<PAGE>
Securities and Exchange Commission
Washington, DC 20549
FORM 8-K/A
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) - June 28, 1995
Minnesota Power & Light Company
A Minnesota Corporation
Commission File No. 1-3548
IRS Employer Identification No. 41-0418150
30 West Superior Street
Duluth, Minnesota 55802
Telephone - (218) 722-2641
<PAGE>
Pursuant to Form 8-K Item 7. instructions, financial statements of ADESA
Corporation (ADESA) for the interim period ended June 30, 1995, and pro forma
financial statements reflecting the acquisition of ADESA are hereby filed as an
amendment to Minnesota Power & Light Company's Form 8-K filed July 12, 1995.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of ADESA Corporation
<TABLE>
ADESA Corporation
Condensed Consolidated Balance Sheet
<CAPTION>
June 30, 1995 December 31, 1994
------------- -----------------
(Unaudited) (Note)
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 17,977,097 $ 10,203,992
Trade receivables, net 62,258,026 48,790,083
Other current assets 5,033,288 4,637,150
------------ ------------
Total current assets 85,268,411 63,631,225
Property and equipment, net 87,540,292 71,114,221
Intangible assets, net 38,991,941 38,571,513
Other assets 190,784 407,388
------------ ------------
Total assets $211,991,428 $173,724,347
============ ============
Liabilities and
Shareholders' Equity
Current liabilities
Accounts payable and accrued
expenses $ 48,945,827 $ 26,747,798
Notes payable 25,346,242 20,647,135
Current portion of long-term
debt 4,975,166 4,994,649
------------ ------------
Total current liabilities 79,267,235 52,389,582
Long-term debt 44,473,321 37,894,509
Deferred income taxes 614,435 452,113
Minority interest in equity
of subsidiary 1,505,588 1,289,280
Shareholders' equity
Common stock 66,181,978 66,162,853
Retained earnings 20,106,295 15,751,929
Cumulative translation
adjustment (157,424) (215,919)
------------ ------------
Total shareholders' equity 86,130,849 81,698,863
------------ ------------
Total liabilities and shareholders'
equity $211,991,428 $173,724,347
============ ============
</TABLE>
Note: The balance sheet at December 31, 1994, has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See accompanying notes.
1
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<TABLE>
ADESA Corporation
Condensed Consolidated Statement of Income
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Operating revenues $30,527,481 $23,538,560 $60,136,826 $45,109,884
Operating expenses
Direct 11,301,643 8,555,340 22,420,970 16,863,376
Selling, general and
administrative
Operating 12,165,059 8,421,864 24,366,301 16,236,532
Depreciation 1,087,122 852,350 2,098,230 1,596,835
Amortization 751,143 941,131 1,500,601 1,876,444
----------- ----------- ----------- -----------
Operating income 5,222,514 4,767,875 9,750,724 8,536,697
Other income (expense)
Interest income 150,577 59,625 304,620 126,917
Interest expense (1,548,587) (828,883) (2,820,621) (1,505,537)
Other, net (106,554) 129,407 (216,308) 201,368
----------- ----------- ----------- -----------
(1,504,564) (639,851) (2,732,309) (1,177,252)
----------- ----------- ----------- -----------
Income before income taxes 3,717,950 4,128,024 7,018,415 7,359,445
Income taxes (1,360,225) (1,656,200) (2,664,005) (2,913,905)
----------- ----------- ----------- -----------
Net income $ 2,357,725 $ 2,471,824 $ 4,354,410 $ 4,445,540
=========== =========== =========== ===========
Weighted average shares
outstanding 11,424,710 11,254,918 11,410,931 11,250,911
=========== =========== =========== ===========
Earnings per share $0.21 $0.22 $0.38 $0.40
=========== =========== =========== ===========
</TABLE>
See accompanying notes.
2
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<TABLE>
ADESA Corporation
Condensed Consolidated Statement of Cash Flows
(Unaudited)
<CAPTION>
Six Months Ended
June 30,
1995 1994
----------- -----------
<S> <C> <C>
Operating activities
Net income $ 4,354,410 $ 4,445,540
Adjustments to reconcile net income to net cash
provided (used) by operating activities
Depreciation 2,098,230 1,596,835
Amortization 1,500,601 1,876,444
Gain on disposal of assets (110,387) (12,835)
Minority interest in subsidiary earnings 216,308 76,795
Changes in operating assets and liabilities
Trade receivables (13,467,943) (21,090,889)
Other current assets (396,138) (3,574,957)
Accounts payable and accrued expenses 22,198,029 26,154,986
----------- -----------
Net cash provided by operating activities 16,393,110 9,471,919
Investing activities
Purchases of property and equipment, net (18,413,914) (13,444,572)
Other assets (1,656,043) (2,175,189)
----------- -----------
Net cash used by investing activities (20,069,957) (15,619,761)
Financing activities
Proceeds from notes and long-term debt 13,927,691 14,781,409
Payments on notes and long-term debt (2,526,556) (9,302,947)
Proceeds from sale of common stock 19,125 -
----------- -----------
Net cash provided by financing activities 11,420,260 5,478,462
Effect of exchange rate changes on cash 29,692 (118,614)
----------- -----------
Net increase (decrease) in cash 7,773,105 (787,994)
Cash and cash equivalents at beginning of period 10,203,992 11,902,141
----------- -----------
Cash and cash equivalents at end of period $17,977,097 $11,114,147
=========== ===========
</TABLE>
See accompanying notes.
3
<PAGE>
ADESA CORPORATION
Notes to Condensed Consolidated Financial Statements - (Unaudited)
1. Basis of Presentation
---------------------
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of ADESA, all adjustments
(consisting of only normal recurring accruals) considered necessary to present
fairly the consolidated financial statements have been included. Quarterly
results of operations are not necessarily indicative of annual results. These
statements should be read in conjunction with the consolidated financial
statements and footnotes thereto included in ADESA's annual report on Form 10-K
for the year ended December 31, 1994.
2. Business Segments
-----------------
Selected second quarter 1995 income data by business segment is as follows:
Auction Services Financial Services Total
---------------- ------------------ -----------
Operating revenues $28,634,538 $1,892,943 $30,527,481
=========== ========== ===========
Operating income $ 4,060,237 $1,162,277 $ 5,222,514
=========== ========== ===========
Total assets presented by business segment and inclusive of ADESA's
headquarters as of June 30, 1995, were as follows:
Auction services $171,985,232
Financial services 27,152,411
Corporate headquarters 12,853,785
------------
$211,991,428
============
3. Per-Share Data
--------------
Earnings per share data are based on the weighted average number of shares
outstanding during the applicable periods, including the effect of dilutive
stock options.
4. Subsequent Event
----------------
ADESA currently has three United States auctions which sell rental repurchase
units under separate master contracts with General Motors (GM). These contracts
do not require GM to sell any minimum number of vehicles through ADESA's
auctions and may be terminated upon 30 days' notice. In 1995 GM requested that
auctions bid for the right to sell rental repurchase units under three-year
contracts commencing January 1, 1996. ADESA was invited in February 1995 to
take part in this process and on May 10, 1995, submitted a bid for all of
ADESA's United States auctions including a greenfield auction in Manville, New
Jersey. On August 24, 1995, GM awarded contracts to seven of ADESA's auctions.
4
<PAGE>
(b) Pro forma financial information
Pro Forma Condensed Financial Information (Unaudited)
On July 1, 1995, Minnesota Power & Light Company (Minnesota Power or the
Company) acquired 80 percent of ADESA for $167 million in cash. The Company
accounted for the acquisition as a purchase and recorded approximately $140
million of goodwill, which will be amortized over a 40 year period. Proceeds
from the sale of the paper and pulp business combined with proceeds from the
sale of securities investments were used to fund the purchase of ADESA. The
following unaudited pro forma balance sheet as of June 30, 1995, combines the
historical consolidated balance sheet of Minnesota Power and ADESA to reflect
the July 1, 1995, acquisition as if it had occurred on June 30, 1995. The
unaudited pro forma combined statement of income for the six months ended June
30, 1995, and for the year ended December 31, 1994, are based on the historical
consolidated statements of income of Minnesota Power and ADESA and reflect the
acquisition as if it had occurred on January 1 of the respective periods.
On June 30, 1995, Minnesota Power sold its investment in the paper and pulp
business for $118 million in cash and realized a $1.5 million after-tax loss
from the sale. Minnesota Power's financial statements as of June 30, 1995,
reflect this transaction as discontinued operations. The historical
consolidated statement of income of Minnesota Power for the year ended December
31, 1994, has been restated to classify the operating results of the paper and
pulp business as discontinued operations.
The unaudited pro forma combined statement of income for the six months ended
June 30, 1995, and for the year ended December 31, 1994, reflect exiting Reach
All Partnership (Reach All), the truck-mounted lifting equipment manufacturing
business immediately prior to January 1 of the respective periods.
The following pro forma financial information has been prepared from, and
should be read in conjunction with, the historical consolidated financial
statements and related notes thereto of Minnesota Power and ADESA. The
following information is not necessarily indicative of the financial position
or operating results that would have occurred had the acquisition and
disposition transactions been consummated on the date, or at the beginning of
the periods, for which the acquisition and disposition are being given effect
nor is it necessarily indicative of future operating results or financial
position.
5
<PAGE>
<TABLE>
Minnesota Power
Unaudited Pro Forma Combined Balance Sheet
June 30, 1995
In Thousands
<CAPTION>
Historical Pro Forma
------------------------- -----------------------------
Minnesota Adjustments
Power ADESA (Note 1) Combined
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Plant and Other Assets
Electric utility operations $ 786,387 $ 786,387
Water utility operations 307,456 307,456
Auto redistribution operations - $ 87,731 $ (3,180) <F3> 84,551
Investments and corporate
services 219,285 - (4,117) <F2> 215,168
---------- -------- -------- ----------
Total plant and other assets 1,313,128 87,731 (7,297) 1,393,562
Intangible Assets 1,740 38,992 117,339 <F1><F4> 158,071
Cash and Funds Held by Trustee 290,693 17,977 (147,751) <F2> 160,919
Other Current Assets 159,388 67,291 (777) <F3> 225,902
Deferred Charges 107,207 - (3,282) <F2> 103,925
---------- -------- -------- ----------
Total Assets $1,872,156 $211,991 $(41,768) $2,042,379
--------------------------------------------------------------------------------------------------------
Capitalization and Liabilities
Capitalization
Common stock $ 372,634 $ 66,182 $(66,182) <F1> $ 372,634
Unearned ESOP shares (74,505) - - (74,505)
Net unrealized gain on securities
investments 245 - - 245
Retained earnings 279,370 20,106 (20,106) <F1> 279,370
Cumulative translation adjustment - (157) 157 <F1> -
---------- -------- -------- ----------
Total common stock equity 577,744 86,131 (86,131) 577,744
Preferred stock 48,547 - - 48,547
Long-term debt 568,725 44,473 - 613,198
---------- -------- -------- ----------
Total capitalization 1,195,016 130,604 (86,131) 1,239,489
Current Liabilities 299,537 79,267 - 378,804
Deferred Credits 377,603 2,120 44,363 <F3><F5> 424,086
---------- -------- -------- ----------
Total Capitalization and Liabilities $1,872,156 $211,991 $(41,768) $2,042,379
--------------------------------------------------------------------------------------------------------
<FN>
Note 1 - Pro forma adjustments necessary to reflect the acquisition of ADESA
are as follows:
Debit Credit
-------- --------
<F1> Elimination of ADESA's historical equity
accounts and net intangibles
Common stock $ 66,182
Retained earnings 20,106
Cumulative translation adjustment $ 157
Intangible assets net of accumulated
amortization 38,301
<F2> Cash payments to acquire 80 percent of
ADESA net of cash retained
Cash payment to shareholders 161,786
Cost of ADESA common stock acquired
previously 4,117
Acquisition costs previously deferred 3,282
Cash retained by ADESA for acquisition
and capital expenditures 14,035
<F3> Fair value adjustment of assets and
liabilities acquired
Auto redistribution operations 3,180
Other current assets 777
Deferred credits 1,945
<F4> Intangible assets including customer lists,
organizational costs, noncompete and
employment contracts, and $140 million
of goodwill representing the excess of
cost over net assets acquired 155,640
<F5> Fair value of minority shareholders'
interest 42,418
-------- --------
$255,963 $255,963
======== ========
</FN>
</TABLE>
6
<PAGE>
<TABLE>
Minnesota Power
Unaudited Pro Forma Combined Statement of Income
For the Six Months Ended June 30, 1995
In Thousands Except Per Share Amounts
<CAPTION>
Historical Pro Forma
----------------------- ------------------------
Minnesota Adjustments
Power ADESA (Note 1) Combined
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Revenue and Income
Electric utility operations $237,865 $237,865
Water utility operations 34,816 34,816
Auto redistribution operations - $60,136 60,136
Investments and corporate services 21,341 305 $(3,613) <F1> 18,033
-------- ------- ------- --------
Total operating revenue and income 294,022 60,441 (3,613) 350,850
-------- ------- ------- --------
Operating Expenses
Fuel and purchased power 84,422 - - 84,422
Operations 123,117 26,020 2,285 <F2> 151,422
Administrative and general 35,250 24,582 418 <F3> 60,250
Interest expense 22,489 2,821 - 25,310
-------- ------- ------- --------
Total operating expenses 265,278 53,423 2,703 321,404
-------- ------- ------- --------
Income (Loss) from Equity Investments (3,908) - 8,528 <F4> 4,620
-------- ------- ------- --------
Operating Income
from Continuing Operations 24,836 7,018 2,212 34,066
Income Tax Expense (Benefit) (9,892) 2,664 2,260 <F5> (4,968)
-------- ------- ------- --------
Income from Continuing Operations 34,728 $ 4,354 $ (48) 39,034
======= =======
Dividends on Preferred Stock 1,600 1,600
-------- --------
Earnings from Continuing Operations
Available for Common Stock $ 33,128 $ 37,434
======== ========
Average Shares of Common Stock 28,409 28,409
Earnings Per Share of Common Stock
from Continuing Operations $ 1.17 $ 1.32
------------------------------------------------------------------------------------------------
<FN>
Note 1 - Pro forma adjustments necessary to reflect the acquisition of ADESA
and disposition of Reach All are as follows:
Debit Credit
------- -------
<F1> Reduction of investment income due
to the sale of portfolio securities to
fund the acquisition of ADESA $ 3,613
<F2> Net increase in operating expenses due
to the following:
Amortization of goodwill on a
straight-line basis over 40 years 1,744
Amortization of other intangibles on a
straight-line basis over 2 to 40 years 835
Change in depreciation expense resulting
from purchase accounting 56
Reduction of management fees relating to
the sale of portfolio securities $ 350
<F3> Minority shareholders' 20 percent interest in
ADESA's earnings 418
<F4> Includes the disposition of Reach All 8,528
<F5> Income tax effect relating to adjustments
<F1>, <F2> and <F4> 2,260
------- -------
$ 8,926 $ 8,878
======= =======
</FN>
</TABLE>
7
<PAGE>
<TABLE>
Minnesota Power
Unaudited Pro Forma Combined Statement of Income
For the Year Ended December 31, 1994
In Thousands Except Per Share Amounts
<CAPTION>
Historical Pro Forma
----------------------- ------------------------
Minnesota Adjustments
Power ADESA (Note 1) Combined
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Revenue and Income
Electric utility operations $453,182 $453,182
Water utility operations 91,224 91,224
Auto redistribution operations - $95,476 95,476
Investments and corporate services 37,761 694 $ (3,641) <F1> 34,814
-------- ------- -------- --------
Total operating revenue and income 582,167 96,170 (3,641) 674,696
-------- ------- -------- --------
Operating Expenses
Fuel and purchased power 157,687 - - 157,687
Operations 220,733 42,809 4,517 <F2> 268,059
Administrative and general 79,846 35,768 650 <F3> 116,264
Interest expense 46,750 4,147 - 50,897
-------- ------- -------- --------
Total operating expenses 505,016 82,724 5,167 592,907
-------- ------- -------- --------
Income from Equity Investments 2,972 - 5,166 <F4> 8,138
-------- ------- -------- --------
Operating Income
from Continuing Operations 80,123 13,446 (3,642) 89,927
Income Tax Expense 20,658 5,663 994 <F5> 27,315
-------- ------- -------- --------
Income from Continuing Operations 59,465 $ 7,783 $ (4,636) 62,612
======= ========
Dividends on Preferred Stock 3,200 3,200
-------- --------
Earnings from Continuing Operations
Available for Common Stock $ 56,265 $ 59,412
======== ========
Average Shares of Common Stock 28,239 28,239
Earnings Per Share of Common Stock
From Continuing Operations $ 1.99 $ 2.10
------------------------------------------------------------------------------------------------
<FN>
Note 1 - Pro forma adjustments necessary to reflect the acquisition of ADESA
and disposition of Reach All are as follows:
Debit Credit
------- -------
<F1> Reduction of investment income due
to the sale of portfolio securities to
fund the acquisition of ADESA $ 3,641
<F2> Net increase in operating expenses due
to the following:
Amortization of goodwill on a
straight-line basis over 40 years 3,488
Amortization of other intangibles on a
straight-line basis over 2 to 40 years 1,670
Change in depreciation expense resulting
from purchase accounting 111
Reduction of management fees relating to
the sale of portfolio securities $ 752
<F3> Minority shareholders' 20 percent interest in
ADESA's earnings 650
<F4> Includes the disposition and operations
of Reach All 5,166
<F5> Income tax effect relating to adjustments
<F1>, <F2> and <F4> 994
------- -------
$10,554 $ 5,918
======= =======
</FN>
</TABLE>
8
<PAGE>
Signatures
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 thereunto duly authorized.
Minnesota Power & Light Company
-------------------------------
(Registrant)
September 8, 1995 D.G. Gartzke
-------------------------------
D.G. Gartzke
Senior Vice President - Finance
and Chief Financial Officer
