UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
________________________________________
(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, 1995
-- OR --
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to _______________
________________________________________
Commission file number 1-4566
THE MONTANA POWER COMPANY
(Exact name of registrant as specified in its charter)
Montana 81-0170530
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
40 East Broadway, Butte, Montana 59701-9394
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (406) 723-5421
________________________________________________________
(Former name, former address and former fiscal year,
if changed since last report.)
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
On May 5, 1995, the Company had 54,024,688 shares of common stock
outstanding.
<PAGE>
PART I
FINANCIAL STATEMENTS
THE MONTANA POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
For the Three Months Ended
March 31, March 31,
1995 1994
Thousands of Dollars
<S> <C> <C>
REVENUES. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 262,287 $ 277,816
EXPENSES:
Operations. . . . . . . . . . . . . . . . . . . . . . . . . 114,113 111,052
Maintenance . . . . . . . . . . . . . . . . . . . . . . . . 15,340 16,312
Selling, general and administrative . . . . . . . . . . . . 27,362 30,667
Taxes other than income taxes . . . . . . . . . . . . . . . 21,920 26,055
Depreciation, depletion and amortization. . . . . . . . . . 22,565 22,223
201,300 206,309
INCOME FROM OPERATIONS. . . . . . . . . . . . . . . . . . 60,987 71,507
INTEREST EXPENSE AND OTHER INCOME:
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . 10,955 10,781
Other (income) deductions-net . . . . . . . . . . . . . . . (1,576) 120
9,379 10,901
INCOME TAXES. . . . . . . . . . . . . . . . . . . . . . . . . 17,276 21,428
NET INCOME. . . . . . . . . . . . . . . . . . . . . . . . . . 34,332 39,178
DIVIDENDS ON PREFERRED STOCK. . . . . . . . . . . . . . . . . 1,807 1,807
NET INCOME AVAILABLE FOR COMMON STOCK . . . . . . . . . . . . $ 32,525 $ 37,371
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (000) . . . . . . 53,738 52,743
NET INCOME PER SHARE OF COMMON STOCK. . . . . . . . . . . . . $ 0.61 $ 0.71
The accompanying notes are an integral part of these statements.
/TABLE
<PAGE>
THE MONTANA POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
A S S E T S
March 31, December 31,
1995 1994
Thousands of Dollars
<S> <C> <C>
PLANT AND PROPERTY IN SERVICE:
UTILITY PLANT (includes $83,558 and $79,510
plant under construction)
Electric. . . . . . . . . . . . . . . . . . . . . . . . . $ 1,628,780 $ 1,608,615
Natural gas . . . . . . . . . . . . . . . . . . . . . . . 464,032 463,134
2,092,812 2,071,749
Less - accumulated depreciation and depletion . . . . . . . 634,672 619,195
1,458,140 1,452,554
ENTECH PROPERTY (includes $6,402 and $3,030
property under construction). . . . . . . . . . . . . . . 548,380 530,167
Less - accumulated depreciation and depletion . . . . . . . 196,389 189,926
351,991 340,241
INDEPENDENT POWER GROUP PROPERTY (includes $2,573 and
$671 property under construction) . . . . . . . . . . . . 72,176 70,253
Less - accumulated depreciation . . . . . . . . . . . . . . 17,126 17,560
55,050 52,693
1,865,181 1,845,488
MISCELLANEOUS INVESTMENTS (at cost):
Independent power investments . . . . . . . . . . . . . . . 54,182 54,397
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,244 49,713
104,426 104,110
CURRENT ASSETS:
Cash and temporary cash investments . . . . . . . . . . . . 13,914 21,564
Accounts receivable . . . . . . . . . . . . . . . . . . . . 128,001 159,975
Materials and supplies (principally at average cost). . . . 47,651 47,937
Prepayments and other assets. . . . . . . . . . . . . . . . 69,992 65,154
259,558 294,630
DEFERRED CHARGES:
Advanced coal royalties . . . . . . . . . . . . . . . . . . 22,551 22,939
Regulatory assets related to income taxes . . . . . . . . . 146,927 146,844
Regulatory assets - other . . . . . . . . . . . . . . . . . 51,208 49,880
Other deferred charges. . . . . . . . . . . . . . . . . . . 48,932 48,806
269,618 268,469
$ 2,498,783 $ 2,512,697
The accompanying notes are an integral part of these statements.
<PAGE>
THE MONTANA POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
L I A B I L I T I E S
March 31, December 31,
1995 1994
Thousands of Dollars
CAPITALIZATION:
Common shareholders' equity:
Common stock (120,000,000 shares
authorized; 53,819,717 and
53,578,737 shares issued) . . . . . . . . . . . . . . . $ 673,087 $ 667,344
Retained earnings and other shareholders' equity. . . . . 331,866 320,756
Unallocated Stock held by Trustee for Deferred
Savings and Employee Stock Ownership Plan . . . . . . . (32,093) (32,580)
972,860 955,520
Preferred stock . . . . . . . . . . . . . . . . . . . . . . 101,416 101,416
Long-term debt. . . . . . . . . . . . . . . . . . . . . . . 588,560 588,876
1,662,836 1,645,812
CURRENT LIABILITIES:
Short-term borrowing. . . . . . . . . . . . . . . . . . . . 33,092 113,989
Long-term debt - portion due within one year. . . . . . . . 17,008 16,980
Dividends payable . . . . . . . . . . . . . . . . . . . . . 23,345 23,249
Income taxes. . . . . . . . . . . . . . . . . . . . . . . . 22,795 9,210
Other taxes . . . . . . . . . . . . . . . . . . . . . . . . 61,140 46,521
Accounts payable. . . . . . . . . . . . . . . . . . . . . . 45,308 50,788
Interest accrued. . . . . . . . . . . . . . . . . . . . . . 13,581 11,785
Accrued lease payments. . . . . . . . . . . . . . . . . . . 8,057
Other current liabilities . . . . . . . . . . . . . . . . . 49,742 40,546
274,068 313,068
DEFERRED CREDITS:
Deferred income taxes . . . . . . . . . . . . . . . . . . . 326,772 322,835
Investment tax credit . . . . . . . . . . . . . . . . . . . 48,291 48,729
Accrued mining reclamation costs. . . . . . . . . . . . . . 112,085 110,035
Other deferred credits. . . . . . . . . . . . . . . . . . . 74,731 72,218
561,879 553,817
CONTINGENCIES AND COMMITMENTS (Note 1)
$ 2,498,783 $ 2,512,697
The accompanying notes are an integral part of these statements.
/TABLE
<PAGE>
THE MONTANA POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the Three Months Ended
March 31, March 31,
1995 1994
Thousands of Dollars
<S> <C> <C>
NET CASH FLOWS FROM OPERATING ACTIVITIES:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . $ 34,332 $ 39,178
Noncash charges (credits) to net income:
Depreciation and depletion. . . . . . . . . . . . . . . . 22,565 22,223
Mining reclamation costs expenses . . . . . . . . . . . . 4,381 4,150
Deferred income taxes.. . . . . . . . . . . . . . . . . . 3,701 1,335
Amortization of loss on long-term sale
of power. . . . . . . . . . . . . . . . . . . . . . . . (816) (1,057)
Other - net . . . . . . . . . . . . . . . . . . . . . . . 2,791 7,560
Changes in other assets and liabilities . . . . . . . . . . 43,622 37,472
Accounts receivable . . . . . . . . . . . . . . . . . . . . 31,973 19,665
Materials and supplies. . . . . . . . . . . . . . . . . . . 286 (2,802)
Accounts payable. . . . . . . . . . . . . . . . . . . . . . (5,480) (6,017)
Payment of mining reclamation costs . . . . . . . . . . . . (2,331) (2,161)
Net Cash Flows from Operating Activities. . . . . . . . . 135,024 119,546
NET CASH FLOWS FROM INVESTING ACTIVITIES:
Gross additions to property and plant . . . . . . . . . . . (47,183) (35,456)
Investments in other operations . . . . . . . . . . . . . . 318 (2,550)
Sales of property . . . . . . . . . . . . . . . . . . . . . 3,609 728
Additional investments. . . . . . . . . . . . . . . . . . . (562) (598)
Net Cash Flows from Investing Activities. . . . . . . . . (43,818) (37,876)
NET CASH FLOWS FROM FINANCING ACTIVITIES:
Sales of common stock . . . . . . . . . . . . . . . . . . . 5,643 6,659
Issuance of long-term debt. . . . . . . . . . . . . . . . . 96 44,241
Retirement of long-term debt. . . . . . . . . . . . . . . . (449) (40,466)
Short-term debt . . . . . . . . . . . . . . . . . . . . . . (80,897) (68,865)
Dividends on common and preferred stock . . . . . . . . . . (23,249) (22,960)
Net Cash Flows from Financing Activities. . . . . . . . . (98,856) (81,391)
Net Cash Flows. . . . . . . . . . . . . . . . . . . . . (7,650) 279
Cash and cash equivalents at beginning of period. . . . . . . 21,564 11,604
Cash and cash equivalents at end of period. . . . . . . . . . $ 13,914 $ 11,883
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash Paid During Three Months For:
Income taxes. . . . . . . . . . . . . . . . . . . . . . . $ 6 $ 851
Interest. . . . . . . . . . . . . . . . . . . . . . . . . 9,991 10,055
The accompanying notes are an integral part of these statements.
/TABLE
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The accompanying financial statements of the Company for the interim
periods ended March 31, 1995 and 1994 are unaudited but, in the opinion of
management, reflect all adjustments, consisting only of normal recurring
accruals, necessary for a fair statement of the results of operations for
those interim periods. The results of operations for the interim periods are
not necessarily indicative of the results to be expected for the full year.
These financial statements do not contain the detail or footnote disclosure
concerning accounting policies and other matters which would be included in
full fiscal year financial statements; therefore, they should be read in
conjunction with the Company's audited financial statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994.
Certain reclassifications have been made to the prior year amounts to
make them comparable to the 1995 presentation. These changes had no impact on
previously reported results of operations or shareholders' equity.
NOTE 1. CONTINGENCIES AND COMMITMENTS:
In 1990, the Company filed with the Federal Energy Regulatory
Commission (FERC) a plan (the Plan) to mitigate damages to, and to manage fish
and wildlife habitat impacted by the operation of the Kerr Hydroelectric
Project. The Plan was prepared pursuant to a joint license issued by the FERC
to the Company and the Confederated Salish and Kootenai Tribes (Tribes). The
Plan provides for a one-time payment by the Company of $15,418,000 and annual
payments of $965,000 which would be adjusted annually to reflect the effects
of inflation and which are to be allocated among the Tribes and various
groups.
As part of its review of the Plan, FERC is preparing a draft
environmental impact statement which is expected to suggest modifications to
the Plan. In addition, the Department of Interior has proposed certain
conditions, requiring changes in the operation of the project, as well as
non-operational measures which would be funded by an initial payment, annual
payments based on a calculation of the Project's value as a base-load facility
and further capital investments. The Company estimates the proposed
operational changes would increase its power costs by approximately $5,500,000
per year. In addition, the proposed conditions would increase the one-time
payment to approximately $33,000,000 and change the annual payments to
approximately $945,000.
While it cannot predict when or in what form the Plan finally will be
approved, the Company expects that the cost of mitigation measures will be
recovered through rates or from the Tribes if they exercise their right to
take over the project and will not have a materially adverse effect on the
Company's financial condition or results of operations.
In November 1992, the Company filed with FERC its application to
relicense nine Madison and Missouri River hydroelectric facilities with
electric generating capacity totaling 292 megawatts. The application proposes
an additional 74 megawatts of generation. The total capital investment of
relicensing, including physical improvements, environmental protection,
mitigation and enhancement measures, is estimated at $173,000,000. Additional
costs for operational changes, as well as annual payments for environmental
protection, mitigation and enhancement, are estimated to be about
$5,400,000 per year. The Company expects that the relicensing costs will be
recovered through rates and, therefore, will not have a materially adverse
effect on the Company's financial condition or results of operations.
The Company is challenging an attempt by Puget Sound Power & Light
Company (Puget) to terminate contractual obligations to purchase 94 MW of
electricity per year under an agreement which expires in 2010 (the Agreement).
On February 27, 1995, Puget notified the Company of its intention to terminate
the Agreement, effective the next day, alleging the Company had failed to
satisfy a requirement to secure firm contractual rights to transmission paths
for the delivery of the electricity. This matter is pending before Federal
District Courts in Washington and Montana.
The Company and Puget have agreed to maintain the status quo until the
matter is resolved either by negotiation or by litigation. If the Company is
unsuccessful, it would be required to reimburse Puget for the difference
between the power purchase price under the Agreement, approximately
4.6 cents/kWh and escalating annually, and the alternative price Puget may
demonstrate it otherwise would have paid for electricity after February 28,
1995. In addition, the Company would be obligated to reimburse Puget
approximately $39,000,000, plus interest, for the amount by which Puget's
payments through February 28, 1995 have exceeded its projection of avoided
costs. Additional potential liability for the Company includes the difference
in revenue resulting from sales at prices under the Agreement, approximately
$29,000,000 per year, and prices it might receive from future alternative
sales of the electricity. The Company may also be required to make a noncash
adjustment to its accounting records reducing an asset related to the
Agreement by approximately $20,000,000 pre-tax.
The Company believes that Puget has no right to terminate the Agreement
and that the required transmission paths have been provided. The Company is
confident regarding its position and is pursuing its rights vigorously;
however, it cannot predict the outcome of this controversy.
The Entech Oil Division has agreed to supply 135 Bcf of natural gas to
four cogeneration facilities through mid-2011. The Oil Division has
sufficient proven, developed and undeveloped reserves, and controls related
sales of production sufficient to supply all of the remaining natural gas
required by these agreements.
NOTE 2. RATE MATTERS:
On April 25, 1995, the Montana Public Service Commission approved an
electric rate increase in the amount of $13,900,000 effective May 1, 1995.
This increase, which affirmed a settlement negotiated with the Consumer
Counsel and other interested parties, includes $7,700,000, which had been
previously approved on an interim basis. The final order in accordance with
the settlement did not itemize an allowed rate of return or other components
of the negotiated amount.
NOTE 3. LONG-TERM DEBT:
In April 1995, the Company sold $20,000,000 of Secured Medium-Term
Notes, 7.33% series due 2025, the proceeds of which were used to finance
construction and repay short-term debt.
NOTE 4. FINANCIAL INSTRUMENTS:
Entech uses swap agreements to hedge revenues from anticipated sales of
oil and natural gas. Under the swap agreements, Entech receives or makes
payments based on the differential between the agreed-upon price and the
market price of oil or natural gas when the hedged production is sold. At
March 31, 1995, Entech had swap agreements to hedge approximately 60% of its
production from proved, developed and producing oil reserves through June
1996, and for approximately 28% of its production from proved, developed and
producing natural gas reserves through October 1995.
The Independent Power Group (IPG) has investments in independent power
partnerships, some of which have entered into derivative financial instruments
to hedge against interest rate exposure on floating rate debt and foreign
currency and gas price fluctuations.
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion should be read in conjunction with the management's
discussion included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1994.
RESULTS OF OPERATIONS
The following discussion presents significant events or trends which
have had an effect on the operations of the Company or which are expected to
have an impact on operating results in the future.
Three Months Ended March 31, 1995 and 1994:
Net Income Per Share of Common Stock
Consolidated net income for the quarter ended March 31, 1995, was
61 cents per share compared with 71 cents per share for the first quarter of
1994. Approximately one-half of the 10 cent decrease was the result of
recording the impact of the arbitration decision in March 1995, relating to
coal sales to Colstrip Unit Nos. 1 and 2 for the period July 1991 through
March 1995 (see Part II, Item 1., Legal Proceedings). In addition, weak
wholesale market conditions reduced the earnings provided by the Utility
division, and increased losses at the underground mine in Colorado impacted
Entech's earnings.
For comparative purposes, the following table shows the breakdown of
consolidated net income per share:
Three Months Ended
March 31,
1995 1994
Utility Operations $ 0.55 $ 0.46
Entech 0.03 0.23
Independent Power Group 0.03 0.02
Consolidated $ 0.61 $ 0.71
<PAGE>
UTILITY OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1995 1994
Thousands of Dollars
<S> <C> <C>
ELECTRIC UTILITY:
REVENUES
Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 117,184 $ 121,268
Intersegment revenues . . . . . . . . . . . . . . . . . . . . 1,573 1,536
118,757 122,804
EXPENSES
Power supply. . . . . . . . . . . . . . . . . . . . . . . . . 35,347 46,091
Transmission and distribution . . . . . . . . . . . . . . . . 6,428 6,496
Selling, general and administrative . . . . . . . . . . . . . 12,048 12,151
Taxes other than income taxes . . . . . . . . . . . . . . . . 11,605 10,730
Depreciation and amortization . . . . . . . . . . . . . . . . 10,621 10,175
76,049 85,643
INCOME FROM ELECTRIC OPERATIONS . . . . . . . . . . . . . . . 42,708 37,161
NATURAL GAS UTILITY:
REVENUES
Revenues (other than gas supply
cost revenues). . . . . . . . . . . . . . . . . . . . . . . 32,099 29,643
Gas supply cost revenues. . . . . . . . . . . . . . . . . . . 8,898 7,572
Intersegment revenues . . . . . . . . . . . . . . . . . . . . 355 194
41,352 37,409
EXPENSES
Gas supply costs. . . . . . . . . . . . . . . . . . . . . . . 8,898 7,572
Other production, gathering and exploration . . . . . . . . . 2,615 1,827
Transmission and distribution . . . . . . . . . . . . . . . . 2,581 2,332
Selling, general and administrative . . . . . . . . . . . . . 4,516 4,335
Taxes other than income taxes . . . . . . . . . . . . . . . . 3,545 3,419
Depreciation, depletion and amortization. . . . . . . . . . . 2,571 2,382
24,726 21,867
INCOME FROM GAS OPERATIONS. . . . . . . . . . . . . . . . . . 16,626 15,542
INTEREST EXPENSE AND OTHER INCOME:
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 11,094 10,750
Other (income) deductions - net . . . . . . . . . . . . . . . (2,087) (279)
9,007 10,471
INCOME BEFORE INCOME TAXES. . . . . . . . . . . . . . . . . . . 50,327 42,232
INCOME TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . 19,360 15,958
UTILITY NET INCOME. . . . . . . . . . . . . . . . . . . . . . . $ 30,967 $ 26,274
/TABLE
<PAGE>
UTILITY OPERATIONS:
Weather can significantly affect revenues and net income, and should be
considered when analyzing trends. The Company's sales increase as a result of
colder weather in the winter months. As measured by heating degree days, the
weather in 1995 in the Company's service territory was 7% warmer than normal
and comparable to 1994.
Electric Utility:
Income from electric operations increased $5,500,000 primarily due to
the coal price arbitration decision, (see Part II, Item 1., Legal
Proceedings), which benefited the electric utility through reduced power
supply costs. The increase was partially offset by reduced revenues from
sales to other utilities due to weak wholesale market conditions.
The following table shows the change from the previous year, in millions
of dollars, in the various classifications of electric revenues (excluding
intersegment revenues) and the related percentage changes in volumes sold and
prices received:
General business - revenue $ 3
- volume -
- price/kWh 3%
Other utilities - revenue $ (6)
- volume (10)%
- price/kWh (19)%
Miscellaneous - revenue $ (1)
Revenues:
Electric sales to general business customers increased $3,300,000
primarily due to higher tariffs resulting from the November 28, 1994 interim
rate order and increased customer growth in the residential and commercial
classes.
Electric revenues from sales to other utilities decreased $6,200,000
primarily due to weak wholesale market conditions resulting from increased
availability of low-cost energy in the region.
Miscellaneous electric revenues decreased $1,200,000 largely due to
reduced wheeling revenue due to the weak wholesale market.
<PAGE>
Expenses:
The following table shows the Company's sources of electricity and power
supply expenses (Operation, Fuel for electric generation and Maintenance) for
the three months ended March 31, 1995 and 1994.
1995 1994
Sources MWH
Hydroelectric. . . . . . . . . . . . . . . . . . 741,424 896,676
Steam . . . . . . . . . . . . . . . . . . . . . 1,350,075 1,290,821
Purchases. . . . . . . . . . . . . . . . . . . . 792,532 814,344
Total Power Supply . . . . . . . . . . . . 2,884,031 3,001,841
Thousands of Dollars
Hydroelectric (including maintenance). . . . . . $ 4,553 $ 4,398
Steam (including fuel and maintenance) . . . . . 3,817 14,795
Purchases. . . . . . . . . . . . . . . . . . . . 26,977 26,898
Total Power Supply Expenses. . . . . . . . $ 35,347 $ 46,091
Cents Per Kilowatt-Hour. . . . . . . . . . 1.226 1.535
Steam generation expenses decreased as a result of the coal arbitration
decision which reduced the price of coal sold by Entech's Western Energy
Company to Colstrip Unit Nos. 1 and 2. This price decrease was retroactive to
July 1991 and current period expenses include a $10,100,000 credit for coal
purchased in prior years. The electric utility benefited through a reduction
of power supply expense while Entech's earnings were negatively impacted by an
adjustment to revenues. See Part II, Item 1., Legal Proceedings.
Natural Gas Utility:
Income from natural gas operations increased $1,000,000 primarily due to
larger volumes sold and higher rates charged to full-requirement customers.
The following table shows the change from the previous year, in millions
of dollars, in the various classifications of natural gas revenues (excluding
intersegment revenues and gas supply costs) and the related percentage changes
in volumes sold and prices received:
Full requirement customers -revenue $ 2
-volume 7%
-price/Mcf 2%
Transportation -revenue $ -
-volume 32%
-price/Mcf 7%
Miscellaneous -revenue $ -
Revenues:
Natural gas revenues (other than gas supply cost) increased $2,400,000.
Higher tariffs resulting from a 1994 rate order and increases of approximately
4% in residential and 3% in commercial customers account for the majority of
the increase.
Gas supply cost revenues consist of the amount authorized by the PSC to
be collected in rates from full requirement customers to cover the cost of
supplying the gas. The $1,300,000 increase in gas supply revenues is the
result of increased volumes sold due to customer growth and a refund made in
1994 for overcollections of prior year costs. Gas supply cost revenues and
gas supply cost expenses are always equal due to rate and accounting
procedures adopted by the PSC in January 1980.
Transportation volumes increased principally due to large amounts of gas
being stored for others. Revenues remained relatively unchanged due to the
Gas Transportation Adjustment Clause (GTAC), which passes through to the
full-requirement customers the difference between estimated interruptible
transportation (IT) revenues and actual IT revenues received.
Expenses:
The increase in gas supply costs results from the reasons mentioned in
the gas supply cost revenue discussion.
Interest Expense and Other Income:
The increase in other income is principally the result of receiving
$1,800,000 in interest income from Entech's Western Energy Company from the
coal arbitration decision. See Part II, Item 1., Legal Proceedings.
<PAGE>
ENTECH OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1995 1994
Thousands of Dollars
<S> <C> <C>
COAL OPERATIONS:
REVENUES
Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 53,103 $ 65,693
Intersegment revenues . . . . . . . . . . . . . . . . . . . . 298 11,527
53,401 77,220
EXPENSES
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . 40,440 41,340
Selling, general and administrative . . . . . . . . . . . . . 7,815 7,596
Taxes other than income taxes . . . . . . . . . . . . . . . . 5,540 10,500
Depreciation, depletion and amortization. . . . . . . . . . . 3,743 3,514
57,538 62,950
INCOME FROM COAL OPERATIONS . . . . . . . . . . . . . . . . . (4,137) 14,270
OIL AND NATURAL GAS OPERATIONS:
REVENUES
Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . 23,275 26,204
Intersegment revenues . . . . . . . . . . . . . . . . . . . . 132 85
23,407 26,289
EXPENSES
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . 12,861 15,801
Selling, general and administrative . . . . . . . . . . . . . 2,242 2,204
Taxes other than income taxes . . . . . . . . . . . . . . . . 630 900
Depreciation, depletion and amortization. . . . . . . . . . . 4,488 4,596
20,221 23,501
INCOME FROM OIL AND NATURAL GAS OPERATIONS. . . . . . . . . . 3,186 2,788
OTHER OPERATIONS:
REVENUES
Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . 6,380 5,532
Intersegment revenues . . . . . . . . . . . . . . . . . . . . 144 188
6,524 5,720
EXPENSES
Cost of Sales . . . . . . . . . . . . . . . . . . . . . . . . 4,356 4,212
Selling, general and administrative . . . . . . . . . . . . . 1,271 983
Taxes other than income taxes . . . . . . . . . . . . . . . . 81 72
Depreciation, depletion and amortization. . . . . . . . . . . 403 474
6,111 5,741
INCOME FROM OTHER OPERATIONS. . . . . . . . . . . . . . . . . 413 (21)
INTEREST EXPENSE AND OTHER INCOME:
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 2,348 315
Other (income) deductions-net . . . . . . . . . . . . . . . . (1,227) 558
1,121 873
INCOME BEFORE INCOME TAXES. . . . . . . . . . . . . . . . . . . (1,659) 16,164
INCOME TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . (3,328) 4,336
ENTECH NET INCOME . . . . . . . . . . . . . . . . . . . . . . . $ 1,669 $ 11,828
/TABLE
<PAGE>
ENTECH OPERATIONS:
Coal Operations:
Income from coal operations decreased $18,400,000 principally as a
result of recording the impact of the coal arbitration decision in March 1995,
relating to Colstrip Unit Nos. 1 and 2, (see Part II, Item 1., Legal
Proceedings), and from increased losses at the Golden Eagle Mine.
Revenues:
Overall coal revenues, including intersegment revenues, decreased
$23,800,000 due to a 29% decrease in prices received and a 4% decrease in
volumes sold. Coal revenues decreased $19,000,000 at the Rosebud Mine due to
the recording of the impact of the lower coal prices resulting from the
Colstrip Unit Nos. 1 and 2 arbitration decision and revenues decreased
$4,400,000 due to the loss of one Midwestern contract at the end of 1994. At
the Jewett Mine, coal revenues increased $1,100,000 due to higher prices
received as a result of mining more of Northwestern's lignite in 1995.
Revenues at Jewett are affected by the mix of tons mined from Northwestern's
lignite leases and the customer's lignite leases. Golden Eagle Mine revenues
decreased $1,500,000 as a result of lower volumes available for sale due to
production problems.
Expenses:
Taxes other than income taxes decreased $5,000,000 due to the recording
of the impact of the arbitration decision mentioned above.
Oil and Natural Gas Operations:
Income from oil and natural gas operations improved $400,000 principally
due to higher oil prices received, partially offset by lower natural gas
prices.
The following table shows the change from the previous year, in millions
of dollars, in the various classifications of revenues including intersegment
revenues, with the related percentage changes in volumes sold and prices
received:
Oil -revenue $ 1
-volume (4)%
-price/bbl 39%
Natural gas -revenue $ (3)
-volume 3%
-price/Mcf (30)%
Natural gas marketing -revenue $ (1)
-volume 13%
Revenues:
Oil revenues increased $1,100,000 from higher market prices received.
Natural gas revenues decreased $2,600,000 as a net result of lower market
prices received partially offset by the effects of higher volumes of Canadian
gas available for sale. Revenues from natural gas marketing decreased
$1,400,000 due to lower prices received partially offset by higher volumes
sold.
<PAGE>
Expenses:
Cost of sales decreased $2,900,000 as a result of decreased costs of
natural gas purchased for resale.
Other Operations:
Income from other operations increased $400,000 due to increased
services provided by telecommunications operations.
Revenues:
Revenues from Entech's other operations increased $800,000 principally
from telecommunications operations due to increased circuits sold to common
carriers, increased equipment sales in Idaho and Washington, and increased
minutes sold to long-distance customers.
Interest Expense and Other Income:
The increase in interest expense is due to the recording of the impact
of the arbitration decision. Other (income) deductions - net increased
$1,800,000 as a result of the sale of assets.
Income Taxes:
Income taxes decreased $7,600,000 due to lower pre-tax net income as a
result of the recording of the impact of the arbitration decision and the
production problems at the Colorado Mine.
<PAGE>
INDEPENDENT POWER GROUP OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1995 1994
Thousands of Dollars
<S> <C> <C>
REVENUES:
Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,024 $ 20,956
Earnings from unconsolidated investments. . . . . . . . . . . 1,180 760
Intersegment revenues . . . . . . . . . . . . . . . . . . . . 336 257
21,540 21,973
EXPENSES:
Operation and maintenance . . . . . . . . . . . . . . . . . . 17,276 18,062
Selling, general and administrative . . . . . . . . . . . . . 814 627
Taxes other than income taxes . . . . . . . . . . . . . . . . 520 433
Depreciation and amortization . . . . . . . . . . . . . . . . 740 1,083
19,530 20,205
INCOME FROM OPERATIONS. . . . . . . . . . . . . . . . . . . . 2,190 1,768
INTEREST EXPENSE AND OTHER INCOME:
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Other (income) deductions - net . . . . . . . . . . . . . . . (750) (448)
(750) (442)
INCOME BEFORE INCOME TAXES. . . . . . . . . . . . . . . . . . . 2,940 2,210
INCOME TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . 1,244 1,134
IPG NET INCOME. . . . . . . . . . . . . . . . . . . . . . . . . $ 1,696 $ 1,076
/TABLE
<PAGE>
INDEPENDENT POWER GROUP OPERATIONS:
Net income of the Independent Power Group (IPG) increased principally
due to increases in earnings from power projects in operation and decreases in
project development expenditures.
LIQUIDITY AND CAPITAL RESOURCES
The Company's capital requirements, long-term debt maturities and
sources of funds for the period 1995-1999 have been discussed in the Company's
Annual Report on Form 10-K for the year ended December 31, 1994. Since Form
10-K was issued, the Utility's capital expenditures for this period have been
reduced by approximately 28%, or $192,000,000, beginning in 1996. During the
first three months of 1995, $25,208,000 was expended for the Utility
construction program, $20,677,000 for Entech capital expenditures and $980,000
for IPG capital expenditures.
In April 1995, the Company sold $20,000,000 of Secured Medium-Term
Notes, 7.33% series due 2025, the proceeds of which will be used to finance
construction and repay short-term debt.
The Company's Mortgage and Deed of Trust contains certain restrictions
upon the issuance of additional First Mortgage Bonds. At March 31, 1995,
after taking into account the April sale of Secured Medium-Term Notes
discussed above, the unfunded net property additions and retired bonds test,
which is the most restrictive test, would have permitted the issuance of
approximately $506,000,000 additional First Mortgage Bonds. There are no
material restrictions upon issuance of unsecured debt or preferred stock in
the Company's Restated Articles of Incorporation, its Mortgage and Deed of
Trust or its Sinking Fund Debenture Agreement.
SEC RATIO OF EARNINGS TO FIXED CHARGES
For the twelve months ended March 31, 1995, the Company's ratio of
earnings to fixed charges was 2.93 times. Fixed charges include interest, the
implicit interest of the Colstrip Unit 4 rentals and one-third of all other
rental payments.
NEW ACCOUNTING PRONOUNCEMENTS
In March 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
This statement, which is effective for 1996 financial statements, requires
that an asset be reviewed for impairment whenever events indicate that the
carrying value of the asset may not be recoverable. The statement also
requires that a loss be recognized whenever a regulator excludes a portion of
an asset's cost from the Company's rate base. The Company is currently
evaluating SFAS No. 121, and cannot estimate at this time if the application
of this statement will have a material impact on its financial position or
results of operations.
UTILITY INDUSTRY CHANGES
On March 29, 1995, FERC issued a Notice of Proposed Rulemaking (NOPR) on
Open-Access Non-Discriminatory Transmission Services by Public and
Transmitting Utilities and a supplemental NOPR on Recovery of Stranded Costs.
The NOPR would require utilities owning transmission lines to file
non-discriminatory rates available to all buyers and sellers of electricity,
require utilities to use that tariff for their own wholesale sales and
purchases, and allow utilities to recover stranded costs.
The Company's Electric Utility is analyzing how it might be affected by
the proposal and is considering the response it will file when comments are
due on August 7, 1995. It is anticipated that a final rule could take effect
in early 1996.
<PAGE>
PART II
Other Information
ITEM 1. Legal Proceedings
Coal Arbitration Decision
A pricing dispute between Western Energy Company (Western), a subsidiary
of the Company, and Puget Sound Power & Light Company (Puget) regarding the
Coal Supply Agreement for Colstrip Unit Nos. 1 and 2 between Puget and the
Company's Utility Division, as co-owners of the units, and Western, as coal
supplier has been resolved through arbitration. See Annual Report on Form
10-K for 1994, Note 2 to the Consolidated Financial Statements.
On March 24, 1995, the Company received the arbitration decision.
Excluding production taxes and royalties, the contract price was reduced
approximately $1.20 per ton. As a result, the Company's consolidated pre-tax
income will decrease approximately $6,000,000 on coal sold to Puget since July
1991. The Company does not expect a significant cash flow impact to result
from the arbitration decision, because Puget paid less than invoiced amounts
for coal delivered after April 1992. In March 1995, Western refunded
approximately $10,500,000, plus interest, on coal sold to the Company's
Utility Division since July 1991. This refund did not affect consolidated
income. On an annual basis, the redetermined contract price is estimated to
result in a pre-tax reduction of consolidated income of approximately
$3,000,000 per year.
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
Exhibit 3(b)(2) Amendments to By-laws
Exhibit 3(b)(3) Amendments to By-laws
Exhibit 12 Computation of ratio of earnings to fixed
charges for the twelve months ended
March 31, 1995.
Exhibit 27 Financial Data Schedule
<TABLE>
<CAPTION>
(b) Reports on Form 8-K
<S> <C> <C>
DATE <PAGE>
SUBJECT
February 2, 1995<PAGE>
Item 7 Exhibits, Preliminary Condensed
Balance Sheet at December 31, 1994 and
1993, Preliminary Consolidated Statement
of Income for the Quarters Ended
December 31, 1994 and 1993 and Preliminary
Consolidated Statement of Income for the
Years Ended December 31, 1994 and 1993. March 7, 1995<PAGE>
Item 5 Other Events. Notice of Intent by
Puget Sound Power and Light to cancel
power purchase agreement. March 28, 1995<PAGE>
Item 5 Other Events. Decision received on
coal price arbitration proceeding.
/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)
/s/ W. C. Verbael
W. C. Verbael
Vice President - Accounting,
Finance and Information Services
Date: May 15, 1995<PAGE>
EXHIBIT INDEX
Exhibit 3(b)(2)
Amendments to By-laws
Exhibit 3(b)(3)
Amendments to By-laws
Exhibit 12
Computation of ratio of earnings
to fixed charges for
the twelve months ended March 31, 1995
Exhibit 27
Financial Data Schedule
BYLAWS
OF
THE MONTANA POWER COMPANY
Adopted on : September 22, 1992
As Amended on : December 13, 1994
January 24, 1995
<PAGE>
THE MONTANA POWER COMPANY
AMENDMENTS TO BYLAWS
Article Amendment Date of Amendment
11 Establishment of the December 13, 1994
number of Directors as
fourteen (14).
(See Attachment A hereto.)
11 The Directors shall be divided January 24, 1995
into three groups, each as
nearly equal as possible.
Each group of Directors shall
stand for election upon
expiration of their terms.
Directors shall hold their
terms. Directors shall hold
office for a term of three (3)
years or until a successor is
duly elected and qualified.
(See Attached B hereto).
<PAGE>
ATTACHMENT B
THE MONTANA POWER COMPANY
CERTIFICATION OF RESOLUTION
I, R. M. Ralph, Assistant Secretary of The Montana
Power Company, a corporation, hereby certify that the
following is a full, true and correct copy of Resolution
duly adopted by the Board of Directors of The Montana Power
Company at a meeting duly called and held January 24, 1995
and that said Resolution is in full force and effect as of
the date of this certificate.
RESOLVED, that the Board of Directors hereby finds
it to be advisable and in the best interest of the
Corporation that the first paragraph of Section 11 of
the Corporation's Bylaws, as amended, be amended to
read as follows:
"The affairs of the Corporation shall be
managed by a Board of fourteen (14) Directors.
The Directors shall be divided into three groups,
each as nearly equal in number as possible. Each
group of Directors shall stand for election upon
expiration of their terms. Directors shall hold
office for a term of three (3) years or until a
successor is duly elected and qualified."
IN WITNESS WHEREOF, I have hereunto set my hand and the
Seal of said Corporation this 26th day of April 1995.
/s/ R. M. Ralph
R. M. Ralph, Assistant Secretary
(SEAL)
BYLAWS
OF
THE MONTANA POWER COMPANY
Adopted on : September 22, 1992
As Amended on : December 13, 1994
January 24, 1995
March 28, 1995
<PAGE>
THE MONTANA POWER COMPANY
AMENDMENTS TO BYLAWS
Article Amendment Date of Amendment
11 Establishment of the December 13, 1994
number of Directors as
fourteen (14).
(See Attachment A hereto.)
11 The Directors shall be divided January 24, 1995
into three groups, each as
nearly equal as possible.
Each group of Directors shall
stand for election upon
expiration of their terms.
Directors shall hold
office for a term of three (3)
years or until a successor is
duly elected and qualified.
(See Attached B hereto).
2 Establishment of notification March 28, 1995
procedure in order share-
holder proposals and
nominations to be eligible
to be made at meeting of
shareholders.
(See Attachment C).
<PAGE>
ATTACHMENT C
THE MONTANA POWER COMPANY
CERTIFICATION OF RESOLUTION
I, R. M. Ralph, Assistant Secretary of The Montana
Power Company, a corporation, hereby certify that the
following is a full, true and correct copy of Resolution
duly adopted by the Board of Directors of The Montana Power
Company at a meeting duly called and held March 28, 1995 and
that said Resolution is in full force and effect as of the
date of this certificate.
RESOLVED, that the Board of Directors hereby finds
it to be advisable and in the best interest of the
Corporation that Section 3 of the Corporation's Bylaws,
as amended, be amended to read in its entirety as
follows:
"Section 3. (A) Annual Meeting of Shareholders.
(1) The annual meeting of the shareholders of the
Corporation for the election of Directors and such
other business as shall properly come before such
meeting shall be held on (a) the second Tuesday in May
in each year, unless that date is a legal holiday, in
which case such meeting shall be held on the first day
thereafter which is not a legal holiday, or (b) at such
other date and/or time as may be fixed by resolution of
the Board of Directors. Nominations of persons for
election to the Board of Directors of the Corporation
and the proposal of business to be considered by the
shareholders may be made at an annual meeting of
shareholders (a) pursuant to the Corporation's notice
of meeting delivered pursuant to Section 5 of these
Bylaws, (b) by the Board of Directors pursuant to a
resolution duly adopted or (c) by any shareholder of
the Corporation who is entitled to vote at the meeting,
who complied with the notice procedures set forth in
clauses (2) and (3) of paragraph (A) of this Bylaw and
who was a shareholder of record at the time such notice
is delivered to the Secretary of the Corporation.
(2) For nominations or other business to be
properly brought before an annual meeting by a
shareholder pursuant to clause (c) of paragraph (A) (1)
of this Bylaw, the shareholder must have given timely
notice thereof in writing to the Secretary of the
Corporation. To be timely, a shareholder's notice
shall be delivered to the Secretary at the principal
executive offices of the Corporation not less than 120
days in advance of the anniversary date of the release
of the Corporation's proxy statement made in connection
with the previous annual meeting; provided, however,
that in the event that the date of the annual meeting
is advanced by more than twenty days, or delayed by
more than seventy days, from the anniversary date of
the previous annual meeting, notice by the shareholder
to be timely must be so delivered not later than the
close of business on the later of the 120th day prior
to such annual meeting or the tenth day following the
day on which public announcement of the date of such
meeting is first made. Such shareholder's notice shall
set forth (a) as to each person whom the shareholder
proposes to nominate for election or reelection as a
Director all information relating to such person that
is required to be disclosed in solicitations of proxies
for election of Directors, or is otherwise required, in
each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the
"Exchange Act"), including such person's written
consent to being named in the proxy statement of the
nominator as a nominee and to serving as a Director if
elected; (b) as to any other business that the
shareholder proposes to bring before the meeting, a
brief description of the business desired to be brought
before the meeting, the reasons for conducting such
business at the meeting and any material interest in
such business of such shareholder and the beneficial
owner, if any, on whose behalf the proposal is made;
and (c) as to the shareholder giving the notice and the
beneficial owner, if any, on whose behalf the
nomination or proposal is made (i) the name and address
of such shareholder, as they appear on the
Corporation's books, and of such beneficial owner and
(ii) the class and number of shares of the Corporation
which are owned beneficially and of record by such
shareholder and such beneficial owner.
(3) Notwithstanding anything in the second
sentence of paragraph (A) (2) of this Bylaw to the
contrary, in the event that the number of Directors to
be elected to the Board of Directors is increased and
the public announcement naming all of the nominees for
Director or specifying the size of the increased Board
of Directors is not made by the Corporation at least
ten days prior to the date by which shareholders
proposals and nominations must be received by the
Corporation, a shareholder's notice required by this
Bylaw shall also be considered timely, but only with
respect to nominees for any new positions created by
such increase, if it shall be delivered to the
Secretary at the principal executive offices of the
Corporation not later than the close of business on the
tenth day following the day on which such public
announcement is first made by the Corporation.
(B) Special Meeting of Shareholders. Only such
business shall be conducted at a special meeting of
shareholders as shall have been brought before the
meeting pursuant to the Corporation's notice of meeting
pursuant to Section 5 of these Bylaws. Nominations of
persons for election to the Board of Directors may be
made at a special meeting of shareholders at which
Directors are to be elected pursuant to the
Corporation's notice of meeting (i) by or at the
direction of the Board of Directors or (ii) by any
shareholder of the Corporation who is entitled to vote
at the meeting, who complies with the notice procedures
set forth in this Bylaw and who is a shareholder of
record at the time such notice is delivered to the
Secretary of the Corporation. Nominations by
shareholders of persons for election to the Board of
Directors may be made at such a special meeting of
shareholders if a shareholder's notice as described in
the third sentence of paragraph (A) (2) of this Section
3 of the Bylaws shall be delivered to the Secretary at
the principal executive offices of the Corporation not
later than the close of business on the later of the
seventieth day prior to such special meeting or the
tenth day following the day on which public
announcement is first made of the date of the special
meeting and of the nominees proposed by the Board of
Directors to be elected at such meeting.
(C) General. (1) Only persons who are nominated
in accordance with the procedures set forth in this
Bylaw shall be eligible to serve as Directors and only
such business shall be conducted at a meeting of
shareholders as shall have been brought before the
meeting in accordance with the procedures set forth in
this Bylaw. Except as otherwise provided by the laws
of the State of Montana, the Restated Articles of
Incorporation of the Corporation or these Bylaws, the
chairman of the meeting shall have the power and duty
to determine whether a nomination or any business
proposed to be brought before the meeting was made in
accordance with the procedures set forth in this Bylaw
and, if any proposed nomination or business is not in
compliance with this Bylaw, to declare that such
defective proposal or nomination shall be disregarded.
(2) For purposes of this Bylaw, "public
announcement" shall mean disclosure in a press release
reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a
document publicly filed by the Corporation with the
Securities and Exchange Commission pursuant to Section
13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of
this Bylaws, a shareholder shall also comply with all
applicable requirements of the Exchange Act and the
rules and regulations thereunder with respect to the
matters set forth in this Bylaws. Nothing in this
Bylaw shall be deemed to affect any rights of
shareholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8
under the Exchange Act."
IN WITNESS WHEREOF, I have hereunto set my hand and the
Seal of said Corporation this 26th day of April 1995.
/s/ R. M. Ralph
R. M. Ralph, Assistant Secretary
(SEAL)
EXHIBIT 12
THE MONTANA POWER COMPANY
Computation of Ratio of Earnings to Fixed Charges
(Dollars in Thousands)
Twelve Months
Ended
March 31, 1995
------------------
Net Income $111,073
Income Taxes 49,994
----------
$161,067
----------
Fixed Charges:
Interest $ 45,143
Amortization of Debt Discount,
Expense and Premium 1,655
Rentals 36,591
----------
$ 83,389
----------
Earnings Before Income Taxes
and Fixed Charges $244,456
==========
Ratio of Earnings to Fixed Charges 2.93X
==========
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT 3/31/95, THE CONSOLIDATED INCOME STATEMENT AND
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE 3 MONTHS ENDED 3/31/95 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,458,140
<OTHER-PROPERTY-AND-INVEST> 511,467
<TOTAL-CURRENT-ASSETS> 259,558
<TOTAL-DEFERRED-CHARGES> 269,618
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,498,783
<COMMON> 673,087
<CAPITAL-SURPLUS-PAID-IN> 2,411
<RETAINED-EARNINGS> 297,362
<TOTAL-COMMON-STOCKHOLDERS-EQ> 972,860
0
101,416
<LONG-TERM-DEBT-NET> 579,742
<SHORT-TERM-NOTES> 33,092
<LONG-TERM-NOTES-PAYABLE> 8,430
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 16,259
0
<CAPITAL-LEASE-OBLIGATIONS> 388
<LEASES-CURRENT> 749
<OTHER-ITEMS-CAPITAL-AND-LIAB> 785,847
<TOT-CAPITALIZATION-AND-LIAB> 2,498,783
<GROSS-OPERATING-REVENUE> 262,287
<INCOME-TAX-EXPENSE> 17,276
<OTHER-OPERATING-EXPENSES> 201,300
<TOTAL-OPERATING-EXPENSES> 218,576
<OPERATING-INCOME-LOSS> 43,711
<OTHER-INCOME-NET> 1,576
<INCOME-BEFORE-INTEREST-EXPEN> 45,287
<TOTAL-INTEREST-EXPENSE> 10,955
<NET-INCOME> 34,332
1,807
<EARNINGS-AVAILABLE-FOR-COMM> 32,525
<COMMON-STOCK-DIVIDENDS> 21,539
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 135,024
<EPS-PRIMARY> 0.61
<EPS-DILUTED> 0.61
</TABLE>
