SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended SEPTEMBER 30, 1994 Commission File No. 0-505
------------------ -----
BANGOR HYDRO-ELECTRIC COMPANY
(Exact Name of Registrant as specified in its Charter
MAINE 01-0024370
- - -------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
33 STATE STREET, BANGOR, MAINE 04401
- - ---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code 207-945-5621
------------
NONE
- - ---------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report
Outstanding Common Stock, $5 Par Value - 7,156,658 Shares
September 30, 1994
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1994
PART I - FINANCIAL INFORMATION
PAGE
Cover Page
Index
Consolidated Statements of Income
Management's Discussion and Analysis
of Financial Statements
Consolidated Balance Sheets - September 30, 1994 and
December 31, 1993
Consolidated Statements of Retained Earnings
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
Signature Page
BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF INCOME
000's Omitted Except Per Share Amounts
3 Months Ended 9 Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1994 1993 1994 1993
---------- -------- --------- ----------
ELECTRIC OPERATING REVENUES:
Base rate revenue 22,493 18,965 63,181 57,058
Fuel charge revenue 20,082 24,511 65,433 76,645
---------- -------- --------- ----------
42,575 43,476 128,614 133,703
---------- -------- --------- ----------
OPERATING EXPENSES:
Fuel for generation 20,076 24,435 65,464 76,417
Purchased power 3,882 3,700 10,448 10,865
Other operation and maintenance 7,341 6,595 25,315 20,196
Depreciation and amortization 1,357 1,244 3,950 3,733
Amortization of Seabrook Nuclear
Unit 424 424 1,274 1,274
Amortization of costs to terminate
purchased power contract 972 -- 2,267 --
Taxes -
Property and payroll 1,125 1,035 3,493 3,072
State income 297 230 394 582
Federal income 1,512 1,417 2,834 3,903
---------- -------- --------- ----------
36,986 39,080 115,439 120,042
---------- -------- --------- ----------
OPERATING INCOME 5,589 4,396 13,175 13,661
---------- -------- --------- ----------
OTHER INCOME
Allowance for equity funds used
during construction 248 800 1,013 1,599
Other, net of applicable income taxes 52 172 35 344
---------- -------- --------- ----------
300 972 1,048 1,943
---------- -------- --------- ----------
INCOME BEFORE INTEREST EXPENSE 5,889 5,368 14,223 15,604
---------- -------- --------- ----------
INTEREST EXPENSE:
Long-term debt 2,675 2,876 8,089 7,692
Other 363 252 1,075 744
Allowance for borrowed funds used
during construction (221) (1,004) (1,116) (1,750)
---------- -------- --------- ----------
2,817 2,124 8,048 6,686
---------- -------- --------- ----------
NET INCOME 3,072 3,244 6,175 8,918
DIVIDENDS ON PREFERRED STOCK 413 414 1,239 1,232
---------- -------- --------- ----------
EARNINGS APPLICABLE TO COMMON STOCK 2,659 2,830 4,936 7,686
== ======= ======== ========= ==========
WEIGHTED AVERAGE NUMBER OF SHARES 7,151 6,207 6,870 5,741
== ======= ======== ========= ==========
EARNINGS PER COMMON SHARE, based on the
weighted average number of shares
outstanding during the period .37 .46 .72 1.34
== ======= ======== ========= ==========
DIVIDENDS DECLARED PER COMMON SHARE .33 .33 .99 .99
== ======= ======== ========= ==========
See notes to the consolidated financial statements.
BANGOR HYDRO-ELECTRIC COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
Management's Discussion and Analysis of the Results of Operations and
Financial Condition contained in Bangor Hydro-Electric Company's (the
"Company") Annual Report on Form 10-K for the year ended December 31, 1993
("1993 Form 10-K") should be read in conjunction with the comments below.
EARNINGS
Earnings for the quarter ended September 30, 1994 were $.37 per common
share compared to $.46 per common share for the same period in 1993. The
third quarter results brought earnings for the first nine months of 1994 to
$.72 per common share compared to $1.34 per common share for the same period
in 1993. The 1994 earnings per share numbers are both based on a greater
number of common shares outstanding than in 1993.
Although earnings in the third quarter of 1994 were sufficient to cover
the quarterly dividend, the Company does not anticipate 1994 earnings will
exceed the annual dividend rate of $1.32 primarily due to the one-time charge
to earnings associated with the early retirement plan incurred in the first
quarter of 1994. Despite a base rate increase that took effect March 1, 1994,
earnings continue to be affected by a lower rate of growth than was assumed
in the decision of the Maine Public Utilities Commission (MPUC) authorizing
the base rate increase. In addition, some revenue erosion is occurring as a
result of strategies implemented by the Company to reduce rates where
necessary in order to prevent the loss of certain customer loads altogether.
The Company's best opportunity for improving financial performance is to
implement changes in the regulatory environment that supports the Company's
efforts to increase sales and expand market share. The Alternative Marketing
Plan (AMP), mentioned below, the Company is pursuing at the MPUC, addresses
these changes. This proposal coupled with the successful disposition of
another of the Company's high-cost non-utility generator (NUG) contracts
could provide the best chance for improving earnings in 1995. Failing that,
the Company may rely on the traditional approach of seeking rate increases in
order to enhance shareholder returns to an adequate level. These matters are
discussed further in the following section.
IMPORTANT CURRENT ACTIVITIES
On July 19, 1994 the Company filed testimony in support of a proposed
alternative form of regulation to govern rate levels and pricing flexibility
policies. The Company has called the proposal an Alternative Marketing Plan
or AMP. AMP is comprised of several interrelated components needed to
improve the Company's competitive position over the next several years,
including: 1) maintaining the current price levels of our general tariffs
for a period up to five years, 2) allowing the Company the ability to reduce
prices to any customer or segment of customers as necessary to compete for
the retention of "at risk" customers and to expand market share, where
appropriate, 3) eliminating the separate "fuel cost adjustment" rates, 4)
eliminating summer/winter seasonal rate differentials, and 5) allowing for
appropriate accounting treatment, and the retention of savings for the
benefit of customers and stockholders, in the event of additional NUG
contract buyouts or other resolutions of those high costs.
In general, approval of a plan like AMP would mean the Company would
gain a greater opportunity to manage its business and enhance the chances for
greater profitability in the competitive environment which has evolved. To
do so, however, the Company must step out, at least to some extent, from the
protective arena of traditional rate-of-return regulation; and with the
Company's rates already at relatively high levels under that traditional
regulatory approach, Management believes this is an appropriate time to be
pressing for alternatives.
The processing of AMP at the MPUC has not been as expeditious as the
Company had hoped, and it now appears that a final decision will not be
issued until late January of 1995. Consequently, it may be necessary for the
Company to file for increases in base rates in the traditional manner, an
eleven month process once the notice is filed. Though the Company does not
believe further rate increases at this time would be as effective as the AMP
proposal, it is quite possible that both paths should be pursued in parallel
in order to best provide for adequate financial returns for the shorter term.
REVENUES
The base rate revenue increase of $3.5 million or 18.6% was primarily
the result of the 15.9% base rate increase effective March 1, 1994 as well as
a 1% increase in kilowatt hour (KWH) sales. This increase was also favorably
impacted by a 3% increase in KWH sales in the third quarter of 1994 as well
as the change in the electric rate in the first quarter of 1994 for the
Company's largest industrial customer, Holtrachem (formerly LCP), whose
contribution to base revenue for the quarter ended September 30, 1994 was
$1.08 million greater than the third quarter of 1993. In the 1994 quarter
$450,000 of income associated with the Company's revenue sharing arrangement
with Holtrachem has been recorded as base revenues, while in the 1993
quarter, revenue sharing amounts were recorded as other income. This increase
in base revenue was offset somewhat by the impact of a special contract rate
with the Company's second largest industrial customer, James River, which was
implemented in the first quarter of 1994. Base rate revenue for this
customer decreased by $137,000 or 16.8% in the 1994 quarter as compared to
1993.
Fuel charge revenue decreased by $4.4 million or 18.1% in the third
quarter of 1994 over the same quarter of 1993. This decrease was due
principally to the 12.5% fuel rate decrease effective in November 1993, as
well as the impact of the special contract with James River. Also off-system
sales resulted in additional fuel charge revenue of $3.4 million for the
third quarter of 1994 as compared to $4.6 million for the same quarter of
1993.
EXPENSES
As a result of the deferred fuel accounting methodology followed by the
Company, retail fuel expense is recorded to match the retail fuel cost
adjustment portion of fuel charge revenue. Fuel expense was also impacted by
off-system sales, resulting in an increase of $3.4 million in fuel expense
for the quarter ended September 30, 1994 as compared to an increase of $4.6
million for the third quarter of 1993.
Purchased power expense increased by $182,000 or 4.9% in the third
quarter of 1994 as compared to the same quarter of 1993. The increase was
principally due to costs associated with an unplanned outage at the Maine
Yankee nuclear plant in August 1994.
Other operation and maintenance (O&M) expense increased $746,000 or
11.3% in the third quarter of 1994. This expense increase was impacted by
the Company charging to operations, beginning in March 1994, the full amount
of other postretirement benefit expense under Financial Accounting Standards
Board Statement Number 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions" (FASB 106), which amounted to $346,000 in the
third quarter of 1994. Also amortizations of certain deferred charges
allowed in the most recent base rate case amounted to $240,000 of expense in
the 1994 quarter. In addition, in the third quarter of 1994, other medical
costs increased $231,000, and pension income decreased $106,000 as compared
to the third quarter of 1993. These increases were offset by a $216,000
decrease in O&M payroll. The decreased payroll is a result of the early
retirement program implemented during the first quarter of 1994, offset by a
3.5% wage rate increase for bargaining unit employees effective January 1,
1994.
Depreciation and amortization expense increased by $113,000 or 9.1% due
to an increase in depreciable property.
Effective March 1, 1994 in connection with the recent base rate
increase, the Company began amortizing deferred costs associated with the
Beaver Wood Joint Venture (Beaver Wood) purchased power contract termination
over a nine year period. Amortization expense amounted to $972,000 in the
third quarter of 1994.
Property and payroll taxes increased $90,000 or 8.7% as a result of
higher levels of property taxes due to greater property levels and increased
property tax rates.
Income taxes increased $162,000 or 9.8% due principally to greater
taxable income in the third quarter of 1994.
AFDC decreased, the equity portion by $552,000 or 69.0% and the borrowed
portion by $783,000 or 78.0%. A large part of this reduction was due to
carrying costs accrued in 1993 on costs associated with the Beaver Wood
purchased power contract termination, which took place in June 1993. In the
third quarter of 1993, approximately $1.03 million in Beaver Wood buyout
carrying costs were recorded. In the third quarter of 1994 no such carrying
cost were recorded, as effective with the new base rates implemented March 1,
1994, the Company discontinued the accrual of these carrying costs, since the
recovery of the contract termination costs (including carrying costs and a
return on the unamortized balance) is included in the revised rates. Also
impacting decreased AFDC in the 1994 quarter was the cessation of accruing
AFDC on costs related to the Basin Mills project effective December 1993. In
the third quarter of 1993 $126,000 of AFDC was recorded on Basin Mills costs.
In the third quarter of 1994 AFDC on construction work in progress decreased
$104,000 as compared to 1993 due to decreased levels of construction
activity.
Other income, net of applicable taxes, decreased by $120,000 or 69.8%
due primarily to the revenue sharing arrangement with Holtrachem. In the
third quarter of 1993 all revenue sharing associated with Holtrachem was
recorded as other income, while in the third quarter of 1994 all revenue
sharing from this customer was recorded as base rate revenue.
Long-term debt interest expense decreased by $201,000 or 7.0% due
principally to September 1993 redemption of the remaining principal balances
of the following first mortgage bonds: 9.25% series due 2001, 8.25% series
due 1999, and the 8.6% series due 2003. Interest expense was also reduced as
a result of regular and optional sinking fund payments on the Company's
12.25% series first mortgage bonds in 1994.
Other interest expense, which is composed primarily of interest expense
on short term borrowings, increased by $111,000 or 44.1% due principally to
increased interest rates, as well as a $2.9 million increase in average short
term borrowings outstanding in the 1994 quarter.
NINE MONTHS OF 1994 VERSUS NINE MONTHS OF 1993
Base rate revenue increased $6.1 million or 10.7% in 1994 due to 15.9%
base rate increase on March 1, 1994. This increase was offset by the impact
of the previously mentioned special contract rates with Holtrachem and James
River. While KWH sales to Holtrachem decreased by 4.8% in the first nine
months of 1994, base rate revenue decreased by 15.3%, excluding $460,000 of
revenue sharing which was also recorded as base rate revenue in 1994. In
1993 all revenue sharing associated with Holtrachem was recorded as other
income. KWH sales to James River increased by 17.9%, but base rate revenue
for this customer decreased by 14.6%. Exclusive of the impact of these two
special contracts, firm sales increased by 1.5% in 1994.
Fuel charge revenue decreased by $11.2 million or 14.6% in 1994. This
decrease was due principally to the 12.5% fuel rate decrease effective in
November 1993, as well as the impact of the special contract with James
River. Also, off-system sales resulted in additional fuel charge revenue of
$9.7 million for the 1994 period as compared to $12.3 million for 1993.
Purchased power expense decreased $417,000 or 3.8% due to lower capacity
and transmission costs associated with the Maine Yankee nuclear plant in
1994, offset by the impact of the outage in the third quarter of 1994.
Other O&M expense increased $5.1 million or 25.4% for the nine months
ended September 30, 1994 as compared to the same period for 1993. This
expense has increased due primarily to the early retirement program
implemented in the first quarter of 1994, which resulted in approximately
$2.8 million in expense being charged to operations. Other postretirement
benefits under FASB 106 amounted to $877,000 in the 1994 period, and other
medical costs increased by $494,000 over the 1993 period. In addition,
previously mentioned base rate case amortizations amounted to $575,000 for
the nine months ended September 30, 1994. Also increasing other O&M was a
decrease in pension income of $317,000 as compared to 1993. These increases
in other O&M were partially offset by a decrease in O&M payroll of $73,000 in
the 1994 period as compared to 1993. The decrease was principally a result
of the impact of the early retirement program in the first quarter of 1994,
offset by the January 1, 1994 wage rate increase of 3.5% for bargaining unit
employees.
Depreciation and amortization expense increased by $217,000 or 5.8% due
to an increase in depreciable property in 1994.
Amortization of the costs associated with the buyout of the Beaver Wood
purchased power contract amounted to $2.3 million for the nine months ended
September 30, 1994.
Property and payroll taxes increased $421,000 or 13.7% for the nine
months ended September 30, 1994 as compared to the same period in 1993 due to
higher levels of taxable property and increased property tax rates.
Income taxes decreased $881,000 for the 1994 period due principally to
lower taxable income. The effective income tax rate was 30% for both the 1994
and 1993 periods.
AFDC decreased, the equity portion by $586,000 or 36.7% and the borrowed
portion by $634,000 or 36.2% for the nine months ended September 30, 1994 as
compared to 1993. As previously noted, the decrease is principally a result
of the accrual of carrying costs associated with the Beaver Wood purchased
power contract buyout, which were $588,000 greater in the 1994 period. Also
$354,000 in AFDC was accrued on Basin Mills costs in 1993, with none recorded
in 1994.
Other income, net of applicable taxes, decreased by $309,000 in 1994 due
principally to a change in Holtrachem's electric rate in the first quarter of
1994.
Long term debt interest expense increased $397,000 or 5.2% due to the
June 1993 issuance of $15 million of first mortgage bonds at an interest rate
of 7.3% and the issuance of $14.3 million of first mortgage bonds at an
interest rate of 12.25%. The latter bonds were issued in exchange for other
lenders' debt in connection with the buyout of the Beaver Wood purchased
power contract. These were partially offset by regular and optional sinking
fund payments on the 12.25% series first mortgage bonds in 1994, as well as
the redemption of the remaining principal balances of the following first
mortgage bonds: 9.25% series due 2001, 8.25% series due 1999, and the 8.6%
series due 2003.
Other interest expense increased $331,000 or 44.5% for the nine months
ended September 30, 1994 as compared to the same period in 1993. The
increase is attributable to a $6.4 million increase in average short-term
debt borrowings outstanding in the 1994 period as well as higher short-term
interest rates.
LIQUIDITY AND CAPITAL RESOURCES
The Consolidated Statements of Cash Flows reflect events in the first
nine months of 1994 and 1993 as they affect the Company's liquidity. Net
cash provided by operations was $20.8 million for the first nine months of
1994 compared with $26.2 million for the first nine months of 1993. The
decrease was due to a $2.0 million decrease in net receivables, and unbilled
revenue in 1994 as compared to a $6.0 million decrease in 1993. Also
decreasing cash flows from operations was a $3.3 million decrease in accounts
payable in 1994 as compared to a $632,000 increase in 1993. Deferred fuel,
purchased power and interest costs decreased $2.3 million for the 1994 period
as compared to a $4.0 million decrease for the 1993 period.
In July 1994 the Company received a $1 million payment from Beaver Wood
associated with the June 1993 contract termination, which called for Beaver
Wood to pay the Company $1 million at the time of settling the transaction as
well as $1 million annually for the next six years (1994 through 1999).
On March 30, 1994 the Company completed a common stock offering that
raised approximately $14.1 million with the issuance and sale of 867,500
shares of common stock. The proceeds from the sale were utilized to reduce
the Company's outstanding short-term debt. During the second quarter of 1994
shareholders approved a proposal to increase the amount of additional common
stock, $5 par value, and preferred stock, $100 par value, that the Company is
authorized to issue, by 2.5 million shares and 200,000 shares, respectively.
As previously discussed, external funds in the amount of $15 million
were provided by the issue of first mortgage bonds in 1993. The documents
governing these bonds do not provide for sinking fund payments. The proceeds
from the bond issuance were used to reduce short-term debt balances and fund
the Company's construction program.
Under the Company's Dividend Reinvestment and Common Stock Purchase Plan
the Company realized a common stock investment of $998,000 through the
issuance of 63,764 new common shares in the first nine months of 1994 as
compared to $850,000 in the comparable 1993 period through the issue of
44,079 shares.
The Company's bank borrowings are provided through a $25 million
revolving credit facility as well as $30 million in lines of credit.
Effective May 26, 1994 the Company renegotiated its revolving credit
agreement with the participating banks for a period of one year, with an
option to renew for one additional year.
As previously discussed, the Company made regular and optional sinking
fund payments on certain of the higher rate coupon bonds and also redeemed
the remaining principal balances of three series of first mortgage bonds in
September 1993.
BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED BALANCE SHEETS
000's Omitted
(Unaudited)
ASSETS Sept. 30, Dec. 31,
1994 1993
--------- ---------
INVESTMENT IN UTILITY PLANT:
Electric plant in service, at original cost $ 270,550 $ 250,123
Less - Accumulated depreciation and amortization 74,927 71,184
-- ----------- ---------
$ 195,623 $ 178,939
Construction in progress 22,347 26,602
-- ----------- ---------
$ 217,970 $ 205,541
Investments in corporate joint ventures:
Maine Yankee Atomic Power Company $ 4,754 $ 4,756
Maine Electric Power Company, Inc. 125 125
-- ----------- ---------
$ 222,849 $ 210,422
-- ----------- ---------
OTHER INVESTMENTS, principally at cost $ 3,308 $ 4,474
-- ----------- ---------
CURRENT ASSETS:
Cash and cash equivalents $ 1,400 $ 2,387
Accounts receivable, net of reserve 17,461 18,763
Unbilled revenue receivable 6,421 7,162
Inventories, at average cost:
Material and supplies 2,876 3,220
Fuel oil 452 635
Prepaid expenses 997 1,574
Deferred fuel and interest costs 1,478 2,569
Deferred purchased power costs 626 1,796
Current deferred income taxes 819 --
-- ----------- ---------
Total current assets $ 32,530 $ 38,106
-- ----------- ---------
DEFERRED CHARGES:
Investment in Seabrook Nuclear Project, net of
accumulated amortization of $22,952 in 1994
and $21,678 in 1993 $ 35,890 $ 37,164
Costs to terminate purchased power contract 37,710 40,302
Deferred regulatory asset 34,994 33,068
Prepaid pension costs 1,840 2,398
Demand-side management costs 3,304 3,691
Other 3,936 3,896
-- ----------- ---------
Total deferred charges $ 117,674 $ 120,519
-- ----------- ---------
Total assets $ 376,361 $ 373,521
= ========= = =========
See notes to the consolidated financial statements.
BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED BALANCE SHEETS
000's Omitted
(Unaudited)
Sept. 30, Dec. 31,
STOCKHOLDERS' INVESTMENT AND LIABILITIES 1994 1993
--------- ---------
CAPITALIZATION:
Common stock, par $5 per share -
Authorized - 10,000,000 shares in 1994 and 7,500,000
shares in 1993
Outstanding - 7,156,658 shares in 1994 and 6,225,394
shares in 1993 $ 35,783 $ 31,127
Amounts paid in excess of par value 55,778 45,431
Retained earnings 15,260 17,386
-- ----------- ---------
$ 106,821 $ 93,944
Preferred stock, non-participating, cumulative,
par value $100 per share, authorized - 600,000 shares
in 1994 and 400,000 shares in 1993
Not redeemable or redeemable solely at the
option of the Company $ 4,734 $ 4,734
Subject to mandadory redemption requirements -
8.76% non-voting not redeemable prior to
December 27, 1994, 150,000 shares authorized 15,222 15,168
and outstanding
Long-term debt, exclusive of current sinking fund 116,367 119,126
requirements
-- ----------- ---------
Total capitalization $ 243,144 $ 232,972
-- ----------- ---------
CURRENT LIABILITIES:
Notes payable - banks $ 25,000 $ 36,000
-- ----------- ---------
Other current liabilities -
Current sinking fund requirements of long-term debt $ 1,461 $ 1,297
Accounts payable 12,703 15,961
Dividends payable 2,757 2,449
Accrued interest 2,438 3,706
Customers' deposits 485 498
-- ----------- ---------
Total other current liabilities $ 19,844 $ 23,911
-- ----------- ---------
Total current liabilities $ 44,844 $ 59,911
-- ----------- ---------
Deferred income taxes - Seabrook $ 18,657 $ 19,176
Other accumulated deferred income taxes 53,631 47,001
Deferred regulatory liability 9,060 9,347
Unamortized investment tax credits 2,138 2,272
Other 4,887 2,842
-- ----------- ---------
Total deferred credits and reserves $ 88,373 $ 80,638
-- ----------- ---------
Total Stockholders' Investment and Liabilities $ 376,361 $ 373,521
= ========= = =========
See notes to the consolidated financial statements.
BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
000's Omitted
(Unaudited)
1994 1993
--------- ---------
BALANCE AT JANUARY 1 $ 17,386 $ 21,639
ADD - NET INCOME 6,175 8,918
--------- ---------
$ 23,561 $ 30,557
--------- ---------
DEDUCT:
Dividends -
Preferred stock $ 1,185 $ 1,185
Common stock 7,062 5,889
Other 54 47
--------- ---------
$ 8,301 $ 7,121
--------- ---------
BALANCE AT SEPTEMBER 30 $ 15,260 $ 23,436
= ======= = =======
See notes to the consolidated financial statements.
BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
000's Omitted
(Unaudited)
1994 1993
-------- --------
CASH FLOWS FROM OPERATIONS:
NET INCOME $ 6,175 $ 8,918
Adjustments to reconcile net income to net cash
provided by operations:
Depreciation and amortization 3,950 3,733
Amortization of Seabrook Nuclear Project 1,274 1,274
Amortization of costs to terminate purchased power
contract 2,267 ---
Base rate case amortizations included in operations
& maintenance 704 130
Allowance for equity funds used during construction (1,013) (1,599)
Deferred income tax provision 3,718 5,305
Deferred income taxes on Seabrook Nuclear Project (311) (308)
Deferred investment tax credits (134) (134)
Changes in assets and liabilities:
Deferred fuel, purchased power and interest costs 2,261 3,953
Receivables, net and unbilled revenue 2,043 6,039
Income tax refunds receivable --- (2,425)
Materials, supplies and fuel oil 527 532
Prepaid pension costs (1,113) (255)
Early retirement plan costs 2,801 ---
Accounts payable (3,258) 632
Accrued interest (1,268) (225)
Accrued current income taxes --- 2,378
Accrued postretirement benefit costs 620 ---
Other current assets and liabilities, net 296 971
Other, net 1,240 (2,711)
--------- ---------
Net Cash Provided By Operations $ 20,779 $ 26,208
--------- ---------
CASH FLOWS FROM INVESTING:
Construction expenditures $(15,198) $(21,626)
Payment received related purchased power contract
termination 1,000 (23,712)
Allowance for borrowed funds used during construction (1,116) (1,750)
--------- ---------
Net Cash Used in Investing $(15,314) $(47,088)
--------- ---------
CASH FLOWS FROM FINANCING:
Dividends on preferred stock $ (1,185) $ (1,185)
Dividends on common stock (6,754) (5,629)
Issuance of long-term debt --- 15,000
Issuance of common stock:
Public offering (867,500 shares in 1994 and
745,000 shares in 1993) 14,084 14,803
Dividend reinvestment plan (63,764 shares in 1994 and
44,079 in 1993) 998 850
Payments on long-term debt (2,595) (15,147)
Change in short-term debt, net (11,000) 12,000
--------- ---------
Net Cash (Used in) Provided by Financing $ (6,452) $ 20,692
--------- ---------
NET CHANGE IN CASH AND CASH EQUIVALENTS $ (987) $ (188)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 2,387 1,488
--------- ---------
CASH AND CASH EQUIVALENTS - END OF NINE MONTHS $ 1,400 $ 1,300
========= =========
CASH PAID DURING THE NINE MONTHS FOR:
INTEREST (Net of Amount Capitalized) $ 8,089 $ 4,807
INCOME TAXES --- ---
========= =========
See notes to the consolidated financial statements.
BANGOR HYDRO-ELECTRIC COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1994
(Unaudited)
(1) BASIS OF PRESENTATION AND ACCOUNTING POLICIES:
Certain information and footnote disclosures, normally included in
financial statements prepared in accordance with generally accepted
accounting principles, have been condensed or omitted in this Form 10-Q
pursuant to the Rules and Regulations of the Securities and Exchange
Commission. However, in the opinion of Bangor Hydro-Electric Company, the
disclosures contained in this Form 10-Q are adequate to make the information
presented not misleading. These statements should be read in conjunction
with the consolidated financial statements and the notes thereto and all
other information included in the 1993 Form 10-K.
In the opinion of the Company, the accompanying unaudited consolidated
financial statements reflect all adjustments, including normal recurring
accruals, necessary to present fairly the financial position as of September
30, 1994 and the results of operations and cash flows for the periods ended
September 30, 1994 and 1993.
The Company's significant accounting policies are described
in the Notes to the Consolidated Financial Statements included in its 1993
Form 10-K filed with the Securities and Exchange
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -(CONTINUED):
(1) BASIS OF PRESENTATION AND ACCOUNTING POLICIES - (Continued):
Commission. For interim reporting purposes, the Company follows these same
basic accounting policies but considers each interim
period as an integral part of an annual period. Accordingly,
certain expenses are allocated to interim periods based upon estimates of
such expenses for the year.
(2) INCOME TAXES:
The following table reconciles a provision calculated by multiplying
income before federal income taxes by the statutory federal income tax rate
to the above provisions for federal income taxes:
NINE MONTHS ENDED SEPTEMBER 30,
1994 1993
AMOUNT % AMOUNT %
(Dollars in Thousands)
Federal income tax provision
at statutory rate $3,212 34% $4,686 34%
Less permanent reductions in
tax expense resulting from
statutory exclusions from
taxable income 323 4 426 4
------ -- ------ --
Federal income tax provision
before effect of temporary
differences $2,889 30% $4,260 30%
Less temporary differences
that are flowed through for rate-
making and accounting purposes 20 - 64 -
------ -- ------ --
Federal income tax provision $2,869 30% $4,196 30%
====== == ====== ==
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED):
3) INVESTMENT IN MAINE YANKEE AND MEPCO:
Condensed financial information for Maine Yankee Atomic Power Company
("Maine Yankee") and Maine Electric Power Company, Inc. ("MEPCO") is as
follows:
MAINE YANKEE MEPCO
----------------- ----------------
(Dollars in Thousands)
(Unaudited)
Operations for
Nine Months Ended
------------------------------------
Sept.30, Sept.30, Sept.30, Sept.30,
1994 1993 1994 1993
-------- -------- -------- -------
OPERATIONS:
As reported by investee-
Operating revenues $128,496 $146,626 $17,572 $ 9,157
======== ======== ======= ========
Earnings applicable to
common stock $ 5,283 $ 6,282 $ 79 $ 79
======= ======= ======= ========
Company's reported equity-
Equity in net income $ 370 $ 440 $ 11 $ 11
Deduct-Effect of
adjusting Company's
estimate to actual (14) (23) - -
------- ------- ------- --------
Amounts reported by
Company $ 356 $ 417 $ 11 $ 11
======= ======= ======= ========
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED):
(3) INVESTMENT IN MAINE YANKEE AND MEPCO - (Continued):
MAINE YANKEE MEPCO
------------------ ----------------
(Dollars in Thousands)
(Unaudited)
Financial Position at
Sept.30, Dec. 31, Sept.30, Dec. 31,
1994 1993 1994 1993
-------- -------- ------- -------
FINANCIAL POSITION:
As reported by investee-
Total assets $533,700 $544,364 $ 5,487 $ 7,060
Less-
Preferred stock 19,800 20,400 - -
Long-term debt and
long-term note 208,147 211,063 1,730 2,590
Other Liabilities and
deferred credits 238,215 244,790 3,757 3,592
-------- -------- -------- -------
Net assets $ 67,538 $ 68,111 $ 878 $ 878
======== ======== ======== =======
Company's reported equity-
Equity in net assets $ 4,728 $ 4,768 $ 125 $ 125
Add (deduct) - Effect of
adjusting Company's
estimate to actual 26 (32) - -
-------- -------- -------- -------
Amounts reported by
Company $ 4,754 $ 4,736 $ 125 $ 125
======== ======== ======== =======
(4) RECLASSIFICATIONS:
Certain 1993 amounts have been reclassified to conform with
presentation used in Form 10-Q for the quarter ended September 30, 1994.
BANGOR HYDRO-ELECTRIC COMPANY
FORM 10-Q FOR PERIOD ENDING SEPTEMBER 30, 1994
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS - None
REPORTS ON FORM 8-K
-------------------
No reports on Form 8-K were filed during the quarter for which this
report is submitted.
BANGOR HYDRO-ELECTRIC COMPANY
FORM 10-Q FOR PERIOD ENDED SEPTEMBER 30, 1994
The information furnished in this report reflects all adjustments which
are, in the opinion of management, necessary to a fair statement of the
results for the interim period.
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.
BANGOR HYDRO-ELECTRIC COMPANY
------------------------------
(Registrant)
Dated: November 10, 1994 /S/ Robert C. Weiser
--------------------------------
Robert C. Weiser
Treasurer
(Chief Financial Officer)
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Bangor
Hydro-Electric Company's third quarter 1994 10Q and is qualified in its entirety
by reference to such 10Q.
</LEGEND>
<CIK> 0000009548
<NAME> BANGOR HYDRO-ELECTRIC COMPANY
<MULTIPLIER> 1,000
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<FISCAL-YEAR-END> DEC-31-1994
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