-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Hl9Y+PveRGSrNqpTYKzvne4JqYVPOBuf7jVbDVp5JTOxiF/i6vOh8n80xpScwpLq BKyX5SPzzDHM1KUjBCFjIg== 0000950162-02-000860.txt : 20020703 0000950162-02-000860.hdr.sgml : 20020703 20020703134843 ACCESSION NUMBER: 0000950162-02-000860 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020702 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMPIRE DISTRICT ELECTRIC CO CENTRAL INDEX KEY: 0000032689 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 440236370 STATE OF INCORPORATION: KS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03368 FILM NUMBER: 02696120 BUSINESS ADDRESS: STREET 1: 602 JOPLIN ST CITY: JOPLIN STATE: MO ZIP: 64801 BUSINESS PHONE: 4176255100 MAIL ADDRESS: STREET 1: P.O. BOX 127 CITY: JOPLIN STATE: MO ZIP: 64802 8-K 1 revempire8k.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 2, 2002 THE EMPIRE DISTRICT ELECTRIC COMPANY - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) Kansas - -------------------------------------------------------------------------------- (State or other jurisdiction of incorporation) 1-3368 44-0236370 - --------------------------------- --------------------------------------- (Commission File Number) (IRS Employer Identification Number) 602 Joplin Street, Joplin, Missouri 64801 - ---------------------------------------------------- ---------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (417) 625-5100 ---------------------------- Not applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) 2 Item 5 Other Events Attached hereto as Exhibit 99.1 is a press release, which is incorporated by reference herein, issued by the Company on July 2, 2002 relating to the announcement of a new rating by Standard & Poor's. Attached hereto as Exhibit 99.2 is a press release, which is incorporated by reference herein, issued by Standard & Poor's on July 2, 2002 relating the Company's new rating. The new ratings are as follows: Company Credit Rating BBB First Mortgage Bonds BBB Senior Notes BBB- Commercial Paper A-2 Trust Preferred Securities BB+ SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE EMPIRE DISTRICT ELECTRIC COMPANY By /s/ D.W. Gibson ------------------------------------------------ Name: D.W. Gibson Title: Vice President - Regulatory and General Services Dated: July 2, 2002 Exhibit Index Exhibit Number Description 99.1 Press Release of Empire dated July 2, 2002. 99.2 Press Release of Standard & Poor's dated July 2, 2002. EX-99.1 3 empireex991.txt PRESS RELEASE - -------------------------------------------------------------------------------- PRESS RELEASE For Immediate Release Contact: Media Contact Investor Relations Contact Amy Bass -------------------------- Director of Corporate Communications Janet S. Watson 417-625-5114 Secretary/Treasurer abass@empiredistrict.com 417-625-5108 ------------------------ jwatson@empiredistrict.com -------------------------- THE EMPIRE DISTRICT ELECTRIC COMPANY ANNOUNCES NEW RATING BY STANDARD & POOR'S JOPLIN, MO - July 2, 2002 - The Empire District Electric Company (NYSE:EDE) announced today that Standard & Poor's has downgraded the Company's corporate credit rating to BBB from A-. The Company's commercial paper program remains at A-2. The outlook was revised from negative to stable. In making the announcement, Bill Gipson, President and CEO, stated, "We are disappointed with the action taken by Standard & Poor's, but in view of the current market conditions in the utility industry sector, we understand their position. Empire's credit rating is still a solid investment grade, and we will continue our efforts to maintain and improve this solid rating." According to Greg Knapp, Vice President - Finance and Chief Financial Officer, Empire has taken a number of steps over the past eighteen months to strengthen its balance sheet, stabilize earnings, and add value for its stakeholders. These steps include: o Finalized a Missouri rate case in October 2001 increasing annual revenues approximately $17.1 million and establishing a two-year Interim Energy Charge. o Resolved the uncertainties surrounding the true-up of the Interim Energy Charge and the cost of Off-System Sales. o Finalized a Kansas rate case in June 2002 increasing annual revenues approximately $2.54 million. (more) Page 2/ Credit rating o Initiated a new $100 million, six-bank syndicate, credit facility which does not contain rating agency default triggers. o Reinstated our Dividend Reinvestment Plan, which now has 3.5 million shares enrolled, or about 16 percent of total shares, avoiding approximately $4.5 million annual cash outlay and further increasing equity. o Filed for new Missouri rates in March 2002, which would increase annual revenues by approximately $19.8 million. In conjunction with the filing, a $9,994,888 reduction in the Interim Energy Charge was also requested. The net effect would be an annual increase in customers' bills of approximately $9,785,027. o Filed for new water rates in May 2002, which would increase annual revenues by approximately $361,000. o Issued over $90 million in Common Stock and $50 million in Trust Preferred securities, resulting in an equity to total capitalization ratio of 46.4 percent. o Initiated a gas procurement strategy to protect the Company and our customers from price volatility. o Retired $37.5 million in long-term debt. o Reduced field operations personnel by 10 percent through a structured redeployment of resources. "We are pleased that Standard and Poor's recognized the commitment of our company to credit quality. Our focus is the creation of long-term value for our stakeholders," said Gipson. "We remain a solid investment-grade company." Based in Joplin, Missouri, The Empire District Electric Company (NYSE:EDE) is an investor-owned utility providing electric service to approximately 150,000 customers in southwest Missouri, southeast Kansas, northeast Oklahoma, and northwest Arkansas. The Company also offers monitored security, fiber optic service, and decorative lighting services to its customers, and provides water service in three incorporated communities in Missouri. ### Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such statements address future plans, objectives, expectations, and events or conditions concerning various matters. Actual results in each case could differ materially from those currently anticipated in such statements, by reason of the factors noted in our filings with the SEC, including the most recent Form 10-K and Form 10-Q. EX-99.2 4 empireex992.txt PRESS RELEASE Ratings On Empire District Electric Co. Lowered To 'BBB'; Outlook Stable Todd A Shipman, CFA, New York (1) 212-438-7676; Craig Hauret, New York (1) 212-438-7938 ================================================================================ Summary analysis -- Empire District Electric Co. -------------- 02-Jul-2002 ================================================================================ CREDIT RATING: BBB/Stable/A-2 Country: United States State/Province: Missouri Primary SIC: Electric Services Mult. CUSIP6: 291641 ================================================================================ Credit Rating History: Local currency Foreign currency 02-Jul-2002 BBB/A-2 BBB/A-2 20-May-1994 A-/A-2 A-/A-2 ================================================================================ Rationale On July 2, Standard & Poor's lowered its corporate credit rating on Joplin, Mo.-based Empire District Electric Co. (EDE) to `BBB' from `A-'. The rating on the company's commercial paper program remains at A-2. The outlook was revised to stable from negative. The rating action on energy provider EDE reflects a downward trend in the company's financial profile that was not adequately stemmed in recent regulatory actions. Roughly 80% of EDE's revenues are derived in Missouri, where the regulatory environment is marked by relatively low allowed ROEs, low plant depreciation allowances, and the lack of a permanent fuel adjustment clause to help shield the company from its markedly increased dependence on natural gas. While the temporary fuel and purchased-power mechanism now in place in Missouri helps to mitigate potential volatility in energy prices through 2003, Standard & Poor's is concerned about future regulatory policy regarding the timely recovery of prudently incurred fuel and purchased-power expenses. EDE has an average business profile, and a financial position (adjusted for purchased power obligations) that is marginally adequate for the new rating. The business profile is supported by a healthy service area with limited industrial concentration, negligible unregulated activities, and a credit-quality conscious management. In addition to the aforementioned regulatory environment, concerns include EDE's reliance on the Asbury coal plant, illustrated by the company's poor financial performance in 2001 during which the plant experienced extended maintenance. This dependence will diminish as more capacity comes on line through 2004, but Asbury will still provide a significant amount of generation. Furthermore, Nox compliance issues at the plant will affect the company's operating and financial risks going forward. Continued reductions in capital spending (outside of expansion) and cost controls are leading to improved earnings protection. Rates are higher, but EDE will remain competitive in -2- the region. In addition, the other principal financial measures are expected to fall in line with levels suitable for the established risk profile at the `BBB' level: funds from operations (FFO) to debt at 20%, FFO coverage at 3.5 times, and debt to capital at 53%. Outlook The stable outlook assumes reasonable regulatory response in future rate proceedings, manageable environmental compliance costs that are recoverable through rates, and the continued improvement in risk management of the company's generation fleet, fuel procurement, and purchased-power needs. Ratings List Empire District Electric Co. Corporate credit rating BBB/Stable/A-2 A complete list of the ratings is available to RatingsDirect subscribers at www.ratingsdirect.com, as well as on Standard & Poor's public Web site at www.standardandpoors.com under Ratings Actions/Newly Released Ratings. -----END PRIVACY-ENHANCED MESSAGE-----