<PAGE>
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1
(Mark One)
/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1996
or
/ / Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File No. 1-3548
Minnesota Power & Light Company
A Minnesota Corporation
IRS Employer Identification No. 41-0418150
30 West Superior Street
Duluth, Minnesota 55802
Telephone - (218) 722-2641
Indicate by check mark whether the registrant (1) has 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 and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Common Stock, no par value,
31,673,778 shares outstanding
as of April 30, 1996
<PAGE>
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This Amendment No. 1 to Minnesota Power & Light Company's (Company)
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996 (Form 10-Q)
is being filed to reflect a reclassification of distributions on Company
obligated mandatorily redeemable preferred securities of subsidiary MP&L Capital
I. This Amendment No. 1 includes only those portions of the Form 10-Q which have
been changed as a result of such reclassification.
- -------------------------------------------------------------------------------
-1-
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Minnesota Power
Consolidated Balance Sheet
In Thousands
March 31, December 31,
1996 1995
Unaudited Audited
- --------------------------------------------------------------------------------
Assets
Plant and Other Assets
Electric operations $ 802,417 $ 800,477
Water operations 316,807 323,182
Automobile auctions 134,043 123,632
Investments 196,279 201,360
----------- -----------
Total plant and other assets 1,449,546 1,448,651
----------- -----------
Current Assets
Cash and cash equivalents 60,270 31,577
Trading securities 45,955 40,007
Trade accounts receivable (less reserve
of $3,716 and $3,325) 173,207 128,072
Notes and other accounts receivable 18,172 12,220
Fuel, material and supplies 22,799 26,383
Prepayments and other 14,213 13,706
----------- -----------
Total current assets 334,616 251,965
----------- -----------
Deferred Charges
Regulatory 82,946 88,631
Other 26,438 25,037
----------- -----------
Total deferred charges 109,384 113,668
----------- -----------
Intangible Assets
Goodwill 121,124 120,245
Other 13,038 13,096
----------- -----------
Total intangible assets 134,162 133,341
----------- -----------
Total Assets $ 2,027,708 $ 1,947,625
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Capitalization and Liabilities
Capitalization
Common stock without par value,
65,000,000 shares authorized
31,647,679 and 31,467,650
shares outstanding $ 379,925 $ 377,684
Unearned ESOP shares (71,964) (72,882)
Net unrealized gain on securities
investments 819 3,206
Cumulative translation adjustment (191) (177)
Retained earnings 278,665 276,241
----------- -----------
Total common stock equity 587,254 584,072
Cumulative preferred stock 28,547 28,547
Redeemable serial preferred stock 20,000 20,000
Company obligated mandatorily
redeemable preferred securities
of subsidiary MP&L Capital I which
holds solely Company Junior Subordinated
Debentures 75,000 -
Long-term debt 576,362 639,548
----------- -----------
Total capitalization 1,287,163 1,272,167
----------- -----------
Current Liabilities
Accounts payable 101,615 68,083
Accrued taxes 62,334 40,999
Accrued interest and dividends 9,744 14,471
Notes payable 45,096 96,218
Long-term debt due within one year 68,821 9,743
Other 35,470 27,292
----------- -----------
Total current liabilities 323,080 256,806
----------- -----------
Deferred Credits
Accumulated deferred income taxes 162,532 164,737
Contributions in aid of construction 96,467 98,167
Regulatory 57,221 57,950
Other 101,245 97,798
----------- -----------
Total deferred credits 417,465 418,652
----------- -----------
Total Capitalization and Liabilities $ 2,027,708 $ 1,947,625
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The accompanying notes are an integral part of this statement.
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<PAGE>
Minnesota Power
Consolidated Statement of Income
In Thousands Except Per Share Amounts - Unaudited
Quarter Ended
March 31,
1996 1995
- --------------------------------------------------------------------------------
Operating Revenue and Income
Electric operations $ 131,501 $ 120,754
Water operations 19,227 15,600
Automobile auctions 39,693 -
Investments 12,255 10,332
----------- -----------
Total operating revenue and income 202,676 146,686
----------- -----------
Operating Expenses
Fuel and purchased power 43,643 40,310
Operations 86,030 62,142
Administrative and general 33,792 18,459
Interest expense 14,160 11,100
----------- -----------
Total operating expenses 177,625 132,011
----------- -----------
Income (Loss) from Equity Investments 3,777 (6,271)
----------- -----------
Operating Income from Continuing Operations 28,828 8,404
Distributions on Redeemable Preferred
Securities of Subsidiary 201 -
Income Tax Expense (Benefit) 10,324 (15,401)
----------- -----------
Income from Continuing Operations 18,303 23,805
Income from Discontinued Operations - 1,652
----------- -----------
Net Income 18,303 25,457
Dividends on Preferred Stock 800 800
----------- -----------
Earnings Available for Common Stock $ 17,503 $ 24,657
=========== ===========
Average Shares of Common Stock 28,786 28,368
Earnings Per Share of Common Stock
Continuing operations $ .61 $ .81
Discontinued operations - .06
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Total $ .61 $ .87
===== =====
Dividends Per Share of Common Stock $ .51 $ .51
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The accompanying notes are an integral part of this statement.
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<PAGE>
Minnesota Power
Consolidated Statement of Cash Flows
In Thousands - Unaudited
Quarter Ended
March 31,
1996 1995
- --------------------------------------------------------------------------------
Operating Activities
Net income $ 18,303 $ 25,457
Depreciation and amortization 16,216 13,766
Deferred income taxes (742) (17,415)
Deferred investment tax credits (623) (620)
Pre-tax gain on sale of plant (1,073) -
Changes in operating assets and liabilities
Trading securities (5,948) 2,336
Notes and accounts receivable (45,776) 8,763
Fuel, material and supplies 3,584 (1,613)
Accounts payable 33,532 (7,052)
Other current assets and liabilities 24,279 16,104
Other - net 5,342 3,698
--------- --------
Cash from operating activities 47,094 43,424
--------- --------
Investing Activities
Proceeds from sale of investments in
securities 7,849 26,466
Additions to investments (4,449) (20,042)
Additions to plant (25,427) (17,027)
Changes to other assets - net 250 1,035
--------- --------
Cash for investing activities (21,777) (9,568)
--------- --------
Financing Activities
Issuance of common stock 4,546 829
Issuance of long-term debt 77,108 305
Issuance of Company obligated mandatorily
redeemable preferred securities of
subsidiary MP&L Capital I - net 72,638 -
Changes in notes payable (53,821) (23,931)
Reductions of long-term debt (81,217) (989)
Dividends on preferred and common stock (15,878) (15,720)
--------- --------
Cash from (for) financing activities 3,376 (39,506)
--------- --------
Change in Cash and Cash Equivalents 28,693 (5,650)
Cash and Cash Equivalents at Beginning of Period 31,577 27,001
--------- --------
Cash and Cash Equivalents at End of Period $ 60,270 $ 21,351
========= ========
Supplemental Cash Flow Information
Cash paid during the period for
Interest (net of capitalized) $ 17,781 $ 16,616
Income taxes $ 2,844 $ 982
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The accompanying notes are an integral part of this statement.
-4-
<PAGE>
Note 1. Business Segments
In Thousands
<TABLE>
<CAPTION>
Investments
---------------------- Corporate
Electric Water Automobile Portfolio & Real Charges
Consolidated Operations Operations Auctions <F1> Reinsurance Estate & Other
------------ ----------- ---------- ------------ ----------- ------ ----------
Quarter Ended March 31, 1996
- ----------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating revenue and income $ 202,676 $ 131,501 $ 19,227 $ 39,693 $ 3,869 $ 8,676 $ (290)
Operation and other expense 147,249 95,307 11,518 34,202 523 3,213 2,486
Depreciation and amortization
expense 16,216 10,499 3,137 2,550 - 30 -
Interest expense 14,160 5,674 3,190 1,291 1 2 4,002
Income from equity investments 3,777 - - - 3,777 - -
---------- ---------- ---------- ---------- ---------- ---------- ---------
Operating income
from continuing operations 28,828 20,021 1,382 1,650 7,122 5,431 (6,778)
Distributions on redeemable
preferred securities of
subsidiary 201 77 - - - - 124
Income tax expense (benefit) 10,324 7,742 449 662 2,322 2,363 (3,214)
---------- ---------- ---------- ---------- ---------- ---------- ---------
Net income $ 18,303 $ 12,202 $ 933 $ 988 $ 4,800 $ 3,068 $ (3,688)
========== ========== ========== ========== ========== ========== =========
Total assets $2,027,708 $ 990,018 $ 340,312 $ 429,604 $ 210,973 $ 55,225 $ 1,576
Accumulated depreciation $ 631,694 $ 518,311 $ 110,536 $ 2,847 - - -
Accumulated amortization $ 4,195 - - $ 3,398 - $ 797 -
Construction work in progress $ 55,491 $ 27,715 - $ 27,776 - - -
Quarter Ended March 31, 1995
- ----------------------------
Operating revenue and income $ 146,686 $ 120,754 $ 15,600 - $ 6,739 $ 4,265 $ (672)
Operation and other expense 108,310 87,037 11,055 - 935 7,134<F3> 2,149
Depreciation and amortization
expense 12,601 10,021 2,520 - - 60 -
Interest expense 11,100 5,497 2,463 - 2 2 3,136
Income (loss) from
equity investments (6,271) - - - 2,257 - (8,528)<F2>
---------- ---------- ---------- ---------- ---------- ---------
Operating income (loss)
from continuing operations 8,404 18,199 (438) - 8,059 (2,931) (14,485)
Income tax expense (benefit) (15,401) 7,782 (395) - 1,775 (18,015)<F4> (6,548)
---------- ---------- ---------- ---------- ---------- ---------
Income (loss) from
continuing operations 23,805 $ 10,417 $ (43) - $ 6,284 $ 15,084 $ (7,937)
========== ========== ========== ========== =========
Income from
discontinued operations 1,652
----------
Net income $ 25,457
==========
Total assets $1,786,626<F5> $ 992,699 $ 310,776 - $ 274,383 $ 34,443 $ 362
Accumulated depreciation $ 598,644<F6> $ 501,545 $ 91,334 - - - -
Accumulated amortization $ 507 - - - - $ 507 -
Construction work in progress $ 37,155 $ 30,432 $ 6,723 - - - -
- --------------------------------
<FN>
<F1> Purchased July 1, 1995.
<F2> Includes an $8.5 million pre-tax provision for exiting the equipment manufacturing business.
<F3> Includes $3.7 million of minority interest relating to the recognition of tax benefits. (See Note 4.)
<F4> Includes $18.4 million of tax benefits. (See Note 4.)
<F5> Includes $174 million related to operations discontinued in 1995.
<F6> Includes $5.8 million related to operations discontinued in 1995.
</FN>
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
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<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)
January 22, 1997 D. G. Gartzke
-------------------------------
D. G. Gartzke
Senior Vice President - Finance
and Chief Financial Officer
January 22, 1997 Mark A. Schober
-------------------------------
Mark A. Schober
Corporate Controller
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<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MINNESOTA
POWER'S CONSOLIDATED BALANCE SHEET, STATEMENT OF INCOME, AND STATEMENT OF CASH
FLOW FOR THE PERIOD ENDED MARCH 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,119,224
<OTHER-PROPERTY-AND-INVEST> 330,322
<TOTAL-CURRENT-ASSETS> 334,616
<TOTAL-DEFERRED-CHARGES> 109,384
<OTHER-ASSETS> 134,162
<TOTAL-ASSETS> 2,027,708
<COMMON> 379,925
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 278,665
<TOTAL-COMMON-STOCKHOLDERS-EQ> 587,254
75,000
48,547
<LONG-TERM-DEBT-NET> 576,362
<SHORT-TERM-NOTES> 45,096
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 68,821
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 555,292
<TOT-CAPITALIZATION-AND-LIAB> 2,027,708
<GROSS-OPERATING-REVENUE> 202,676
<INCOME-TAX-EXPENSE> 10,324
<OTHER-OPERATING-EXPENSES> 163,465
<TOTAL-OPERATING-EXPENSES> 177,625
<OPERATING-INCOME-LOSS> 28,828
<OTHER-INCOME-NET> 3,576 <F1>
<INCOME-BEFORE-INTEREST-EXPEN> 32,463
<TOTAL-INTEREST-EXPENSE> 14,160
<NET-INCOME> 18,303
800
<EARNINGS-AVAILABLE-FOR-COMM> 17,503
<COMMON-STOCK-DIVIDENDS> 15,078
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 47,094
<EPS-PRIMARY> .61
<EPS-DILUTED> .61
<FN>
<F1>Includes $3,777,000 of Income from Equity Investments and $201,000 for
Distributions on Redeemable Preferred Securities of Subsidiary.
</FN>
</TABLE>
