REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of Union Electric Company
Our audits of the financial statements referred to in our report dated February 4, 1997 appearing on page 16 of the 1996 Annual Report to Stockholders of Union Electric Company (which report and financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedule listed in Item 14(a) of this Form 10-K. In our opinion, this Financial Statement Schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related financial statements.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP St. Louis, Missouri February 4, 1997
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UNION ELECTRIC COMPANY SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
Note: Uncollectible accounts charged off, less recoveries.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
AMEREN CORPORATION
The following unaudited pro forma financial information combines the historical balance sheets and statements of income of the Company and CIPSCO Incorporated, including their respective subsidiaries, after giving effect to the Merger. The unaudited pro forma combined condensed balance sheet at December 31, 1996 gives effect to the Merger as if it had occurred at December 31, 1996. The unaudited pro forma combined condensed statements of income for each of the years ended December 31, 1996, 1995, and 1994, give effect to the Merger as if it had occurred at the beginning of the periods presented. These statements are prepared on the basis of accounting for the Merger as a pooling of interests and are based on the assumptions set forth in the notes thereto. In addition, the pro forma financial information does not give effect to the expected synergies of the transaction.
The following pro forma financial information has been prepared from, and should be read in conjunction with, the historical financial statements and related notes thereto of the Company and CIPSCO. The following information is not necessarily indicative of the financial position or operating results that would have occurred had the Merger been consummated on the date, or at the beginning of the periods, for which the Merger is being given effect nor is it necessarily indicative of future operating results or financial position.
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AMEREN CORPORATION UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET AT DECEMBER 31, 1996 (Thousands of Dollars)
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements.
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AMEREN CORPORATION UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME YEAR ENDED DECEMBER 31, 1996 (THOUSANDS OF DOLLARS EXCEPT SHARES AND PER SHARE AMOUNTS)
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements.
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AMEREN CORPORATION UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME YEAR ENDED DECEMBER 31, 1995 (THOUSANDS OF DOLLARS EXCEPT SHARES AND PER SHARE AMOUNTS)
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements.
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AMEREN CORPORATION UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME YEAR ENDED DECEMBER 31, 1994 (THOUSANDS OF DOLLARS EXCEPT SHARES AND PER SHARE AMOUNTS)
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements.
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AMEREN CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
1. Reclassifications were made to certain "as reported" account balances reflected in the registrant's and CIPSCO's financial statements to conform to this reporting presentation (See Notes 6, 7 and 8). All other financial statement presentation and accounting policy differences were immaterial and were not adjusted in the pro forma combined condensed financial statements.
2. The pro forma combined condensed financial statements reflect the conversion of each share of the registrant's Common Stock ($5 par value) outstanding into one share of Ameren Common Stock ($.01 par value) and the conversion of each share of CIPSCO Common Stock (no par value) outstanding into 1.03 shares of Ameren Common Stock, as provided in the Merger Agreement. The pro forma combined condensed financial statements are presented as if the companies were combined during all periods included therein.
3. Net income for the twelve months ended December 31, 1995 included CIPSCO's pre-tax charge of $5.8 million for a voluntary separation program and $5.7 million of system development expenses.
4. The allocation between the registrant and CIPSCO and their customers of the estimated cost savings, resulting from the merger, net of the costs incurred to achieve such savings, will be subject to regulatory review and approval. Merger-related costs (which include transaction costs and costs to achieve such savings) are currently estimated to be approximately $73 million (including costs for financial advisors, attorneys, accountants, consultants, filings, printing, system integration, relocation, etc.). None of these estimated cost savings have been reflected in the pro forma combined condensed financial statements. However, net income for the twelve months ended December 31, 1996 and 1995, included merger-related costs of $7.9 million and $9.0 million, net of income taxes, for the registrant, and $4.9 million and $4.7 million, net of income taxes, for CIPSCO, respectively.
5. Intercompany transactions (including purchased and exchanged power transactions) between the registrant and CIPSCO during the periods presented were not material and, accordingly, no pro forma adjustments were made to eliminate such transactions.
6. CIPSCO's regulatory asset related to deferred income taxes was reclassified from the regulatory liability account balance to conform to this reporting presentation.
7. CIPSCO's income taxes are reflected as operating expenses to conform to this reporting presentation.
8. Currently, the registrant's Preferred Stock is not issued by a subsidiary; subsequent to the merger, the registrant's Preferred Stock will be issued by a subsidiary of Ameren. As a result, the registrant's preferred dividend requirements have been reclassified to conform to this reporting presentation.
9. Pro forma adjustments have been made to consolidate the financial results of Electric Energy, Inc. (EEI), which will, in substance, be a 60% owned subsidiary of Ameren subsequent to the merger. Prior to the merger, the registrant and CIPSCO held 40% and 20% ownership interests, respectively, in EEI and accounted for these investments under the equity method of accounting. All intercompany transactions between the registrant, CIPSCO and EEI were eliminated.
10. Net income for the twelve months ended December 31, 1996 and 1995 included credits for Missouri electric customers which reduced revenues and pre-tax income of the registrant by $47 million and $30 million, respectively.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
UNION ELECTRIC COMPANY (Registrant)
CHARLES W. MUELLER President and Chief Executive Officer
Date March 27, 1997 By /s/ James C. Thompson ------------------------ ----------------------------------- (James C. Thompson, Attorney-in-Fact)
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.
Signature Title - --------- ----- CHARLES W. MUELLER President, Chief Executive Officer and Director (Principal Executive Officer)
DONALD E. BRANDT Senior Vice President (Principal Financial and Accounting Officer)
WILLIAM E. CORNELIUS Director
THOMAS A. HAYS Director
THOMAS H. JACOBSEN Director
RICHARD A. LIDDY Director
JOHN PETERS MacCARTHY Director
PAUL L. MILLER, JR. Director
ROBERT H. QUENON Director
HARVEY SALIGMAN Director
JANET MCAFEE WEAKLEY Director
By /s/ James C. Thompson March 27, 1997 ------------------------------------- (James C. Thompson, Attorney-in-Fact)
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EXHIBITS
Exhibits Filed Herewith
Exhibit No. Description ----------- -----------
4.36 - Indenture of the Company (For Unsecured Subordinated Debt Securities), dated as of December 1, 1996.
4.37 - Resolutions authorizing the issuance of 7.69% Unsecured Subordinated Debt Securities.
12(a) - Statement re Computation of Ratios of Earnings to Fixed Charges.
12(b) - Statement re Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements.
13 - Those pages of the 1996 Annual Report incorporated herein by reference.
23 - Consent of Independent Accountants.
24 - Powers of Attorney.
27 - Financial Data Schedule.
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EXHIBITS INCORPORATED BY REFERENCE
The following exhibits heretofore have been filed with the Securities and Exchange Commission pursuant to requirements of the Acts administered by the Commission. Such exhibits are identified by the references following the listing of each such exhibit, and they are hereby incorporated herein by reference.
Exhibit No. Description ----------- -----------
2 - Agreement and Plan of Merger, dated as of August 11, 1995, by and among the Company, CIPSCO Incorporated, Ameren Corporation and Arch Merger Inc. (June 30, 1995 Form 10-Q/A (Amendment No. 1), Exhibit 2(a).)
3(i) - Restated Articles of Incorporation of the Company, as filed with the Secretary of State of the State of Missouri. (1993 Form 10-K, Exhibit 3(i).)
3(ii) - By-Laws of the Company as amended to August 11, 1995. (June 30, 1995 Form 10-Q/A (Amendment No. 2), Exhibit 3(ii).)
4.1 - Order of the Securities and Exchange Commission dated October 16, 1945 in File No. 70-1154 permitting the issue of Preferred Stock, $3.70 Series. (Registration No. 2-27474, Exhibit 3-E.)
4.2 - Order of the Securities and Exchange Commission dated April 30, 1946 in File No. 70-1259 permitting the issue of Preferred Stock, $3.50 Series. (Registration No. 2-27474, Exhibit 3-F.)
4.3 - Order of the Securities and Exchange Commission dated October 20, 1949 in File No. 70-2227 permitting the issue of Preferred Stock, $4.00 Series. (Registration No. 2-27474, Exhibit 3-G.)
4.4 - Indenture of Mortgage and Deed of Trust of the Company dated June 15, 1937, as amended May 1, 1941, and Second Supplemental Indenture dated May 1, 1941. (Registration No. 2-4940, Exhibit B-1.)
4.5 - Supplemental Indentures to Mortgage
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Exhibit No. Description ----------- -----------
4.6 - Indenture of Mortgage and Deed of Trust of Missouri Power & Light Company dated July 1, 1946 and Supplemental Indentures dated July 1, 1946, November 1, 1949, June 1, 1951, July 1, 1954, December 1, 1959, July 1, 1962, March 1, 1966, April 1, 1967, June 15, 1969, April 15, 1973, December 1, 1974, May 1, 1976 and July 1, 1979. (Registration No. 2-87469, Exhibit 4.1.)
4.7 - Fourteenth Supplemental Indenture dated as of December 30, 1983 to the Mortgage and Deed of Trust dated July 1, 1946, of Missouri Power & Light Company. (1983 Form 10-K, Exhibit 4.23.)
4.8 - Instrument of Substitution of Individual Trustee dated as of November 1, 1988 under the Mortgage and Deed of Trust dated July 1, 1946 of Union Electric Company (successor to Missouri Power & Light Company). (1988 Form 10-K, Exhibit 4.8.)
4.9 - Indenture of Mortgage or Deed of Trust of Missouri Edison Company dated July 1, 1945 and Supplemental Indentures dated January 1, 1952, June 1, 1961, June 1, 1965, August 1, 1975, September 1, 1976, November 1, 1977, February 1, 1981 and July 1, 1982. (Registration No. 2-87469, Exhibit 4.2.)
4.10 - Ninth Supplemental Indenture dated as of December 30, 1983 to the Indenture of Mortgage or Deed of Trust dated as of July 1, 1945 of Missouri Edison Company. (1983 Form 10-K, Exhibit 4.24.)
4.11 - Instrument of Substitution of Trustee dated as of March 1, 1985 under the Indenture of Mortgage or Deed of Trust dated July 1, 1945 of Union Electric Company (successor to Missouri Edison Company). (1984 Form 10-K, Exhibit 4.10.)
4.12 - Instrument of Substitution of Trustee dated as of October 14, 1986 under the Indenture of Mortgage or Deed of Trust dated July 1, 1945 of Union Electric Company (successor to Missouri Edison Company). (September 30, 1986 Form 10-Q, Exhibit 4.2.)
4.13 - Series A Agreement of Sale dated as of June 1, 1984 between the State Environmental Improvement and Energy Resources Authority of the State of Missouri and the Company, together with Letter of Credit and Reimbursement Agreement dated as of June 1, 1984 between Citibank, N.A. and the Company and
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Series A Trust Indenture dated as of June 1, 1984 between the Authority and Mercantile Trust Company National Association, as trustee. (Registration No. 2-96198, Exhibit 4.25.)
4.14 - Reimbursement Agreement dated as of April 21, 1992 among Swiss Bank Corporation, various financial institutions, and the Company, providing for an alternate letter of credit to serve as a source of payment for bonds issued under the Series A Trust Indenture dated as of June 1, 1984. (1992 Form 10-K, Exhibit 4.23.)
4.15 - Series B Agreement of Sale dated as of June 1, 1984 between the State Environmental Improvement and Energy Resources Authority of the State of Missouri and the Company, together with Reimbursement Agreement dated as of June 1, 1984 between Chemical Bank and the Company and Series B Trust Indenture dated as of June 1, 1984 between the Authority and Mercantile Trust Company National Association, as trustee. (Registration No. 2-96198, Exhibit 4.26.)
4.16 - Reimbursement Agreement dated as of April 22, 1988 between Union Bank of Switzerland and the Company, providing for an alternate letter of credit to serve as a source of payment for bonds issued under the Series B Trust Indenture dated as of June 1, 1984. (June 30, 1988 Form 10-Q, Exhibit 4.2.)
4.17 - Amendment and Extension Agreement dated as of June 1, 1990 to the Reimbursement Agreement dated as of April 22, 1988 between Union Bank of Switzerland and the Company. (1990 Form 10-K, Exhibit 4.29.)
4.18 - Amendment and Extension Agreement dated as of June 1, 1991 to the amended Reimbursement Agreement dated as of April 22, 1988 between Union Bank of Switzerland and the Company. (1992 Form 10-K, Exhibit 4.27.)
4.19 - Amendment Agreement dated as of June 1, 1992 to the amended Reimbursement Agreement dated as of April 22, 1988 between Union Bank of Switzerland and the Company. (1992 Form 10-K, Exhibit 4.28.)
4.20 - Series 1985 A Reaffirmation Agreement and Second Supplement to Agreement of Sale dated as of June 1, 1985 between the State Environmental Improvement and Energy Resources Authority of the State of Missouri and the Company, together with Series 1985 A Reimbursement Agreement dated as of June 1, 1985 between Union Bank of Switzerland and the Company and Series 1985 A Trust Indenture dated as of June 1, 1985 between the Authority and Mercantile Trust Company National Association, as trustee and Texas Commerce Bank National Association, as co-trustee. (June 30, 1985 Form 10-Q, Exhibit 4.1.)
4.21 - Amendment and Extension Agreement dated as of June 1, 1988 revising the Reimbursement Agreement dated as of June 1, 1985 between Union Bank of Switzerland and the Company. (June 30, 1988 Form 10-Q, Exhibit 4.4.)
- 25 - Exhibit No. Description ----------- -----------
4.22 - Amendment and Extension Agreement dated as of June 1, 1990 revising the Reimbursement Agreement dated as of June 1, 1985, as amended, between Union Bank of Switzerland and the Company. (1990 Form 10-K, Exhibit 4.37.)
4.23 - Amendment and Extension Agreement dated as of June 1, 1991 to the amended Reimbursement Agreement dated as of June 1, 1985 between Union Bank of Switzerland and the Company. (1992 Form 10-K, Exhibit 4.32.)
4.24 - Amendment Agreement dated as of June 1, 1992 to the amended Reimbursement Agreement dated as of June 1, 1985 between Union Bank of Switzerland and the Company. (1992 Form 10-K, Exhibit 4.33.)
4.25 - Series 1985 B Reaffirmation Agreement and Third Supplement to Agreement of Sale dated as of June 1, 1985 between the State Environmental Improvement and Energy Resources Authority of the State of Missouri and the Company, together with Series 1985 B Reimbursement Agreement dated as of June 1, 1985 between The Long-term Credit Bank of Japan, Limited and the Company and Series 1985 B Trust Indenture dated as of June 1, 1985 between the Authority and Mercantile Trust Company National Association, as trustee and Texas Commerce Bank National Association, as co-trustee. (June 30, 1985 Form 10-Q, Exhibit 4.2.)
4.26 - Reimbursement Agreement dated as of February 1, 1993 between Westdeutsche Landesbank Girozentrale and the Company, providing for an alternate letter of credit to serve as a source of payment for bonds issued under the Series 1985 B Trust Indenture dated as of June 1, 1985. (1992 Form 10-K, Exhibit 4.35.)
4.27 - Loan Agreement dated as of May 1, 1990 between the State Environmental Improvement and Energy Resources Authority of the State of Missouri and the Company, together with Indenture of Trust dated as of May 1, 1990 between the Authority and Mercantile Bank of St. Louis, N.A., as trustee. (1990 Form 10-K, Exhibit 4.40.)
4.28 - Loan Agreement dated as of December 1, 1991 between the State Environmental Improvement and Energy Resources Authority and the Company, together with Indenture of Trust dated as of December 1, 1991 between the Authority and Mercantile Bank of St. Louis, N.A., as trustee. (1992 Form 10-K, Exhibit 4.37.)
4.29 - Loan Agreement dated as of December 1, 1992, between the State Environmental Improvement and Energy Resources Authority and the Company, together with Indenture of Trust dated as of December 1, 1992 between the Authority and Mercantile Bank of St. Louis, N.A., as trustee. (1992 Form 10-K, Exhibit 4.38.)
4.30 - Fuel Lease dated as of February 24, 1981 between the Company, as lessee, and Gateway Fuel Company, as lessor, covering nuclear fuel. (1980 Form 10-K, Exhibit 10.20.)
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Exhibit No. Description ----------- -----------
4.31 - Amendments to Fuel Lease dated as of May 8, 1984 and October 15, 1984, respectively, between the Company, as lessee, and Gateway Fuel Company, as lessor, covering nuclear fuel. (Registration No. 2-96198, Exhibit 4.28.)
4.32 - Amendment to Fuel Lease dated as of October 15, 1986 between the Company, as lessee, and Gateway Fuel Company, as lessor, covering nuclear fuel. (September 30, 1986 Form 10-Q, Exhibit 4.3.)
4.33 - Credit Agreement dated as of August 15, 1989 among the Company, Certain Lenders, The First National Bank of Chicago, as Agent and Swiss Bank Corporation, Chicago Branch, as Co-Agent. (September 30, 1989 Form 10-Q, Exhibit 4.)
4.34 - Credit Agreement dated as of November 8, 1991 between the Company, Certain Banks and Chemical Bank, as Agent. (1991 Form 10- K, Exhibit 4.44.)
4.35 - Amendment dated as of October 26, 1992, to the Credit Agreement dated as of November 8, 1991 between the Company, Certain Banks and Chemical Bank, as Agent. (1992 Form 10-K, Exhibit 4.44.)
10.1 - Deferred Compensation Plan for Members of the Board of Directors. (1992 Form 10-K, Exhibit 10.1.)
10.2 - Deferred Compensation Plan for Members of the General Executive Staff. (1992 Form 10-K, Exhibit 10.3.)
10.3 - Executive Incentive Plan. (1992 Form 10-K, Exhibit 10.4.)
10.4 - Stock Option Agreement, dated as of August 11, 1995, by and between CIPSCO Incorporated and the Company. (June 30, 1995 Form 10-Q, Exhibit 10(a).)
10.5 - Stock Option Agreement, dated as of August 11, 1995, by and between the Company and CIPSCO Incorporated. (June 30, 1995 Form 10-Q, Exhibit 10(b).)
10.6 - Long-Term Incentive Plan of 1995. (1995 Form 10-K, Exhibit 10.7.)
10.7 - Change of Control Severance Plan. (1995 Form 10-K, Exhibit 10.8.)
Note: Reports of the Company on Forms 8-K, 10-Q and 10-K are on file with the SEC under file number 1-2967.
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