UNITED STATES
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) July 24, 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
Exhibit Index is found on page 5.
ITEM 5. Other Events.
Second Quarter Net Income
Net income for the quarter ended June 30, 1996 was 23 cents per share
compared with 11 cents per share for the second quarter 1995. Utility earnings
increased seven cents per share due to a reduction in power supply expenses
which was the result of improved productivity and shorter maintenance periods
at the Colstrip thermal units and continued availability of low cost
hydroelectric energy in the region. Customer growth, a metering correction and
higher rates also contributed to the increase. Non-Utility operations, which
now includes Entech and the Independent Power Group operations, increased five
cents per share in part due to continued growth in earnings from independent
power investments. Also, the Colorado coal mine, which has been closed,
sustained losses of seven cents per share last year. These increases were
partially offset due to a decline in coal sales caused by reduced thermal
generation at Colstrip and the expiration of a Midwestern contract.
Consolidated net income for the six months ended June 30, 1996 was 93
cents per share compared with 71 cents per share for the same period last
year. In addition to the items discussed for the quarter, Utility earnings
increased due to weather 11% colder than last year. Utility earnings would
have been an additional 13 cents higher except for the impact of the coal
contract arbitration decision recorded in March 1995. Non-Utility earnings
increased 19 cents per share primarily as a result of growth in earnings from
independent power investments and two non-recurring charges, recorded in 1995,
which amounted to 31 cents per share. The increase was reduced due to lower
coal sales at the Rosebud Mine.
Consolidated net income for the twelve months ended June 30, 1996
decreased 69 cents per share primarily as a result of an 85 cent per share
charge in 1995 related to the adoption of a new financial accounting standard
and the writedown of the Colorado mine. Significant power project development
fees recorded in the 1995 period also contributed to the decrease. These
decreases were moderated by the improved Utility performance and increased
earnings from independent power investments.
For comparative purposes, the following table shows the breakdown of
consolidated net income per share:
Quarter Ended
June 30, June 30,
1996 1995
Utility Operations $ 0.11 $ 0.04
Non-Utility Operations 0.12 0.07
Consolidated $ 0.23 $ 0.11
Six Months Ended
June 30, June 30,
1996 1995
Utility Operations $ 0.61 $ 0.58
Non-Utility Operations 0.32 0.13
Consolidated $ 0.93 $ 0.71
Twelve Months Ended
June 30, June 30,
1996 1995
Utility Operations $ 1.25 $ 1.03
Non-Utility Operations (0.11) 0.80
Consolidated $ 1.14 $ 1.83
ITEM 7. Exhibits.
99a Consolidated Statements of Income for the Quarters Ended June 30, 1996
and 1995, Six Months Ended June 30, 1996 and 1995, and for the Twelve
Months Ended June 30, 1996 and 1995.
99b Utility Operations Schedule of Revenues and Expenses for the Quarters
Ended June 30, 1996 and 1995, Six Months Ended June 30, 1996 and 1995,
and for the Twelve Months Ended June 30, 1996 and 1995.
99c Non-Utility Operations Schedule of Revenues and Expenses for the Quarters
Ended June 30, 1996 and 1995, Six Months Ended June 30, 1996 and 1995,
and for the Twelve Months Ended June 30, 1996 and 1995.
Exhibit Index
Exhibit Page
99a Consolidated Statements of Income for the Quarters Ended
June 30, 1996 and 1995, Six Months Ended June 30, 1996 and
1995, and for the Twelve Months Ended June 30, 1996 and 1995. 6
99b Utility Operations Schedule of Revenues and Expenses for
the Quarters Ended June 30, 1996 and 1995, Six Months Ended
June 30, 1996 and 1995, and for the Twelve Months Ended
June 30, 1996 and 1995. 7
99c Non-Utility Operations Schedule of Revenues and Expenses for
the Quarters Ended June 30, 1996 and 1995, Six Months Ended
June 30, 1996 and 1995, and for the Twelve Months Ended
June 30, 1996 and 1995. 8-9
<TABLE>
Exhibit 99a
<CAPTION>
CONSOLIDATED STATEMENT OF INCOME
The Montana Power Company and Subsidiaries
Quarter Ended Six Months Ended 12 Months Ended
June 30, June 30, June 30,
1996 1995 1996 1995 1996 1995
Thousands of Dollars
<S> <C> <C> <C> <C> <C> <C>
REVENUES $197,919 $203,643 $462,324 $465,940 $949,775 $988,642
EXPENSES:
Operations 82,831 95,315 190,653 209,118 402,527 441,013
Maintenance 15,357 20,681 28,659 36,021 60,923 71,931
Selling, general and
administrative 25,965 23,632 50,449 51,168 100,801 105,082
Taxes other than income taxes 20,134 23,140 42,814 45,060 87,613 95,450
Depreciation, depletion and
amortization 21,351 21,731 42,106 44,424 84,657 87,351
Writedowns of long-lived assets 74,297
165,638 184,499 354,681 385,791 810,818 800,827
INCOME FROM OPERATIONS 32,281 19,144 107,643 80,149 138,957 187,815
INTEREST EXPENSE AND OTHER INCOME:
Interest 11,649 10,668 23,635 21,623 45,676 43,088
Other (income) deductions - net (1,667) (1,400) (2,408) (2,958) (10,161) (10,785)
9,982 9,268 21,227 18,665 35,515 32,303
INCOME TAXES 8,013 2,306 31,815 19,582 33,807 49,905
NET INCOME 14,286 7,570 54,601 41,902 69,635 105,607
DIVIDENDS ON PREFERRED STOCK 1,807 1,807 3,614 3,614 7,227 7,227
NET INCOME AVAILABLE FOR
COMMON STOCK $ 12,479 $ 5,763 $ 50,987 $ 38,288 $ 62,408 $ 98,380
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING (000) 54,632 53,976 54,635 53,857 54,510 53,616
NET INCOME PER SHARE OF
COMMON STOCK $ 0.23 $ 0.11 $ 0.93 $ 0.71 $ 1.14 $ 1.83
</TABLE>
<TABLE>
Exhibit 99b
UTILITY OPERATIONS
<CAPTION>
Quarter Ended Six Months Ended 12 Months Ended
June 30, June 30, June 30,
1996 1995 1996 1995 1996 1995
Thousands of Dollars
ELECTRIC UTILITY:
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Revenues $ 85,410 $ 84,625 $205,297 $201,809 $425,487 $424,475
Intersegment revenues 1,487 1,655 3,515 3,228 6,100 5,951
86,897 86,280 208,812 205,037 431,587 430,426
EXPENSES:
Power supply 24,999 32,810 66,745 68,157 146,828 165,292
Transmission and distribution 7,562 6,706 15,021 13,134 28,802 26,753
Selling, general and
administrative 10,742 9,334 22,055 21,382 42,605 44,069
Taxes other than income taxes 11,481 11,670 23,419 23,275 43,447 44,290
Depreciation and amortization 11,548 10,630 23,095 21,251 44,350 41,600
66,332 71,150 150,335 147,199 306,032 322,004
INCOME FROM ELECTRIC OPERATIONS 20,565 15,130 58,477 57,838 125,555 108,422
NATURAL GAS UTILITY:
REVENUES:
Revenues (other than gas supply
cost revenues) 19,313 17,187 57,201 49,286 101,367 93,268
Gas supply cost revenues 3,904 4,488 13,980 13,386 22,254 20,584
Intersegment revenues 151 189 358 540 670 1,070
23,368 21,864 71,539 63,212 124,291 114,922
EXPENSES:
Gas supply costs 3,904 4,488 13,980 13,386 22,254 20,584
Other production, gathering and
exploration 2,325 2,579 4,691 5,190 9,144 9,993
Transmission and distribution 2,837 2,929 5,907 5,510 11,330 10,794
Selling, general and
administrative 4,334 4,485 8,682 8,873 16,970 17,677
Taxes other than income taxes 3,709 3,727 7,721 7,272 15,289 14,283
Depreciation, depletion and
amortization 2,929 2,702 5,860 5,401 11,253 10,378
20,038 20,910 46,841 45,632 86,240 83,709
INCOME FROM GAS OPERATIONS 3,330 954 24,698 17,580 38,051 31,213
INTEREST EXPENSE AND OTHER INCOME:
Interest 11,311 10,804 23,051 21,898 45,183 43,665
Other (income) deductions - net (966) (690) (1,461) (2,777) (4,101) (5,096)
10,345 10,114 21,590 19,121 41,082 38,569
INCOME BEFORE INCOME TAXES 13,550 5,970 61,585 56,297 122,524 101,066
INCOME TAXES 5,727 2,202 24,754 21,562 47,238 38,356
UTILITY NET INCOME $ 7,823 $ 3,768 $36,831 $ 34,735 $ 75,286 $ 62,710
</TABLE>
<TABLE>
Exhibit 99c
NON-UTILITY OPERATIONS
<CAPTION>
Quarter Ended Six Months Ended 12 Months Ended
June 30, June 30, June 30,
1996 1995 1996 1995 1996 1995
Thousands of Dollars
COAL:
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Revenues $31,319 $ 49,033 $ 69,709 $102,116 $174,839 $232,800
Intersegment revenues 4,836 6,216 13,033 6,514 32,179 29,016
36,155 55,249 82,742 108,630 207,018 261,816
EXPENSES:
Operations and maintenance 25,294 39,276 52,830 79,716 128,617 169,147
Selling, general and
administrative 5,420 6,749 10,555 14,564 23,849 29,953
Taxes other than income taxes 3,467 6,513 8,842 12,053 23,999 31,719
Depreciation, depletion and
amortization 1,078 2,504 2,221 6,247 7,162 12,447
Writedowns of long-lived assets 55,102
35,259 55,042 74,448 112,580 238,729 243,266
INCOME (LOSS) FROM COAL OPERATIONS 896 207 8,294 (3,950) (31,711) 18,550
OIL AND NATURAL GAS:
REVENUES:
Revenues 29,406 24,209 58,469 47,478 111,188 98,204
Intersegment revenues 67 39 166 171 238 262
29,473 24,248 58,635 47,649 111,426 98,466
EXPENSES:
Operations and maintenance 17,802 14,862 35,451 27,723 68,254 55,494
Selling, general and
administrative 2,506 2,308 4,932 4,550 9,701 8,796
Taxes other than income taxes 924 684 1,758 1,314 2,777 2,881
Depreciation, depletion and
amortization 4,635 4,744 8,588 9,232 16,924 18,327
Writedowns of long-lived assets 19,194
25,867 22,598 50,729 42,819 116,850 85,498
INCOME (LOSS) FROM OIL AND NATURAL
GAS OPERATIONS 3,606 1,650 7,906 4,830 (5,424) 12,968
INDEPENDENT POWER:
REVENUES:
Revenues 18,283 19,287 38,000 39,311 77,784 92,832
Earnings from Unconsolidated
Investments 3,150 (1,455) 5,859 (275) 8,755 352
Intersegment Revenues 352 280 421 616 602 943
21,785 18,112 44,280 39,652 87,141 94,127
EXPENSES:
Operations and maintenance 14,874 15,947 31,486 33,223 66,564 71,136
Selling, general and
administrative 1,044 558 1,866 1,372 4,051 3,498
Taxes other than income taxes 451 463 882 983 1,730 1,970
Depreciation, depletion and
amortization 784 738 1,568 1,478 3,265 2,799
17,153 17,706 35,802 37,056 75,610 79,403
INCOME FROM INDEPENDENT POWER
OPERATIONS 4,632 406 8,478 2,596 11,531 14,724
Exhibit 99c
NON-UTILITY OPERATIONS (continued)
Quarter Ended Six Months Ended 12 Months Ended
June 30, June 30, June 30,
1996 1995 1996 1995 1996 1995
Thousands of Dollars
TELECOMMUNICATIONS:
REVENUES:
Revenues 6,435 5,167 12,664 10,740 25,101 21,619
Intersegment Revenues 108 (32) 177 169 384 727
6,543 5,135 12,841 10,909 25,485 22,346
EXPENSES:
Operations and maintenance 4,335 3,346 8,499 7,297 16,723 15,156
Selling, general and
administrative 1,427 1,181 2,723 2,276 5,135 4,519
Taxes other than income taxes 101 82 192 163 371 307
Depreciation, depletion and
amortization 212 189 435 377 862 772
6,075 4,798 11,849 10,113 23,091 20,754
INCOME FROM TELECOMMUNICATIONS
OPERATIONS 468 337 992 796 2,394 1,592
OTHER OPERATIONS:
REVENUES:
Revenues 318 872 583 1,582 1,923 3,672
Intersegment revenues 286 275 409 360 748 161
604 1,147 992 1,942 2,671 3,833
EXPENSES:
Operations and maintenance 291 540 555 945 1,220 2,017
Selling, general and
administrative 1,365 (76) 1,300 100 2,047 442
Taxes other than income taxes
Depreciation, depletion and
amortization 165 223 339 438 841 1,028
1,821 687 2,194 1,483 4,108 3,487
INCOME FROM OTHER OPERATIONS (1,217) 460 (1,202) 459 (1,437) 346
INTEREST EXPENSE AND OTHER INCOME:
Interest 1,051 387 1,980 2,735 3,863 3,507
Other (income) deductions - net (1,414) (1,233) (2,343) (3,191) (9,428) (9,773)
(363) (846) (363) (456) (5,565) (6,266)
INCOME (LOSS) BEFORE INCOME TAXES 8,748 3,906 24,831 5,187 (19,082) 54,446
INCOME TAXES 2,285 104 7,061 (1,980) (13,431) 11,549
NON-UTILITY NET INCOME (LOSS) $ 6,463 $ 3,802 $ 17,770 $ 7,167 $ (5,651) $ 42,897
</TABLE>
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: July 24, 1996
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