-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Q3CNzvp8hCq6QXvNt4v/WO5fXTEYaODa4KPgm4VF8n2r35W0wuNagk1NkZwKVb/K Lz6itR5KVdXIMX35WfwZyQ== 0000012400-95-000011.txt : 19950517 0000012400-95-000011.hdr.sgml : 19950516 ACCESSION NUMBER: 0000012400-95-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLACK HILLS CORP CENTRAL INDEX KEY: 0000012400 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 460111677 STATE OF INCORPORATION: SD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07978 FILM NUMBER: 95537070 BUSINESS ADDRESS: STREET 1: 625 NINTH ST STREET 2: PO BOX 1400 CITY: RAPID CITY STATE: SD ZIP: 57709 BUSINESS PHONE: 6053481700 MAIL ADDRESS: STREET 1: P O BOX 1400 CITY: RAPID CITY STATE: SD ZIP: 57709 FORMER COMPANY: FORMER CONFORMED NAME: BLACK HILLS POWER & LIGHT CO DATE OF NAME CHANGE: 19860409 10-Q 1 Securities and Exchange Commission Washington, D.C. 20549 Form 10-Q X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995. OR ___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 For the transition period from _______________ to _______________. Commission File Number 1-7978 Black Hills Corporation Incorporated in South Dakota IRS Identification Number 46-0111677 625 Ninth Street Rapid City, South Dakota 57709 Registrant's telephone number (605)-348-1700 NONE Former name, former address, and former fiscal year if changed since last report 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 Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the last practicable date. Class Outstanding at April 30, 1995 Common stock, $1.00 par value 14,399,499 shares BLACK HILLS CORPORATION I N D E X Page Number PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets- 2-3 March 31, 1995, December 31, 1994, and March 31, 1994 Consolidated Statements of Income- 4 Three and Twelve Months Ended March 31, 1995 and 1994 Consolidated Statements of Cash Flows- 5-6 Three and Twelve Months Ended March 31, 1995 and 1994 Consolidated Statements of Shareholders' Equity- 7 Three and Twelve Months Ended March 31, 1995 and 1994 Notes to Consolidated Financial Statements 8 Item 2. Management's Discussion and Analysis of 8-10 Financial Position and Consolidated Statements of Earnings PART II. OTHER INFORMATION Item 1. Legal Proceedings 11 Signatures 12 BLACK HILLS CORPORATION Consolidated Balance Sheets (unaudited)
March 31 December 31 March 31 1995 1994 1994 (in thousands) Assets Current assets: Cash and cash equivalents $ 4,164 $ 12,174 $ 16,787 Short-term investments 18,225 24,134 26,225 Receivables- Customers 12,661 12,409 10,931 Other 2,522 4,045 2,524 Materials, supplies, and fuel 7,552 7,139 7,013 Prepaid expenses 1,286 1,564 1,409 -------- -------- -------- 46,410 61,465 64,889 -------- -------- -------- Property and investments: Electric 442,671 425,690 347,805 Coal mining 51,061 52,267 52,357 Oil and gas 36,022 38,842 32,993 Other 3,254 2,785 3,400 -------- -------- -------- 533,008 519,584 436,555 Less accumulated depreciation and depletion (158,442) (156,046) (148,704) -------- -------- -------- Net property and investments 374,566 363,538 287,851 -------- -------- -------- Deferred charges: Federal income taxes 7,679 7,505 7,317 Other 4,904 4,369 3,407 -------- -------- -------- 12,583 11,874 10,724 -------- -------- -------- Total $433,559 $436,877 $363,464 ======== ======== ======== See accompanying notes to consolidated financial statements.
BLACK HILLS CORPORATION Consolidated Balance Sheets (unaudited)
March 31 December 31 March 31 1995 1994 1994 (in thousands) Liabilities and Capitalization Current liabilities: Current maturities of long-term debt $ 2,042 $ 2,144 $ 2,090 Notes payable 2,218 37,018 21,668 Accounts payable 9,131 12,018 6,257 Accrued liabilities- Income taxes 2,604 572 2,818 Other taxes 6,964 5,759 6,671 Interest 2,833 2,795 2,200 Fuel and purchased power refunds 1,175 1,025 1,200 Other 6,403 7,101 6,085 -------- -------- ------- 33,370 68,432 48,989 -------- -------- ------- Deferred credits: Federal income taxes 40,955 39,953 36,581 Investment tax credits 5,396 5,521 5,901 Reclamation costs 7,761 7,618 7,441 Regulatory liability 6,693 6,925 6,912 Other 4,206 4,093 3,180 -------- -------- ------- 65,011 64,110 60,015 -------- -------- ------- Capitalization: Common stock equity- Common stock 14,400 14,386 14,307 Additional paid-in capital 45,951 45,740 44,184 Retained earnings 116,459 115,284 111,485 Total common stock equity 176,810 175,410 169,976 Long-term debt 158,368 128,925 84,484 -------- -------- -------- 335,178 304,335 254,460 -------- -------- -------- Total $433,559 $436,877 $363,464 ======== ======== ======== See accompanying notes to consolidated financial statements.
BLACK HILLS CORPORATION Consolidated Statements of Income (unaudited)
Three Months Twelve Months March 31 March 31 1995 1994 1995 1994 (in thousands) Operating revenues: Electric $26,023 $25,870 $104,909 $ 99,385 Coal mining 6,939 7,179 28,353 29,682 Oil and gas 2,977 2,611 12,419 11,591 ------- ------- -------- -------- 35,939 35,660 145,681 140,658 ------- ------- -------- -------- Operating expenses: Fuel and purchased power 10,027 9,994 42,002 37,961 Operations & maintenance 6,306 6,917 28,092 29,880 Administrative and general 2,704 1,967 8,657 7,935 Depreciation, depletion and amortization 4,747 4,493 17,930 17,139 Taxes, other than income taxes 2,652 2,610 10,422 10,259 ------- ------- ------- ------- 26,436 25,981 107,103 103,174 ------- ------- ------- ------- Operating income: Electric 6,245 6,605 24,717 23,976 Coal mining 2,918 2,963 11,776 12,398 Oil and gas 340 111 2,085 1,110 ------- ------- ------- ------- 9,503 9,679 38,578 37,484 ------- ------- ------- ------- Other (income) and expense: Interest expense 3,566 2,147 11,758 8,798 Investment income (400) (347) (1,684) (1,668) Allowance for funds used during construction (2,296) (360) (5,919) (935) Other (69) 68 (308) (273) ------- ------- ------- ------- 801 1,508 3,847 5,922 ------- ------- ------- ------- Income before income taxes 8,702 8,171 34,731 31,562 Income taxes (2,703) (2,371) (10,726) (8,920) ------- ------- -------- -------- Net income available for common stock $ 5,999 $ 5,800 $ 24,005 $ 22,642 ======= ======= ======== ======== Weighted average common shares outstanding 14,395 14,275 14,366 13,954 ======= ======= ======== ======== Earnings per share $ 0.42 $ 0.41 $ 1.67 $ 1.62 ======= ======= ======== ======== Dividends paid per share of common stock $ 0.335 $ 0.330 $ 1.325 $ 1.290 ======= ======= ======== ======== See accompanying notes to consolidated financial statements.
BLACK HILLS CORPORATION
Consolidated Statements of Cash Flows (unaudited) Three Months Twelve Months March 31 March 31 1995 1994 1995 1994 (in thousands) Operating activities: Net Income $ 5,999 $ 5,800 $24,005 $22,642 Principal non-cash items- Depreciation, depletion, and amortization 4,747 4,493 17,930 17,139 Deferred income taxes and investment tax credits, net 469 204 2,737 1,139 Allowance for other funds used during construction (1,419) (162) (3,610) (434) (Increase) decrease in receivables, inventories, and other current assets 1,137 (158) (2,144) (1,845) Increase (decrease) in other current liabilities (161) 1,015 3,879 (1,178) Other, net 1,714 (484) 8,295 3,155 ------- ------- ------- ------- 12,486 10,708 51,092 40,618 ------- ------- ------- ------- Investment activities: Neil Simpson Unit #2 construction costs, excluding allowance for other funds used during construction (13,567) (4,302) (81,558) (16,339) Other property additions, excluding allowance for other funds used during construction (3,091) (3,437) (28,426) (27,039) Short-term investments purchased (7,835) (7,525) (41,419) (31,012) Short-term investments sold 13,744 5,517 49,419 21,558 Proceeds from sale of long-term investments 311 4,215 1,054 18,946 ------- ------ -------- ------- (10,438) (5,532) (100,930) (33,886) ------- ------ -------- ------- Financing activities: Dividends paid (4,824) (4,714) (19,031) (18,047) Common stock issued 225 801 1,860 14,370 Net short-term borrowings (34,800) 9,900 (19,450) 14,484 Long-term debt issued 31,650 - 77,445 - Long-term debt retired (2,309) (2,242) (3,609) (4,506) ------- ------ ------- ------- (10,058) 3,745 37,215 6,301 ------- ------ ------- ------- Increase (decrease) in cash and cash equivalents (8,010) 8,921 (12,623) 13,033 Cash and cash equivalents: Beginning of period 12,174 7,866 16,787 3,754 ------- ------- ------- ------- End of period $ 4,164 $16,787 $ 4,164 $16,787 ======= ======= ======= ======= Supplemental disclosure of cash flow information Cash paid during the period for: Interest $ 3,527 $ 1,647 $11,125 $ 9,300 Income taxes $ 2,220 $ - $ 9,510 $ 7,825 See accompanying notes to consolidated financial statements.
BLACK HILLS CORPORATION Statements of Shareholders' Equity (unaudited)
Three Months Twelve Months March 31 March 31 1995 1994 1995 1994 (in thousands) Common stock: Beginning of period $ 14,386 $ 14,270 $ 14,307 $ 13,707 Issuance of $1 par value shares 14 37 93 600 -------- -------- -------- -------- End of period 14,400 14,307 14,400 14,307 -------- -------- -------- -------- Additional paid-in capital: Beginning of period 45,740 43,420 44,184 30,414 Excess of proceeds over par value of stock issued 211 753 1,811 14,406 Expenses related to issuance of stock - 11 (44) (636) -------- -------- -------- -------- End of period 45,951 44,184 45,951 44,184 -------- -------- -------- -------- Retained earnings: Beginning of period 115,284 110,399 111,485 106,890 Net income 5,999 5,800 24,005 22,642 Cash dividends on common stock (4,824) (4,714) (19,031) (18,047) -------- -------- -------- -------- End of period 116,459 111,485 116,459 111,485 -------- -------- -------- -------- Total shareholders' equity $176,810 $169,976 $176,810 $169,976 ======== ======== ======== ========
BLACK HILLS CORPORATION Notes to Consolidated Financial Statements (Reference is made to Notes to Consolidated Financial Statements included in the Company's Annual Report) (1) Management's Statement The financial statements included herein have been prepared by Black Hills Corporation (the Company) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the footnotes adequately disclose the information presented. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto, included in the Company's 1994 Annual Report on Form 10-K filed with the Securities and Exchange Commission. In March 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of. This statement imposes stricter criteria for regulatory assets by requiring that such assets be probable of future recovery at each balance sheet date. The Company anticipates adopting this standard on January 1, 1996, and does not expect that adoption will have a material impact on the financial position or results of operations of the Company based on the current regulatory structure in which the Company operates. Accounting methods historically employed require certain estimates as of interim dates. The information furnished in the accompanying financial statements reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the March 31, 1995, December 31, 1994, and March 31, 1994, financial information and are of a normal recurring nature. The results of operations for the three months ended March 31, 1995, are not necessarily indicative of the results to be expected for the full year. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity, Capital Resources, and Commitments In the past the Company has depended upon internally generated funds, issuance of short and long-term debt, and sales of common stock to finance its activities. It is expected future activities will also be financed by the most appropriate mix of these various sources of funds. The Company currently has bank lines of credit totaling $45,000,000 which provides for interim borrowings and the opportunity for timing of permanent financing. At March 31, 1995, the Company had borrowings of $2,175,000 outstanding under these lines of credit. There are no compensating balance requirements associated with these lines of credit. The Company filed a Form S-3, shelf registration for $100,000,000 first mortgage bonds, with the Securities and Exchange Commission on June 28, 1994. The registration statement became effective on July 13, 1994. The Company issued $45,000,000 of bonds under this filing on September 1, 1994 and $30,000,000 of bonds on February 3, 1995. The $30,000,000 bond issue has a 15 year life and carries an 8.06 percent interest rate. The bondholders have a one-time option to cause the Company to redeem the bonds. The bonds were used to finance Neil Simpson Unit #2, an 80 MW coal fired generating plant, located adjacent to Wyodak Resources Development Corp.'s coal mine. Management believes that this issue will complete the long-term debt financing associated with Neil Simpson Unit #2. The remaining expenditures related to the project will be financed by existing cash balances, short-term investments, and short-term lines of credit. Construction of the Plant is proceeding ahead of schedule and costs incurred to date are under the initial project budget. Total construction costs of the plant are estimated to be approximately $121,000,000. The Company has incurred approximately $104,000,000 of costs related to the plant and such costs are reflected in the Company's Balance Sheet at March 31, 1995. The plant will be fueled by coal from the Wyodak mine, air cooled, and is expected to meet all Clean Air Act requirements. Construction commenced at the plant site in August 1993 and is scheduled to be completed by September 1, 1995. The Company filed applications with the South Dakota Public Utilities Commission and Wyoming Public Service Commission during the first quarter of 1995, requesting authority to increase rates approximately 9.96% when Neil Simpson Unit #2 begins commercial operation, scheduled to occur September 1, 1995. Rate hearings have been scheduled for July 17-19 in South Dakota and August 14-15 in Wyoming. See the Company's 1994 Annual Report on Form 10-K for more information on the Rate Applications. Results of Operations Black Hills Corporation is an energy services company consisting of three principal businesses: electric, coal mining, and oil and gas production. Consolidated income was $5,999,000 for the three months ended and $24,005,000 for the twelve months ended March 31, 1995, an increase of $199,000 and $1,363,000 for the three and twelve month periods, respectively. The increase in consolidated net income for the first quarter was primarily due to a $365,000 increase in earnings from the oil and gas operations. The increase in earnings for the twelve month period was the result of increased electric and oil and gas earnings caused by increased electric sales and an increase in oil and gas production. Consolidated revenue and income from continuing operations provided by the three businesses as a percentage of the total were as follows:
Three Months Ended Twelve Months Ended March 31 March 31 1995 1994 1995 1994 Revenue Electric 73% 73% 72% 71% Coal mining 19 20 19 21 Oil and gas 8 7 9 8 --- --- --- --- 100% 100% 100% 100% === === === === Net Income Electric 56% 59% 53% 50% Coal mining 40 43 41 47 Oil and gas 4 (2) 6 3 --- --- --- --- 100% 100% 100% 100% === === === ===
Capital expenditures and depreciation, depletion, and amortization by industry segment were as follows:
Three Months Ended Twelve Months Ended March 31 March 31 1995 1994 1995 1994 (in thousands) Capital Expenditures (includes AFDC) Neil Simpson Unit #2 $14,942 $4,454 $ 84,808 $16,608 Other electric 2,039 1,859 14,391 13,040 Coal mining 103 687 5,326 7,758 Oil and gas 993 901 9,069 6,406 ------- ------ -------- ------- $18,077 $7,901 $113,594 $43,812 ======= ====== ======== ======= Depreciation, Depletion, and Amortization Electric $2,644 $2,588 $10,370 $10,103 Coal mining 906 573 2,836 2,065 Oil and gas 1,197 1,332 4,724 4,971 ------ ------ ------- ------- $4,747 $4,493 $17,930 $17,139 ====== ====== ======= =======
Electric Operations Electric revenue increased 0.6 percent and 6 percent for the three and twelve months ended March 31, 1995, respectively. Revenue for the three month period was relatively flat due to flat kilowatthour sales. The flat kilowatthour sales were the result of mild weather. Degree days, which is a measure of weather trends were 10 percent below normal for the first quarter of 1995 and 9 percent below last year. The increase in electric revenue for the twelve month period was the result of a 3 percent increase in firm kilowatthour sales and an increase in purchased power expense. Purchased power expense was abnormally low for the twelve months ended March 1994 due to a refund received on the Colstrip purchased power contract which was flowed back to customers in 1993. Electric expenses increased 3 percent and 6 percent for the three and twelve months ended March 31, 1995, compared to the same periods last year. The increase in expenses was primarily due to an increase in administrative and general expenses for both periods and an increase in purchased power cost for the twelve month period. Non-operating income increased for the three and twelve months ended March 31, 1995, primarily due to the allowance for funds used during construction recorded on the Neil Simpson Unit #2 construction project. Allowance for funds used during construction increased $1,936,000 and $4,984,000 for the three and twelve months ended March 31, 1995, while interest expense increased $1,392,000 and $3,052,000, respectively. Mining Operations Mining revenue decreased 3 percent and 4 percent for the three and twelve month periods ended March 31, 1995, compared to the same periods last year. Tons of coal sold decreased 6 percent and 7 percent for the three and twelve month periods, respectively. The Wyodak Plant was out of service for maintenance for 13 days during the first quarter of 1995 and 35 days during the second quarter of 1994 thereby reducing the tons of coal sold significantly. Mining operating expenses decreased 6 percent and 5 percent for the three and twelve month periods ended March 31, 1995, primarily due to the decrease in tons of coal sold offset by an increase in depreciation expense. Non-operating income increased $256,000 and $226,000 for the three and twelve months ended March 31, 1995. Oil and Gas Production Operations Oil and gas production revenue which represents less than 10 percent of consolidated revenue increased 14 percent and 7 percent for the three and twelve months ended March 31, 1995, directly related to an increase in equivalent barrels of oil sold as a result of the Company's 1993 and 1994 drilling program, along with an increase in oil prices. Equivalent barrels of oil sold increased 31 percent and 29 percent for the three and twelve month periods. Operating expenses increased 6 percent for the three month period and decreased 1 percent for the twelve months ended March 31, 1995, due to the increase in production offset by lower depletion expense. BLACK HILLS CORPORATION Part II - Other Information Item 1. Legal Proceedings The Company filed a complaint with the Federal Energy Regulatory Commission seeking refunds related to alleged overbillings by PacifiCorp under a 40 year contract for the purchase of power. The complaint requests a refund of approximately $3,936,000 plus interest of $1,630,000 related to prior periods and a 2.5% reduction of future costs or $492,000 per year for the next 24 years under the contract. The overbillings relate to income tax benefits that the Company alleges have not been properly reflected in the calculation of contract costs. This matter will not impact the earnings of the Company because the Company is obligated, if successful, to return any refunds related to this complaint to its customers under existing fuel and purchase power adjustment tariffs. Item 6. Exhibits and Reports on Form 8-K a. Exhibits None b. Reports on Form 8-K The Registrant filed a Form 8-K on February 3, 1995, reporting the issuance and sale of $30,000,000 First Mortgage Bonds, Series AC, 8.06 percent, due February 1, 2010 under a Registration Statement on Form S-3 (Registration No. 33-54329). BLACK HILLS CORPORATION 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. BLACK HILLS CORPORATION /s/ Dale E. Clement Dale E. Clement, Senior Vice President-Finance (Principal Financial Officer) /s/ Gary R. Fish Gary R. Fish, Controller (Principal Accounting Officer) Dated: May 10, 1995 EX-27 2
UT 3-MOS DEC-31-1995 MAR-31-1995 PER-BOOK 323,520,000 51,046,000 46,410,000 12,583,000 0 433,559,000 14,400,000 45,951,000 116,459,000 176,810,000 0 0 158,368,000 2,218,000 0 0 2,042,000 0 0 0 94,121,000 433,559,000 35,939,000 2,703,000 26,436,000 29,139,000 6,800,000 2,765,000 9,565,000 3,566,000 5,999,000 0 5,999,000 4,824,000 3,137,000 12,486,000 0.42 0.42
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