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) October 22, 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.
Third Quarter Net Income
Net income for the quarter ended September 30, 1996 was 30 cents per
share, compared with 26 cents per share for the third quarter 1995. Non-
Utility earnings increased primarily due to the October 1995 closure of the
Colorado coal mine and improved financial performance at the Jewett lignite
mine in Texas. The increase was partially offset by decreased coal sales at
the Rosebud mine resulting from the expiration of a Midwestern coal contract
and reduced generation at the Colstrip units. Non-Utility earnings also
benefited from continued growth from independent power project investments.
Consolidated net income for the nine months ended September 30, 1996 was
$1.23 per share compared with 97 cents per share for the same period last
year. Increased rates, 10% colder weather, continued customer growth and
reduced power supply expenses contributed to an increase in Utility earnings.
This increase was larger than the 13 cents per share positive impact recorded
in 1995 for a coal contract arbitration decision. The 24 cents per share
increase in Non-Utility earnings is due primarily to growth in earnings from
independent power investments and the absence of losses at the Colorado mine
and the coal arbitration decision recorded in 1995. The increase was partially
offset by the decrease in coal sales mentioned above.
Consolidated net income for the twelve months ended September 30, 1996
decreased 61 cents per share primarily as a result of an 85 cents per share
charge due to the adoption of a new financial accounting standard and the
writedown of the Colorado mine in the fourth quarter of 1995. Also, the
absence of significant power project development fees recorded in the 1995
period contributed to the decrease. Higher Utility revenues, reduced power
supply expenses for all of the thermal units and increased earnings from
independent power investments moderated these decreases.
For comparative purposes, the following table shows the breakdown of
consolidated net income per share:
Quarter Ended
1996 1995
Utility Operations $ 0.07 $ 0.08
Non-Utility Operations 0.23 0.18
Consolidated $ 0.30 $ 0.26
Nine Months Ended
1996 1995
Utility Operations $ 0.68 $ 0.66
Non-Utility Operations 0.55 0.31
Consolidated $ 1.23 $ 0.97
Twelve Months Ended
1996 1995
Utility Operations $ 1.24 $ 1.15
Non-Utility Operations (0.06) 0.64
Consolidated $ 1.18 $ 1.79
ITEM 7. Exhibits.
99a Consolidated Statements of Income for the Quarters Ended September 30,
1996 and 1995, Nine Months Ended September 30, 1996 and 1995, and for the
Twelve Months Ended September 30, 1996 and 1995.
99b Utility Operations Schedule of Revenues and Expenses for the Quarters
Ended September 30, 1996 and 1995, Nine Months Ended September 30, 1996
and 1995, and for the Twelve Months Ended September 30, 1996 and 1995.
99c Non-Utility Operations Schedule of Revenues and Expenses for the Quarters
Ended September 30, 1996 and 1995, Nine Months Ended September 30, 1996
and 1995, and for the Twelve Months Ended September 30, 1996 and 1995.
Exhibit Index
Exhibit Page
99a Consolidated Statements of Income for the Quarters Ended
September 30, 1996 and 1995, Nine Months Ended September 30,
1996 and 1995, and for the Twelve Months Ended September 30,
1996 and 1995. 6
99b Utility Operations Schedule of Revenues and Expenses for
the Quarters Ended September 30, 1996 and 1995, Nine Months
Ended September 30, 1996 and 1995, and for the Twelve Months
Ended September 30, 1996 and 1995. 7
99c Non-Utility Operations Schedule of Revenues and Expenses for
the Quarters Ended September 30, 1996 and 1995, Nine Months
Ended September 30, 1996 and 1995, and for the Twelve Months
Ended September 30, 1996 and 1995. 8-9
Exhibit 99a
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF INCOME
The Montana Power Company and Subsidiaries
Quarter Ended Nine Months Ended 12 Months Ended
September 30, September 30, September 30,
1996 1995 1996 1995 1996 1995
Thousands of Dollars
<S> <C> <C> <C> <C> <C> <C>
REVENUES $216,073 $217,407 $678,397 $683,347 $948,274 $972,717
EXPENSES:
Operations 89,058 100,268 279,711 309,386 391,150 430,477
Maintenance 18,360 16,900 47,019 52,922 62,384 68,894
Selling, general and
administrative 24,580 24,337 75,029 75,505 101,044 102,761
Taxes other than income taxes 21,747 24,580 64,561 69,640 84,780 95,178
Depreciation, depletion and
amortization 23,032 21,955 65,138 66,379 85,733 88,063
Writedowns of long-lived assets 74,297
176,777 188,040 531,458 573,832 799,388 785,373
INCOME FROM OPERATIONS 39,296 29,367 146,939 109,515 148,886 187,344
INTEREST EXPENSE AND OTHER INCOME:
Interest 12,803 11,012 36,438 32,635 47,459 43,119
Other (income) deductions - net (1,738) (3,622) (4,146) (6,580) (8,270) (8,843)
11,065 7,390 32,292 26,055 39,189 34,276
INCOME TAXES 10,002 5,825 41,817 25,407 37,984 49,591
NET INCOME 18,229 16,152 72,830 58,053 71,713 103,477
DIVIDENDS ON PREFERRED STOCK 1,807 1,807 5,420 5,420 7,227 7,227
NET INCOME AVAILABLE FOR
COMMON STOCK $ 16,422 $ 14,345 $ 67,410 $ 52,633 $ 64,486 $ 96,250
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING (000) 54,632 54,243 54,634 53,986 54,608 53,864
NET INCOME PER SHARE OF
COMMON STOCK $ 0.30 $ 0.26 $ 1.23 $ 0.97 $ 1.18 $ 1.79
</TABLE>
Exhibit 99b
<TABLE>
<CAPTION>
UTILITY OPERATIONS
Quarter Ended Nine Months Ended 12 Months Ended
September 30, September 30, September 30,
1996 1995 1996 1995 1996 1995
Thousands of Dollars
ELECTRIC UTILITY:
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Revenues $ 99,716 $ 94,593 $305,013 $296,402 $430,609 $423,255
Intersegment revenues 1,011 1,209 4,526 4,437 5,902 5,895
100,727 95,802 309,539 300,839 436,511 429,150
EXPENSES:
Power supply 32,981 34,549 99,726 102,706 145,260 153,841
Transmission and distribution 8,347 7,478 23,368 20,612 29,671 27,284
Selling, general and
administrative 9,950 9,822 32,005 31,204 42,733 42,528
Taxes other than income taxes 11,459 11,532 34,878 34,807 43,374 45,262
Depreciation and amortization 12,719 10,627 35,814 31,878 46,441 42,053
75,456 74,008 225,791 221,207 307,479 310,968
INCOME FROM ELECTRIC OPERATIONS 25,271 21,794 83,748 79,632 129,032 118,182
NATURAL GAS UTILITY:
REVENUES:
Revenues (other than gas supply
cost revenues) 13,212 12,408 70,413 61,694 102,171 94,082
Gas supply cost revenues 1,489 1,920 15,469 15,306 21,822 21,036
Intersegment revenues 105 118 463 658 657 936
14,806 14,446 86,345 77,658 124,650 116,054
EXPENSES:
Gas supply costs 1,489 1,920 15,469 15,306 21,822 21,036
Other production, gathering and
exploration 2,230 1,949 6,921 7,139 9,425 9,552
Transmission and distribution 3,004 2,673 8,911 8,183 11,662 10,822
Selling, general and
administrative 3,812 4,162 12,494 13,035 16,620 17,371
Taxes other than income taxes 3,658 3,626 11,379 10,898 15,321 14,671
Depreciation, depletion and
amortization 3,135 2,692 8,995 8,093 11,696 10,603
17,328 17,022 64,169 62,654 86,546 84,055
INCOME (LOSS) FROM GAS
OPERATIONS (2,522) (2,576) 22,176 15,004 38,104 31,999
INTEREST EXPENSE AND OTHER INCOME:
Interest 12,040 11,178 35,091 33,076 46,046 43,915
Other (income) deductions - net (141) (1,455) (1,602) (4,232) (2,790) (5,378)
11,899 9,723 33,489 28,844 43,256 38,537
INCOME BEFORE INCOME TAXES 10,850 9,495 72,435 65,792 123,880 111,644
INCOME TAXES 5,206 3,244 29,960 24,806 49,201 42,815
UTILITY NET INCOME $ 5,644 $ 6,251 $ 42,475 $ 40,986 $ 74,679 $ 68,829
</TABLE>
<TABLE>
<CAPTION>
Exhibit 99c
NON-UTILITY OPERATIONS
Quarter Ended Nine Months Ended 12 Months Ended
September 30, September 30, September 30,
1996 1995 1996 1995 1996 1995
Thousands of Dollars
COAL:
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Revenues $ 43,941 $ 55,095 $113,650 $157,211 $163,685 $223,168
Intersegment revenues 8,916 8,501 21,949 15,015 32,594 26,925
52,857 63,596 135,599 172,226 196,279 250,093
EXPENSES:
Operations and maintenance 29,853 40,599 82,683 120,315 117,869 165,741
Selling, general and
administrative 5,611 6,743 16,166 21,307 22,718 29,286
Taxes other than income taxes 5,453 8,157 14,295 20,210 21,294 30,224
Depreciation, depletion and
amortization 1,693 3,072 3,914 9,319 5,782 12,587
Writedowns of long-lived assets 55,103
42,610 58,571 117,058 171,151 222,766 237,838
INCOME (LOSS) FROM COAL OPERATIONS 10,247 5,025 18,541 1,075 (26,487) 12,255
OIL AND NATURAL GAS:
REVENUES:
Revenues 28,684 25,363 87,153 72,841 114,343 97,629
Intersegment revenues 26 162 192 333 268 445
28,710 25,525 87,345 73,174 114,611 98,074
EXPENSES:
Operations and maintenance 17,921 15,419 53,372 43,142 70,755 56,601
Selling, general and
administrative 2,547 2,261 7,479 6,811 9,988 9,002
Taxes other than income taxes 616 672 2,374 1,986 2,721 2,686
Depreciation, depletion and
amortization 4,238 4,378 12,826 13,610 16,785 18,131
Writedowns of long-lived assets 19,194
25,322 22,730 76,051 65,549 119,443 86,420
INCOME (LOSS) FROM OIL AND NATURAL
GAS OPERATIONS 3,388 2,795 11,294 7,625 (4,832) 11,654
INDEPENDENT POWER:
REVENUES:
Revenues 18,773 20,170 56,773 59,481 76,386 85,802
Earnings from Unconsolidated
Investments 3,132 1,354 8,991 1,079 10,534 1,680
Intersegment Revenues 313 93 734 709 821 857
22,218 21,617 66,498 61,269 87,741 88,339
EXPENSES:
Operations and maintenance 16,375 17,332 47,861 50,556 65,605 68,604
Selling, general and
administrative 1,939 1,093 3,805 2,465 4,897 3,683
Taxes other than income taxes 480 511 1,362 1,494 1,700 2,015
Depreciation, depletion and
amortization 841 740 2,409 2,218 3,366 2,948
19,635 19,676 55,437 56,733 75,568 77,250
INCOME FROM INDEPENDENT
POWER OPERATIONS $ 2,583 $ 1,941 $ 11,061 $ 4,536 $ 12,173 $ 11,089
</TABLE>
<TABLE>
<CAPTION>
Exhibit 99c
NON-UTILITY OPERATIONS (continued)
Quarter Ended Nine Months Ended 12 Months Ended
September 30, September 30, September 30,
1996 1995 1996 1995 1996 1995
Thousands of Dollars
TELECOMMUNICATIONS:
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Revenues $ 6,505 $ 5,954 $19,169 $16,694 $25,652 $21,969
Intersegment Revenues 119 77 296 246 426 623
6,624 6,031 19,465 16,940 26,078 22,592
EXPENSES:
Operations and maintenance 4,470 4,117 12,969 11,414 17,075 15,275
Selling, general and
administrative 1,289 1,148 4,012 3,424 5,277 4,505
Taxes other than income taxes 80 82 272 245 370 320
Depreciation, depletion and
amortization 238 208 673 585 892 780
6,077 5,555 17,926 15,668 23,614 20,880
INCOME FROM TELECOMMUNICATIONS
OPERATIONS 547 476 1,539 1,272 2,464 1,712
OTHER OPERATIONS:
REVENUES:
Revenues 348 344 931 1,926 1,927 3,293
Intersegment revenues 169 142 578 502 774 233
517 486 1,509 2,428 2,701 3,526
EXPENSES:
Operations and maintenance 314 248 869 1,193 1,284 1,847
Selling, general and
administrative 253 87 1,553 187 2,214 266
Depreciation, depletion and
amortization 168 238 507 676 771 961
735 573 2,929 2,056 4,269 3,074
INCOME (LOSS) FROM OTHER
OPERATIONS (218) (87) (1,420) 372 (1,568) 452
INTEREST EXPENSE AND OTHER INCOME:
Interest 1,528 1,044 3,508 3,779 4,346 4,018
Other (income) deductions - net (2,361) (3,376) (4,704) (6,567) (8,413) (8,280)
(833) (2,332) (1,196) (2,788) (4,067) (4,262)
INCOME (LOSS) BEFORE INCOME TAXES 17,380 12,482 42,211 17,668 (14,183) 41,424
INCOME TAXES 4,795 2,581 11,856 601 (11,217) 6,776
NON-UTILITY NET INCOME (LOSS) $12,585 $ 9,901 $30,355 $17,067 $(2,966) $34,648
</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
and Information Officer
Dated: October 22, 1996
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