__________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
__________________________________
For the fiscal year ended December 31, 1995
ENTECH, INC.
DEFERRED SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
THE MONTANA POWER COMPANY
40 EAST BROADWAY
BUTTE, MT 59701
Item 1. Changes in the Plan
The Entech, Inc. Deferred Savings Plan was amended and restated
in 1989 as The Entech, Inc. Deferred Savings and Employee Stock
Ownership Plan to reflect the merger of the Entech, Inc. Deferred
Savings Plan and that portion of the Employee Stock Ownership
Plan of The Montana Power Company and Subsidiaries attributable
to employees of Entech, Inc. Management applied for, and
received a favorable determination letter in 1994.
Item 2. Changes in Investment Policy
No changes have been made to the Plan's investment policy in
1995.
Item 3. Contributions to the Leveraged
Employee Stock Ownership Plan Fund
Entech, Inc., contributed $381,404 in 1995 to the Plan's
Leveraged ESOP Fund.
Item 4. Participating Employees
There were 410 employees and retirees participating in the
Entech, Inc. Deferred Savings and Employee Stock Ownership Plan
at December 31, 1995.
Item 5. Administration of the Plan
The Plan is administered by the seven-member Retirement Plan
Committee (Committee) appointed by, and serving at the pleasure
of, the Board of Directors of Entech, Inc. No compensation was
paid to the members of the Committee by the Plan. The members of
the Committee, each of whose address is c/o The Montana Power
Company, 40 East Broadway, Butte, Montana 59701, are as follows:
Positions or Offices Held
With
The Montana Power Company
and Its Subsidiaries
Jerrold P. Pederson Administrator Vice President -
Chief Financial
Officer
Richard F. Cromer Member President and Chief Operating
Officer,
Continental Energy
Services, Inc.
Robert P. Gannon Member President and
Chief Operating Officer,
Utility Division
John S. Miller Member Controller, Utility Division
Arthur K. Neill Member Executive Vice President -
Utility
Services, Utility Division
James J. Murphy Member President, Entech, Inc.
Ellen M. Senechal Member Vice President and Treasurer,
Entech, Inc.
-1-
Certain members of the Committee are also directors or officers
of certain subsidiaries of The Montana Power Company.
Item 6. Custodian of Investments
The Northern Trust Company, Fifty South LaSalle Street, Chicago,
Illinois 60675 is the Trustee of the Plan. Ark Capital
Management Company, Inc., manages one hundred percent of the Bond
Fund and approximately fifty percent of the Stock Fund. INVESCO
Capital Management, Inc., manages approximately fifty percent of
the Stock Fund. The Trustee and the money managers are
responsible for the safekeeping and investment of all
contributions made to the Plan. There is no specific coverage by
any bond furnished by the Trustee or either money manager in
connection with the custody of the security investments or other
assets of the Plan. No fees are paid out of the Plan.
Item 7. Reports to Participating Employees
Summary Annual Reports will be made directly to participating
employees for the fiscal year 1995 with respect to the operations
of the Plan. These reports present the basic financial
statements and the employees' rights to additional information.
Statements of the status of individual accounts under the Plan
have been sent directly to the employees.
Item 8. Investment of Master Trust Funds
(a) The aggregate dollar amounts of brokerage commissions paid
by the Master Trust were $102,565, $104,437, $95,182 for the
years 1995, 1994 and 1993, respectively. None of these
commissions were paid to any broker which is an affiliated
person of the Plan or their investment advisor, principal
underwriters or to an affiliated person of any such person.
(b) SEI Evaluation Services provided reports on the performance
of the Master Trust investment managers and received
brokerage fees of $63,152 and $24,065 in 1995 and 1994,
respectively.
-2-
Item 9. Financial Statements
Entech, Inc.
Deferred Savings and
Employee Stock Ownership Plan
Index to Financial Statements
Page
Report of Independent Accountants 4
Plan Financial Statements:
Statement of Net Assets Available for Benefits
at December 31, 1995 and 1994 5 through 6
Statement of Changes in Net Assets Available for
Benefits for the three years ended December 31, 1995 7
through 9
Notes to Financial Statements 10 through 21
Retirement Plan Committee Authorization 22
Consent of Independent Accountants 23
Note: All other schedules are omitted because they are not
applicable or the required information is shown in the Plan's
financial statements.
-3-
Report of Independent Accountants
To the Participants and Retirement Plan Committee
of the Entech, Inc. Deferred Savings and
Employee Stock Ownership Plan
In our opinion, the accompanying statements of net assets
available for benefits, with fund information and the related
statements of changes in net assets available for benefits, with
fund information present fairly, in all material respects, the
net assets available for benefits of the Entech, Inc. Deferred
Savings and Employee Stock Ownership Plan at December 31, 1995
and 1994, and the changes in net assets available for benefits
for each of the three years in the period ended December 31,
1995, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of
the plan administrator; our responsibility is to express an
opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed
above.
Our audit was performed for the purpose of forming an opinion on
the basic financial statements taken as a whole. The fund
information in the statements of net assets available for
benefits and the statements of changes in net assets available
for benefits is presented for purposes of additional analysis
rather than to present the net assets available for plan benefits
and changes in net assets available for benefits of each fund.
The fund information has been subjected to the auditing
procedures applied in the audits of the basic financial
statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a
whole.
PRICE WATERHOUSE LLP
Portland, Oregon
March 31, 1996
-4-
<TABLE>
<CAPTION>
ENTECH, INC. DEFERRED SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
December 31, 1995_________________________________
Company Stock Fund
Allocated Unallocated
to Leveraged
Common Fixed
Employees ESOP
Bond Fund Stock Fund Rate Fund
ESOP Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Cash $ 0 $ 23,722 $ 17,192 $
492,704 $ 192,283 $ 0 $ 725,901
Units held in the Master Trust at
current value (Notes 2 and 3):
The Montana Power Company Stock Fund 3,916,746 2,142,906
6,059,652
Bond Fund 396,113
396,113
Equity Fund 4,919,602
4,919,602
Fixed Rate Fund
2,137,645 2,137,645
Employee Stock Ownership Plan Fund 1,015,849
1,015,849
Contributions Receivable 102,149 14,850 150,844
51,584 319,427
Dividends and Interest Receivable 53,886 60,155
17,775 131,816
Loans Receivable
43,502 292,544 414,530
750,576
Total Assets 3,970,632 2,328,932
471,657 5,855,694 2,796,042
1,033,624 16,456,581
Liabilities:
Note Payable to The Montana Power Company 2,501,517
2,501,517
Net Assets Available for Benefits $3,970,632 $ (172,585) $
471,657 $5,855,694 $2,796,042
$1,033,624 $13,955,064
</TABLE>
The accompanying notes are an integral part of this statement.
-5-
<TABLE>
<CAPTION>
ENTECH, INC. DEFERRED SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
December 31, 1994________________________________
Company Stock Fund
Allocated Unallocated
to Leveraged
Common Fixed
Employees ESOP
Bond Fund Stock Fund Rate Fund
ESOP Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Cash $ 0 $ 38,012 $ 8,302 $ 203,380
$ 92,891 $ 195 $ 342,780
Units held in the Master Trust at
current value (Notes 2 and 3):
The Montana Power Company Stock Fund 3,427,754 2,413,929
5,841,683
Bond Fund 378,663
378,663
Equity Fund 3,405,077
3,405,077
Fixed Rate Fund
2,023,881 2,023,881
Employee Stock Ownership Plan Fund 997,566
997,566
Contributions Receivable 98,111 11,410
95,156 36,957 241,634
Dividends and Interest Receivable 43,793 60,778
17,533 122,104
Loans Receivable
42,550 242,641 333,990
619,181
Total Assets 3,471,547 2,610,830
440,925 3,946,254 2,487,719
1,015,294 13,972,569
Liabilities:
Note Payable to The Montana Power Company 2,666,343
2,666,343
Net Assets Available for Benefits $3,471,547 $ (55,513)
$440,925 $3,946,254 $2,487,719
$1,015,294 $11,306,226
</TABLE>
The accompanying notes are an integral part of this statement.
-6-
<TABLE>
<CAPTION>
ENTECH, INC. DEFERRED SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
Year ended
December 31, 1995___________________________
Company Stock Fund
Allocated Unallocated
to Leveraged
Common Fixed
Employees ESOP
Bond Fund Stock Fund Rate Fund
ESOP Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends, Interest, and Realized
Gains and Losses $ 215,370 $ 244,074 $ 61,516 $
542,813 $ 228,775 $ 70,039 $
1,362,587
Net Appreciation (Depreciation) in
Current Value of Investments (63,695) (39,678)
35,873 886,850 (15,788) 803,562
Contributions:
Company 381,404
381,404
Participants 54,737 535,149 204,368
794,254
Allocation of Montana Power Company
Stock to Participants (Note 1) 472,243 (472,243)
0
Transfers from Other Funds 1,031
205,584 72,650
279,265
Total Additions 623,918 113,557 153,157
2,170,396 505,793 54,251
3,621,072
Participants' Withdrawals at
Current Value:
Cash 59,439 202,519 39,627
301,585
The Montana Power Company Stock 124,833 35,921
160,754
Transfers to Other Funds 62,986 58,437 157,843
279,266
Note Payable, Interest
Payments (Note 5) 230,629
230,629
Total Deductions 124,833 230,629 122,425
260,956 197,470 35,921
972,234
Net Increase (Decrease) 499,085 (117,072)
30,732 1,909,440 308,323
18,330 2,648,838
Net Assets Available for Benefits:
Beginning of Year 3,471,547 (55,513)
440,925 3,946,254 2,487,719
1,015,294 11,306,226
End of Year $3,970,632 $(172,585)
$471,657 $5,855,694 $2,796,042
$1,033,624 $13,955,064
</TABLE>
The accompanying notes are an integral part of this statement.
-7-
<TABLE>
<CAPTION>
ENTECH, INC. DEFERRED SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
Year ended
December 31, 1994
Company Stock Fund
Allocated Unallocated
to Leveraged
Common Fixed
Employees ESOP
Bond Fund Stock Fund Rate Fund
ESOP Fund Total
<S> <C> <C> <C> <C> <C> <C>
<C>
Investment Income:
Dividends, Interest, and Realized
Gains and Losses $ 172,241 $ 256,473 $ 5,710 $
314,666 $ 130,935 $ 69,271 $ 949,296
Net Appreciation (Depreciation) in
Current Value of Investments (395,032) (487,486) (15,651)
(200,897) (116,997) (1,216,063)
Contributions:
Company 358,489
358,489
Participants 59,687 475,975 192,235
727,897
Allocation of Montana Power Company
Stock to Participants (Note 1) 413,260 (413,260)
0
Transfers from Other Funds 48,226
105,141 13,154 166,521
Total Additions 190,469 (285,784) 97,972 694,885
336,324 (47,726) 986,140
Participants' Withdrawals at
Current Value:
Cash 29,565 157,974 73,317
260,856
The Montana Power Company Stock 95,591
27,335 122,926
Transfers to Other Funds 15,687 7,481 143,352
2,091 168,611
Note Payable, Interest
Payments (Note 5) 244,960
244,960
Total Deductions 95,591 244,960 45,252
165,455 216,669 29,426
797,353
Net Increase (Decrease) 94,878 (530,744) 52,720 529,430
119,655 (77,152) 188,787
Net Assets Available for Benefits:
Beginning of Year 3,376,669 475,231 388,205
3,416,824 2,368,064 1,092,446
11,117,439
End of Year $3,471,547 $ (55,513) $440,925 $3,946,254
$2,487,719 $1,015,294 $11,306,226
</TABLE>
The accompanying notes are an integral part of this statement.
-8-
<TABLE>
<CAPTION>
ENTECH, INC. DEFERRED SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
Year ended
December 31, 1993
Company Stock Fund
Allocated Unallocated
to Leveraged
Common Fixed
Employees ESOP
Bond Fund Stock Fund Rate Fund
ESOP Fund Total
<S> <C> <C> <C> <C> <C> <C>
<C>
Investment Income:
Dividends, Interest, and Realized
Gains and Losses $ 190,780 $ 230,681 $ 42,886 $
285,997 $ 141,280 $ 63,133 $
954,757
Net Appreciation (Depreciation) in
Current Value of Investments (97,544) (111,655) (10,051) 71,900
(28,387) (175,737)
Contributions:
Company 350,884
350,884
Participants 49,169 436,568 214,220
699,957
Allocation of Montana Power Company
Stock to Participants (Note 1) 302,147 (302,147)
0
Transfers from Other Funds 22,427
187,932
210,359
Total Additions 395,383 167,763 104,431
982,397 355,500 34,746
2,040,220
Participants' Withdrawals at
Current Value:
Cash 62,652 187,437 140,196
390,285
The Montana Power Company Stock 240,877
60,349 301,226
Transfers to other Funds 45,393 17,688
26,969 238,869 6,631
335,550
Note Payable, Interest
Payments (Note 5) 261,134
261,134
Total Deductions 286,270 261,134 80,340
214,406 379,065 66,980
1,288,195
Net Increase (Decrease) 109,113 (93,371) 24,091 767,991
(23,565) (32,234) 752,025
Net Assets Available for Benefits:
Beginning of Year 3,267,556 568,602 364,114
2,648,833 2,391,629 1,124,680
10,365,414
End of Year $3,376,669 $ 475,231 $388,205
$3,416,824 $2,368,064 $1,092,446
$11,117,439
</TABLE>
The accompanying notes are an integral part of this statement.
-9-
ENTECH, INC.
DEFERRED SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - Description of the Plan:
The Deferred Savings and Employee Stock Ownership Plan (Plan),
formerly known as the Deferred Savings Plan, was established by
Entech, Inc. to provide a means for regular savings and
investment by employees. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA).
Amendments
Previously, employees of Entech, Inc. participated in The Montana
Power Company Plan. Effective January 1, 1986, the Plan was
amended and restated into four separate plans. The Montana Power
Company (Company); Entech, Inc., a Montana Power Company
subsidiary; Western Energy Company and Northwestern Resources
Co., subsidiaries of Entech, Inc., established their own Deferred
Savings Plans. As of January 1, 1986, the assets of the Plan
effectively became The Montana Power Company Deferred Savings
Master Trust (Trust); see Note 3. A portion of the assets of the
Trust were then allocated back to the Plan based on participants'
equity at that date as measured by the Plan administrator.
On June 27, 1989, the Board of Directors of The Montana Power
Company authorized the merger of The Montana Power Company and
Subsidiaries Employee Stock Ownership Plan (ESOP) into the Plan.
Effective June 27, 1989, the Plan was amended and restated as
Entech, Inc. Deferred Savings and Employee Stock Ownership Plan
to reflect a merger and incorporate provisions permitting
acquisition loans. The assets of the ESOP have been transferred
into the Plan and are held in trust under the Plan.
Employee Contributions
Participation in the Deferred Savings portion of the Plan
(Savings Plan) is voluntary and an employee becomes eligible to
make contributions under the Savings Plan after completing
90 days of service. Participants may contribute from one to six
percent of eligible compensation to the Savings Plan based on
years of service subject to Internal Revenue Code (IRC)
limitations. These contributions are tax deferred under
Section 4O1(k) of the IRC.
In addition to the contributions that are matched by the Company
as discussed below, participants, regardless of their years of
service, may contribute an additional ten percent of eligible
compensation to the Savings Plan. These contributions are not
matched by the Company, nor are they tax deferred.
Company Contributions
As an incentive to thrift, the Company contributes a matched
contribution which is determined as follows:
From 90 days through 10th
anniversary of employment - 60% of participant's
contribution
From the start of the 11th
through 20th anniversary of
employment - 65% of participant's
contribution
After the 20th anniversary of
employment and beyond - 70% of participant's
contribution
-10-
Montana Power Company Stock is allocated to employees to
recognize contributions and dividends in employees' accounts in
the same manner as if the Plan had not been leveraged. In
addition, appreciation, if any, on the shares released from the
Unallocated Leveraged ESOP during the period is also allocated to
employees. The allocation to the employees is accomplished
through the transfer of 127,992 shares, on an annual basis, from
the Unallocated Leveraged ESOP at market price, at the time of
transfer, and the purchase of additional shares, in the market,
with cash contributions received from the Company. The Trust
repays the principal and interest on the debt obligation (Note 5)
by using the dividends on the unallocated shares and cash
contributions by the Company.
ESOP Contributions
Contributions to the ESOP Fund by the Company were based upon
investment tax credits claimed by the Company based upon its
property additions. Contributions to the ESOP Fund by the
Company are made to the trustee in the form of common stock of
the Company, valued at the average closing prices of the common
stock on the 20 consecutive trading days immediately preceding
the date upon which the additional investment credit was claimed.
Participants were eligible to make matching contributions in the
form of cash or payroll deductions. Effective December 31, 1989,
the Company had fully utilized all of its available investment
tax credits and no further contributions to the ESOP Fund were
made.
Vesting
Participants are immediately 100 percent vested in their personal
contributions and become 100 percent vested in Company
contributions after 90 days of service.
Investment Options
Upon enrollment in the Plan, participants may elect to have their
contributions invested in a bond fund, common stock fund, or a
fixed rate fund, or any combination thereof. Company
contributions are invested in a stock fund consisting of the
Company's common stock.
Participants may elect to change their investment options
quarterly.
Payments of Benefits
Withdrawals from the Bond, Common Stock, and Fixed Rate Funds are
paid in cash. Withdrawals from the Company Stock and ESOP Funds
are paid in shares, with fractional shares and final dividends on
withdrawn shares paid in cash. Participants are permitted to
borrow money out of their individual accounts.
Financial Statement Preparation
The financial statements of the Plan have been prepared by
allocating the Master Trust total assets and investment income
based on the Plan's units of participation at December 31 and the
yearly average, respectively, in the Master Trust in proportion
to the total units of participation at December 31 and the yearly
average, respectively, in the Master Trust. The unit represents
a right to share in the assets and earnings of the Master Trust.
The number of units held by each Plan is a function of
contributions and withdrawals throughout the year.
Plan Administration
Administration of the Plan is performed by a Retirement Plan
Committee (Committee) appointed by the Board of Directors of The
Montana Power Company. The Northern Trust Company is the Plan's
trustee.
-11-
Plan Termination
Although it is not expressed any intent to do so, the Company has
the right under Employee Retirement Income Security Act (ERISA)
to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. If the Plan is
terminated, the trustee would continue to hold, invest and
administer the trust funds in accordance with the provisions of
the trust agreement and make distributions from the trust in
accordance with the provisions of the Plan pursuant to
instructions filed with the trustee by the Committee upon such
termination.
NOTE 2 - Summary of Accounting Policies:
Basis of Accounting
The financial statements of the Plan are prepared under the
accrual method of accounting.
Valuation of Master Trust Investments
Assets invested in the Company Stock, Bond, Common Stock and ESOP
Funds have been recorded at their current value as determined by
quoted market prices based on reported closing prices at December
31 on national securities exchanges or other markets, as
applicable, and the unrealized appreciation or depreciation has
been reflected in the Statement of Changes in Net Assets
Available for Benefits, with Fund Information. The investment
contracts with various insurance companies, are valued at the
contract value which represents participants' contributions made
under the contracts plus accumulated interest at the contract
rate.
Payment of Benefits
Benefits are recorded when paid.
Contributions
Participant contributions are transferred to the trustee or
accrued in the period during which participant payroll deductions
are made.
Plan Expenses
All expenses attributable to the administration of the Plan and
the expenses of the trustee are paid by the Company.
Reclassifications
Certain reclassifications have been made to the prior year's
amounts to make them comparable to the 1995 presentation. These
changes had no impact on previously reported changes in net
assets available for benefits.
-12-
<TABLE>
<CAPTION>
Note 3 - Financial Statements for the Master Trust:
Statement of Net Assets Available for Benefits
December 31, 1995_________________________________
Company Stock Fund
Allocated Unallocated
to Leveraged
Common Fixed
Employees ESOP
Bond Fund Stock Fund Rate Fund
ESOP Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Cash $ 0 $ 229,962 $ 216,691 $
6,767,192 $ 2,773,904 $ 0 $ 9,987,749
Investments, at current value:
The Montana Power Company Stock Fund:
Allocated Shares - 2,820,125 Shares
(Cost - $55,924,604) 63,906,963
63,906,963
Unallocated Shares - 1,183,926 Shares
(Cost - $24,691,458) 26,786,325
26,786,325
The Montana Power Company Deferred Savings
Plan:
Bond Fund (cost - $4,731,327) 4,992,761
4,992,761
Common Stock Fund (cost - $53,287,188)
67,569,721 67,569,721
Fixed Rate Fund (cost approximates
current value)
30,837,990 30,837,990
The Montana Power Company Employee Stock
Ownership Plan (ESOP) Fund -
750,831 shares
(cost - $15,025,290) 16,987,070
16,987,070
Contributions Receivable 1,198,550 74,312 1,534,642
659,498 3,467,002
Dividends and Interest Receivable 849,687 751,934
300,332 1,901,953
Loans Receivable
744,616 5,390,818 5,584,844
11,720,278
Total Assets 64,756,650 28,966,771
6,028,380 81,262,373 39,856,236
17,287,402 238,157,812
Liabilities:
Note Payable to The Montana Power
Company 31,268,958
31,268,958
Net Assets Available for Benefits $64,756,650 $(2,302,187) $
6,028,380 $81,262,373 $39,856,236
$17,287,402 $206,888,854
</TABLE>
-13-
<TABLE>
<CAPTION>
Note 3 - Financial Statements for the Master Trust:
Statement of Net Assets Available for Benefits
December 31, 1994_________________________________
Company Stock Fund
Allocated Unallocated
to Leveraged
Common Fixed
Employees ESOP
Bond Fund Stock Fund Rate Fund
ESOP Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Cash $ 0 $ 530,802 $ 94,722 $
2,911,420 $ 1,355,039 $ 3,270 $ 4,895,253
Investments, at current value:
The Montana Power Company Stock Fund:
Allocated Shares - 2,538,795 Shares
(Cost - $49,378,334) 58,501,936
58,501,936
Unallocated Shares - 1,311,918 Shares
(Cost - $27,360,805) 30,174,114
30,174,114
The Montana Power Company Deferred Savings
Plan:
Bond Fund (cost - $4,503,756) 4,341,482
4,341,482
Common Stock Fund (cost - $47,523,495)
49,544,814 49,544,814
Fixed Rate Fund (cost approximates
current value)
29,520,685 29,520,685
The Montana Power Company Employee Stock
Ownership Plan (ESOP) Fund -
726,922 shares (cost - $14,363,196)
16,712,777 16,712,777
Contributions Receivable 1,170,737 69,485 665,262
315,364 2,220,848
Dividends and Interest Receivable 780,496 759,715
290,724 1,830,935
Loans Receivable
581,716 4,402,413 4,892,096
9,876,225
Total Assets 59,282,432 32,635,368
5,087,405 57,523,909 36,083,184
17,006,771 207,619,069
Liabilities:
Note Payable to The Montana Power
Company 33,329,285
33,329,285
Net Assets Available for Benefits $59,282,432 $ (693,917)
$5,087,405 $57,523,909 $36,083,184
$17,006,771 $174,289,784
</TABLE>
-14-
<TABLE>
<CAPTION>
Note 3 - Financial Statements for the Master Trust (continued):
Statement of Changes in Net Assets Available for Benefits
Year ended
December 31, 1995____________________________
Company Stock Fund
Allocated Unallocated
to Leveraged
Common Fixed
Employees ESOP
Bond Fund Stock Fund Rate Fund
ESOP Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends, Interest and Realized
Gains and Losses $ 3,306,105 $ 3,052,198 $
546,900 $ 7,153,350 $ 3,187,082 $
1,188,899 $ 18,434,534
Net Appreciation (Depreciation) in
Current Value of Investments (1,004,653) (495,969)
423,707 12,270,330 (266,754) 10,926,661
Contributions:
Company 4,684,083
4,684,083
Participants 541,310
5,816,376 2,747,549 9,105,235
Allocation of Montana Power Company
Stock to Participants (Note 1) 5,965,716 (5,965,716)
0
Transfers from Other Funds
369,018 2,685,793 2,251,535
5,306,346
Total Additions 8,267,168 1,274,596
1,880,935 27,925,849 8,186,166
922,145 48,456,859
Participants' Withdrawals at Current
Value:
Cash 322,428
2,195,139 1,716,545 4,234,112
The Montana Power Company Stock -
120,738 Shares 2,792,950
641,514 3,434,464
Transfers to other Funds 617,532
1,992,246 2,696,569 5,306,347
Note Payable, Interest
Payments (Note 5) 2,882,866
2,882,866
Total Deductions 2,792,950 2,882,866
939,960 4,187,385 4,413,114
641,514 15,857,789
Net Increase (Decrease) 5,474,218 (1,608,270)
940,975 23,738,464 3,773,052
280,631 32,599,070
Net Assets Available for Benefits:
Beginning of Year 59,282,432 (693,917)
5,087,405 57,523,909 36,083,184
17,006,771 174,289,784
End of Year $64,756,650 $(2,302,187)
$6,028,380 $81,262,373 $39,856,236
$17,287,402 $206,888,854
</TABLE>
-15-
<TABLE>
<CAPTION>
Note 3 - Financial Statements for the Master Trust
(continued):
Statement of Changes in Net Assets Available for Benefits
Year ended
December 31, 1994
Company Stock Fund
Allocated Unallocated
to Leveraged
Common Fixed
Employees ESOP
Bond Fund Stock Fund Rate Fund
ESOP Fund Total
<S> <C> <C> <C> <C> <C> <C>
<C>
Investment Income:
Dividends, Interest and Realized
Gains and Losses $ 2,795,736 $ 3,205,914 $
68,850 $ 4,537,372 $ 1,901,901 $
1,142,849 $ 13,652,622
Net Appreciation (Depreciation) in
Current Value of Investments (6,411,980) (3,863,760) (188,714)
(2,896,871) (1,939,998) (15,301,323)
Contributions:
Company 4,533,101
4,533,101
Participants 601,441 5,541,885
2,559,412 8,702,738
Allocation of Montana Power Company
Stock to Participants (Note 1) 5,800,395 (5,800,395)
0
Transfers from Other Funds
411,720 1,898,901 868,718
2,091 3,181,430
Total Additions 2,184,151 (1,925,140)
893,297 9,081,287 5,330,031
(795,058) 14,768,568
Participants' Withdrawals at Current
Value:
Cash 74,882
1,215,218 1,039,745
2,329,845
The Montana Power Company Stock -
51,142 Shares 967,782
237,229 1,205,011
Transfers to other Funds 584,666 719,273
1,875,307 2,091 3,181,337
Note Payable, Interest
Payments (Note 5) 3,062,000
3,062,000
Total Deductions 967,782 3,062,000
659,548 1,934,491 2,915,052
239,320 9,778,193
Net Increase (Decrease) 1,216,369 (4,987,140)
233,749 7,146,796 2,414,979
(1,034,378) 4,990,375
Net Assets Available for Benefits:
Beginning of Year 58,066,063 4,293,223
4,853,656 50,377,113 33,668,205
18,041,149 169,299,409
End of Year $59,282,432 $ (693,917) $
5,087,405 $57,523,909 $36,083,184
$17,006,771 $174,289,784
</TABLE>
-16-
<TABLE>
<CAPTION>
Note 3 - Financial Statements for the Master Trust
(continued):
Statement of Changes in Net Assets Available for Benefits
Year ended
December 31, 1993
Company Stock Fund
Allocated Unallocated
to Leveraged
Common Fixed
Employees ESOP
Bond Fund Stock Fund Rate Fund
ESOP Fund Total
<S> <C> <C> <C> <C> <C> <C>
<C>
Investment Income:
Dividends, Interest and Realized
Gains and Losses $ 2,968,806 $ 2,883,521 $
505,415 $ 4,213,860 $ 1,886,316 $
1,078,560 $ 13,536,478
Net Appreciation (Depreciation)
in Current Value of Investments (1,609,891) (1,395,693) (118,455)
1,059,369 (448,236) (2,512,906)
Contributions:
Company 4,285,932
4,285,932
Participants 517,202 4,935,261
2,719,043 8,171,506
Allocation of Montana Power Company
Stock to Participants (Note 1) 4,345,391 (4,345,391)
0
Transfers from Other Funds 70,847
351,123 2,481,279 451,753
3,355,002
Total Additions 5,775,153 1,428,369
1,255,285 12,689,769 5,057,112
630,324 26,836,012
Participants' Withdrawals at Current
Value:
Cash 124,057
1,729,309 1,570,107 3,423,473
The Montana Power Company Stock -
99,971 Shares 2,391,830
333,569 2,725,399
Transfers to Other Funds 70,847 458,089 428,712
2,397,354 3,355,002
Note Payable, Interest
Payments (Note 5) 3,264,175
3,264,175
Total Deductions 2,462,677 3,264,175
582,146 2,158,021 3,967,461
333,569 12,768,049
Net Increase (Decrease) 3,312,476 (1,835,806)
673,139 10,531,748 1,089,651
296,755 14,067,963
Net Assets Available for Benefits:
Beginning of Year 54,753,587 6,129,029
4,180,517 39,845,365 32,578,554
17,744,394 155,231,446
End of Year $58,066,063 $ 4,293,223 $
4,853,656 $50,377,113 $33,668,205
$18,041,149 $169,299,409
</TABLE>
-17-
NOTE 3 - Financial Statements for the Master Trust (Continued):
Net Increase (Decrease) in Current Value of Investments
The following table sets forth the net increase (decrease) in the current
value of Master Trust investments for the three years ended December 31,
1995. Unrealized appreciation or depreciation recognized in prior years on
investments sold is removed from unrealized appreciation or depreciation in
the year of the sale as it is reflected in the realized gain or loss
amounts in the year of the sale in this table. Cost of securities sold is
determined on the basis of average cost. Withdrawals from the Company
Stock and ESOP Funds are paid in shares and the realized gain or loss is
determined as the difference between average cost and market value.
<TABLE>
<CAPTION>
Year Ended December 31, 1995
Company Common ESOP
Stock Fund Bond Fund
Stock Fund Fund
<S> <C> <C> <C> <C>
Unrealized Appreciation of
Plan Investments:
Beginning of Year $ 11,936,911 $ (162,273) $
2,021,319 $ 2,349,581
End of Year 9,975,592 261,434
14,291,649 1,962,260
Net Unrealized
Appreciation/
(Depreciation) (1,961,319) 423,707
12,270,330 (387,321)
Unrealized Gain/(Loss) of
Security Disbursements
Less Receipts 460,697
120,567
Realized Gain 6,740 93,038
4,594,834 823
Net Increase (Decrease)
in Current Value $ (1,493,882) $ 516,745 $
16,865,164 $ (265,931)
</TABLE>
-18-
NOTE 3 - Financial Statements for the Master Trust (Continued):
<TABLE>
<CAPTION>
Year Ended December 31, 1994
Company Common ESOP
Stock Fund Bond Fund
Stock Fund Fund
<S> <C> <C> <C> <C>
Unrealized Appreciation of
Plan Investments:
Beginning of Year $ 22,395,126 $ 26,441 $
4,918,189 $ 4,289,579
End of Year 11,936,911 (162,273)
2,021,319 2,349,581
Net Unrealized
Appreciation/
(Depreciation) (10,458,215) (188,714)
(2,896,870) (1,939,998)
Unrealized Gain/Loss of
Security Disbursements
Less Receipts 182,475
Realized Gain 1,294 (232,783)
2,955,939 648
Net Increase (Decrease)
in Current Value $(10,274,446) $ (421,497) $
59,069 $ (1,939,350)
Year Ended December 31, 1993
Company Common ESOP
Stock Fund Bond Fund
Stock Fund Fund
Unrealized Appreciation of
Plan Investments:
Beginning of Year $ 26,242,486 $ 144,896 $
3,858,820 $ 4,737,815
End of Year 22,395,126 26,441
4,918,189 4,289,579
Net Unrealized
Appreciation/
(Depreciation) (3,847,360) (118,455)
1,059,369 (448,236)
Unrealized Gain/(Loss) of
Security Disbursements
Less Receipts 841,776
Realized Gain 11,523 261,685
2,999,414 1,413
Net Increase (Decrease)
in Current Value $ (2,994,061) $ 143,230 $
4,058,783 $ (446,823)
</TABLE>
-19-
NOTE 4 - Tax Status:
The Plan, as amended to comply with the ERISA, has received a
determination letter from the Internal Revenue Service (IRS) that
the Plan is qualified under Internal Revenue Code Section 401(a)
and the trust is exempt from taxation under Section 501(a).
NOTE 5 - Plan Leveraging and Notes Payable:
On January 22, 1990, the Company borrowed $40,000,000 at an
interest rate of 9.2 percent to be repaid in equal installments
over 15 years. The proceeds of this loan were lent on similar
terms to the Trust which purchased 1,922,297 shares of the
Company's common stock on the open market. The stock will be
used to fund the Company's future matching requirements under the
Deferred Savings portion of the Trust. The shares purchased by
the Trust will be allocated to participants in equal quarterly
amounts over the 15-year term of the loan. Debt principal and
interest payments are made quarterly utilizing Company
contributions received under the Trust, plus dividends paid on
the unallocated shares purchased by the Trust.
On December 31, 1995, 1,183,926 shares remained unallocated.
Principal payments for 1995, 1994, and 1993 totaled $2,014,004,
$1,838,899, and $1,640,400 respectively. The principal payments
paid by the Plan do not affect net assets of the trust. Such
payments reduce both Trust assets and liabilities by an identical
amount.
The Trust is required to make the following principal payments to
the Company on its note payable as follows:
1996 2,205,783
1997 2,415,825
1998 2,645,866
1999 2,897,814
2000 3,173,751
Thereafter 17,226,904
Interest expense for the Trust for 1995, 1994 and 1993 totaled
$2,882,866, $3,062,000 and $3,264,175 respectively; including
accrued interest of $703,016, $749,339 and $791,633 respectively.
-20-
NOTE 6 - Significant Investments of the Master Trust:
At December 31, 1995, investments representing five percent or
more of the Plan's net assets are as follows:
Description
Current Value
The Montana Power Company Common Stock $ 7,075,501
-21-
Pursuant to the requirements of the Securities Exchange Act of
1934, Entech, Inc. Retirement Plan Committee has duly caused this
annual report to be signed by the undersigned thereunto duly
authorized.
ENTECH, INC. DEFERRED SAVINGS AND
EMPLOYEE STOCK OWNERSHIP PLAN
Date: June 27, 1996 By JERROLD P.
PEDERSON______________________
Jerrold P. Pederson
Vice President - Chief Financial
Officer
-22-
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the
Registration Statements on Form S-8 (No.s 33-24952 and 33-28096)
of The Montana Power Company of our report dated March 31, 1996
appearing on page 4 of this Form 11-K relating to the Entech,
Inc. Deferred Savings and Employee Stock Ownership Plan.
PRICE WATERHOUSE LLP
Portland, Oregon
June 27, 1996
-23-
R:\600\EDGENT1.DOC
