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 March 31, 1995 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 - 7,229,344 Shares
March 31, 1995
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 MARCH 31, 1995
PART I - FINANCIAL INFORMATION
PAGE
----
Cover Page 1
Index 2
Consolidated Statements of Income 3
Management's Discussion and Analysis
of Financial Statements 4
Consolidated Balance Sheets - March 31, 1995 and
December 31, 1994 12
Consolidated Statements of Retained Earnings 14
Consolidated Statements of Cash Flows 15
Notes to the Consolidated Financial Statements 16
PART II - OTHER INFORMATION 22
Item 6 - Exhibits and Reports on Form 8-K 23
Signature Page 24
BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF INCOME
000's Omitted Except Per Share Amounts
(Unaudited)
3 Months Ended
March 31, March 31,
1995 1994
---------- ----------
ELECTRIC OPERATING REVENUES $ 48,263 $ 46,376
---------- ----------
OPERATING EXPENSES:
Fuel for generation $ 24,958 $ 26,656
Purchased power capacity 3,960 3,182
Other operation and maintenance 7,234 9,875
Depreciation and amortization 1,549 1,298
Amortization of Seabrook Nuclear Project 425 425
Amortization of costs to terminate
purchased power contract 972 324
Taxes -
Property and payroll 1,217 1,236
State income 300 (42)
Federal income 1,645 384
---------- ----------
$ 42,260 $ 43,338
---------- ----------
OPERATING INCOME $ 6,003 $ 3,038
---------- ----------
OTHER INCOME AND (DEDUCTIONS):
Allowance for equity funds used
during construction $ 219 $ 553
Other, net of applicable income taxes 84 (76)
---------- ----------
$ 303 $ 477
---------- ----------
INCOME BEFORE INTEREST EXPENSE $ 6,306 $ 3,515
---------- ----------
INTEREST EXPENSE:
Long-term debt $ 2,642 $ 2,709
Other 581 403
Allowance for borrowed funds used
during construction (210) (692)
---------- ----------
$ 3,013 $ 2,420
---------- ----------
NET INCOME $ 3,293 $ 1,095
DIVIDENDS ON PREFERRED STOCK 413 413
---------- ----------
EARNINGS APPLICABLE TO COMMON STOCK $ 2,880 $ 682
========== ==========
WEIGHTED AVERAGE NUMBER OF SHARES 7,220 6,321
========== ==========
EARNINGS PER COMMON SHARE,
based on the weighted average
number of shares outstanding
during the period $ .40 $ .11
========== ==========
DIVIDENDS DECLARED PER COMMON SHARE $ .33 $ .33
========== ==========
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, 1994
("1994 Form 10-K") should be read in conjunction with the comments below.
EARNINGS
Earnings for the quarter ended March 31, 1995 were $.40 per common share
compared to $.11 per common share for the same period in 1994. The 1995
earnings per share number is based on a greater number of common shares
outstanding than in 1994.
With the Maine Public Utilities Commission's (MPUC) order on February
14, 1995 approving many aspects of the Company's Alternative Marketing Plan
(AMP) proposal, the fuel clause adjustment (FCA), seasonal rates and deferred
fuel accounting were eliminated effective January 1, 1995 with the Company
maintaining its rates at existing levels (combining base and fuel revenues).
The change in FCA required the Company to record, as expense, actual fuel
costs incurred whereby previously fuel costs were expensed when recovered
through revenues. For the quarter ended March 31, 1995 earnings were
enhanced by $1.7 million before income taxes. Despite the decrease in
kilowatt hour (KWH) sales in the first quarter of 1995, electric operating
revenues increased by $1.9 million as a result of the elimination of seasonal
rates on March 7, 1995, which resulted in a higher combined electric rate,
due to the blended average rate now in effect being in excess of the summer
rate that was in effect during March 1994. Operations and Maintenance (O&M)
expenses were $2.6 million lower in the 1995 quarter as compared to 1994 due
principally to the early retirement program implemented in March 1994. The
Company experienced a $2.8 million non-cash charge before taxes related to
this event. The positive earnings performance in the first quarter of 1995
is not anticipated to continue for the remainder of 1995 due to the possible
ramifications of the Maine Yankee shutdown (discussed below), as well as the
favorable impact the elimination of FCA had on the first quarter is not
expected to continue over the rest of the year.
IMPORTANT CURRENT ACTIVITIES
MAINE YANKEE - The Company owns 7% of the common stock of Maine Yankee
Atomic Power Company (Maine Yankee) which owns and operates a nuclear power
plant in Wiscasset, Maine. Under purchased power arrangements, the Company
is entitled to purchase an amount approximately equal to its ownership share
of the output of Maine Yankee, an entitlement of approximately 61 megawatts.
The Company is also obligated to pay its pro rata share of Maine Yankee's
operating expenses, fuel costs, capital costs, and decommissioning costs.
The Maine Yankee unit, like other pressurized water reactors, has been
experiencing degradation of its steam generator tubes, principally in the
form of circumferential cracking, which, until early 1995, was believed to be
limited to a relatively small number of steam generator tubes. In the past
the detection of defects has resulted in the plugging of those tubes to
prevent their subsequent use. During the refueling and maintenance shutdown
that commenced in early February 1995, Maine Yankee detected increased
degradation of the plant's steam generator tubes in excess of the number
expected.
Following a careful, detailed analysis of the safety, technical and
financial considerations associated with its defective steam generator tubes,
Maine Yankee intends to further explore sleeving all 17,000 steam generator
tubes. Testing has revealed that approximately 40 percent of the tubes are
free of defects. Maine Yankee's plan would be to sleeve all tubes as a
preventative safety measure. If this option were implemented, the plant
could return to service in the final quarter of 1995.
Based on Maine Yankee's initial review, Maine Yankee management has
indicated that sleeving appears to be the most viable option. Sleeving is a
safe, economical repair solution that would allow the steam generators to
function well for several years. Sleeving is a proven technology that has
been used widely throughout the industry for more than ten years and has an
excellent track record of success.
The Company estimates that, under current conditions in the bulk power
market, its power costs will be increased by approximately $700,000 to
$900,000 per month during the Maine Yankee shutdown, which will place added
pressure on the Company's earnings in 1995 with the elimination of the FCA.
In addition, the Company would be responsible for its pro rata share of any
costs associated with repairing or mitigating the impact of the degraded
tubes. The Company believes it is too early to provide reliable estimates of
such costs, but that they could be substantial.
BUYBACK OF PURCHASED POWER CONTRACTS - The Company has negotiated
definitive agreements to buy back two contracts for the purchase of power
from operators of biomass-fueled plants located in West Enfield and
Jonesboro, Maine, that will involve a financing on the Company's part of
about $162 million. The Company is currently pursuing regulatory approvals
and financing alternatives. Although financing this transaction is a
significant challenge, the Company believes accomplishing these buybacks will
improve the Company's chance for improved earnings sooner than if the
contracts were to stay in place.
REVENUES
The $1.9 million increase in total electric operating revenues was
attributable to the 15.9% base rate increase effective March 1, 1994 as well
as the previously mentioned impact of the elimination of seasonal rates for
certain customers, offset by a .9% decrease in total KWH sales in the first
quarter of 1995 as compared to 1994. The decrease in KWH sales was due
principally to the warmer than average winter as well as the continued
sluggish economy in the Company's service territory.
EXPENSES
With the AMP order by the MPUC, and the elimination of the FCA, the
Company, in the first quarter of 1995, began recording, as expense, the
actual cost of fuel for generation. Previously the Company had historically
been permitted to adjust its rates retroactively for changes in these costs.
The FCA had allowed the Company to respond quickly to changes in fuel costs
(both increases and decreases) and had reduced the volatility of earnings.
As discussed in the section on earnings, the elimination of the FCA resulted
in a $1.7 million decrease in fuel expenses in the first quarter of 1995, as
compared to the expense had the FCA still been in effect.
As of January 1, 1995, the Company's collections under the FCA had
exceeded its costs by approximately $3.03 million. With the elimination of
the FCA, the MPUC recognized that there would no longer be a mechanism for
the return of that sum to customers. The MPUC allowed the Company to retain
that overcollection and ordered that the amount be amortized over a period of
three years, effective January 1, 1995. Consequently, in the first quarter
of 1995 this amortization resulted in a $252,000 decrease in fuel for
generation expense.
The $778,000 increase in purchased power expense was due principally to
higher Maine Yankee capacity and transmission costs, as well as with the
elimination of the FCA, certain capacity transmission costs are no longer
reclassified as fuel costs.
The $2.6 million decrease in other O&M expense in the first quarter of
1995 was primarily a result of the early retirement program implemented in
the first quarter of 1994, which positively impacted O&M payroll for the
first quarter of 1995 by $498,000 as compared to 1994. This expense decrease
was offset to some extent 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). FASB
106 in the first quarter of 1995 was $275,000 greater than that recorded in
the first quarter of 1994. Also amortizations of certain deferred charges
allowed in the last recent base rate case, which principally became effective
March 1, 1994, were $159,000 greater in the 1995 quarter as compared to 1994.
The increase in depreciation and amortization expense was due to an
increase in depreciable property.
Effective March 1, 1994 in connection with the last 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 in the first quarter of 1995 was $648,000
greater than that recorded in the 1994 period.
The increase in income taxes was primarily a function of greater
taxable income in the first quarter of 1995. The effective income tax rate
was 32% in the first quarter of 1995 as compared to 25% in the first quarter
of 1994. This was due to significantly greater amounts of the equity
component of AFDC in the 1994 period, which is non-taxable income.
AFDC decreased in 1995 relative to 1994 primarily because the Company
ceased accruing carrying costs associated with the Beaver Wood purchased
power contract buyout when recovery was authorized by the MPUC on March 1,
1994.
Other interest expense, which is composed primarily of interest expense
on short term borrowings, increased due to higher interest rates, offset by
lower levels of short term borrowings outstanding in the 1995 quarter.
LIQUIDITY AND CAPITAL RESOURCES
The Consolidated Statements of Cash Flows reflect events in the first
three months of 1995 and 1994 as they affect the Company's liquidity. Net
cash provided by operations for the quarter ended March 31, 1995 decreased
$5.0 million compared to the 1994 period. The decrease in cash flows was due
principally to deferred fuel revenue, which decreased $252,000 in the 1995
period as compared to a $5.3 million increase for the 1994 period. The
decrease was also due to a $987,000 increase in net receivables, and unbilled
revenue in 1995 as compared to a $2.5 million increase in 1994. These
decreases in cash flows from operations were offset to some extent by
increased net income in the 1995 period as compared to 1994, and a $1.0
million increase in accounts payable in 1995 as compared to a $1.9 million
decrease in the 1994 period.
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.
Under the Company's Dividend Reinvestment and Common Stock Purchase Plan
the Company realized a common stock investment of $421,000 through the
issuance of 44,201 new common shares in the first quarter of 1995 as compared
to $354,000 in the comparable 1994 period through the issue of 19,780 shares.
The Company is presently engaged in discussions with its short-term
lenders in connection with renewing the Company's short-term borrowing
facilities and accommodating the proposed financing of the power contract
buyback discussed earlier.
The Company in each period made regular and optional sinking fund
payments on its 12.25% first mortgage bonds.
BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED BALANCE SHEETS
000's Omitted
(Unaudited)
ASSETS March 31, Dec. 31,
1995 1994
----------- -----------
INVESTMENT IN UTILITY PLANT:
Electric plant in service, at original cost $ 288,212 $ 274,830
Less - Accumulated depreciation and amortization 77,382 75,667
----------- -----------
$ 210,830 $ 199,163
Construction in progress 15,373 23,929
----------- -----------
$ 226,203 $ 223,092
Investments in corporate joint ventures-
Maine Yankee Atomic Power Company $ 4,750 $ 4,754
Maine Electric Power Company, Inc. 125 125
----------- -----------
$ 231,078 $ 227,971
----------- -----------
OTHER INVESTMENTS, principally at cost $ 3,777 $ 3,482
----------- -----------
CURRENT ASSETS:
Cash and cash equivalents $ 1,466 $ 1,956
Accounts receivable, net of reserve 19,182 19,130
Unbilled revenue receivable 7,572 8,611
Inventories, at average cost:
Material and supplies 2,693 2,992
Fuel oil 369 435
Prepaid expenses 1,161 1,681
Deferred purchased power costs 1,301 235
Current deferred income taxes 910 1,094
----------- -----------
Total current assets $ 34,654 $ 36,134
----------- -----------
DEFERRED CHARGES:
Investment in Seabrook Nuclear Project, net of
accumulated amortization of $23,802 in 1995
and $23,377 in 1994 $ 35,040 $ 35,465
Costs to terminate purchased power contract 35,767 36,739
Deferred regulatory assets 31,161 33,537
Prepaid pension costs 2,182 2,082
Demand-side management costs 2,494 2,684
Other 3,473 3,156
----------- -----------
Total deferred charges $ 110,117 $ 113,663
----------- -----------
Total assets $ 379,626 $ 381,250
=========== ===========
See notes to the consolidated financial statements.
BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED BALANCE SHEETS
000's Omitted
(Unaudited)
March 31, Dec. 31,
STOCKHOLDERS' INVESTMENT AND LIABILITIES 1995 1994
---------- ----------
CAPITALIZATION:
Common stock, par $5 per share -
Authorized 10,000,000 shares
Outstanding- 7,229,344 in 1995 and 7,185,143 in 1994 $ 36,147 $ 35,926
Amounts paid in excess of par value 56,174 55,974
Retained earnings 14,252 13,758
---------- ----------
$ 106,573 $ 105,658
Preferred stock, non-participating, cumulative,
par value $100 per share, authorized - 600,000 shares
Not redeemable or redeemable solely at the
option of the Company $ 4,734 $ 4,734
Subject to mandadory redemption requirements -
8.76%, callable at 105.63% if called on
or prior to December 27, 1995, 150,000
shares authorized and outstanding, exclusive
of current sinking fund requirements 13,758 13,740
Long-term debt, exclusive of current sinking fund
requirements 114,922 116,367
---------- ----------
Total capitalization $ 239,987 $ 240,499
---------- ----------
CURRENT LIABILITIES:
Notes payable - banks $ 27,000 $ 27,000
---------- ----------
Other current liabilities -
Sinking fund requirements on preferred stock
and long-term debt $ 3,051 $ 2,961
Accounts payable 15,671 14,669
Dividends payable 2,781 2,766
Accrued interest 2,439 3,650
Deferred fuel revenue 2,773 3,025
Customers' deposits 321 288
Income taxes payable 2,015 966
---------- ----------
Total other current liabilities $ 29,051 $ 28,325
---------- ----------
Total current liabilities $ 56,051 $ 55,325
---------- ----------
DEFERRED CREDITS AND RESERVES:
Deferred income taxes - Seabrook $ 18,214 $ 18,434
Other accumulated deferred income taxes 48,841 50,084
Deferred regulatory liability 8,927 9,222
Unamortized investment tax credits 2,371 2,415
Other 5,235 5,271
---------- ----------
Total deferred credits and reserves $ 83,588 $ 85,426
---------- ----------
Total Stockholders' Investment and Liabilities $ 379,626 $ 381,250
========== ==========
See notes to the consolidated financial statements.
BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
000's Omitted
(Unaudited)
1995 1994
--------- ---------
BALANCE AT JANUARY 1 $ 13,758 $ 17,386
ADD - NET INCOME 3,293 1,095
--------- ---------
$ 17,051 $ 18,481
--------- ---------
DEDUCT:
Cash dividends declared on -
Preferred stock $ 395 $ 395
Common stock 2,386 2,347
Other 18 18
--------- ---------
$ 2,799 $ 2,760
--------- ---------
BALANCE AT MARCH 31 $ 14,252 $ 15,721
========= =========
See notes to the consolidated financial statements.
BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
000's Omitted
(Unaudited)
1995 1994
CASH FLOWS FROM OPERATIONS: --------- ---------
NET INCOME $ 3,293 $ 1,095
Adjustments to reconcile net income to net cash
provided by (used in) operations:
Depreciation and amortization 1,549 1,298
Amortization of Seabrook Nuclear Project 425 425
Amortization of costs to terminate
purchased power contract 972 324
Allowance for equity funds used during construction (219) (553)
Deferred income tax provision 660 345
Deferred investment tax credits (44) (45)
Changes in assets and liabilities:
Deferred purchased power costs (1,066) 391
Receivables, net and unbilled revenue 987 2,482
Prepaid pension costs (100) 1,691
Accounts payable 1,002 (1,909)
Accrued interest (1,211) (1,282)
Deferred fuel revenue (252) 5,274
Current and deferred income taxes 1,171 444
Other current assets and liabilities, net 553 754
Other, net 495 2,441
--------- ---------
Net Cash Provided By Operations $ 8,215 $ 13,175
--------- ---------
CASH FLOWS FROM INVESTING:
Construction expenditures $ (4,795) $ (4,564)
Allowance for borrowed funds used during construction (210) (692)
--------- ---------
Net Cash (Used in) Investing $ (5,005) $ (5,256)
--------- ---------
CASH FLOWS FROM FINANCING:
Dividends on preferred stock $ (395) $ (395)
Dividends on common stock (2,371) (2,054)
Sinking fund payments on long-term debt (1,355) (1,259)
Issuances:
Common stock:
Public offering (867,500 shares in 1994) - 14,084
Dividend reinvestment plan (44,201 shares in 1995
and 19,780 shares in 1994) 421 354
Short-term debt, net - (20,000)
--------- ---------
Net Cash (Used in) Financing $ (3,700) $ (9,270)
--------- ---------
Net Change in Cash and Cash Equivalents $ (490) $ (1,351)
Cash and Cash Equivalents-Beginning of Quarter 1,956 2,387
--------- ---------
Cash and Cash Equivalents-End of Quarter $ 1,466 $ 1,036
========= =========
SUPPLEMENTAL CASH FLOW INFORMATION:
CASH PAID DURING THE QUARTER FOR -
Interest (Net of Amount Capitalized) $ 3,956 $ 3,709
Income Taxes - -
========= =========
See notes to the consolidated financial statements.
BANGOR HYDRO-ELECTRIC COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1995
-------------
(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. The year end condensed balance sheet data was
derived from audited financial statements but does not include all
disclosures required by generally accepted accounting principles. These
statements should be read in conjunction with the consolidated financial
statements and the notes thereto and all other information included in the
1994 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 March 31,
1995 and the results of operations and cash flows for the periods ended March
31, 1995 and 1994.
The Company's significant accounting policies are described in the Notes
to the Consolidated Financial Statements included in its 1994 Form 10-K filed
with the Securities and Exchange 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:
THREE MONTHS ENDED MARCH 31,
----------------------------
1995 1994
---- ----
Amount % Amount %
-------- -- -------- --
(Dollars in Thousands)
----------------------
Federal income tax provision
at statutory rate $1,807 34% $474 34%
Less permanent reductions in
tax expense resulting from
statutory exclusions from
taxable income 55 1 179 12
------ --- ------ ---
Federal income tax provision
before effect of temporary
differences $1,752 33% $295 22%
Less (plus) temporary differences
that are flowed through for
ratemaking and accounting
purposes 49 1 (57) (3)
------ --- ----- ---
Federal income tax provision $1,703 32% $352 25%
====== === ====== ===
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 Three Months Ended
-------------------------------------
March 31 March 31 March 31 March 31
1995 1994 1995 1994
-------- -------- -------- --------
OPERATIONS:
As reported by investee-
Operating revenues $62,662 $ 39,316 $ 9,069 $ 5,048
======= ======== ======= =======
Earnings applicable to
common stock $ 1,715 $ 1,707 $ 26 $ 26
======= ======== ======= =======
Company's reported equity-
Equity in net income $ 120 $ 119 $ 4 $ 4
Deduct-Effect of
adjusting Company's
estimate to actual 8 (18) - -
------- -------- ------- -------
Amounts reported by
Company $ 128 $ 101 $ 4 $ 4
======= ======== ======= =======
MAINE YANKEE MEPCO
----------------- ----------------
(Dollars in Thousands)
(Unaudited)
Financial Position at
-----------------------------------
Mar. 31 Dec. 31 Mar. 31 Dec. 31
1995 1994 1995 1994
-------- -------- -------- --------
FINANCIAL POSITION:
As reported by investee-
Total assets $568,787 $549,910 $ 7,038 $ 6,563
Less-
Preferred stock 18,600 19,200 - -
Long-term debt 115,166 118,666 1,730 1,730
Other liabilities and
deferred credits 367,487 344,550 4,430 3,955
------- ------- ------- -------
Net assets $ 67,534 $ 67,494 $ 878 $ 878
======= ======= ======= =======
Company's reported equity-
Equity in net assets $ 4,727 $ 4,725 $ 125 $ 125
Add (deduct) - Effect
of adjusting Company's
estimate to actual 23 29 - -
-------- -------- -------- -------
Amounts reported by
Company $ 4,750 $ 4,754 $ 125 $ 125
======== ======== ======== =======
(4) ALTERNATIVE MARKETING PLAN:
With the Maine Public Utilities Commission's (MPUC) order on February
14, 1995, approving many aspects of the Company's Alternative Marketing Plan
proposal, the fuel adjustment clause and deferred fuel accounting were
eliminated effective January 1, 1995. Consequently, in the first quarter of
1995, base and fuel cost adjustment (FCA) rates have been combined into one
overall rate, and the associated revenues are reflected as Electric Operating
Revenues.
As of January 1, 1995, the Company's collections under the FCA had
exceeded its costs by approximately $3.03 million. The MPUC has allowed the
Company to retain the overcollection and ordered that the amount be amortized
over a period of three years beginning January 1, 1995.
(5) MAINE YANKEE OUTAGE:
The Maine Yankee unit, like other pressurized water reactors, has been
experiencing degradation of its steam generator tubes, principally in the
form of circumferential cracking, which, until early 1995, was believed to be
limited to a relatively small number of steam generator tubes. During the
refueling and maintenance shutdown that commenced in early February 1995,
Maine Yankee detected increased degradation of the plant's steam generator
tubes in excess of the number expected.
Following a careful, detailed analysis of the safety, technical and
financial considerations associated with its defective steam generator tubes,
Maine Yankee intends to further explore sleeving all 17,000 steam generator
tubes. If this option were implemented, the plant could return to service in
the final quarter of 1995.
The Company estimates that, under current conditions in the bulk power
market, its power costs will be increased by approximately $700,000 to
$900,000 per month during the Maine Yankee shutdown. In addition, the Company
would be responsible for its pro rata share of any costs associated with
repairing or mitigating the impact of the degraded tubes. The Company
believes it is too early to provide reliable estimates of such costs, but
that they could be substantial.
(6) BUYBACK OF PURCHASED POWER CONTRACTS:
The Company has negotiated definitive agreements to buy back two
contracts for the purchase of power from operators of biomass-fueled plants
located in West Enfield and Jonesboro, Maine, that will involve a financing
on the Company's part of about $162 million. The Company is currently
pursuing regulatory approvals and financing alternatives.
(7) RECLASSIFICATIONS:
Certain 1994 amounts have been reclassified to conform with presentation
used in Form 10-Q for the quarter ended March 31, 1995.
BANGOR HYDRO-ELECTRIC COMPANY
FORM 10-Q FOR PERIOD ENDING MARCH 31, 1995
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------- ---------------------------------
EXHIBITS - None.
--------
REPORTS ON FORM 8-K
-------------------
A Current Report on Form 8-K dated March 15, 1995 describing certain
regulatory changes, reporting on the buyback of two high-cost contracts for
the purchase of power from non-utility independent power producers with whom
the Company was required to contract in the 1980's and describing the
implications of those events on the Company's dividend policy was submitted
during the period covered by this Report.
BANGOR HYDRO-ELECTRIC COMPANY
FORM 10-Q FOR PERIOD ENDED MARCH 31, 1995
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)
/s/ Robert C. Wesier
Dated: May 11, 1995 -----------------------------
Robert C. Weiser
Treasurer
(Chief Financial Officer)
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Form 10Q for
the first quarter of 1995 and is qualified in its entirety by reference to such
10Q.
</LEGEND>
<CIK> 0000009548
<NAME> BANGOR HYDRO-ELECTRIC COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> MAR-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 210,830
<OTHER-PROPERTY-AND-INVEST> 24,025
<TOTAL-CURRENT-ASSETS> 34,654
<TOTAL-DEFERRED-CHARGES> 110,117
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 379,626
<COMMON> 36,147
<CAPITAL-SURPLUS-PAID-IN> 56,174
<RETAINED-EARNINGS> 14,252
<TOTAL-COMMON-STOCKHOLDERS-EQ> 106,573
13,758
4,734
<LONG-TERM-DEBT-NET> 114,922
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 27,000
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 1,551
1,500
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 109,588
<TOT-CAPITALIZATION-AND-LIAB> 379,626
<GROSS-OPERATING-REVENUE> 48,263
<INCOME-TAX-EXPENSE> 1,945
<OTHER-OPERATING-EXPENSES> 40,315
<TOTAL-OPERATING-EXPENSES> 42,260
<OPERATING-INCOME-LOSS> 6,003
<OTHER-INCOME-NET> 303
<INCOME-BEFORE-INTEREST-EXPEN> 6,306
<TOTAL-INTEREST-EXPENSE> 3,013
<NET-INCOME> 3,293
413
<EARNINGS-AVAILABLE-FOR-COMM> 2,880
<COMMON-STOCK-DIVIDENDS> 2,386
<TOTAL-INTEREST-ON-BONDS> 10,358
<CASH-FLOW-OPERATIONS> 8,215
<EPS-PRIMARY> .40
<EPS-DILUTED> .40
</TABLE>
