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) April 23, 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 4.
ITEM 5. Other Events
First Quarter Net Income
Net income for the quarter ended March 31, 1996 was 70 cents per share,
compared with 61 cents per share for the first quarter 1995. The nine cent
increase is primarily due to two nonrecurring charges recorded in the first
quarter of 1995. A coal contract arbitration decision decreased Entech's
earnings by 18 cents per share, but benefited Utility earnings by 13 cents
through a retroactive adjustment to power supply costs. In addition, Entech's
Colorado coal mine, which had sustained operating losses of six cents per
share during last year's first quarter, is being permanently closed and was
written down to net salvage value effective October 1995.
Colder weather, increased hydroelectric generation and 2.6% customer
growth over last year contributed to higher Utility earnings. Low wholesale
prices resulting from the increased availability of low cost energy in the
region allowed the Utility to serve its obligations with less reliance on
steam generation. While this benefits the Utility, Entech's coal sales are
reduced when generation at the Colstrip units is cut back.
Also during the first quarter the Independent Power Group (IPG)
continued its growth in earnings from investments in operating projects.
Net income for the twelve-month period ended March 31, 1996, decreased
88 cents per share compared with the same period in 1995. In addition to the
items discussed for the quarter, consolidated earnings declined principally
due to the previously mentioned writedown of the investment in the Colorado
mine and the adoption of a new financial accounting standard "Accounting for
the Impairment of Long-Lived Assets and Assets to be Disposed Of" (SFAS
No. 121). IPG earnings for the twelve-months ended 1996 were lower than the
1995 period, when significant earnings from project development fees were
recorded.
For comparative purposes, the following table shows the breakdown of
consolidated net income per share by principal business segment.
Quarter Ended
March 31, March 31,
1996 1995
Utility Operations $ 0.50 $ 0.55
Entech 0.15 0.03
Independent Power Group 0.05 0.03
Consolidated $ 0.70 $ 0.61
Twelve Months Ended
March 31, March 31,
1996 1995
Utility Operations $ 1.17 $ 0.99
Entech (0.25) 0.71
Independent Power Group 0.10 0.20
Consolidated $ 1.02 $ 1.90
ITEM 7. Exhibits
99a Consolidated Statements of Income for the Quarters Ended March 31, 1996
and 1995 and for the Twelve Months Ended March 31, 1996 and 1995.
99b Utility Operations Schedule of Revenues and Expenses for the Quarters
Ended March 31, 1996 and 1995 and for the Twelve Months Ended March 31,
1996 and 1995.
99c Entech Operations Schedule of Revenues and Expenses for the Quarters
Ended March 31, 1996 and 1995 and for the Twelve Months Ended March 31,
1996 and 1995.
99d Independent Power Group Operations Schedule of Revenues and Expenses for
the Quarters Ended March 31, 1996 and 1995 and for the Twelve Months
Ended March 31, 1996 and 1995.
Exhibit Index
Exhibit Page
99a Consolidated Statement of Income for the Quarters Ended
March 31, 1996 and 1995 and for the Twelve Months Ended
March 31, 1996 and 1995. 5
99b Utility Operations Schedule of Revenues and Expenses for
the Quarters Ended March 31, 1996 and 1995 and for the
Twelve Months Ended March 31, 1996 and 1995. 6
99c Entech Operations Schedule of Revenues and Expenses for the
Quarters Ended March 31, 1996 and 1995 and for the Twelve
Months Ended March 31, 1996 and 1995. 7
99d Independent Power Group Operations Schedule of Revenues
and Expenses for the Quarters Ended March 31, 1996 and 1995
and for the Twelve Months Ended March 31, 1996 and 1995. 8
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF INCOME Exhibit 99a
The Montana Power Company and Subsidiaries
Quarter Ended Twelve Months Ended
March 31, March 31,
1996 1995 1996 1995
Thousands of Dollars
<S> <C> <C> <C> <C>
REVENUES $ 264,405 $ 262,297 $ 955,510 $ 990,387
EXPENSES:
Operations 109,470 113,803 416,679 435,770
Maintenance 11,654 15,340 64,600 74,385
Selling, general and administrative 23,470 27,536 97,440 107,446
Taxes other than income taxes 22,680 21,920 90,618 95,065
Depreciation, depletion and amortization 20,755 22,693 85,038 87,138
Writedowns of Long-Lived Assets 74,297
188,029 201,292 828,672 799,804
INCOME FROM OPERATIONS 76,376 61,005 126,838 190,583
INTEREST EXPENSE AND OTHER INCOME:
Interest 11,986 10,955 44,819 42,990
Other (income) deductions - net 273 (1,558) (9,001) (12,228)
12,259 9,397 35,818 30,762
INCOME TAXES 23,802 17,276 28,100 51,075
NET INCOME 40,315 34,332 62,920 108,746
DIVIDENDS ON PREFERRED STOCK 1,807 1,807 7,227 7,227
NET INCOME AVAILABLE FOR COMMON STOCK $ 38,508 $ 32,525 $ 55,693 $ 101,519
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (000) 54,639 53,738 54,346 53,374
NET INCOME PER SHARE OF COMMON STOCK $ 0.70 $ 0.61 $ 1.02 $ 1.90
</TABLE
</TABLE>
<TABLE>
<CAPTION>
UTILITY OPERATIONS Exhibit 99b
Quarter Ended Twelve Months Ended
March 31, March 31,
1996 1995 1996 1995
Thousands of Dollars
<S> <C> <C> <C> <C>
ELECTRIC UTILITY
REVENUES:
Revenues $ 119,887 $ 117,184 $ 424,702 $ 423,602
Intersegment revenues 2,028 1,573 6,268 5,962
121,915 118,757 430,970 429,564
EXPENSES:
Power supply 41,746 35,347 154,639 168,183
Transmission and distribution 7,459 6,428 27,945 27,499
Selling, general and administrative 11,313 12,048 41,198 46,031
Taxes other than incomes taxes 11,938 11,605 43,635 43,089
Depreciation and amortization 11,547 10,621 43,433 41,144
84,003 76,049 310,850 325,946
INCOME FROM ELECTRIC OPERATIONS 37,912 42,708 120,120 103,618
NATURAL GAS UTILITY:
REVENUES:
Revenues (other than gas supply cost revenues) 37,888 32,099 99,248 91,370
Gas supply cost revenues 10,076 8,898 22,839 19,517
Intersegment revenues 207 351 701 1,063
48,171 41,348 122,788 111,950
EXPENSES:
Gas supply costs 10,076 8,898 22,839 19,517
Other production, gathering and exploration 2,366 2,611 9,397 9,656
Transmission and distribution 3,070 2,581 11,423 10,403
Selling, general and administrative 4,348 4,388 17,121 17,765
Taxes other than income taxes 4,012 3,545 15,308 13,833
Depreciation, depletion and amortization 2,931 2,699 11,026 10,116
26,803 24,722 87,114 81,290
INCOME FROM GAS OPERATIONS 21,368 16,626 35,674 30,660
INTEREST EXPENSE AND OTHER INCOME:
Interest 11,740 11,094 44,676 43,357
Other (income) deductions - net (495) (2,087) (3,826) (5,755)
11,245 9,007 40,850 37,602
INCOME BEFORE INCOME TAXES 48,035 50,327 114,944 96,676
INCOME TAXES 19,027 19,360 43,713 36,574
UTILITY NET INCOME $ 29,008 $ 30,967 $ 71,231 $ 60,102
</TABLE>
<TABLE>
<CAPTION>
ENTECH OPERATIONS Exhibit 99c
Quarter Ended Twelve Months Ended
March 31, March 31,
1996 1995 1996 1995
Thousands of Dollars
<S> <C> <C> <C> <C>
COAL
REVENUES:
Revenues $ 38,390 $ 53,083 $ 192,757 $ 240,309
Intersegment revenues 8,197 298 33,559 30,973
46,587 53,381 226,316 271,282
EXPENSES:
Cost of sales 27,536 40,440 142,599 168,357
Selling, general and administrative 4,121 7,815 25,179 29,683
Taxes other than income taxes 5,375 5,540 27,045 32,773
Depreciation, depletion and amortization 1,143 3,743 8,587 12,878
Writedown of Long-Lived Assets 55,102
38,175 57,538 258,512 243,691
INCOME FROM COAL OPERATIONS 8,412 (4,157) (32,196) 27,591
OIL AND NATURAL GAS:
REVENUES:
Revenues 29,063 23,269 105,991 95,092
Intersegment revenues 99 132 208 302
29,162 23,401 106,199 95,394
EXPENSES:
Cost of sales 17,649 12,861 65,313 51,342
Selling, general and administrative 2,426 2,242 9,503 8,552
Taxes other than income taxes 834 630 2,537 3,070
Depreciation, depletion and amortization 3,953 4,488 17,033 18,357
Writedown of Long-Lived Assets 19,194
24,862 20,221 113,580 81,321
INCOME FROM OIL AND NATURAL GAS OPERATIONS 4,300 3,180 (7,381) 14,073
OTHER OPERATIONS:
REVENUES:
Revenues 6,494 6,283 26,249 24,503
Intersegment revenues 192 286 837 832
6,686 6,569 27,086 25,335
EXPENSES:
Cost of sales 4,428 4,356 17,198 16,930
Selling, general and administrative 1,231 1,271 4,483 5,005
Taxes other than income taxes 91 81 352 297
Depreciation, depletion and amortization 397 403 1,740 1,874
6,147 6,111 23,773 24,106
INCOME FROM OTHER OPERATIONS 539 458 3,313 1,229
INTEREST EXPENSE AND OTHER INCOME:
Interest 929 2,348 3,177 3,459
Other (income) deductions - net 877 (1,208) (4,778) (5,300)
1,806 1,140 (1,601) (1,841)
INCOME BEFORE INCOME TAXES 11,445 (1,659) (34,663) 44,734
INCOME TAXES 2,907 (3,328) (21,013) 7,005
ENTECH NET INCOME $ 8,538 $ 1,669 $ (13,650) $ 37,729
</TABLE>
<TABLE>
<CAPTION>
INDEPENDENT POWER GROUP OPERATIONS Exhibit 99d
Quarter Ended Twelve Months Ended
March 31, March 31,
1996 1995 1996 1995
Thousands of Dollars
<S> <C> <C> <C> <C>
REVENUES:
Revenues $ 19,717 $ 20,024 $ 78,788 $ 92,716
Earnings from unconsolidated investments 2,709 1,180 4,154 2,500
Intersegment revenues 69 336 530 1,539
22,495 21,540 83,472 96,755
EXPENSES:
Operation and maintenance 16,612 17,276 67,636 74,296
Selling, general and administrative 822 814 3,565 4,274
Taxes other than income taxes 431 520 1,741 2,004
Depreciation and amortization 784 740 3,221 2,769
18,649 19,350 76,163 83,343
INCOME FROM OPERATIONS 3,846 2,190 7,309 13,412
INTEREST EXPENSE AND OTHER INCOME:
Interest 21 15
Other (income) deductions - net (792) (750) (3,451) (5,013)
(792) (750) (3,430) (4,998)
INCOME BEFORE INCOME TAXES 4,638 2,940 10,739 18,410
INCOME TAXES 1,869 1,244 5,400 7,495
IPG NET INCOME $ 2,769 $ 1,696 $ 5,339 $ 10,915
</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: April 23, 1996
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