-----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, o5PrAmt2Bvrgdrjym51swvztXzwDVZqAzFN0swLl6ubiY7IcAC0zZzOCQcN0s71I xEvWwX6/rhRNmG476a/uBw== 0000075129-95-000011.txt : 19950511 0000075129-95-000011.hdr.sgml : 19950511 ACCESSION NUMBER: 0000075129-95-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950510 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: OTTER TAIL POWER CO CENTRAL INDEX KEY: 0000075129 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 410462685 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-00368 FILM NUMBER: 95536295 BUSINESS ADDRESS: STREET 1: 215 S CASCADE ST STREET 2: PO BOX 496 CITY: FERGUS FALLS STATE: MN ZIP: 56538-0496 BUSINESS PHONE: 2187398200 10-Q 1 10-Q MARCH 1995 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [ X] QUARTERLY REPORT PURSUANT TO 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 EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-368 OTTER TAIL POWER COMPANY (Exact name of registrant as specified in its charter) Minnesota 41-0462685 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 215 South Cascade Street, Box 496, Fergus Falls, Minnesota 56538-0496 (Address of principal executive offices) (Zip Code) 218-739-8200 (Registrant's telephone number, including area code) (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 latest practicable date: May 1, 1995 - 11,180,136 Common Shares ($5 par value) OTTER TAIL POWER COMPANY INDEX Part I. Financial Information Page No. Item 1. Financial Statements Consolidated Balance Sheets - March 31, 1995 and December 31, 1994 (Unaudited) 2 & 3 Consolidated Statements of Income - Three Months Ended March 31, 1995 and 1994 (Unaudited) 4 Consolidated Statements of Cash Flows - Three Months Ended March 31,1995 and 1994 (Unaudited) 5 Notes to Consolidated Financial Statements (Unaudited) 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 6 & 7 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K 8 Signatures 8 Part I. Financial Information Item 1. Financial Statements OTTER TAIL POWER COMPANY CONSOLIDATED BALANCE SHEETS (Unaudited) -ASSETS- March 31, December 31, 1995 1994 (Thousands of Dollars) PLANT: Electric Plant in Service $700,998 $698,437 Other 42,702 36,221 _________ _________ Total 743,700 734,658 Less Accumulated Depreciation and Amortization 293,365 287,902 _________ _________ 450,335 446,756 Construction Work in Progress 12,487 10,485 _________ _________ Net Plant 462,822 457,241 _________ _________ INVESTMENTS AND OTHER ASSETS: 47,692 43,944 _________ _________ CURRENT ASSETS: Cash and Cash Equivalents 2,367 1,852 Temporary Cash Investments 357 391 Accounts Receivable: Trade - Net 31,465 27,004 Other 3,759 5,172 Materials and Supplies: Fuel 3,346 3,664 Inventory, Materials and Operating Supplies 18,885 15,794 Deferred Income Taxes 4,312 4,306 Accrued Utility Revenues 4,018 4,154 Other 3,184 3,041 _________ _________ Total Current Assets 71,693 65,378 _________ _________ DEFERRED DEBITS: Unamortized Debt Expense and Reacquisition Premiums 5,042 5,174 Other 6,549 7,235 _________ _________ Total Deferred Debits 11,591 12,409 _________ _________ TOTAL $593,798 $578,972 ========= ========= See Accompanying Notes to Consolidated Financial Statements - 2 -
OTTER TAIL POWER COMPANY CONSOLIDATED BALANCE SHEETS (Unaudited) -LIABILITIES- March 31, December 31 1995 1994 (Thousands of Dollars) CAPITALIZATION: Common Shares, Par Value $5 Per Share - Authorized 25,000,000 Shares; Outstanding 1995 and 1994, 11,180,136 Shares $55,901 $55,901 Premium on Common Shares 30,335 30,335 Retained Earnings 94,226 90,412 _________ _________ Total 180,462 176,648 Cumulative Preferred Shares - Authorized 1,500,000 Shares Without Par Value; Outstanding 1995 and 1994, 388,311 Shares: Subject to Mandatory Redemption 18,000 18,000 Other 20,831 20,831 Cumulative Preference Shares - Authorized 1,000,000 Shares Without Par Value; Outstanding - None -- -- Long-Term Debt 168,370 162,196 _________ _________ Total Capitalization 387,663 377,675 _________ _________ CURRENT LIABILITIES: Short-Term Debt 950 2,900 Sinking Fund Requirements and Current Maturities 13,195 8,739 Accounts Payable 20,273 22,542 Federal and State Income Taxes Accrued 5,841 2,095 Other Taxes Accrued 12,454 11,712 Interest Accrued 1,855 3,524 Other 5,003 6,369 _________ _________ Total Current Liabilities 59,571 57,881 _________ _________ NONCURRENT LIABILITIES: 9,883 8,245 _________ _________ DEFERRED CREDITS: Accumulated Deferred Income Taxes 96,531 94,911 Accumulated Deferred Investment Tax Credit 21,878 22,171 Regulatory Liability 15,052 15,197 Other 3,220 2,892 _________ _________ Total Deferred Credits 136,681 135,171 _________ _________ TOTAL $593,798 $578,972 ========= ========= See Accompanying Notes to Consolidated Financial Statements -3-
OTTER TAIL POWER COMPANY CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31 1995 1994 (Thousands of Dollars) OPERATING REVENUES Electric $55,726 $54,889 Health Services 15,108 10,920 Manufacturing 7,810 2,393 Diversified Operations 5,319 5,234 _________ _________ Total Operating Revenues 83,963 73,436 OPERATING EXPENSES Production Fuel 9,212 8,658 Purchased Power 7,780 6,713 Electric Operation Expenses 12,307 11,703 Electric Maintenance 2,954 3,037 Cost of Goods Sold 17,560 11,627 Other Nonelectric Expenses 7,451 5,382 Depreciation and Amortization 5,421 5,233 Property Taxes 3,056 2,982 Income Taxes 5,624 5,754 _________ _________ Total Operating Expenses 71,365 61,089 _________ _________ OPERATING INCOME 12,598 12,347 Allowance For Equity (Other) Funds Used During Construction 2 31 Other Income and Deductions and Applicable Taxes (201) 312 _________ _________ INCOME BEFORE INTEREST CHARGES 12,399 12,690 Interest Charges 3,734 3,348 Allowance For Borrowed Funds Used During Construction - Credit (42) (14) _________ _________ NET INCOME 8,707 9,356 Preferred Dividend Requirements 589 590 _________ _________ EARNINGS AVAILABLE FOR COMMON SHARES $8,118 $8,766 ========= ========= Earnings Per Average Common Share $0.73 $0.78 ========= ========= Average Number of Common Shares Outstanding 11,180,136 11,180,136 Dividends Per Common Share $0.44 $0.43 See Accompanying Notes to Consolidated Financial Statements -4-
OTTER TAIL POWER COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 1995 1994 (Thousands of Dollars) CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $8,707 $9,356 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 7,020 6,427 Deferred Investment Tax Credit - Net (294) (308) Deferred Income Taxes 232 928 Change in Deferred Debits and Other Assets 1,850 395 Change in Noncurrent Liabilities and Deferred Credits 1,966 376 Allowance for Equity (Other) Funds Used During Construction (2) (31) Loss on Disposal of Noncurrent Assets 713 20 Cash Provided by (Used for) Current Assets & Current Liabilities: Change in Receivables, Materials and Supplies (1,605) (3,360) Change in Other Current Assets 57 496 Change in Payables and Other Current Liabilities (2,835) 1,086 Change in Interest and Income Taxes Payable 1,988 3,442 ________ ________ Net Cash Provided by Operating Activities 17,797 18,827 CASH FLOWS FROM INVESTING ACTIVITIES: Gross Capital Expenditures (8,058) (6,573) Proceeds from Disposal of Noncurrent Assets 1,560 494 Purchase of Subsidiaries, Net of Cash Acquired (1,634) (286) Change in Temporary Cash Investments 35 18 Change in Marketable Securities and Other Investments (2,401) (381) ________ ________ Net Cash Used in Investing Activities (10,498) (6,728) CASH FLOWS FROM FINANCING ACTIVITIES: Change in Short-Term Debt - Net Issuances (1,950) -- Proceeds from Issuance of Long-Term Debt 4,570 390 Payments for Retirement of Long-Term Debt (3,895) (3,082) Payments for Debt Issuance Expenses -- (56) Dividends Paid (5,509) (5,397) ________ ________ Net Cash Used in Financing Activities (6,784) (8,145) Net Change in Cash and Cash Equivalents 515 3,954 Cash and Cash Equivalents at Beginning of Year 1,852 3,808 ________ ________ Cash and Cash Equivalents at March 31 $2,367 $7,762 ======== ======== Supplemental Cash Flow Information Cash Paid for Interest and Income Taxes: Interest $5,169 $4,816 Income Taxes $1,182 $552 See Accompanying Notes to Consolidated Financial Statements
- 5 - OTTER TAIL POWER COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The Company, in its opinion, has included all adjustments (including normal recurring accruals) necessary for a fair presentation of the results of operations for the periods. The financial statements for 1995 are subject to adjustment at the end of the year when they will be audited by independent accountants. The financial statements and notes thereto should be read in conjunction with the financial statements and notes for the years ended December 31, 1994, 1993, and 1992 included in the Company's 1994 Annual Report to the Securities and Exchange Commission on Form 10-K. In January 1995 the Company acquired an additional manufacturing business and three small diagnostic imaging companies. The total revenues of these companies were $17,122,000 in 1994. These acquisitions were accounted for under the purchase method of accounting. The breakdown of Cost of Goods Sold and Other Nonelectric Expenses by business segments are as follows: 3 Months Ended Cost of Goods Sold Other Nonelectric Expenses 1995 1994 1995 1994 (in thousands) Health Services $9,279 $6,824 $4,287 $3,224 Manufacturing 6,225 1,786 1,010 255 Diversified Operations 2,056 3,017 2,154 1,903 ------ ------ ------ ------- Total $17,560 $11,627 $7,451 $5,382 Because of seasonal and other factors, the earnings for the three-month period ended March 31, 1995, should not be taken as an indication of earnings for all or any part of the balance of the year. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Material Changes in Financial Position Cash provided by operating activities of $17,797,000 as shown on the Consolidated Statement of Cash Flows for the three months ended March 31, 1995, combined with funds on hand of $2,243,000 at December 31, 1994, allowed the Company to finance its construction program, pay dividends, invest in additional nonutility businesses, and in passive investments. At March 31, 1995, the Company had $17,474,000 in marketable securities included in Investments and Other Assets which could be used to supplement cash needs. The Company estimates that funds internally generated, combined with funds on hand, will be sufficient to meet all sinking fund payments for First Mortgage Bonds in the next five year and to provide for most of its 1995-1999 construction program expenditures (including allowance for funds used during construction). Additional short- or long-term financing will be required in the period 1995-1999 in connection with the maturity of First Mortgage Bonds and a Long-Term Lease Obligation ($21,000,000), in the event the Company decides to refund or retire early any of its presently outstanding debt or cumulative preferred shares, complete its common stock repurchase program or for other corporate purposes. The bulk of the increases in Plant - Other, Accounts Receivable - Trade, Inventory, Materials and Operating Supplies, Long-Term Debt, and Sinking Fund Requirements and Current Maturities are due to the acquisitions of an additional manufacturing company and three small diagnostic imaging companies. In addition, Investments and Other Assets also increased because of further passive investments. Inventory, Materials and Operating Supplies also increased due to timing of purchases of the health services companies and increases in steel inventory in the manufacturing companies as result of a longer lead-times. Accounts Payable decreased due to the seasonal decline at the electric utility. The increase in Construction Work in Progress is due to new electric construction principally in transmission, distribution, and general plant. The increase in Federal and State Income Taxes Accrued was due to the timing of tax payments. The reduction in Interest Accrued was caused by the timing of interest payments. Material Changes in Results of Operations The 1.5% increase in Electric Operating Revenues for the quarter ended March 31, 1995, as compared to the quarter ended March 31, 1994, was due to a 70% increase in noncontractual power pool sales offset by a 2.7% decrease in retail sales. Noncontractual power pool sales increased because the Company had more energy to market due to warmer weather and greater plant availability in 1995. Retail sales decreased mainly because of the warmer weather in 1995. The increase in Production Fuel for the three months ended March 31, 1995, as compared to the same period a year ago, was chiefly because of a 7.5% increase in generation which resulted from greater plant availability in 1995. The increase in Purchased Power for the quarter ended March 31, 1995, as compared to the quarter ended March 31, 1994, was due to a 91% increase in kwh purchased for resale which correlates to the increase in power pool sales. The increase in Electric Operation Expenses for the three months ended March 31, 1995, as compared to the same interval a year ago, was chiefly due to a settlement with the Minnesota Public Utilities Commission. The settlement required recovery of Conservation Improvement Program costs in current rates starting in 1995. The increase in Health Services Operating Revenues for the quarter ended March 31,1995, as compared to the same period a year ago, resulted principally from the acquisition of three additional mobile imaging companies and the sale of three scanners. The increase in Cost of Health Services Sold and Other Health Services Expenses resulted primarily from the increase in sales. The increase in Manufacturing Operating Revenues for the three months ended March 31, 1995, as compared to the quarter ended March 31, 1994, resulted chiefly from an acquisition of a new company, as well as continued expansion of existing product lines. The increase in Manufacturing Cost of Goods Sold and Other Manufacturing Expenses resulted predominately from the increase in sales. The decrease in Other Income and Deductions and Applicable Taxes for the quarter ended March 31, 1995, as compared to the quarter ended March 31, 1994, primarily resulted from the timing of net investment earnings realized in the Company's marketable securities. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. a) Exhibits: 27 Financial Data Schedule b) Report on Form 8-K. No reports on Form 8-K were filed during the fiscal quarter ended March 31, 1995. 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. OTTER TAIL POWER COMPANY By: /s/ Andrew E. Anderson Andrew E. Anderson Vice President, Finance /Chief Accounting Officer Authorized Officer Dated: May 10, 1995 EX-27 2
UT This schedule contains summary financial information extracted from the consolidated balance sheet as of March 31, 1995, and the Consolidated Statement of Income for the three months ended March 31, 1995, and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS DEC-31-1995 MAR-31-1995 PER-BOOK 432,723 77,791 71,693 11,591 0 593,798 55,901 30,335 94,226 180,462 18,000 20,831 168,370 950 0 0 13,195 0 0 0 191,990 593,798 83,963 5,624 65,741 71,365 12,598 (199) 12,399 3,692 8,707 589 8,118 4,919 3,621 17,797 .73 .73
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