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) January 5, 1996
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
ITEM 5. Other Events - Attached news release from Montana Power
dated January 5, 1996
MPC REPORTS FOURTH-QUARTER CHARGE FOR ASSET IMPAIRMENT
BUTTE, Montana, January 5, 1996 -- The Montana Power Company
(NYSE: MTP) today announced that it will record a charge against
income of approximately $75 million (approximately $46 million or
85 cents per share after income taxes) in the fourth quarter of
1995, to reflect the impairment of certain assets of the company's
non-regulated subsidiary, Entech, Inc., including its investment
in, and mine-closure costs to be incurred by, Entech's subsidiary,
Basin Resources, Inc.
This charge encompasses the company's decision to implement
in 1995 a new financial accounting standard (FAS 121) entitled
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed Of."
"The accounting standard provides new rules to determine when
and how long-lived assets are reviewed for possible impairment,"
said Daniel T. Berube, MPC's chairman and chief executive officer.
"For example, it requires an immediate writedown of some resource
properties that previously would have been charged against income
over longer periods of time as depletion or amortization. The
charge against income will not adversely affect Montana Power's
future cash flows, future earnings, or in my opinion, the ability
to maintain our dividend on common stock," he added.
The impairment also includes a writedown of Entech's
investment in Basin Resources, Inc., which owns an underground
coal mine in Colorado. On December 29, Basin announced that all
coal sales agreements had been terminated, that underground
production would cease immediately, and that the mine would be
permanently closed by the end of the first quarter of 1996, unless
a viable buyer is identified. To date, efforts to sell the mine
have been unsuccessful.
"Basin has been unable to operate without losses because of
operating problems and a market where prices continue to be low,"
Berube said.
The before-income tax charge includes the Basin writedown of
approximately $46 million; the charge related to other properties
is approximately $29 million.
"After these writedowns, the value of our coal, oil and gas
properties remains well above the historic book cost, and the
properties will continue to generate substantial earnings and cash
flow for our investors," Berube said.
Based in Butte, Montana Power is an energy company with
assets of $2.5 billion. Its business units include a utility
division with electric and natural gas systems, nonutility
businesses involved in coal, oil, gas and telecommunications, and
an independent power group which engages in independent power
project development and investment, and wholesale power sales.
Montana Power expects to report its preliminary earnings for
1995 about January 24, 1996.
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: January 5, 1996
