Back to GetFilings.com



______________________________________________________________________________
______________________________________________________________________________

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-Q

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2004

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission
File Number

Registrants; State of Incorporation;
Address; and Telephone Number

IRS Employer
Identification No.
     

1-11337

WPS RESOURCES CORPORATION
(A Wisconsin Corporation)
700 North Adams Street
P. O. Box 19001
Green Bay, WI 54307-9001
920-433-4901

39-1775292
     

1-3016

WISCONSIN PUBLIC SERVICE CORPORATION
(A Wisconsin Corporation)
700 North Adams Street
P. O. Box 19001
Green Bay, WI 54307-9001
800-450-7260

39-0715160

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.

 

WPS Resources Corporation

Yes [x] No [ ]

Wisconsin Public Service Corporation

Yes [x] No [ ]

Indicate by check mark whether the registrants are accelerated filers (as defined in Rule 12b-2 of the Act).

WPS Resources Corporation

Yes [x] No [ ]

Wisconsin Public Service Corporation

Yes [ ] No [x ]

Indicate the number of shares outstanding of each of the issuers' classes of common stock, as of the latest practicable date:

WPS RESOURCES CORPORATION

Common stock, $1 par value,
37,386,727 shares outstanding at
October 31, 2004
   

WISCONSIN PUBLIC SERVICE CORPORATION

Common stock, $4 par value,
23,896,962 shares outstanding at
October 31, 2004

______________________________________________________________________________
______________________________________________________________________________

 <PAGE>

 

WPS RESOURCES CORPORATION
AND
WISCONSIN PUBLIC SERVICE CORPORATION
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2004

CONTENTS
   

Page
     
 

FORWARD-LOOKING STATEMENTS

4
     

PART I.

FINANCIAL INFORMATION

  
     

Item 1.

FINANCIAL STATEMENTS

  
 

WPS RESOURCES CORPORATION

  
 

Consolidated Statements of Income

5
 

Consolidated Balance Sheets

6
 

Consolidated Statements of Cash Flows

7
     
 

WISCONSIN PUBLIC SERVICE CORPORATION

  
 

Consolidated Statements of Income

8
 

Consolidated Balance Sheets

9
 

Consolidated Statements of Capitalization

10
 

Consolidated Statements of Cash Flows

11
     
 

CONDENSED NOTES TO FINANCIAL STATEMENTS OF

  

WPS Resources Corporation and Subsidiaries
Wisconsin Public Service Corporation and Subsidiaries

12-32
     

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations for

  
 

WPS Resources Corporation

33-62
 

Wisconsin Public Service Corporation

63-70
     

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

71
     

Item 4.

Controls and Procedures

72
     

PART II.

OTHER INFORMATION

  

Item 1.

Legal Proceedings

73

Item 6.

Exhibits

73
     

Signatures

  

74-75
 

-2-

<PAGE> 

 

EXHIBIT INDEX

  

76
     

3.1

Wisconsin Public Service Corporation By-Laws as in Effect August 15, 2004

12.1

WPS Resources Corporation Ratio of Earnings to Fixed Charges

12.2

Wisconsin Public Service Corporation Ratio of Earnings to Fixed Charges and Ratio of Earnings to Fixed Charges and Preferred Dividends

31.1

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934 for WPS Resources Corporation

31.2

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934 for WPS Resources Corporation

31.3

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934 for Wisconsin Public Service Corporation

31.4

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934 for Wisconsin Public Service Corporation

32.1

Written Statement of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 for WPS Resources Corporation

32.2

Written Statement of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 for Wisconsin Public Service Corporation

 

-3-

<PAGE>

 

FORWARD-LOOKING STATEMENTS

Except for historical data and statements of current fact, the information contained or incorporated by reference in this document constitutes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Any references to plans, goals, beliefs or expectations in respect to future events and conditions or to estimates are forward-looking statements. Although we believe that statements of our expectations are based on reasonable assumptions, forward-looking statements are inherently uncertain and subject to risks and should be viewed with caution. Actual results or experience could differ materially from the forward-looking statements as a result of many factors. Forward-looking statements included or incorporated in this document include, but are not limited to statements regarding:

We cannot predict the course of future events or anticipate the interaction of multiple factors beyond our control and their effect on revenues, project timing, and costs. Some risk factors that could cause results different from any forward-looking statement include those described in the Risk Factors Section of our Annual Report on Form 10-K for the year ended December 31, 2003 and the following:

We make no commitment to disclose any revisions to the forward-looking statements as a result of facts, events, or circumstances after the date of this report.

 

 -4-

<PAGE>

PART 1. FINANCIAL INFORMATION

 

 

 

 

 

Item 1. Financial Statements

 

 

 

 

 

 

 

 

 

WPS RESOURCES CORPORATION

 

 

 

 

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

Three Months Ended

Nine Months Ended

September 30

September 30

(Millions, except share amounts)

2004

2003

2004

2003

Nonregulated revenue

$793.4

$719.9

$2,550.1

$2,350.9

Utility revenue

279.1

269.5

941.6

892.2

Total revenues

1,072.5

989.4

3,491.7

3,243.1

Nonregulated cost of fuel, gas, and purchased power

769.7

694.8

2,459.4

2,266.5

Utility cost of fuel, gas, and purchased power

97.3

98.4

404.9

403.2

Operating and maintenance expense

118.0

104.2

375.8

340.8

Depreciation and decommissioning expense

26.1

28.6

78.4

79.7

Taxes other than income

11.5

11.0

34.8

32.5

Operating income

49.9

52.4

138.4

120.4

Miscellaneous income

9.9

8.8

20.8

17.7

Interest expense and distributions on trust preferred securities

(13.4)

(14.0)

(39.9)

(41.8)

Minority interest

1.2

2.0

2.3

4.3

Other expense

(2.3)

(3.2)

(16.8)

(19.8)

Income before taxes

47.6

49.2

121.6

100.6

Provision for income taxes

9.8

16.0

26.7

22.4

Income from continuing operations

37.8

33.2

94.9

78.2

Discontinued operations, net of tax

(2.3)

1.6

(10.6)

(9.3)

Net income before cumulative effect of change in

accounting principles

35.5

34.8

84.3

68.9

Cumulative effect of change in accounting principles, net of tax

-

-

-

3.2

Net income before preferred stock dividends of subsidiary

35.5

34.8

84.3

72.1

Preferred stock dividends of subsidiary

0.7

0.7

2.3

2.3

Income available for common shareholders

$34.8

$34.1

$82.0

$69.8

Average shares of common stock

Basic

37.4

32.6

37.2

32.5

Diluted

37.6

32.9

37.5

32.6

Earnings (loss) per common share (basic)

Income from continuing operations

$0.99

$1.00

$2.49

$2.34

Discontinued operations

($0.06)

$0.05

($0.29)

($0.29)

Cumulative effect of change in accounting principles

-

-

-

$0.10

Earnings per common share (basic)

$0.93

$1.05

$2.20

$2.15

Earnings (loss) per common share (diluted)

Income from continuing operations

$0.99

$0.99

$2.47

$2.33

Discontinued operations

($0.06)

$0.05

($0.28)

($0.29)

Cumulative effect of change in accounting principles

-

-

-

$0.10

Earnings per common share (diluted)

$0.93

$1.04

$2.19

$2.14

Dividends per common share declared

$0.555

$1.090

$1.645

$2.160

The accompanying condensed notes are an integral part of these statements.

-5-

<PAGE>

 

 

 

WPS RESOURCES CORPORATION

 

 

 

 

CONSOLIDATED BALANCE SHEETS (Unaudited)

September 30

December 31

(Millions)

2004

2003

Assets

Cash and cash equivalents

$55.1

$50.7

Restricted funds

4.4

3.2

Accounts receivable - net of reserves of $6.9 and $6.6, respectively

393.2

502.4

Accrued unbilled revenues

52.0

90.0

Inventories

187.6

178.3

Current assets from risk management activities

558.5

518.1

Assets held for sale

121.4

116.4

Other current assets

86.3

86.4

Current assets

1,458.5

1,545.5

Property, plant, and equipment - net of reserves of $1,583.6 and $1,511.7, respectively

1,927.4

1,828.7

Nuclear decommissioning trusts

337.1

332.3

Regulatory assets

128.6

127.7

Long-term assets from risk management activities

107.9

104.3

Other

375.3

353.8

Total assets

$4,334.8

$4,292.3

Liabilities and Shareholders' Equity

Short-term debt

$143.6

$38.0

Current portion of long-term debt

6.3

56.6

Note payable to preferred stock trust

-

51.5

Accounts payable

461.0

510.7

Current liabilities from risk management activities

528.4

517.3

Liabilities held for sale

2.5

2.7

Current deferred income taxes

9.3

1.7

Other current liabilities

89.3

86.9

Current liabilities

1,240.4

1,265.4

Long-term debt

868.8

871.9

Long-term deferred income taxes

88.2

78.8

Deferred investment tax credits

16.5

17.7

Regulatory liabilities

286.5

304.4

Environmental remediation liabilities

36.8

37.9

Pension and postretirement benefit obligations

151.6

137.7

Long-term liabilities from risk management activities

92.3

92.2

Asset retirement obligations

359.1

344.0

Other

87.8

88.0

Long-term liabilities

1,987.6

1,972.6

Commitments and contingencies

Preferred stock of subsidiary with no mandatory redemption

51.1

51.1

Common stock equity

1,055.7

1,003.2

Total liabilities and shareholders' equity

$4,334.8

$4,292.3

The accompanying condensed notes are an integral part of these statements.

-6-

<PAGE>

 

 

 

WPS RESOURCES CORPORATION

 

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Nine Months Ended

September 30

(Millions)

2004

2003

Operating Activities

Net income before preferred stock dividends of subsidiary

$84.3

$72.1

Adjustments to reconcile net income before preferred stock dividends of

  subsidiary to net cash provided by operating activities

Discontinued operations, net of tax

10.6

9.3

Depreciation and decommissioning

78.4

79.7

Amortization of nuclear fuel and other

31.0

30.1

Unrealized gain on investments

(3.3)

(5.5)

Equity earnings from nonconsolidated investments

(7.4)

(0.4)

Pension and post retirement expense

30.4

20.0

Deferred income taxes

9.0

11.9

Unrealized (gains)/losses on nonregulated energy contracts

(0.3)

6.9

Gain on sale of partial interest in synthetic fuel operation

(5.6)

(5.8)

Cumulative effect of change in accounting principles, net of tax

-

(3.2)

Other

(13.0)

(19.6)

Changes in working capital

Receivables, net

137.6

(4.7)

Inventories

(11.7)

(82.1)

Other current assets

0.8

(17.6)

Accounts payable

(62.2)

6.0

Other current liabilities

(13.1)

1.7

Net cash operating activities

265.5

98.8

Investing Activities

Capital expenditures

(197.2)

(117.3)

Sale of property, plant and equipment

4.7

24.1

Purchase of equity investments and other acquisitions

(37.5)

(50.1)

Dividends received from equity investments

14.9

7.1

Decommissioning funding

(0.3)

(2.2)

Other

7.7

1.8

Net cash investing activities

(207.7)

(136.6)

Financing Activities

Short-term debt - net

102.4

134.9

Repayment of long-term debt and note to preferred stock trust

(103.2)

(75.1)

Payment of dividends

Preferred stock

(2.3)

(2.3)

Common stock

(60.9)

(51.8)

Issuance of common stock

22.3

24.1

Purchase of common stock

-

(0.8)

Other

(0.9)

5.8

Net cash financing activities

(42.6)

34.8

Change in cash and cash equivalents - continuing operations

15.2

(3.0)

Change in cash and cash equivalents - discontinued operations

(10.8)

0.4

Change in cash and cash equivalents

4.4

(2.6)

Cash and cash equivalents at beginning of period

50.7

43.3

Cash and cash equivalents at end of period

$55.1

$40.7

The accompanying condensed notes are an integral part of these statements.

-7-

<PAGE>

 

 

 

 

 

 

WISCONSIN PUBLIC SERVICE CORPORATION

 

 

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

Three Months Ended

Nine Months Ended

September 30

September 30

(Millions)

2004

2003

2004

2003

Operating revenues

 

 

 

 

Electric

$214.6

$205.0

$603.2

$555.7

Gas

45.6

49.0

288.8

294.8

Total operating revenues

260.2

254.0

892.0

850.5

Operating expenses

Electric production fuels

35.5

38.1

102.6

105.2

Purchased power

26.7

25.2

80.9

73.1

Gas purchased for resale

28.8

32.2

203.4

213.3

Other operating expenses

72.1

64.2

226.8

207.2

Maintenance

16.7

14.4

56.8

57.2

Depreciation and decommissioning

21.9

24.6

66.7

68.1

Federal income taxes

11.5

12.2

30.5

24.9

Investment tax credit restored

(0.3)

(0.4)

(1.0)

(1.1)

State income taxes

3.5

3.9

8.6

7.3

Gross receipts tax and other

9.4

9.0

28.8

27.3

Total operating expense

225.8

223.4

804.1

782.5

Operating income

34.4

30.6

87.9

68.0

Other income and (deductions)

Allowance for equity funds used during construction

0.5

0.3

1.5

1.9

Other, net

5.9

6.5

14.9

16.8

Income taxes

(1.2)

(0.8)

(2.2)

(2.6)

Total other income

5.2

6.0

14.2

16.1

Interest expense

Interest on long-term debt

7.4

6.6