Filed Pursuant to Rule 424(b)(3)
Registration No. 333-207196
PROSPECTUS SUPPLEMENT NO. 1
(to Prospectus dated October 16, 2015)
IPALCO Enterprises, Inc.
Offer to Exchange
3.45% Senior Secured Notes due 2020
for
New 3.45% Senior Secured Notes due 2020
This is a prospectus supplement to our prospectus dated October 16, 2015 (the “Prospectus”) relating to our offer, upon the terms and subject to the conditions set forth in the Prospectus, to exchange up to $405 million of our new registered 3.45% Senior Secured Notes due 2020 for up to $405 million of our existing unregistered 3.45% Senior Secured Notes due 2020.
On November 4, 2015, we filed our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 with the Securities and Exchange Commission. We are filing this prospectus supplement to update and supplement the information included or incorporated by reference in the Prospectus with the information contained in our Quarterly Report on Form 10-Q. The text of our Quarterly Report on Form 10-Q is attached to and a part of this prospectus supplement.
This prospectus supplement should be read in conjunction with the Prospectus and may not be delivered or utilized without the Prospectus. To the extent there is a discrepancy between the information contained in this prospectus supplement and the information in the Prospectus, the information contained herein supersedes and replaces such conflicting information.
See “Risk Factors” beginning on page 6 of the Prospectus for a discussion of risk factors that should be considered by you prior to tendering your old notes in the exchange offer.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in the exchange offer or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
November 5, 2015
Indiana | 35-1575582 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
One Monument Circle Indianapolis, Indiana | 46204 | |
(Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code:317-261-8261 |
Large accelerated filer¨ | Accelerated filer¨ |
Non-accelerated filer (Do not check if a smaller reporting company)þ | Smaller reporting company¨ |
Item No. | Page No. | |
DEFINED TERMS | 3 | |
FORWARD-LOOKING STATEMENTS | 5 | |
PART I - FINANCIAL INFORMATION | ||
1. | Financial Statements | |
Unaudited Condensed Consolidated Statements of Operations for the Three Months and Nine Months | ||
ended September 30, 2015 and 2014 | 7 | |
Unaudited Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014 | 8 | |
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months ended | 9 | |
September 30, 2015 and 2014 | ||
Notes to Unaudited Condensed Consolidated Financial Statements | 10 | |
2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 19 |
3. | Quantitative and Qualitative Disclosure About Market Risk | 26 |
4. | Controls and Procedures | 26 |
PART II - OTHER INFORMATION | ||
1. | Legal Proceedings | 28 |
1A. | Risk Factors | 28 |
2. | Unregistered Sales of Equity Securities and Use of Proceeds | 28 |
3. | Defaults Upon Senior Securities | 28 |
4. | Mine Safety Disclosures | 28 |
5. | Other Information | 28 |
6. | Exhibits | 29 |
SIGNATURES | 30 |
DEFINED TERMS | |
The following is a list of frequently used abbreviations or acronyms that are found in this Form 10-Q: | |
2014 Form 10-K | IPALCO’s Annual Report on Form 10-K for the year ended December 31, 2014, as amended |
2016 IPALCO Notes | $400 million of 7.25% Senior Secured Notes due April 1, 2016 |
2018 IPALCO Notes | $400 million of 5.00% Senior Secured Notes due May 1, 2018 |
2020 IPALCO Notes | $405 million of 3.45% Senior Secured Notes due July 15, 2020 |
AES | The AES Corporation |
AES U.S. Investments | AES U.S. Investments, Inc. |
ARO | Asset Retirement Obligations |
ASC | Accounting Standards Codification |
ASU | Accounting Standards Update |
CAA | U.S. Clean Air Act |
CCR | Coal Combustion Residuals |
CDPQ | CDP Infrastructure Fund GP, a wholly-owned subsidiary of La Caisse de dépôt et placement du Québec |
CO2 | Carbon Dioxide |
CPCN | Certificate of Public Convenience and Necessity |
CPP | Clean Power Plan |
Credit Agreement | $250,000,000 Revolving Credit Facilities Amended and Restated Credit Agreement, by and among Indianapolis Power & Light Company, the Lenders Party thereto, PNC Bank, National Association, as Administrative Agent, PNC Capital Markets LLC, as Sole Bookrunner and Sole Lead Arranger, Fifth Third Bank, as Syndication Agent and BMO Harris Bank N.A., as Documentation Agent, Dated as of May 6, 2014, and as Amended under the First Amendment to Credit Agreement, Dated as of October 16, 2015. |
CWA | U.S. Clean Water Act |
Defined Benefit Pension Plan | Employees’ Retirement Plan of Indianapolis Power & Light Company |
DSM | Demand Side Management |
EPA | U.S. Environmental Protection Agency |
ERISA | Employee Retirement Income Security Act of 1974 |
FAC | Fuel Adjustment Clause |
FASB | Financial Accounting Standards Board |
FERC | Federal Energy Regulatory Commission |
Financial Statements | Unaudited Condensed Consolidated Financial Statements of IPALCO in“Item 1. Financial Statements” included in Part I – Financial Information of this Form 10-Q |
GAAP | Generally accepted accounting principles in the United States |
IPALCO | IPALCO Enterprises, Inc. |
IPL | Indianapolis Power & Light Company |
IURC | Indiana Utility Regulatory Commission |
kWh | Kilowatt hours |
MATS | Mercury and Air Toxics Standards |
MW | Megawatts |
MISO | Midcontinent Independent System Operator, Inc. |
NAAQS | National Ambient Air Quality Standards |
NOV | Notice of Violation |
NPDES | National Pollutant Discharge Elimination System |
NSPS | New Source Performance Standards |
Pension Plans | Employees’ Retirement Plan of Indianapolis Power & Light Company and Supplemental Retirement Plan of Indianapolis Power & Light Company |
PSD | Prevention of Significant Deterioration |
RCRA | Resource Conservation and Recovery Act |
SEC | Securities and Exchange Commission |
Securities Act | Securities Act of 1933, as Amended |
Service Company | AES U.S. Services, LLC |
VIE | Variable Interest Entity |
U.S. SBU | AES U.S. Strategic Business Unit |
• | fluctuations in customer growth and demand; |
• | impacts of weather on retail sales and wholesale prices; |
• | impacts of renewable energy generation, natural gas prices and other market factors on wholesale prices; |
• | weather-related damage to our electrical system; |
• | fuel, commodity and other input costs; |
• | generating unit availability and capacity; |
• | transmission and distribution system reliability and capacity; |
• | purchased power costs and availability; |
• | availability and price of capacity; |
• | regulatory action, including, but not limited to, the review of our basic rates and charges by the IURC; |
• | federal and state legislation and regulations; |
• | changes in our credit ratings or the credit ratings of AES; |
• | fluctuations in the value of pension plan assets, fluctuations in pension plan expenses and our ability to fund defined benefit pension and other post-retirement plans; |
• | changes in financial or regulatory accounting policies; |
• | environmental matters, including costs of compliance with current and future environmental laws and requirements; |
• | interest rates, inflation rates and other costs of capital; |
• | the availability of capital; |
• | the ability of subsidiaries to pay dividends or distributions to IPALCO; |
• | level of creditworthiness of counterparties to contracts and transactions; |
• | labor strikes or other workforce factors, including the ability to attract and retain key personnel; |
• | facility or equipment maintenance, repairs and capital expenditures; |
• | significant delays or unanticipated cost increases associated with large construction projects; |
• | the availability and cost of funds to finance working capital and capital needs, particularly during periods when the time lag between incurring costs and recovery is long and the costs are material; |
• | local economic conditions; |
• | catastrophic events such as fires, explosions, cyber-attacks, terrorist acts, acts of war, pandemic events, or natural disasters such as floods, earthquakes, tornadoes, severe winds, ice or snow storms, droughts, or other similar occurrences; |
• | costs and effects of legal and administrative proceedings, audits, settlements, investigations and claims and the ultimate disposition of litigation; |
• | industry restructuring, deregulation and competition; |
• | issues related to our participation in the MISO, including the cost associated with membership, allocation of costs, the recovery of costs incurred, and the risk of default of other MISO participants; |
• | changes in tax laws and the effects of our strategies to reduce tax payments; |
• | the use of derivative contracts; and |
• | product development, technology changes, and changes in prices of products and technologies. |
IPALCO ENTERPRISES, INC. and SUBSIDIARIES | |||||||||||||
Unaudited Condensed Consolidated Statements of Operations | |||||||||||||
(In Thousands) | |||||||||||||
Three Months Ended, | Nine Months Ended, | ||||||||||||
September 30, | September 30, | ||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
UTILITY OPERATING REVENUES | $ | 326,562 | $ | 335,574 | $ | 951,240 | $ | 1,005,037 | |||||
UTILITY OPERATING EXPENSES: | |||||||||||||
Fuel | 85,631 | 113,550 | 248,147 | 315,492 | |||||||||
Other operating expenses | 58,770 | 51,081 | 168,578 | 168,593 | |||||||||
Power purchased | 32,606 | 21,665 | 106,591 | 85,797 | |||||||||
Maintenance | 25,973 | 20,995 | 98,010 | 85,746 | |||||||||
Depreciation and amortization | 46,662 | 46,396 | 136,038 | 138,831 | |||||||||
Taxes other than income taxes | 10,061 | 11,191 | 33,553 | 34,403 | |||||||||
Income taxes - net | 21,404 | 21,385 | 48,386 | 49,147 | |||||||||
Total utility operating expenses | 281,107 | 286,263 | 839,303 | 878,009 | |||||||||
UTILITY OPERATING INCOME | 45,455 | 49,311 | 111,937 | 127,028 | |||||||||
OTHER INCOME AND (DEDUCTIONS): | |||||||||||||
Allowance for equity funds used during construction | 3,888 | 2,051 | 10,185 | 5,014 | |||||||||
Loss on early extinguishment of debt | (2,728 | ) | — | (22,051 | ) | — | |||||||
Miscellaneous income and (deductions) - net | (556 | ) | (391 | ) | (1,924 | ) | (1,932 | ) | |||||
Income tax benefit applicable to nonoperating income | 5,521 | 5,545 | 24,102 | 16,696 | |||||||||
Total other income and (deductions) - net | 6,125 | 7,205 | 10,312 | 19,778 | |||||||||
INTEREST AND OTHER CHARGES: | |||||||||||||
Interest on long-term debt | 24,720 | 27,503 | 80,061 | 80,602 | |||||||||
Other interest | 539 | 467 | 1,487 | 1,386 | |||||||||
Allowance for borrowed funds used during construction | (3,411 | ) | (1,246 | ) | (8,644 | ) | (2,978 | ) | |||||
Amortization of redemption premiums and expense on debt | 1,086 | 1,321 | 3,755 | 3,956 | |||||||||
Total interest and other charges - net | 22,934 | 28,045 | 76,659 | 82,966 | |||||||||
NET INCOME | 28,646 | 28,471 | 45,590 | 63,840 | |||||||||
LESS: PREFERRED DIVIDENDS OF SUBSIDIARY | 803 | 803 | 2,410 | 2,410 | |||||||||
NET INCOME APPLICABLE TO COMMON STOCK | $ | 27,843 | $ | 27,668 | $ | 43,180 | $ | 61,430 | |||||
See notes to unaudited condensed consolidated financial statements. |
IPALCO ENTERPRISES, INC. and SUBSIDIARIES | ||||||
Unaudited Condensed Consolidated Balance Sheets | ||||||
(In Thousands) | ||||||
September 30, | December 31, | |||||
2015 | 2014 | |||||
ASSETS | ||||||
UTILITY PLANT: | ||||||
Utility plant in service | $ | 4,931,260 | $ | 4,658,023 | ||
Less accumulated depreciation | 2,298,634 | 2,264,606 | ||||
Utility plant in service - net | 2,632,626 | 2,393,417 | ||||
Construction work in progress | 601,234 | 447,399 | ||||
Spare parts inventory | 13,903 | 14,816 | ||||
Property held for future use | 1,002 | 1,002 | ||||
Utility plant - net | 3,248,765 | 2,856,634 | ||||
OTHER ASSETS: | ||||||
Nonutility property - at cost, less accumulated depreciation | 518 | 522 | ||||
Other long-term assets | 6,404 | 6,221 | ||||
Other assets - net | 6,922 | 6,743 | ||||
CURRENT ASSETS: | ||||||
Cash and cash equivalents | 125,238 | 26,933 | ||||
Accounts receivable and unbilled revenue (less allowance | ||||||
for doubtful accounts of $2,400 and $2,076, respectively) | 135,442 | 139,709 | ||||
Fuel inventories - at average cost | 66,772 | 47,550 | ||||
Materials and supplies - at average cost | 61,715 | 60,185 | ||||
Deferred tax asset - current | 40,856 | 61,782 | ||||
Regulatory assets | 4,212 | 93 | ||||
Prepayments and other current assets | 28,657 | 23,161 | ||||
Total current assets | 462,892 | 359,413 | ||||
DEFERRED DEBITS: | ||||||
Regulatory assets | 430,756 | 419,193 | ||||
Miscellaneous | 28,755 | 25,835 | ||||
Total deferred debits | 459,511 | 445,028 | ||||
TOTAL | $ | 4,178,090 | $ | 3,667,818 | ||
CAPITALIZATION AND LIABILITIES | ||||||
CAPITALIZATION: | ||||||
Common shareholders' equity: | ||||||
Paid in capital | $ | 383,314 | $ | 168,610 | ||
Accumulated deficit | (35,328 | ) | (17,339 | ) | ||
Total common shareholders' equity | 347,986 | 151,271 | ||||
Cumulative preferred stock of subsidiary | 59,784 | 59,784 | ||||
Long-term debt | 2,083,815 | 1,951,013 | ||||
Total capitalization | 2,491,585 | 2,162,068 | ||||
CURRENT LIABILITIES: | ||||||
Short-term and current portion of long-term debt (Note 5) | 181,850 | 50,000 | ||||
Accounts payable | 145,658 | 110,623 | ||||
Accrued expenses | 22,471 | 25,187 | ||||
Accrued real estate and personal property taxes | 22,434 | 19,177 | ||||
Regulatory liabilities | 32,636 | 27,943 | ||||
Accrued interest | 39,469 | 30,726 | ||||
Customer deposits | 29,737 | 28,337 | ||||
Other current liabilities | 11,816 | 12,881 | ||||
Total current liabilities | 486,071 | 304,874 | ||||
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES: | ||||||
Regulatory liabilities | 632,159 | 610,917 | ||||
Deferred income taxes - net | 429,476 | 421,127 | ||||
Non-current income tax liability | 7,241 | 7,042 | ||||
Unamortized investment tax credit | 4,240 | 5,229 | ||||
Accrued pension and other postretirement benefits | 66,478 | 96,464 | ||||
Asset retirement obligations | 59,972 | 59,098 | ||||
Miscellaneous | 868 | 999 | ||||
Total deferred credits and other long-term liabilities | 1,200,434 | 1,200,876 | ||||
COMMITMENTS AND CONTINGENCIES (Note 7) | ||||||
TOTAL | $ | 4,178,090 | $ | 3,667,818 | ||
See notes to unaudited condensed consolidated financial statements. |
IPALCO ENTERPRISES, INC. and SUBSIDIARIES | ||||||
Unaudited Condensed Consolidated Statements of Cash Flows | ||||||
(In Thousands) | ||||||
Nine Months Ended, | ||||||
September 30, | ||||||
2015 | 2014 | |||||
CASH FLOWS FROM OPERATIONS: | ||||||
Net income | $ | 45,590 | $ | 63,840 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 149,862 | 139,607 | ||||
(Deferral) amortization of regulatory assets | (10,639 | ) | 2,480 | |||
Amortization of debt premium | 574 | 704 | ||||
Deferred income taxes and investment tax credit adjustments - net | 24,284 | (1,505 | ) | |||
Loss on early extinguishment of debt | 22,051 | — | ||||
Allowance for equity funds used during construction | (9,969 | ) | (4,831 | ) | ||
Change in certain assets and liabilities: | ||||||
Accounts receivable | 4,267 | 761 | ||||
Fuel, materials and supplies | (20,751 | ) | 9,774 | |||
Income taxes receivable or payable | — | 33,956 | ||||
Financial transmission rights | (359 | ) | (6,465 | ) | ||
Accounts payable and accrued expenses | 191 | (27,808 | ) | |||
Accrued real estate and personal property taxes | 3,257 | 4,412 | ||||
Accrued interest | 8,743 | 19,150 | ||||
Pension and other postretirement benefit expenses | (29,986 | ) | (56,343 | ) | ||
Short-term and long-term regulatory assets and liabilities | 3,777 | 16,250 | ||||
Prepaids and other current assets | (5,113 | ) | (3,453 | ) | ||
Other - net | 2,458 | 2,147 | ||||
Net cash provided by operating activities | 188,237 | 192,676 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Capital expenditures - utility | (458,180 | ) | (232,313 | ) | ||
Project development costs | (8,146 | ) | (7,277 | ) | ||
Cost of removal, net of salvage | (7,997 | ) | (3,737 | ) | ||
Other | 58 | (43 | ) | |||
Net cash used in investing activities | (474,265 | ) | (243,370 | ) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Short-term debt borrowings | 222,000 | 105,000 | ||||
Short-term debt repayments | (222,000 | ) | (105,000 | ) | ||
Long-term borrowings, net of discount | 663,350 | 128,358 | ||||
Retirement of long-term debt, including make whole provision | (420,242 | ) | — | |||
Dividends on common stock | (61,170 | ) | (78,000 | ) | ||
Issuance of common stock | 214,366 | — | ||||
Equity contribution from AES | — | 106,400 | ||||
Preferred dividends of subsidiary | (2,410 | ) | (2,410 | ) | ||
Deferred financing costs paid | (7,363 | ) | (1,724 | ) | ||
Retention payments on capital expenditures | (1,829 | ) | — | |||
Other | (369 | ) | (108 | ) | ||
Net cash provided by financing activities | 384,333 | 152,516 | ||||
Net change in cash and cash equivalents | 98,305 | 101,822 | ||||
Cash and cash equivalents at beginning of period | 26,933 | 19,067 | ||||
Cash and cash equivalents at end of period | $ | 125,238 | $ | 120,889 | ||
Supplemental disclosures of cash flow information: | ||||||
Cash paid during the period for: | ||||||
Interest (net of amount capitalized) | $ | 64,133 | $ | 59,833 | ||
Income taxes | $ | — | $ | — | ||
As of September 30, | ||||||
2015 | 2014 | |||||
Non-cash investing activities: | ||||||
Accruals for capital expenditures | $ | 61,188 | $ | 49,218 | ||
See notes to unaudited condensed consolidated financial statements. |
September 30, 2015 | December 31, 2014 | |||||||||||
Face Value | Fair Value | Face Value | Fair Value | |||||||||
(In Millions) | ||||||||||||
Fixed-rate | $ | 2,220.3 | $ | 2,386.3 | $ | 1,955.3 | $ | 2,231.2 | ||||
Variable-rate | 50.0 | 50.0 | 50.0 | 50.0 | ||||||||
Total indebtedness | $ | 2,270.3 | $ | 2,436.3 | $ | 2,005.3 | $ | 2,281.2 |
September 30, | December 31, | ||||||
Series | Due | 2015 | 2014 | ||||
(In Thousands) | |||||||
IPL first mortgage bonds (see below): | |||||||
4.90%(1) | January 2016 | $ | 30,000 | $ | 30,000 | ||
4.90%(1) | January 2016 | 41,850 | 41,850 | ||||
4.90%(1) | January 2016 | 60,000 | 60,000 | ||||
5.40%(2) | August 2017 | 24,650 | 24,650 | ||||
3.875%(1) | August 2021 | 55,000 | 55,000 | ||||
3.875%(1) | August 2021 | 40,000 | 40,000 | ||||
4.55%(1) | December 2024 | 40,000 | 40,000 | ||||
6.60% | January 2034 | 100,000 | 100,000 | ||||
6.05% | October 2036 | 158,800 | 158,800 | ||||
6.60% | June 2037 | 165,000 | 165,000 | ||||
4.875% | November 2041 | 140,000 | 140,000 | ||||
4.65% | June 2043 | 170,000 | 170,000 | ||||
4.50% | June 2044 | 130,000 | 130,000 | ||||
4.70% | September 2045 | 260,000 | — | ||||
Unamortized discount – net | (4,240 | ) | (2,940 | ) | |||
Total IPL first mortgage bonds | 1,411,060 | 1,152,360 | |||||
Total Long-term Debt – IPL | 1,411,060 | 1,152,360 | |||||
Long-term Debt – IPALCO: | |||||||
7.25% Senior Secured Notes | April 2016 | — | 400,000 | ||||
5.00% Senior Secured Notes | May 2018 | 400,000 | 400,000 | ||||
3.45% Senior Secured Notes | July 2020 | 405,000 | — | ||||
Unamortized discount – net | (395 | ) | (1,347 | ) | |||
Total Long-term Debt – IPALCO | 804,605 | 798,653 | |||||
Total Consolidated IPALCO Long-term Debt | 2,215,665 | 1,951,013 | |||||
Less: Current Portion of Long-term Debt | 131,850 | — | |||||
Net Consolidated IPALCO Long-term Debt | $ | 2,083,815 | $ | 1,951,013 |
(1) | First mortgage bonds are issued to the Indiana Finance Authority, to secure the loan of proceeds from the tax-exempt bonds issued by the Indiana Finance Authority. |
(2) | First mortgage bonds are issued to the city of Petersburg, Indiana, to secure the loan proceeds from various tax-exempt instruments issued by the city. |
Net unfunded status of plans: | |||
Net unfunded status at December 31, 2014, before tax adjustments | $ | (91,182 | ) |
Net benefit cost components reflected in net funded status during first quarter: | |||
Service cost | (2,079 | ) | |
Interest cost | (7,408 | ) | |
Expected return on assets | 11,206 | ||
Employer contributions during quarter | 25,000 | ||
Net unfunded status at March 31, 2015, before tax adjustments | $ | (64,463 | ) |
Net benefit cost components reflected in net funded status during second quarter: | |||
Service cost | (2,078 | ) | |
Interest cost | (7,408 | ) | |
Expected return on assets | 11,206 | ||
Net unfunded status at June 30, 2015, before tax adjustments | $ | (62,743 | ) |
Net benefit cost components reflected in net funded status during third quarter: | |||
Service cost | (2,079 | ) | |
Interest cost | (7,411 | ) | |
Expected return on assets | 11,204 | ||
Actuarial valuation adjustment | 108 | ||
Employer contributions during quarter | 146 | ||
Net unfunded status at September 30, 2015, before tax adjustments | $ | (60,775 | ) |
Regulatory assets related to pensions(1): | |||
Regulatory assets at December 31, 2014, before tax adjustments | $ | 236,891 | |
Amount reclassified through net benefit cost: | |||
Amortization of prior service cost | (1,216 | ) | |
Amortization of net actuarial loss | (3,475 | ) | |
Regulatory assets at March 31, 2015, before tax adjustments | $ | 232,200 | |
Amount reclassified through net benefit cost: | |||
Amortization of prior service cost | (1,217 | ) | |
Amortization of net actuarial loss | (3,475 | ) | |
Regulatory assets at June 30, 2015, before tax adjustments | $ | 227,508 | |
Amount reclassified through net benefit cost: | |||
Amortization of prior service cost | (1,217 | ) | |
Amortization of net actuarial loss | (3,470 | ) | |
ASC 715 settlement accounting re-actuarial valuation - supplemental plan(2) | (206 | ) | |
Actuarial valuation adjustment | (108 | ) | |
Regulatory assets at September 30, 2015, before tax adjustments | $ | 222,507 | |
(1) | Amounts that would otherwise be charged/credited to Accumulated Other Comprehensive Income or Loss upon application of ASC 715, “Compensation – Retirement Benefits,” are recorded as a regulatory asset or liability because IPL has historically recovered and currently recovers pension and other postretirement benefit expenses in rates. These are unrecognized amounts yet to be recognized as components of net periodic benefit costs. |
(2) | The $0.2 million settlement loss was the result of a lump sum distribution paid out of the Supplemental Retirement Plan of IPL for the nine months ended September 30, 2015. |
For the Three Months Ended, | For the Nine Months Ended, | |||||||||||
September 30, | September 30, | |||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||
(In Thousands) | ||||||||||||
Components of net periodic benefit cost: | ||||||||||||
Service cost | $ | 2,079 | $ | 1,808 | $ | 6,236 | $ | 5,423 | ||||
Interest cost | 7,411 | 7,788 | 22,227 | 23,365 | ||||||||
Expected return on plan assets | (11,204 | ) | (10,474 | ) | (33,616 | ) | (31,420 | ) | ||||
Amortization of prior service cost | 1,217 | 1,214 | 3,650 | 3,640 | ||||||||
Amortization of actuarial loss | 3,470 | 2,428 | 10,420 | 7,283 | ||||||||
ASC 715 settlement accounting re-actuarial valuation - supplemental plan | 206 | — | 206 | — | ||||||||
Net periodic benefit cost | $ | 3,179 | $ | 2,764 | $ | 9,123 | $ | 8,291 |
Three Months Ended | ||||||||||
September 30, | Percentage | |||||||||
2015 | 2014 | Change | Change | |||||||
Utility Operating Revenues: | ||||||||||
Retail Revenues | $ | 317,971 | $ | 307,598 | $ | 10,373 | 3.4% | |||
Wholesale Revenues | 3,200 | 22,576 | (19,376 | ) | (85.8)% | |||||
Miscellaneous Revenues | 5,391 | 5,400 | (9 | ) | (0.2)% | |||||
Total Utility Operating Revenues | $ | 326,562 | $ | 335,574 | $ | (9,012 | ) | (2.7)% | ||
Heating Degree Days: | ||||||||||
Actual | 21 | 79 | (58 | ) | (73.4)% | |||||
30-year Average | 66 | 67 | ||||||||
Cooling Degree Days: | ||||||||||
Actual | 746 | 549 | 197 | 35.9% | ||||||
30-year Average | 781 | 793 |
Operating expenses for the three months ended September 30, 2014 | $ | 286.3 | |
Decrease in fuel costs | (27.9 | ) | |
Increase in power purchased | 10.9 | ||
Increase in maintenance expenses | 5.0 | ||
Increase in miscellaneous steam power expenses | 3.3 | ||
Increase in DSM program costs | 0.8 | ||
Other miscellaneous variances | 2.7 | ||
Operating expenses for the three months ended September 30, 2015 | $ | 281.1 | |
Nine Months Ended | ||||||||||
September 30, | Percentage | |||||||||
2015 | 2014 | Change | Change | |||||||
Utility Operating Revenues: | ||||||||||
Retail Revenues | $ | 920,084 | $ | 925,082 | $ | (4,998 | ) | (0.5)% | ||
Wholesale Revenues | 15,506 | 63,929 | (48,423 | ) | (75.7)% | |||||
Miscellaneous Revenues | 15,650 | 16,026 | (376 | ) | (2.3)% | |||||
Total Utility Operating Revenues | $ | 951,240 | $ | 1,005,037 | $ | (53,797 | ) | (5.4)% | ||
Heating Degree Days: | ||||||||||
Actual | 3,665 | 4,064 | (399 | ) | (9.8)% | |||||
30-year Average | 3,288 | 3,284 | ||||||||
Cooling Degree Days: | ||||||||||
Actual | 1,145 | 891 | 254 | 28.5% | ||||||
30-year Average | 1,124 | 1,136 |
Operating expenses for the nine months ended September 30, 2014 | $ | 878.0 | |
Decrease in fuel costs | (67.3 | ) | |
Increase in power purchased | 20.8 | ||
Increase in maintenance expenses | 12.3 | ||
Decrease in DSM program costs | (7.6 | ) | |
Increase in miscellaneous steam power expenses | 6.1 | ||
Decrease in depreciation and amortization | (2.8 | ) | |
Other miscellaneous variances | (0.2 | ) | |
Operating expenses for the nine months ended September 30, 2015 | $ | 839.3 | |
Exhibit No. | Document |
4.1* | Sixty-Third Supplemental Indenture, dated as of September 1, 2015, to the Mortgage and Deed of Trust, dated as of May 1, 1940, between IPL and the Bank of New York Mellon Trust Company, NA, as successor in interest to American National Bank & Trust Company of Chicago, Trustee |
10.1 | First Amendment to Credit Agreement by and among IPL, the Lenders party thereto, Fifth Third Bank, as syndication agent, BMO Harris Bank N.A., as documentation agent and PNC Bank, National Association, as administrative agent, dated as of October 16, 2015 |
10.2 | $91,850,000 364-Day Delayed Draw Term Loan Facility Credit Agreement by and among IPL, the Lenders party thereto, U.S. Bank National Association, as administrative agent, U.S. Bank National Association, sole lead arranger and Fifth Third Bank, as documentation agent, dated as of October 16, 2015 |
31.1 | Certification by Chief Executive Officer required by Rule 13a-14(a) or 15d-14(a) |
31.2 | Certification by Principal Financial Officer required by Rule 13a-14(a) or 15d-14(a) |
32 | Certification required by Rule 13a-14(b) or 15d-14(b) |
101.INS | XBRL Instance Document (filed herewith as provided in Rule 406T of Regulation S-T) |
101.SCH | XBRL Taxonomy Extension Schema Document (filed herewith as provided in Rule 406T of Regulation S-T) |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith as provided in Rule 406T of Regulation S-T) |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document (filed herewith as provided in Rule 406T of Regulation S-T) |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document (filed herewith as provided in Rule 406T of Regulation S-T) |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith as provided in Rule 406T of Regulation S-T) |
* Incorporated by reference to IPALCO's Registration Statement on Form S-4 filed with the SEC on September 28, 2015 |
IPALCO ENTERPRISES, INC. | ||||
Date: | November 4, 2015 | /s/ Craig L. Jackson | ||
Craig L. Jackson | ||||
Chief Financial Officer | ||||
(Principal Financial Officer) | ||||
Date: | November 4, 2015 | /s/ Kurt A. Tornquist | ||
Kurt A. Tornquist | ||||
Controller | ||||
(Principal Accounting Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of IPALCO Enterprises, Inc. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 4, 2015 | /s/ Kenneth J. Zagzebski | ||
Kenneth J. Zagzebski | ||||
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of IPALCO Enterprises, Inc. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 4, 2015 | /s/ Craig L. Jackson | ||
Craig L. Jackson | ||||
Chief Financial Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of IPALCO. |
Date: | November 4, 2015 | /s/ Kenneth J. Zagzebski | ||
Kenneth J. Zagzebski | ||||
Chief Executive Officer | ||||
Date: | November 4, 2015 | /s/ Craig L. Jackson | ||
Craig L. Jackson | ||||
Chief Financial Officer |