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) October 24, 1995
THE MONTANA POWER COMPANY
(Exact name of registrant as specified in its charter)
Montana 1-4566 81-0170530
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
40 East Broadway, Butte, Montana 59701
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (406) 723-5421
Exhibit Index is found on page 5.
<PAGE>
ITEM 5. Other Events
Third Quarter Net Income
Net income for the quarter ended September 30, 1995 was 26 cents per
share, compared with 31 cents per share for the third quarter 1994. Net
income for the nine-month and twelve-month periods ended September 30, 1995,
was 97 cents and $1.79 per share, a decrease of 21 cents and 32 cents per
share, respectively, compared with the same periods in 1994.
Third-quarter earnings from Utility operations improved substantially
over last year. Generation from the Company's hydroelectric facilities was
65 percent higher than the comparable period in 1994. This additional low
cost energy allowed the Utility to meet its own energy requirements for firm
loads while significantly reducing purchased power expenses. Additional cost
savings resulted from improved productivity and shorter maintenance periods at
the Colstrip coal-fired generating units.
Entech's third-quarter earnings were down from last year due to
reductions in coal volumes sold to midwestern customers and operating losses
at its Colorado mine, which continued to have production problems. Lower
natural gas prices also contributed to the earnings decline.
The Independent Power Group (IPG) continued its growth in earnings from
investments in operating projects. However, overall IPG earnings were lower
than the third quarter of 1994, when significant earnings from project
development fees were recorded.
In the nine-month and twelve-month periods, consolidated earnings also
were adversely affected by a March 1995 arbitration decision, retroactive to
July 1991, which lowered the price of coal sold by Entech's coal division to
Colstrip Units Nos. 1 and 2. (See the Company's report on Form 10-Q for the
quarterly period ended March 31, 1995).
For comparative purposes, the following table shows the breakdown of
consolidated net income per share by principal business segment.
Quarter Ended
1995 1994
Utility Operations $ 0.08 $ (0.03)
Entech 0.15 0.23
Independent Power Group 0.03 0.11
Consolidated $ 0.26 $ 0.31
Nine Months Ended
1995 1994
Utility Operations $ 0.66 $ 0.42
Entech 0.24 0.64
Independent Power Group 0.07 0.12
Consolidated $ 0.97 $ 1.18
<PAGE>
Twelve Months Ended
1995 1994
Utility Operations $ 1.15 $ 0.99
Entech 0.50 0.98
Independent Power Group 0.14 0.14
Consolidated $ 1.79 $ 2.11
<PAGE>
ITEM 7. Exhibits
99a Consolidated Statements of Income for the Quarters Ended September 30,
1995 and 1994, Nine Months Ended September 30, 1995 and 1994, and for
the Twelve Months Ended September 30, 1995 and 1994.
99b Utility Operations Schedule of Revenues and Expenses for the Quarters
Ended September 30, 1995 and 1994, Nine Months Ended September 30, 1995
and 1994 and for the Twelve Months Ended September 30, 1995 and 1994.
99c Entech Operations Schedule of Revenues and Expenses for the Quarters
Ended September 30, 1995 and 1994, Nine Months Ended September 30, 1995
and 1994 and for the Twelve Months Ended September 30, 1995 and 1994.
99d Independent Power Group Operations Schedule of Revenues and Expenses for
the Quarters Ended September 30, 1995 and 1994, Nine Months Ended
September 30, 1995 and 1994 and for the Twelve Months Ended
September 30, 1995 and 1994.
<PAGE>
Exhibit Index
Exhibit Page
99a Consolidated Statement of Income for the Quarters Ended
September 30, 1995 and 1994, Nine Months Ended September 30,
1995 and 1994 and for the Twelve Months Ended September 30,
1995 and 1994. 6
99b Utility Operations Schedule of Revenues and Expenses for
the Quarters Ended September 30, 1995 and 1994, Nine Months
Ended September 30, 1995 and 1994 and for the Twelve Months
Ended September 30, 1995 and 1994. 7
99c Entech Operations Schedule of Revenues and Expenses for the
Quarters Ended September 30, 1995 and 1994, Nine Months Ended
September 30, 1995 and 1994 and for the Twelve Months Ended
September 30, 1995 and 1994. 8
99d Independent Power Group Operations Schedule of Revenues
and Expenses for the Quarters Ended September 30, 1995 and 1994,
Nine Months Ended September 30, 1995 and 1994 and for the Twelve
Months Ended September 30, 1995 and 1994. 10
<PAGE>
<TABLE>
CONSOLIDATED STATEMENT OF INCOME Exhibit 99a
The Montana Power Company and Subsidiaries
<CAPTION>
Quarter Ended Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
1995 1994 1995 1994 1995 1994
Thousands of Dollars
<S> <C> <C> <C> <C> <C> <C>
REVENUES . . . . . . . . . . . . . . . . . . . $ 217,545 $ 233,304 $ 685,369 $ 716,565 $ 974,727 $1,010,250
EXPENSES:
Operations . . . . . . . . . . . . . . . . . 101,666 111,356 312,803 318,181 435,094 444,857
Maintenance. . . . . . . . . . . . . . . . . 16,900 19,937 52,921 59,385 68,894 75,186
Selling, general and administrative. . . . . 23,241 26,226 72,754 77,291 98,986 103,419
Taxes other than income taxes. . . . . . . . 24,580 24,851 69,639 73,660 95,179 98,274
Depreciation, depletion and amortization . . 21,828 21,117 65,998 64,760 87,551 85,675
188,215 203,487 574,115 593,277 785,704 807,411
INCOME FROM OPERATIONS . . . . . . . . . . . 29,330 29,817 111,254 123,288 189,023 202,839
INTEREST EXPENSE AND OTHER INCOME:
Interest . . . . . . . . . . . . . . . . . . 11,018 10,980 32,765 32,332 43,250 44,396
Other (income) deductions - net. . . . . . . (3,665) (5,583) (4,971) (8,254) (7,295) (16,790)
7,353 5,397 27,794 24,078 35,955 27,606
INCOME TAXES . . . . . . . . . . . . . . . . . 5,825 6,139 25,407 31,042 49,591 56,941
NET INCOME . . . . . . . . . . . . . . . . . . 16,152 18,281 58,053 68,168 103,477 118,292
DIVIDENDS ON PREFERRED STOCK . . . . . . . . . 1,807 1,807 5,420 5,420 7,227 6,931
NET INCOME AVAILABLE FOR COMMON STOCK. . . . . $ 14,345 $ 16,474 $ 52,633 $ 62,748 $ 96,250 $ 111,361
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING (000). . . . . . . . . . . . . . 54,243 53,250 53,986 53,000 53,864 52,851
NET INCOME PER SHARE OF COMMON STOCK . . . . . $ 0.26 $ 0.31 $ 0.97 $ 1.18 $ 1.79 $ 2.11
</TABLE>
<PAGE>
<TABLE>
UTILITY OPERATIONS Exhibit 99b
<CAPTION>
Quarter Ended Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
1995 1994 1995 1994 1995 1994
Thousands of Dollars
ELECTRIC UTILITY:
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Revenues . . . . . . . . . . . . . . . . . . $ 94,593 $ 95,813 $ 296,402 $ 300,833 $ 423,255 $ 431,106
Intersegment revenues. . . . . . . . . . . . 1,209 1,265 4,437 4,466 5,896 6,704
95,802 97,078 300,839 305,299 429,151 437,810
EXPENSES:
Power supply . . . . . . . . . . . . . . . . 34,549 46,000 102,781 127,793 153,915 176,152
Transmission and distribution. . . . . . . . 7,478 6,948 20,612 20,894 27,284 27,254
Selling, general and administrative. . . . . 9,822 11,362 31,204 34,809 42,529 50,024
Taxes other than incomes taxes . . . . . . . 11,532 10,560 34,807 31,759 45,262 41,427
Depreciation and amortization. . . . . . . . 10,627 10,175 31,878 30,524 42,053 36,645
74,008 85,045 221,282 245,779 311,043 331,502
INCOME FROM ELECTRIC OPERATIONS 21,794 12,033 79,557 59,520 118,108 106,308
NATURAL GAS UTILITY:
REVENUES:
Revenues (other than gas
supply cost revenues). . . . . . . . . . . 12,410 11,595 61,702 56,517 94,099 86,563
Gas supply cost revenues . . . . . . . . . . 1,920 1,468 15,306 12,461 21,036 18,573
Intersegment revenues. . . . . . . . . . . . 122 254 665 645 937 1,224
14,452 13,317 77,673 69,623 116,072 106,360
EXPENSES:
Gas supply costs . . . . . . . . . . . . . . 1,920 1,468 15,306 12,461 21,036 18,573
Other production, gathering & exploration. . 1,954 2,394 7,153 6,465 9,570 7,911
Transmission and distribution. . . . . . . . 2,672 2,644 8,183 7,514 10,822 9,913
Selling, general and administrative. . . . . 4,291 4,597 13,418 13,603 17,881 17,938
Taxes other than income taxes. . . . . . . . 3,626 3,237 10,899 9,936 14,672 13,523
Depreciation, depletion & amortization . . . 2,565 2,340 7,710 7,063 10,092 9,316
17,028 16,680 62,669 57,042 84,073 77,174
INCOME FROM GAS OPERATIONS . . . . . . . . . (2,576) (3,363) 15,004 12,581 31,999 29,186
INTEREST EXPENSE AND OTHER INCOME:
Interest . . . . . . . . . . . . . . . . . . 11,176 10,928 33,074 32,174 43,913 44,121
Other (income) deductions - net. . . . . . . (1,453) (1,173) (4,305) (2,801) (5,451) (3,151)
9,723 9,755 28,769 29,373 38,462 40,970
INCOME BEFORE INCOME TAXES . . . . . . . . . . 9,495 (1,085) 65,792 42,728 111,645 94,524
INCOME TAXES . . . . . . . . . . . . . . . . . 3,244 (1,215) 24,806 15,162 42,816 35,000
UTILITY NET INCOME . . . . . . . . . . . . . . $ 6,251 $ 130 $ 40,986 $ 27,566 $ 68,829 $ 59,524
/TABLE
<PAGE>
<TABLE>
ENTECH OPERATIONS Exhibit 99c
<CAPTION>
Quarter Ended Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
1995 1994 1995 1994 1995 1994
Thousands of Dollars
COAL:
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Revenues . . . . . . . . . . . . . . . . . . $ 55,058 $ 64,727 $ 157,148 $ 186,695 $ 223,046 $ 251,162
Intersegment revenues. . . . . . . . . . . . 8,501 10,591 15,015 30,291 26,925 41,470
63,559 75,318 172,163 216,986 249,971 292,632
EXPENSES:
Cost of sales. . . . . . . . . . . . . . . . 41,099 44,005 120,816 123,832 166,241 166,390
Selling, general and administrative. . . . . 6,243 7,409 20,807 21,483 28,786 28,418
Taxes other than income taxes. . . . . . . . 8,157 9,652 20,210 27,719 30,224 37,652
Depreciation, depletion & amortization . . . 3,073 2,933 9,320 9,382 12,587 11,763
58,572 63,999 171,153 182,416 237,838 244,223
INCOME FROM COAL OPERATIONS 4,987 11,319 1,010 34,570 12,133 48,409
OIL AND NATURAL GAS:
REVENUES:
Revenues . . . . . . . . . . . . . . . . . . 25,525 25,916 73,003 73,192 97,812 98,926
Intersegment revenues. . . . . . . . . . . . 0 0 170 162 262 194
25,525 25,916 73,173 73,354 98,074 99,120
EXPENSES:
Cost of sales. . . . . . . . . . . . . . . . 15,419 14,314 43,142 40,825 56,601 55,867
Selling, general and administrative. . . . . 2,261 2,054 6,811 6,322 9,002 8,425
Taxes other than income taxes. . . . . . . . 672 868 1,986 2,640 2,686 3,539
Depreciation, depletion & amortization . . . 4,378 4,573 13,610 13,943 18,131 19,099
22,730 21,809 65,549 63,730 86,420 86,930
INCOME FROM OIL AND NATURAL GAS OPERATIONS . 2,795 4,107 7,624 9,624 11,654 12,190
OTHER OPERATIONS:
REVENUES:
Revenues . . . . . . . . . . . . . . . . . . 6,373 6,456 18,891 17,597 25,314 23,184
Intersegment revenues. . . . . . . . . . . . 144 104 479 465 804 695
6,517 6,560 19,370 18,062 26,118 23,879
EXPENSES:
Cost of sales. . . . . . . . . . . . . . . . 4,364 4,418 12,607 12,273 17,121 16,212
Selling, general and administrative. . . . . 1,235 1,424 3,611 3,557 4,771 4,543
Taxes other than income taxes. . . . . . . . 82 68 245 211 320 279
Depreciation, depletion & amortization . . . 446 504 1,261 1,465 1,741 1,947
6,127 6,414 17,724 17,506 23,953 22,981
INCOME FROM OTHER OPERATIONS . . . . . . . . 390 146 1,646 556 2,165 898
<PAGE>
ENTECH OPERATIONS (CONT.)
Quarter Ended Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
1995 1994 1995 1994 1995 1994
Thousands of Dollars
INTEREST EXPENSE AND OTHER INCOME:
Interest . . . . . . . . . . . . . . . . . . 1,033 527 3,764 1,191 3,996 1,700
Other (income) deductions - net. . . . . . . (2,523) (1,845) (4,101) (2,486) (4,094) (10,717)
(1,490) (1,318) (337) (1,295) (98) (9,017)
INCOME BEFORE INCOME TAXES . . . . . . . . . . 9,662 16,890 10,617 46,045 26,050 70,514
INCOME TAXES . . . . . . . . . . . . . . . . . 1,446 4,498 (2,411) 12,052 (873) 18,965
ENTECH NET INCOME. . . . . . . . . . . . . . . $ 8,216 $ 12,392 $ 13,028 $ 33,993 $ 26,923 $ 51,549
</TABLE>
<PAGE>
<TABLE>
INDEPENDENT POWER GROUP OPERATIONS Exhibit 99d
<CAPTION>
Quarter Ended Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
1995 1994 1995 1994 1995 1994
Thousands of Dollars
REVENUES:
<S> <C> <C> <C> <C> <C> <C>
Revenues . . . . . . . . . . . . . . . . . . $ 20,170 $ 27,199 $ 59,481 $ 67,326 $ 85,802 $ 97,263
Earnings from unconsolidated investments . . 1,353 26 2,958 1,480 3,559 2,778
Intersegment revenue . . . . . . . . . . . . 93 179 709 1,312 857 1,783
21,616 27,404 63,148 70,118 90,218 101,824
EXPENSES:
Operations and maintenance . . . . . . . . . 17,332 19,865 50,561 57,032 68,609 85,365
Selling, general and administrative. . . . . 1,093 908 2,465 2,870 3,683 5,516
Taxes other than income taxes. . . . . . . . 511 466 1,494 1,395 2,015 1,853
Depreciation and amortization. . . . . . . . 740 590 2,219 2,384 2,948 3,243
19,676 21,829 56,739 63,681 77,255 95,977
INCOME FROM OPERATIONS . . . . . . . . . . . 1,940 5,575 6,409 6,437 12,963 5,847
INTEREST EXPENSE AND OTHER INCOME:
Interest . . . . . . . . . . . . . . . . . . 10 5 16 15 22 77
Other (income) deductions - net. . . . . . . (889) (3,045) (657) (4,015) (1,353) (4,424)
(879) (3,040) (641) (4,000) (1,331) (4,347)
INCOME BEFORE INCOME TAXES . . . . . . . . . . 2,819 8,615 7,050 10,437 14,294 10,194
INCOME TAXES. . . . . . . . . . . . . . . . . 1,134 2,856 3,011 3,828 6,569 2,975
IPG NET INCOME . . . . . . . . . . . . . . . . $ 1,685 $ 5,759 $ 4,039 $ 6,609 $ 7,725 $ 7,219
</TABLE>
<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.
THE MONTANA POWER COMPANY
(Registrant)
By /s/ J.P. Pederson
J. P. Pederson
Vice President and Chief
Financial Officer
Dated: October 24, 1995
<PAGE>
