-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GHri1hm9fOzZEtrSPsjDrcmgB4nZ3tz1sOCbLB4UhlHkJVtwcaCDGuyw4WG+JdBr ADocvjfBOExu4UMJxFwNKA== 0000012400-96-000010.txt : 19960513 0000012400-96-000010.hdr.sgml : 19960513 ACCESSION NUMBER: 0000012400-96-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960510 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: 96559062 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, 1996. 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 Former name, former address, and former fiscal year if changed since last report NONE 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, 1996 Common stock, $1.00 par value 14,433,821 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, 1996, December 31, 1995, and March 31, 1995 Consolidated Statements of Income- 4 Three, and Twelve Months Ended March 31, 1996 and 1995 Consolidated Statements of Cash Flows- 5 Three and Twelve Months Ended March 31, 1996 and 1995 Consolidated Statements of Shareholders' Equity- 6 Three and Twelve Months Ended March 31, 1996 and 1995 Notes to Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Position and Consolidated Statements of Earnings 7-10 PART II. OTHER INFORMATION Item 1. Legal Proceedings 10 Item 6. Exhibits and Reports on Form 8-K 10 Signatures 11 BLACK HILLS CORPORATION Consolidated Balance Sheets (unaudited) March 31 December 31 March 31 1996 1995 1995 -------- ----------- -------- (in thousands) ASSETS Current assets: Cash and cash equivalents $ 4,390 $ 8,179 $ 4,164 Securities available for sale 13,465 6,804 18,225 Receivables, net Customers 13,059 13,339 12,661 Other 4,767 3,825 2,522 Materials, supplies, and fuel 7,822 7,415 7,552 Prepaid expenses 1,007 1,247 1,286 -------- -------- -------- 44,510 40,809 46,410 -------- -------- -------- Property and investments: Electric 470,078 469,135 442,671 Coal mining 44,616 44,473 51,061 Oil and gas 41,824 40,704 36,022 Other 3,644 3,330 3,254 -------- -------- -------- 560,162 557,642 533,008 Less accumulated depreciation and depletion (169,758) (164,383) (158,442) -------- -------- -------- Net property and investments 390,404 393,259 374,566 -------- -------- -------- Deferred charges: Federal income taxes 7,573 7,543 7,679 Regulatory asset 2,726 2,576 709 Other 4,588 4,643 4,904 -------- -------- -------- 14,887 14,762 13,292 -------- -------- -------- Total $449,801 $448,830 $434,268 ======== ======== ======== See accompanying notes to consolidated financial statements. BLACK HILLS CORPORATION Consolidated Balance Sheets (unaudited) March 31 December 31 March 31 1996 1995 1995 -------- ----------- -------- (in thousands) LIABILITIES AND CAPITALIZATION Current liabilities: Current maturities of long-term debt $ 1,468 $ 1,405 $ 2,042 Notes payable 923 618 2,218 Accounts payable 4,991 9,737 9,131 Accrued liabilities- Taxes 10,849 7,046 9,568 Interest 3,010 4,089 2,833 Other 6,144 6,978 7,578 -------- -------- -------- 27,385 29,873 33,370 -------- -------- -------- Deferred credits: Federal income taxes 46,110 45,290 40,955 Investment tax credits 4,893 5,018 5,396 Reclamation costs 8,153 7,974 7,761 Regulatory liability 7,054 7,111 7,402 Other 5,343 5,153 4,206 -------- -------- -------- 71,553 70,546 65,720 -------- -------- -------- Capitalization: Common stock equity- Common stock 14,434 14,425 14,400 Additional paid-in capital 46,526 46,355 45,951 Retained earnings 124,584 121,562 116,459 -------- -------- -------- 185,544 182,342 176,810 Long-term debt 165,319 166,069 158,368 -------- -------- -------- 350,863 348,411 335,178 -------- -------- -------- Total $449,801 $448,830 $434,268 ======== ======== ======== See accompanying notes to consolidated financial statements. BLACK HILLS CORPORATION Consolidated Statements of Income (unaudited) Three Months Twelve Months March 31 March 31 1996 1995 1996 1995 ---- ---- ---- ---- (in thousands) Operating revenues: Electric $30,305 $26,023 $113,065 $104,909 Coal mining 8,068 6,939 31,000 28,353 Oil and gas 2,731 2,977 10,917 12,419 ------- ------- -------- -------- 41,104 35,939 154,982 145,681 ------- ------- -------- -------- Operating expenses: Fuel and purchased power 8,814 10,027 38,053 42,002 Operations & maintenance 7,448 6,306 29,458 28,092 Administrative and general 2,096 2,704 8,863 8,657 Depreciation, depletion and amortization 5,406 4,747 20,342 17,930 Taxes, other than income taxes 3,158 2,652 11,496 10,422 ------- ------- -------- -------- 26,922 26,436 108,212 107,103 ------- ------- -------- -------- Operating income: Electric 10,587 6,245 32,584 24,717 Coal mining 3,306 2,918 12,544 11,776 Oil and gas 289 340 1,642 2,085 ------- ------ ------- ------- 14,182 9,503 46,770 38,578 ------- ------ ------- ------- Other income and (expense): Interest expense (3,468) (3,566) (14,098) (11,758) Investment income 236 400 1,206 1,684 Allowance for funds used during construction 116 2,296 3,686 5,919 Other, net 526 69 1,654 308 ------- ------- ------- ------- (2,590) (801) (7,552) (3,847) ------- ------- ------- ------- Income before income taxes 11,592 8,702 39,218 34,731 Income taxes (3,591) (2,703) (11,623) (10,726) ------- ------- -------- -------- Net income available for common stock $ 8,001 $ 5,999 $ 27,595 $ 24,005 ======= ======= ======== ======== Weighted average common shares outstanding 14,429 14,395 14,417 14,366 ======= ======= ======== ======== Earnings per share $ 0.55 $ 0.42 $ 1.91 $ 1.67 ======= ======= ======== ======== Dividends paid per share of common stock $ 0.345 $ 0.335 $ 1.350 $ 1.325 ======= ======= ======== ======== See accompanying notes to consolidated financial statements. BLACK HILLS CORPORATION Consolidated Statements of Cash Flows (unaudited) Three Months Twelve Months March 31 March 31 1996 1995 1996 1995 ---- ---- ---- ---- (in thousands) Operating activities: Net Income $ 8,001 $ 5,999 $27,595 $24,005 Principal non-cash items- Depreciation, depletion, and amortization 5,406 4,747 20,342 17,930 Deferred income taxes and investment tax credits 614 469 2,731 2,737 Allowance for other funds used during construction (73) (1,419) (2,299) (3,610) (Increase) decrease in receivables, inventories, and other current assets (829) 1,137 (2,634) (2,144) Increase (decrease) in other current liabilities (2,856) (161) (4,116) 3,879 Other, net 196 1,714 1,637 8,295 ------- ------- ------- ------- 10,459 12,486 43,256 51,092 ------- ------- ------- ------- Investment activities: Property additions, excluding allowance for other funds used during construction (2,406) (16,658) (34,011) (109,984) Available for sale securities purchased (9,673) (7,835) (21,165) (41,419) Available for sale securities sold 3,012 14,055 25,925 50,473 ------- -------- -------- --------- (9,067) (10,438) (29,251) (100,930) ------- -------- -------- --------- Financing activities: Dividends paid (4,979) (4,824) (19,470) (19,031) Common stock issued 180 225 609 1,860 Net short-term borrowings 305 (34,800) (1,295) (19,450) Long-term debt issued - 31,650 15,254 77,445 Long-term debt retired (687) (2,309) (8,877) (3,609) ------- -------- -------- ------- (5,181) (10,058) (13,779) 37,215 ------- -------- -------- ------- Increase (decrease) in cash and cash equivalents (3,789) (8,010) 226 (12,623) Cash and cash equivalents: Beginning of period 8,179 12,174 4,164 16,787 ------- ------- ------- ------- End of period $ 4,390 $ 4,164 $ 4,390 $ 4,164 ======= ======= ======= ======= Supplemental disclosure of cash flow information: Cash paid during the period for- Interest $ 4,547 $ 3,527 $13,921 $11,125 Income taxes $ 600 $ 2,220 $ 6,155 $ 9,510 See accompanying notes to consolidated financial statements. BLACK HILLS CORPORATION Statements of Shareholders' Equity (unaudited) Three Months Twelve Months March 31 March 31 1996 1995 1996 1995 ---- ---- ---- ---- (in thousands) Common stock: Beginning of period $ 14,425 $ 14,386 $ 14,400 $ 14,307 Issuance of $1 par value shares 9 14 34 93 -------- -------- -------- -------- End of period 14,434 14,400 14,434 14,400 -------- -------- -------- -------- Additional paid-in capital: Beginning of period 46,355 45,740 45,951 44,184 Net proceeds over par value of stock issued 171 211 575 1,767 -------- -------- -------- -------- End of period 46,526 45,951 46,526 45,951 -------- -------- -------- -------- Retained earnings: Beginning of period 121,562 115,284 116,459 111,485 Net income 8,001 5,999 27,595 24,005 Dividend paid (4,979) (4,824) (19,470) (19,031) -------- -------- -------- -------- End of period 124,584 116,459 124,584 116,459 -------- -------- -------- -------- Total shareholders' equity $185,544 $176,810 $185,544 $176,810 ======== ======== ======== ======== 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 1995 Annual Report and Form 10-K filed with the Securities and Exchange Commission. 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, 1996, December 31, 1995, and March 31, 1995 financial information and are of a normal recurring nature. The results of operations for the three months ended March 31, 1996, are not necessarily indicative of the results to be expected for the full year. (2) JOINT DEVELOPMENT AGREEMENT WYGEN, Inc., a subsidiary of the Company recently entered into a joint development agreement with Calpine Corporation, a national electric power company headquartered in San Jose, California. The joint plan is to secure appropriate sales agreements and to develop the WYGEN Plant, an 80 MW mine- mouth, coal fired, electric generating plant, to be constructed at the Wyodak mine. The electricity will be marketed by Calpine's power marketing subsidiary, Calpine Power Services Company, to customers throughout the West. Construction of the WYGEN Plant will not commence and WYGEN will not incur substantial costs unless long-term power sale contracts are obtained, justifying the construction. 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 $36,000,000 which provides for interim borrowings and the opportunity for timing of permanent financing. The Company had no borrowings outstanding under these lines of credit at March 31, 1996. There are no compensating balance requirements associated with these lines of credit. 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 net income was $8,001,000 for the first quarter and $27,595,000 for the twelve months ended March 31, 1996, an increase of $2,002,000 and $3,590,000, respectively. The increase in earnings for both the three and twelve months ending March 31, 1996, was the result of increased sales volume for both the electric and coal mining operations. Consolidated revenue increased 14 percent and 6 percent for the three month and twelve month periods while consolidated operating expenses increased 2 percent and 1 percent, respectively, for the same periods. Earnings from the electric operations increased $1,708,000 and $3,459,000 for the three and twelve month periods, respectively. This increase was the result of strong growth in sales and earnings associated with the inclusion of Neil Simpson Unit #2 (NS #2) in the Company's rate base. NS #2 is an 80 MW coal-fired power plant which began commercial operation on August 1, 1995. Coal mining earnings increased $290,000 and $187,000 for the three and twelve months, respectively. This increase was the result of an increase in coal sales of 24 percent for the quarter and 12 percent for the twelve months ended March 31, 1996. The increase in tons of coal sold was the result of sales of coal to NS #2 and the Wyodak Plant being in service for the entire quarter. The Wyodak Plant was down for 13 days of unscheduled maintenance during the first quarter of 1995. 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 1996 1995 1996 1995 ---- ---- ---- ---- REVENUE Electric 74% 73% 73% 72% Coal mining 20 19 20 19 Oil and gas 6 8 7 9 --- --- --- --- 100% 100% 100% 100% === === === === Three Months Ended Twelve Months Ended March 31 March 31 1996 1995 1996 1995 ---- ---- ---- ---- Net Income Electric 64% 56% 59% 53% Coal mining 34 40 36 41 Oil and gas 2 4 5 6 --- --- --- --- 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 1996 1995 1996 1995 ---- ---- ---- ---- (in thousands) CAPITAL EXPENDITURES (includes AFDC) Electric $ 1,061 $16,981 $28,541 $ 99,199 Coal mining 143 103 1,584 4,855 Oil and gas 1,272 993 6,168 9,069 Other 3 - 17 471 ------- ------- ------- -------- $ 2,479 $18,077 $36,310 $113,594 ======= ======= ======= ======== DEPRECIATION, DEPLETION, AND AMORTIZATION Electric $3,705 $2,644 $13,004 $10,370 Coal mining 663 906 3,362 2,836 Oil and gas 1,038 1,197 3,976 4,724 ------ ------ ------- ------- $5,406 $4,747 $20,342 $17,930 ====== ====== ======= ======= ELECTRIC OPERATIONS Electric revenues increased 16 percent and 8 percent for the three and twelve months ended March 31, 1996 due to a strong growth in sales and the inclusion of NS #2 in the Company's rate base. Firm kilowatthour sales increased 6 percent for the quarter and 2 percent for the twelve month period. A 12 percent increase in residential sales in the first quarter reflected an extremely cold winter. Degree days, which is a measure of weather trends were 14 percent above normal for the first quarter of 1996 and 27 percent above last year. Electric expenses overall remained relatively flat for both the three and twelve month periods. Purchased power expense decreased 24 percent and 18 percent, respectively, while both depreciation and production expense increased as a result of the commercial operation of NS #2. Non-operating income decreased for both the 3 months and 12 months ended March 31, 1996 due to a $2.2 million decrease in AFUDC for both periods reflecting the completion of NS #2 construction. Interest expense decreased 2 percent for the quarter and increased 20 percent for the twelve month period. MINING OPERATIONS Mining revenues increased 16 percent for the quarter and 9 percent for the 12 months ended March 31, 1996. Revenues increased as a result of a 24 percent and 12 percent increase in tons of coal sold, respectively. This is a reflection of the sale of coal to NS #2 and the Wyodak Plant being in service for the entire first quarter of 1996. Mining expenses increased 21 percent for the quarter and 12 percent for the 12 month period as a result of the increase in tons of coal sold. OIL AND GAS PRODUCTION OPERATIONS Oil and gas production revenue which represents less than 10 percent of consolidated revenue decreased 8 percent and 12 percent for the three and twelve months ended March 31, 1996, directly related to a decrease in equivalent barrels of oil sold. Operating expenses decreased 7 percent for the three month period and decreased 11 percent for the twelve month period ended March 31, 1996. BLACK HILLS CORPORATION Part II - Other Information Item 1. LEGAL PROCEEDINGS There are no legal proceedings to be reported on for the quarter ending March 31, 1996. Item 6. EXHIBITS AND REPORTS ON FORM 8-K a. EXHIBITS None b. REPORTS ON FORM 8-K None 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, 1996 EX-27 2
UT 3-MOS DEC-31-1996 MAR-31-1996 PER-BOOK 339,038,000 51,366,000 44,510,000 14,887,000 0 449,801,000 14,434,000 46,526,000 124,584,000 185,544,000 0 0 165,319,000 923,000 0 0 1,468,000 0 0 0 96,547,000 449,801,000 41,104,000 3,591,000 26,922,000 30,513,000 10,591,000 878,000 11,469,000 3,468,000 8,001,000 0 8,001,000 4,979,000 3,394,000 10,459,000 0.55 0.55
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