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, 1998
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 Financial Results
The Montana Power Company reported consolidated net income of $0.64 per
share for the quarter ended March 31, 1998, compared to first-quarter earnings
of $0.83 per share a year earlier.
For the quarter, Utility earnings were 34 cents a share compared to 52
cents in the first quarter of 1997, while Nonutility earnings were 30 cents a
share compared to 31 cents a year earlier.
The Utility was adversely affected by winter's El Nino weather patterns,
which had a compound effect in the company's Montana service territory. First,
winter weather in the primary heating months of January and February was 9
percent warmer than normal, reducing the natural gas utility's earnings by 4
cents per share. And because normal winter moisture was pushed further south,
there was a significant reduction in hydro-electric generation capability.
The combination of reduced hydro output and commencement of a long-term
seasonal power-purchase agreement reduced the electric utility's performance
by 9 cents per share. A timing difference on natural gas utility
restructuring costs reduced net income by 4 cents a share.
The earnings improvements by Touch America nearly offset the impact of
an $8.2 million (15 cents per share) decrease in Nonutility income resulting
primarily from reduced volumes and prices for oil and natural gas as well as 5
cents from a non-recurring asset sale.
For comparative purposes, the following table shows the breakdown of
consolidated basic net income per share by principal business segment.
Quarter Ended
March 31, March 31,
1998 1997
Utility Operations $ 0.34 $ 0.52
Nonutility Operations 0.30 0.31
Consolidated $ 0.64 $ 0.83
Twelve Months Ended
March 31, March 31,
1998 1997
Utility Operations $ 0.91 $ 1.14
Nonutility Operations 1.18 1.02
Consolidated $ 2.09 $ 2.16
ITEM 7. Exhibits
99a Consolidated Statements of Income for the Quarters Ended March 31, 1998
and 1997 and for the Twelve Months Ended March 31, 1998 and 1997.
99b Utility Operations Schedule of Revenues and Expenses for the Quarters
Ended March 31, 1998 and 1997 and for the Twelve Months Ended March 31,
1998 and 1997.
99c Nonutility Operations Schedule of Revenues and Expenses for the Quarters
Ended March 31, 1998 and 1997 and for the Twelve Months Ended March 31,
1998 and 1997.
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: April 23, 1998
Exhibit Index
Exhibit Page
99a Consolidated Statement of Income for the Quarters Ended
March 31, 1998 and 1997 and for the Twelve Months Ended
March 31, 1998 and 1997. 5
99b Utility Operations Schedule of Revenues and Expenses for the
Quarters Ended March 31, 1998 and 1997 and for the Twelve
Months Ended March 31, 1998 and 1997. 6
99c Nonutility Operations Schedule of Revenues and Expenses for
the Quarters Ended March 31, 1998 and 1997 and for the Twelve
Months Ended March 31, 1998 and 1997. 7-8
Exhibit 99a
<TABLE>
<CAPTION>
THE MONTANA POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
Quarter Ended Twelve Months Ended
March 31, March 31,
1998 1997 1998 1997
Thousands of Dollars
<S> <C> <C> <C> <C>
REVENUES $ 298,531 $ 281,370 $ 1,040,758 $ 989,855
EXPENSES:
Operations 132,908 103,784 447,038 385,082
Maintenance 19,782 19,275 81,448 72,058
Selling, general and administrative 29,367 27,806 119,003 107,738
Taxes other than income taxes 25,525 25,094 95,889 89,787
Depreciation, depletion and amortization 27,086 22,042 100,385 90,945
234,668 198,001 843,763 745,610
INCOME FROM OPERATIONS 63,863 83,369 196,995 244,245
INTEREST EXPENSE AND OTHER INCOME:
Interest 14,504 12,563 56,605 49,347
Distributions on mandatorily redeemable
preferred securities of subsidiary trust 1,373 1,373 5,496 1,373
Other (income) deductions - net (1,729) (4,817) (31,071) (7,969)
14,148 9,119 31,030 42,751
INCOME TAXES 13,848 28,045 47,673 76,218
NET INCOME 35,867 46,205 118,292 125,276
DIVIDENDS ON PREFERRED STOCK 923 923 3,690 7,474
NET INCOME AVAILABLE FOR COMMON STOCK $ 34,944 $ 45,282 $ 114,602 $ 117,802
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING (000) 54,875 54,634 54,709 54,632
BASIC EARNINGS PER SHARE OF COMMON STOCK $ 0.64 $ 0.83 $ 2.09 $ 2.16
FULLY DILUTED EARNINGS PER SHARE OF COMMON STOCK $ 0.64 $ 0.83 $ 2.09 $ 2.16
</TABLE>
Exhibit 99b
<TABLE>
<CAPTION>
UTILITY OPERATIONS
Quarter Ended Twelve Months Ended
March 31, March 31,
1998 1997 1998 1997
Thousands of Dollars
<S> <C> <C> <C> <C>
ELECTRIC UTILITY:
REVENUES:
Revenues $ 116,798 $ 122,008 $ 430,776 $ 431,974
Intersegment revenues 996 1,337 4,344 5,102
117,794 123,345 435,120 437,076
EXPENSES:
Power supply 39,967 35,845 145,912 130,586
Transmission and distribution 8,584 9,317 36,010 35,468
Selling, general and administrative 13,316 13,510 51,845 50,897
Taxes other than incomes taxes 12,097 12,829 46,692 46,680
Depreciation and amortization 13,185 12,756 52,103 50,146
87,149 84,257 332,562 313,777
INCOME FROM ELECTRIC OPERATIONS 30,645 39,088 102,558 123,299
NATURAL GAS UTILITY:
REVENUES:
Revenues (other than gas supply cost revenues) 26,666 40,228 91,658 110,122
Gas supply cost revenues 14,378 6,852 24,661 17,522
Intersegment revenues 130 233 485 675
41,174 47,313 116,804 128,319
EXPENSES:
Gas supply costs 14,378 6,852 24,661 17,522
Other production, gathering and exploration 645 2,533 6,386 9,297
Transmission and distribution 3,635 3,487 13,780 13,797
Selling, general and administrative 4,558 4,263 18,407 17,134
Taxes other than income taxes 3,372 4,254 14,976 15,837
Depreciation, depletion and amortization 2,204 3,128 11,015 12,474
28,792 24,517 89,225 86,061
INCOME FROM GAS OPERATIONS 12,382 22,796 27,579 42,258
INTEREST EXPENSE AND OTHER INCOME:
Interest 13,445 12,138 53,497 47,061
Distributions on mandatorily redeemable
preferred securities of subsidiary trust 1,373 1,373 5,492 1,373
Other (income) deductions - net (116) (755) (6,489) (662)
14,702 12,756 52,500 47,772
INCOME BEFORE INCOME TAXES 28,325 49,128 77,637 117,785
INCOME TAXES 8,456 20,209 23,890 47,869
DIVIDENDS ON PREFERRED STOCK 923 923 3,690 7,474
UTILITY NET INCOME AVAILABLE FOR COMMON STOCK $ 18,946 $ 27,996 $ 50,057 $ 62,442
</TABLE>
Exhibit 99c
<TABLE>
<CAPTION>
NONUTILTY OPERATIONS
Quarter Ended Twelve Months Ended
March 31, March 31,
1998 1997 1998 1997
Thousands of Dollars
<S> <C> <C> <C> <C>
COAL:
REVENUES:
Revenues $ 43,426 $ 42,371 $ 168,677 $ 168,085
Intersegment revenues 10,198 8,079 36,283 31,127
53,624 50,450 204,960 199,212
EXPENSES:
Operations and maintenance 31,765 29,708 121,141 118,031
Selling, general and administrative 5,052 4,939 21,468 20,849
Taxes other than income taxes 6,689 5,819 24,325 21,327
Depreciation, depletion and amortization 2,736 1,166 10,614 6,004
46,242 41,632 177,548 166,211
INCOME FROM COAL OPERATIONS 7,382 8,818 27,412 33,001
OIL AND NATURAL GAS:
REVENUES:
Revenues 23,546 42,356 144,846 137,846
Intersegment revenues 8,868 106 11,882 279
32,414 42,462 156,728 138,125
EXPENSES:
Operations and maintenance 20,636 24,469 114,432 83,795
Selling, general and administrative 3,483 2,250 11,957 9,976
Taxes other than income taxes 1,351 1,560 4,346 3,657
Depreciation, depletion and amortization 5,377 4,300 17,999 17,427
30,847 32,579 148,734 114,855
INCOME FROM OIL AND NATURAL GAS
OPERATIONS 1,567 9,883 7,994 23,270
INDEPENDENT POWER GROUP:
REVENUES:
Revenues 18,576 17,198 72,310 72,803
Earnings from unconsolidated investments 1,553 3,025 13,508 21,490
Intersegment revenues 569 817 1,572 2,174
20,698 21,040 87,390 96,467
EXPENSES:
Operations and maintenance 18,673 15,904 66,606 63,566
Selling, general and administrative 974 1,089 4,175 5,490
Taxes other than income taxes 466 495 1,838 1,847
Depreciation, depletion and amortization 919 305 3,389 3,314
21,032 17,793 76,008 74,217
INCOME (LOSS) FROM INDEPENDENT POWER OPERATIONS $ (334) $ 3,247 $ 11,382 $ 22,250
Exhibit 99c
NONUTILITY OPERATIONS
Quarter Ended
Twelve Months Ended
March 31, March 31,
1998 1997
1998 1997
Thousands of Dollars
TELECOMMUNICATIONS:
REVENUES:
Revenues $ 20,382 $ 6,981 $ 57,864 $ 27,958
Earnings from unconsolidated investments 2,080 23 2,492 72
Intersegment revenues 251 181 867 614
22,713 7,185 61,223 28,644
EXPENSES:
Operations and maintenance 5,947 4,835 22,022 18,987
Selling, general and administrative 2,207 1,635 8,415 5,839
Taxes other than income taxes 1,245 136 3,402 437
Depreciation, depletion and amortization 1,532 254 3,733 942
10,931 6,860 37,572 26,205
INCOME FROM TELECOMMUNICATIONS OPERATIONS 11,782 325 23,651 2,439
OTHER OPERATIONS:
REVENUES:
Revenues 31,045 252 32,897 1,112
Intersegment revenues 62,808 290 66,442 936
93,853 542 99,339 2,048
EXPENSES:
Operations and maintenance 90,995 218 93,171 2,640
Selling, general and administrative 982 980 7,907 1,043
Taxes other than income taxes 304 310
Depreciation, depletion and amortization 1,133 133 1,532 638
93,414 1,331 102,920 4,321
INCOME (LOSS) FROM OTHER OPERATIONS 439 (789) (3,581) (2,273)
INTEREST EXPENSE AND OTHER INCOME:
Interest 2,229 1,112 7,724 4,993
Other (income) deductions - net (2,783) (4,750) (29,192) (10,014)
(554) (3,638) (21,468) (5,021)
INCOME BEFORE INCOME TAXES 21,390 25,122 88,326 83,708
INCOME TAXES 5,392 7,836 23,782 28,348
NONUTILITY NET INCOME AVAILABLE FOR COMMON STOCK $ 15,998 $ 17,286 $ 64,544 $ 55,360
</TABLE>
