-----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, OoyZNwn/ZAFrf25h3RXM4kU7PTc6mI09M21wAHQGcyQUtW+LS0TYGEy7ErDdGI/+ FJAPMQIX3oz242T6Q5S26w== 0000012400-96-000019.txt : 19960809 0000012400-96-000019.hdr.sgml : 19960809 ACCESSION NUMBER: 0000012400-96-000019 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960808 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: 96605925 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 June 30, 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 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 July 31, 1996 Common stock, $1.00 par value 14,439,930 shares BLACK HILLS CORPORATION I N D E X Page NUMBER PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets- 2-3 June 30, 1996, December 31, 1995 and June 30, 1995 Consolidated Statements of Income- 4 Three, Six and Twelve Months Ended June 30, 1996 and 1995 Consolidated Statements of Cash Flows- 5 Three, Six and Twelve Months Ended June 30, 1996 and 1995 Consolidated Statements of Shareholders' Equity- 6 Three, Six and Twelve Months Ended June 30, 1996 and 1995 Notes to Consolidated Financial Statements 7 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 Item 6. Exhibits and Reports on Form 8-K 11 Signatures 12 BLACK HILLS CORPORATION Consolidated Balance Sheets (unaudited) June 30 December 31 June 30 1996 1995 1995 ------- ----------- ------- (in thousands) ASSETS Current assets: Cash and cash equivalents $ 3,767 $ 8,179 $ 4,567 Securities available for sale 10,598 6,804 10,263 Receivables, net Customers 11,092 13,339 10,537 Other 7,637 3,825 2,446 Materials, supplies, and fuel 7,508 7,415 7,619 Prepaid expenses 775 1,247 1,273 -------- -------- -------- 41,377 40,809 36,705 -------- -------- -------- Property and investments: Electric 473,295 469,135 455,399 Coal mining 44,668 44,473 51,139 Oil and gas 42,991 40,704 37,072 Other 3,664 3,330 3,312 -------- -------- -------- 564,618 557,642 546,922 Less accumulated depreciation and depletion (174,836) (164,383) (162,764) -------- -------- -------- Net property and investments 389,782 393,259 384,158 -------- -------- -------- Deferred charges: Federal income taxes 7,620 7,543 7,678 Regulatory asset 2,876 2,576 709 Other 4,544 4,643 5,060 -------- -------- -------- 15,040 14,762 13,447 -------- -------- -------- Total $446,199 $448,830 $434,310 ======== ======== ======== BLACK HILLS CORPORATION Consolidated Balance Sheets (unaudited) June 30 December 31 June 30 1996 1995 1995 ------- ----------- ------- (in thousands) LIABILITIES AND CAPITALIZATION Current liabilities: Current maturities of long-term debt $ 1,468 $ 1,405 $ 2,034 Notes payable 1,078 618 3,568 Accounts payable 3,714 9,737 8,642 Accrued liabilities- Taxes 5,857 7,046 6,240 Interest 4,046 4,089 3,642 Other 5,687 6,978 7,608 -------- -------- -------- 21,850 29,873 31,734 -------- -------- -------- Deferred credits: Federal income taxes 46,873 45,290 41,385 Investment tax credits 4,767 5,018 5,270 Reclamation costs 8,314 7,974 7,928 Regulatory liability 6,998 7,111 7,409 Other 5,507 5,153 4,439 -------- -------- -------- 72,459 70,546 66,431 -------- -------- -------- Capitalization: Common stock equity- Common stock 14,440 14,425 14,409 Additional paid-in capital 46,643 46,355 46,099 Retained earnings 125,488 121,562 117,275 -------- -------- -------- Total common stock equity 186,571 182,342 177,783 Long-term debt 165,319 166,069 158,362 -------- -------- -------- 351,890 348,411 336,145 -------- -------- -------- Total $446,199 $448,830 $434,310 ======== ======== ======== BLACK HILLS CORPORATION Consolidated Statements of Income (unaudited) Three Months Six Months Twelve Months June 30 June 30 June 30 1996 1995 1996 1995 1996 1995 ---- ---- ---- ---- ---- ---- (in thousands) Operating revenues: Electric $26,978 $23,990 $57,283 $50,013 $116,054 $102,929 Coal mining 7,418 7,797 15,486 14,736 30,620 30,797 Oil and gas 3,387 2,816 6,118 5,794 11,487 12,068 ------- ------- ------- ------- -------- -------- 37,783 34,603 78,887 70,543 158,161 145,794 ------- ------- ------- ------- -------- -------- Operating expenses: Fuel and purchased power 7,931 9,743 16,745 19,770 36,241 40,025 Operations and maintenance 7,635 6,540 15,084 12,870 30,569 27,705 Administrative and general 1,843 1,799 3,940 4,478 8,909 8,881 Depreciation, depletion, and amortization 6,023 4,900 11,429 9,648 21,493 18,437 Taxes, other than income taxes 3,155 2,719 6,313 5,372 11,932 10,775 ------- ------- ------- ------- -------- -------- 26,587 25,701 53,511 52,138 109,144 105,823 ------- ------- ------- ------- -------- -------- Operating income: Electric 7,642 4,946 18,229 11,190 35,281 24,606 Coal mining 2,994 3,537 6,299 6,456 11,954 13,348 Oil and gas 560 419 848 759 1,782 2,017 ------- ------- ------- ------- -------- -------- 11,196 8,902 25,376 18,405 49,017 39,971 ------- ------- ------- ------- -------- -------- Other income and (expense): Interest expense (3,462) (3,448) (6,930) (7,015) (14,113) (12,875) Investment income 346 261 583 661 1,292 1,571 Allowance for funds used during construction 134 2,530 250 4,826 1,290 7,732 Other, net 127 50 650 120 1,774 260 ------- ------- ------- ------- -------- -------- (2,855) (607) (5,447) (1,408) (9,757) (3,312) ------- ------- ------- ------- -------- -------- Income before income taxes 8,341 8,295 19,929 16,997 39,260 36,659 Income taxes (2,454) (2,653) (6,043) (5,355) (11,424) (11,394) ------- ------- ------- ------- -------- -------- Net income available for common stock $ 5,887 $ 5,642 $13,886 $11,642 $27,836 $25,265 ======= ======= ======= ======= ======== ======== Weighted average common shares outstanding 14,437 14,405 14,433 14,400 14,425 14,386 ======= ======= ======= ======= ======== ======= Earnings per share $0.41 $0.39 $0.96 $0.81 $1.93 $1.76 ======= ======= ======= ======= ======== ======= Dividends paid per share of common stock $0.345 $0.335 $0.690 $0.670 $1.360 $1.330 ======= ======= ======= ======= ======== ======= BLACK HILLS CORPORATION Consolidated Statements of Cash Flows (unaudited) Three Months Six Months Twelve Months June 30 June 30 June 30 1996 1995 1996 1995 1996 1995 ---- ---- ---- ---- ---- ---- (in thousands) Operating activities: Net Income $5,887 $5,642 $13,886 $11,642 $27,836 $25,265 Principal non-cash items- Depreciation, depletion, and amortization 6,023 4,900 11,429 9,648 21,493 18,437 Deferred income taxes and investment tax credits, net 384 179 913 522 2,235 2,088 Allowance for other funds used during construction (83) (1,564) (156) (2,982) (819) (4,791) (Increase) decrease in receivables, inventories, and other current assets (357) 2,146 (1,186) 3,283 (5,137) 369 Increase (decrease) in other current liabilities (5,690) (2,977) (8,546) (3,138) (6,829) 3,698 Other, net 91 242 373 2,081 2,146 9,222 ------ ------ ------- ------- ------- ------- 6,255 8,568 16,713 21,056 40,925 54,288 ------ ------ ------- ------- ------- ------- Investment activities: Property additions, excluding allowance for other funds used during construction (5,041) (12,794) (7,447) (29,453) (26,243) (102,563) Available for sale securities purchased (233) (599) (9,905) (8,434) (20,799) (35,332) Available for sale securities sold 3,100 8,561 6,111 22,616 20,464 48,373 ------ ------ ------- ------- ------- ------- (2,174) (4,832) (11,241) (15,271) (26,578) (89,522) ------ ------ ------- ------- ------- ------- Financing activities: Dividends paid (4,982) (4,826) (9,960) (9,651) (19,623) (19,134) Common stock issued 123 157 303 382 575 1,222 Net short-term borrowings 155 1,350 460 (33,450) (2,490) (29,593) Long-term debt issued - - - 31,644 15,254 77,439 Long-term debt retired - (14) (687) (2,317) (8,863) (3,609) ------ ------ ------- ------- ------- ------- (4,704) (3,333) (9,884) (13,392) (15,147) 26,325 ------ ------ ------- ------- ------- ------- Increase (decrease) in cash and cash equivalents (623) 403 (4,412) (7,607) (800) (8,909) Cash and cash equivalents: Beginning of period 4,390 4,164 8,179 12,174 4,567 13,476 ------- ------- ------- ------- ------- ------- End of period $ 3,767 $ 4,567 $ 3,767 $ 4,567 $ 3,767 $ 4,567 ======= ======= ======= ======= ======= ======= Supplemental disclosure of cash flow information Cash paid during the period for: Interest $ 2,426 $ 2,639 $ 6,973 $ 6,168 $13,709 $10,822 Income taxes $ 6,150 $ 1,925 $ 6,750 $ 4,145 $10,380 $ 7,410 BLACK HILLS CORPORATION Consolidated Statements of Shareholders' Equity (unaudited) Three Months Six Months Twelve Months June 30 June 30 June 30 1996 1995 1996 1995 1996 1995 ---- ---- ---- ---- ---- ---- (in thousands) Common stock: Beginning of period $ 14,434 $ 14,400 $ 14,425 $ 14,386 $ 14,409 $ 14,345 Issuance of $1 par value shares 6 9 15 23 31 64 -------- -------- -------- -------- -------- -------- End of period 14,440 14,409 14,440 14,409 14,440 14,409 -------- -------- -------- -------- -------- -------- Additional paid-in capital: Beginning of period 46,526 45,951 46,355 45,740 46,099 44,942 Net proceeds over par value of stock issued 117 148 288 359 544 1,157 -------- -------- ------- ------- ------- ------- End of period 46,643 46,099 46,643 46,099 46,643 46,099 -------- -------- ------- ------- ------- ------- Retained earnings: Beginning of period 124,583 116,459 121,562 115,284 117,275 111,144 Net income 5,887 5,642 13,886 11,642 27,836 25,265 Cash dividends on common stock (4,982) (4,826) (9,960) (9,651) (19,623) (19,134) -------- ------- ------- ------- ------- ------- End of period 125,488 117,275 125,488 117,275 125,488 117,275 -------- ------- ------- ------- ------- ------- Total shareholders' equity $186,571 $177,783 $186,571 $177,783 $186,571 $177,783 ======== ======== ======== ======== ======== ======== See accompanying notes to consolidated financial statements. 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 on 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 June 30, 1996, December 31, 1995 and June 30, 1995, financial information and are of a normal recurring nature. The results of operations for the three and six months ended June 30, 1996, are not necessarily indicative of the results to be expected for the full year. (2) JOINT DEVELOPMENT AGREEMENT In April 1996, WYGEN, Inc., a subsidiary of the Company 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. In conjunction with the above agreement the Company also entered into a Power Sales Enabling agreement with Calpine Corporation whereby the parties may enter into transactions pursuant to which power can be made available by one party to the other at one or more delivery points. 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 $12,000,000, which provides for interim borrowings and the opportunity for timing of permanent financing. The Company had no borrowings outstanding under these lines of credit on June 30, 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 income was $5,887,000 for the three months ended, $13,886,000 for the six months ended and $27,836,000 for the twelve months ended June 30, 1996, an increase of 4 percent, 19 percent and 10 percent, respectively. The increase in earnings was primarily due to increased sales volumes for the electric operations, the inclusion of Neil Simpson Unit #2 (NS #2), an 80 MW coal-fired power plant which began commercial operation on August 1, 1995, into the Company's rate base, and increased oil and gas prices. Consolidated revenue and income from continuing operations provided by the three businesses as a percentage of the total were as follows: Three Months Ended Six Months Ended Twelve Months Ended June 30 June 30 June 30 1996 1995 1996 1995 1996 1995 ---- ---- ---- ---- ---- ---- REVENUE Electric 71% 69% 73% 71% 74% 71% Coal mining 20 23 20 21 19 21 Oil and gas 9 8 7 8 7 8 --- --- --- --- --- --- 100% 100% 100% 100% 100% 100% === === === === === === NET INCOME Electric 56% 50% 60% 53% 60% 53% Coal mining 37 45 36 43 35 41 Oil and gas 7 5 4 4 5 6 --- --- --- --- --- --- 100% 100% 100% 100% 100% 100% === === === === === === Capital expenditures and depreciation, depletion, and amortization by industry segment were as follows: Three Months Ended Six Months Ended Twelve Months Ended June 30 June 30 June 30 1996 1995 1996 1995 1996 1995 ---- ---- ---- ---- ---- ---- (in thousands) CAPITAL EXPENDITURES (includes AFDC) Electric $ 3,738 $13,250 $ 4,800 $30,232 $19,030 $ 94,361 Coal mining 53 80 196 182 1,558 5,135 Oil and gas 1,327 1,027 2,599 2,020 6,468 7,385 Other 6 1 8 1 7 473 ------- ------- ------- ------- ------- -------- $ 5,124 $14,358 $ 7,603 $32,435 $27,063 $107,354 ======= ======= ======= ======= ======= ======== DEPRECIATION, DEPLETION, AND AMORTIZATION Electric $ 4,099 $ 2,661 $ 7,803 $ 5,305 $14,442 $ 10,473 Coal mining 647 1,090 1,310 1,997 2,947 3,366 Oil and gas 1,277 1,149 2,316 2,346 4,104 4,598 ------ ------- ------- ------- ------- -------- $ 6,023 $ 4,900 $11,429 $ 9,648 $21,493 $ 18,437 ====== ======= ======= ======= ======= ======== ELECTRIC OPERATIONS Electric revenue increased 12 percent, 15 percent and 13 percent for the three, six and twelve months ended June 30, 1996 primarily due to strong growth in sales and earnings associated with the inclusion of NS #2 in the Company's rate base. Firm kilowatthour sales increased 3 percent, 4 percent and 2 percent for the three, six and twelve month periods, respectively. Degree days, which is a measure of weather trends, were 12 percent above normal for the second quarter of 1996 and 7 percent below last year. Degree days for the six month period were 17 percent above last year and 14 percent above normal. Electric expenses remained relatively flat for the three and six months ended June 30, 1996. Although purchased power expense decreased, depreciation and amortization expense increased due to the commercial operation of NS #2. Expenses for the twelve month period increased 3 percent, also due to the inclusion of NS #2 in the Company's rate base. Non-operating income decreased for the three, six and twelve month periods due to a decrease in AFUDC of $2.4 million, $4.6 million and $6.4 million, respectively. This was a reflection of the completion of construction on NS #2 and was offset by the increase in electric revenues. MINING OPERATIONS Mining revenue decreased 5 percent and 1 percent for the three and twelve month periods and increased 5 percent for the six month period ended June 30, 1996, compared to the same periods last year. Tons of coal sold decreased slightly for the quarter, while increasing 9 percent and 2 percent for the six and twelve month periods. This increase was a reflection of the sale of coal to NS #2. Mining expenses increased 5 percent, 13 percent and 8 percent for the three, six and twelve months ended June 30, 1996. The increase in expense is related to the increase in tons of coal sold as well as an increase in royalty expense. Last year a portion of the coal mined was fee coal which does not carry a federal royalty, whereas this year the coal mined was all Federal coal. OIL AND GAS PRODUCTION OPERATIONS Oil and gas production revenue, which represents less than 10 percent of consolidated revenue, increased 20 percent and 6 percent for the three and six months ended and decreased 5 percent for the twelve months ended June 30, 1996, directly related to an increase in oil and gas prices offset by a decrease in equivalent barrels of oil sold. Operating expenses increased 18 percent and 5 percent for the three and six month periods ended June 30, 1996, due to increased production expense. Operating expenses for the twelve month period decreased 3 percent when compared to the same period last year. BLACK HILLS CORPORATION Part II - Other Information Item 1. LEGAL PROCEEDINGS There are no legal proceedings to be reported on for the quarter ending June 30, 1996. 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 May 30, 1996, reporting the items voted on at the Annual Meeting of Shareholders. 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 /S/ GARY R. FISH Gary R. Fish, Controller (Principal Accounting Officer) Dated: August 8, 1996 EX-27 2
UT 6-MOS DEC-31-1996 JUN-30-1996 PER-BOOK 338,729,000 51,053,000 41,377,000 15,040,000 0 446,199,000 14,440,000 46,643,000 125,488,000 186,571,000 0 0 165,319,000 1,078,000 0 0 1,468,000 0 0 0 91,763,000 446,199,000 78,887,000 6,043,000 53,511,000 59,554,000 19,333,000 1,483,000 20,816,000 6,930,000 13,886,000 0 13,886,000 9,960,000 6,791,000 16,713,000 0.96 0.96
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