-----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, QlBuu/YuN9772BECQl+dgsZ0DvRJ1RJVR8UeoBon7y0mCIfSfMaWA99sFcLrZVJz MX0Nb8cRLFu5VE0mf45kNA== 0000009548-96-000011.txt : 19960515 0000009548-96-000011.hdr.sgml : 19960515 ACCESSION NUMBER: 0000009548-96-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANGOR HYDRO ELECTRIC CO CENTRAL INDEX KEY: 0000009548 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 010024370 STATE OF INCORPORATION: ME FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10922 FILM NUMBER: 96562539 BUSINESS ADDRESS: STREET 1: 33 STATE ST CITY: BANGOR STATE: ME ZIP: 04401 BUSINESS PHONE: 2079455621 MAIL ADDRESS: STREET 1: PO BOX 932 CITY: BANGOR STATE: ME ZIP: 04401 10-Q 1 1ST QUARTER 10Q DOCUMENT/BANGOR HYDRO-ELECTRIC CO. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended March 31, 1996 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 - 7,315,099 Shares March 31, 1996 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, 1996 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, 1996 and December 31, 1995 11 Consolidated Statements of Capitalization 13 Consolidated Statements of Cash Flows 14 Consolidated Statements of Retained Earnings 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, 1996 1995 --------- ---------- ELECTRIC OPERATING REVENUES $ 49,266 $ 48,263 --------- ---------- OPERATING EXPENSES: Fuel for generation $ 15,930 $ 24,958 Purchased power 3,928 3,960 Other operation and maintenance 7,737 7,234 Depreciation and amortization 1,960 1,549 Amortization of Seabrook Nuclear Unit 425 425 Amortization of contract buyouts 5,190 972 Taxes - Property and payroll 1,290 1,217 State income 257 300 Federal income 2,095 1,645 --------- ---------- $ 38,812 $ 42,260 --------- ---------- OPERATING INCOME $ 10,454 $ 6,003 --------- ---------- OTHER INCOME AND (DEDUCTIONS): Allowance for equity funds used during construction $ 99 $ 219 Other, net of applicable income taxes 298 84 --------- --------- $ 397 $ 303 --------- --------- INCOME BEFORE INTEREST EXPENSE $ 10,851 $ 6,306 --------- --------- INTEREST EXPENSE: Long-term debt $ 6,057 $ 2,642 Other 911 581 Allowance for borrowed funds used during construction (212) (210) --------- --------- $ 6,756 $ 3,013 --------- --------- NET INCOME $ 4,095 $ 3,293 DIVIDENDS ON PREFERRED STOCK 393 413 --------- --------- EARNINGS APPLICABLE TO COMMON STOCK $ 3,702 $ 2,880 ========= ========= WEIGHTED AVERAGE NUMBER OF SHARES 7,312 7,220 ========= ========= EARNINGS PER COMMON SHARE, based on the weighted average number of shares outstanding during the period $ .51 $ .40 ========= ========= DIVIDENDS DECLARED PER COMMON SHARE $ .18 $ .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, 1995 ("1995 Form 10-K") should be read in conjunction with the comments below. EARNINGS The quarter ended March 31, 1996 resulted in earnings of $.51 per common share, compared to earnings of $.40 per common share for the quarter ended March 31, 1995. The improvement in earnings were due in part to the return to operation of the Maine Yankee Nuclear Plant (Maine Yankee) in late January of 1996 (See more complete discussion of the Maine Yankee outage in the 1995 Form 10-K). The plant was not operational during most of the first quarter of 1995, and the Company incurred approximately $2.2 million in incremental replacement power costs. This compares to approximately $934,000 in incremental replacement power costs in the first quarter of 1996. Also positively affecting earnings in the first quarter of 1996 were approximately $1.5 million in savings realized from the 1995 purchased power contracts buyback. This was offset by an increase in operation and maintenance (O&M) expense due to storm related activities during the first quarter of 1996 and an increase in the price of oil, which was minimized by entering into hedging transactions with three financial institutions (See more complete discussion of the hedging transactions in the 1995 Form 10-K). REVENUES The $1.0 million increase in electric operating revenues was attributable to an overall 2.4% increase in total kilowatt hour (KWH) sales in the first quarter of 1996 as compared to 1995, as well as a $1.2 million increase in off-system sales (sales related to power pool and interconnection agreements and resales of purchased power). The KWH increase was impacted by an increase in heating degree days in the first quarter of 1996, due to colder weather as compared to the 1995 quarter. These increases were offset to some extent by the impact of eliminating seasonal rates for certain customers effective March, 1995, and the need to reduce rates to meet increasing competitive pressures. EXPENSES The significant decrease in fuel for generation expense is related to the buyback of the high cost non-utility generator purchased power contracts on June 30, 1995 and the previously mentioned return of Maine Yankee to operation in January 1996. Fuel expense related to the purchased power contracts buyback were $8.9 million lower in the first quarter of 1996 as compared to 1995. These decreases were offset somewhat by an increase in the cost of fuel oil in the first quarter of 1996, which was minimized by the previously discussed hedging transactions. The Company reduced its fuel expense by approximately $1.1 million in the first quarter of 1996 through entering into the fuel hedging agreements. The $503,000 increase in other O&M expense in the first quarter of 1996 was due to several factors. Bad debt expense increased by $64,000, due to higher levels of bad debt write-offs in the 1996 quarter. O&M payroll expense increased by $52,000 due to one additional week of payroll in the 1996 quarter, as well as the impact of a 2% wage rate increase for both union and nonunion employees effective November 1, 1995. These payroll increases were offset by lower employee levels in 1996 due to the early retirement and severance program in the third quarter of 1995. Also increasing O&M expense in the first quarter of 1995 was $75,000 in additional outside legal services and $85,000 related to accruals under the Company's incentive bonus program. Further, in the first quarter of 1996, postretirement medical and life insurance benefits expenses increased by $67,000 as compared to the 1995 quarter. The increase in depreciation and amortization expense was due principally to anticipated property additions for 1996, recording a full year's depreciation on 1995 additions to electric plant in service, as well as an increase in the composite depreciation rate from 3.0% to 3.2%, resulting from a depreciation study conducted by the Company. The increase in amortization of costs to terminate purchased power contracts was a result of the Company amortizing over a ten year period, starting in July 1995, the costs to terminate the purchased power contracts in June 1995, amounting to monthly amortization of $1.4 million. The increase in property and other taxes in the first quarter of 1996 was due principally to greater property taxes, which was a result of increased property levels and property tax rates. These increases were offset by reduced payroll taxes, as a result of lower employee levels in 1996 as compared to 1995. The increase in income taxes was primarily a function of higher earnings in the first quarter of 1996 as compared to the 1995 quarter. Allowance for funds used during construction (AFDC) decreased in 1996 relative to 1995 primarily due to ceasing accrual of AFDC on FERC hydro relicensing projects effective March 1, 1995. Other income, net, increased in the 1996 quarter due principally to $345,000 of interest income earned on the $21 million capital reserve fund set aside in connection with the June 30, 1995 purchased power contracts buyback financing with the Finance Authority of Maine. Long-term debt interest expense increased $3.4 million in the first quarter of 1996 as compared to 1995 due to $186 million of borrowings on June 30, 1995 to finance the purchased power contracts buyback. The increase was offset by the impact of sinking fund payments on the Company's 12.25% first mortgage bonds. Other interest expense, which is composed primarily of interest expense on short term borrowings, increased due to higher interest rates as well as a $7.5 million increase in weighted average short term borrowings outstanding in the 1996 quarter as compared to 1995. Also included in other interest expense is the amortization of issuance costs of various debt instruments. Due to the issuance costs incurred in connection with financing the 1995 purchased power contracts buyback, debt issuance cost amortization expense was approximately $97,000 higher in the first quarter of 1996. LIQUIDITY AND CAPITAL RESOURCES The Consolidated Statements of Cash Flows reflect events in the first quarters of 1996 and 1995 as they affect the Company's liquidity. Net cash provided by operations increased by $5.6 million in the first quarter of 1996 as compared to the 1995 quarter. With the elimination of the previously discussed purchased power contracts in June 1995, the Company's fuel costs related to the contracts were approximately $8.9 million lower in the first quarter of 1996. These savings from the contract buybacks were reduced by increased interest payments on debt issued to finance the buyback transactions. Also positively impacting cash flows from operations were the incremental costs incurred in to replace the Company's share of Maine Yankee's output. These additional fuel costs amounted to $2.2 million for the first quarter of 1995 as compared to $934,000 for the 1996 quarter. Reducing cash flows from operations to some extent was a $1.4 million decrease in accounts payable in the first quarter of 1996 as compared to a $1.0 million increase in the first quarter of 1995. Also, accounts receivable, net and unbilled revenue increased by $21,000 in the 1996 quarter, as compared to a $987,000 decrease in the 1995 quarter. Due to efforts by the Company to control costs and enhance cash flows in 1996, construction expenditures have been reduced by $1.2 million in the 1996 quarter as compared to 1995. As discussed in the Form 10-Q for the second quarter of 1995, the Company reduced its quarterly dividend on common stock by $.15 from the prior quarterly level of $.33 per share, effective for the quarter ending June 30, 1995. This reduction has improved cash flows through a $1.1 million decrease in common dividend payments for the first quarter of 1996. The Company in each period made sinking fund payments on its 12.25% first mortgage bonds. Also in the first quarter of 1996 the Company made a sinking fund payment of $1.5 million on its 8.76% mandatory redeemable preferred stock. As discussed in more detail in the footnotes to the consolidated financial statements contained in the 1995 Form 10-K, the Company, in the first quarter of 1996 made a $115,000 payment to this preferred stockholder related to a "make whole provision" under the preferred stock agreement. Under the Company's Dividend Reinvestment and Common Stock Purchase Plan the Company realized a common stock investment of $163,000 through the issuance of 13,542 new common shares in 1996 as compared to $421,000 in the comparable 1995 period through the issue of 44,201 shares. As discussed in the 10-Q for the second quarter of 1995, effective June 30, 1995, the Company entered into a Credit Agreement with a group of seven banks providing a revolving credit facility in the initial amount of $55 million. The revolving credit facility has a term of five years. With the completion of the purchased contract buyback in the second quarter of 1995, the Company expects minimal external financing needs for the foreseeable future. NEW ACCOUNTING STANDARD In March 1995 the Financial Accounting Standards Board issued Statement No. 121 (FAS 121), "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Asset to be Disposed Of", effective for financial statements for fiscal years beginning after December 15, 1995. The Company implemented this standard in the first quarter of 1995. With the cost of the Company's long- lived assets and intangibles currently being recovered through its electric rates, the effect of FAS 121 on the Company's results of operations and financial position in the first quarter of 1996 was not significant. Management cannot predict the outcome of the possibility of further competition and deregulation of the electric utility industry, or the application of this standard. OTHER The Company occassionally makes forward-looking statements such as forecasts and projections of expected future performance or statements of the Company's plans and objectives. These forward-looking statements may be contained in filings with the Securities and Exchange Commission, press releases, and oral statements. Actual results could potentially differ materially from these statements. Therefore, no assurances can be given that such forward-looking statements and estimates will be achieved. BANGOR HYDRO-ELECTRIC COMPANY CONSOLIDATED BALANCE SHEETS 000's Omitted (Unaudited) ASSETS Mar. 31, Dec. 31, 1996 1995 ---------- ---------- INVESTMENT IN UTILITY PLANT: Electric plant in service, at original cost $ 302,917 $ 300,374 Less - Accumulated depreciation and amortization 83,948 81,934 ---------- ---------- $ 218,969 $ 218,440 Construction work in progress 19,413 18,151 ---------- ---------- $ 238,382 $ 236,591 Investments in corporate joint ventures: Maine Yankee Atomic Power Company $ 5,014 $ 5,014 Maine Electric Power Company, Inc. 125 125 ---------- ---------- $ 243,521 $ 241,730 ---------- ---------- OTHER INVESTMENTS, principally at cost $ 4,248 $ 4,185 ----------- ---------- FUNDS HELD BY TRUSTEE, at cost $ 21,536 $ 21,192 ----------- ---------- CURRENT ASSETS: Cash and cash equivalents $ 7,498 $ 1,424 Accounts receivable, net of reserve 18,523 18,226 Unbilled revenue receivable 8,545 8,821 Inventories, at average cost: Material and supplies 3,042 3,029 Fuel oil 390 106 Prepaid expenses 1,500 1,738 Deferred Maine Yankee refueling costs 2,083 2,419 ----------- ---------- Total current assets $ 41,581 $ 35,763 ----------- ---------- DEFERRED CHARGES: Investment in Seabrook Nuclear Project, net of accumulated amortization of $25,501 in 1996 and $25,076 in 1995 $ 33,341 $ 33,766 Costs to terminate purchased power contracts, net of accumulated amortization of $20,751 in 1996 and $4,210 in 1995 186,950 192,140 Deferred regulatory assets 29,755 30,328 Demand-side management costs 1,777 1,946 Other 4,567 5,026 ----------- ---------- Total deferred charges $ 256,390 $ 263,206 ----------- ---------- Total assets $ 567,276 $ 566,076 ========== ========== See notes to the consolidated financial statements. BANGOR HYDRO-ELECTRIC COMPANY CONSOLIDATED BALANCE SHEETS 000's Omitted (Unaudited) Mar. 31, Dec. 31, STOCKHOLDERS' INVESTMENT AND LIABILITIES 1996 1995 --------- --------- CAPITALIZATION: Common stock investment $ 105,740 $ 103,192 Preferred stock 4,734 4,734 Preferred stock subject to mandatory redemption, exclusive of current sinking fund requirements 12,164 12,070 Long-term debt, net of current portion 287,176 288,075 ----------- ----------- Total capitalization $ 409,814 $ 408,071 ----------- ----------- CURRENT LIABILITIES: Notes payable - banks $ 35,000 $ 35,000 ----------- ----------- Other current liabilities - Current portion of long-term debt and sinking fund requirements on preferred stock $ 15,362 $ 16,939 Accounts payable 9,138 10,527 Dividends payable 1,679 1,709 Accrued interest 5,947 4,908 Customers' deposits 335 349 Deferred fuel revenue 1,765 2,017 ----------- ----------- Total other current liabilities $ 34,226 $ 36,449 ----------- ----------- Total current liabilities $ 69,226 $ 71,449 ----------- ----------- DEFERRED CREDITS AND RESERVES: Deferred income taxes - Seabrook $ 17,325 $ 17,546 Other accumulated deferred income taxes 52,847 50,775 Deferred regulatory liability 8,419 8,568 Unamortized investment tax credits 2,310 2,354 Accrued pension 638 626 Other 6,697 6,687 ----------- ----------- Total deferred credits and reserves $ 88,236 $ 86,556 ----------- ----------- Total Stockholders' Investment and Liabilities $ 567,276 $ 566,076 =========== =========== See notes to the consolidated financial statements. BANGOR HYDRO-ELECTRIC COMPANY CONSOLIDATED STATEMENTS OF CAPITALIZATION 000's Omitted Mar. 31, Dec. 31, 1996 1995 ------------- --------- COMMON STOCK INVESTMENT Common stock, par value $5 per share- $ 36,575 $ 36,508 Authorized -- 10,000,000 shares Outstanding -- 7,315,099 shares in 1996 and 7,301,557 shares in 1995 Amounts paid in excess of par value 56,706 56,611 Retained earnings 12,459 10,073 ------------ --------- Total common stock investment $ 105,740 $ 103,192 ------------ ---------- PREFERRED STOCK-Non participating, cumulative- Par value $100 per share, authorized 600,000 shares Not redeemable or redeemable solely at the option of the issuer - 7%, Noncallable, 25,000 shares, authorized and outstanding $ 2,500 $ 2,500 4.25%, Callable at $100, 4,840 shares, authorized and outstanding 484 484 4%, Series A, Callable at $110, 17,500 shares, authorized and outstanding 1,750 1,750 ------------ ---------- $ 4,734 $ 4,734 ------------ ---------- 8.76%, Subject to mandatory redemption requirements- Callable at 105.01% if called on or prior to December 27, 1996, 150,000 shares authorized and 135,000 shares outstanding in 1996 and 150,000 shares outstanding in 1995 $ 13,779 $ 15,363 Less: Sinking fund requirements 1,615 3,293 ------------ ---------- $ 12,164 $ 12,070 ------------ ---------- LONG-TERM DEBT First Mortgage Bonds- 6.75% Series due 1998 $ 2,500 $ 2,500 10.25% Series due 2019 15,000 15,000 10.25% Series due 2020 30,000 30,000 8.98% Series due 2022 20,000 20,000 7.38% Series due 2002 20,000 20,000 7.30% Series due 2003 15,000 15,000 12.25% Series due 2001 8,222 9,021 ------------ ---------- $ 110,722 $ 111,521 Less: Sinking fund requirements 1,746 1,646 ------------ ---------- Total first mortgage bonds $ 108,976 $ 109,875 ------------ ---------- Variable rate demand pollution control revenue bonds Series 1983 due 2009 $ 4,200 $ 4,200 ------------ ---------- Other Long-Term Debt- Finance Authority of Maine - Taxable Electric Rate Stabilization Revenue Notes, 7.03% Series 1995A, due 2005 $ 126,000 $ 126,000 ------------ ---------- Medium Term Notes, Variable interest rate - LIBO Rate Plus 2%, due 2000 $ 60,000 $ 60,000 Less: Current portion of long-term debt 12,000 12,000 ------------ ---------- $ 48,000 $ 48,000 ------------ ---------- Total long-term debt $ 287,176 $ 288,075 ------------ ---------- Total Capitalization $ 409,814 $ 408,071 ============ ========== See notes to the consolidated financial statements. BANGOR HYDRO-ELECTRIC COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995 000's Omitted (Unaudited) 1996 1995 -------- -------- CASH FLOWS FROM OPERATIONS: NET INCOME $ 4,095 $ 3,293 Adjustments to reconcile net income to net cash provided by (used in) operations: Depreciation and amortization 1,960 1,549 Amortization of Seabrook Nuclear Project 425 425 Amortization of contract buyouts 5,190 972 Base rate case amortizations included in operation and maintenance 249 270 Allowance for equity funds used during construction (99) (219) Deferred income tax provision 2,691 660 Deferred investment tax credits (44) (44) Changes in assets and liabilities: Deferred fuel revenue and Maine Yankee refueling costs 84 (1,318) Receivables, net and unbilled revenue (21) 987 Materials, supplies and fuel oil (297) 365 Accounts payable (1,389) 1,002 Accrued interest 1,039 (1,211) Current and deferred income taxes (403) 1,171 Other current assets and liabilities, net 224 283 Other, net 136 30 ---------- ---------- Net Cash Provided By Operations $ 13,840 $ 8,215 ---------- ---------- CASH FLOWS FROM INVESTING: Construction expenditures $ (3,595) $ (4,795) Allowance for borrowed funds used during construction (212) (210) ---------- ---------- Net Cash (Used in) Investing $ (3,807) $ (5,005) ---------- ---------- CASH FLOWS FROM FINANCING: Dividends on preferred stock $ (395) $ (395) Dividends on common stock (1,314) (2,371) Repayments on long-term debt (798) (1,355) Sinking fund and make whole provision payments on mandatory redeemable preferred stock (1,615) -- Issuances of common stock Dividend reinvestment plan (13,542 shares in 1996 and 44,201 in 1995) 163 421 ---------- ---------- Net Cash (Used in) Financing $ (3,959) $ (3,700) ---------- ---------- NET CHANGE IN CASH AND CASH EQUIVALENTS $ 6,074 $ (490) CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 1,424 1,956 ---------- ---------- CASH AND CASH EQUIVALENTS - END OF THREE MONTHS $ 7,498 $ 1,466 ========== ========== CASH PAID DURING THE THREE MONTHS FOR: INTEREST (Net of Amount Capitalized) $ 5,618 $ 3,956 INCOME TAXES -- -- ========== ========== See notes to the consolidated financial statements. BANGOR HYDRO-ELECTRIC COMPANY CONSOLIDATED STATEMENTS OF RETAINED EARNINGS FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995 000's Omitted (Unaudited) 1996 1995 ----------- ----------- BALANCE AT JANUARY 1 $ 10,073 $ 13,758 ADD - NET INCOME 4,095 3,293 ----------- ----------- $ 14,168 $ 17,051 ----------- ----------- DEDUCT: Dividends - Preferred stock $ 362 $ 395 Common stock 1,317 2,386 Other 30 18 ----------- ----------- $ 1,709 $ 2,799 ----------- ----------- BALANCE AT MARCH 31 $ 12,459 $ 14,252 =========== =========== See notes to the consolidated financial statements. BANGOR HYDRO-ELECTRIC COMPANY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS March 31, 1996 (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 1995 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, 1996 and the results of operations and cash flows for the periods ended March 31, 1996 and 1995. The Company's significant accounting policies are described in the Notes to the Consolidated Financial Statements included in its 1995 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, 1996 1995 Amount % Amount % (Dollars in Thousands) Federal income tax provision at statutory rate $2,267 34% $1,807 34% Less permanent reductions in tax expense resulting from statutory exclusions from taxable income 6 - 55 1 ------ --- ------ --- Federal income tax provision before effect of temporary differences $2,261 34% $1,752 33% Less temporary differences that are flowed through for ratemaking and accounting purposes 166 3 49 1 ------ --- ------ --- Federal income tax provision $2,095 31% $1,703 32% ====== === ====== === 3) INVESTMENT IN JOINTLY OWNED FACILITIES: Condensed financial information for Maine Yankee Atomic Power Company ("Maine Yankee"), Maine Electric Power Company, Inc. ("MEPCO"), Bangor-Pacific Hydro Associates ("BPHA") and Chester SVC Partnership ("Chester") is as follows: MAINE YANKEE MEPCO --------------- ------------------- (Dollars in Thousands) (Unaudited) Operations for Three Months Ended ------------------------------------- Mar. 31, Mar. 31, Mar. 31, Mar. 31, 1996 1995 1996 1995 -------- -------- -------- -------- OPERATIONS: As reported by investee- Operating revenues $41,812 $ 62,662 $14,860 $ 9,069 ======== ======== ======= ======= Earnings applicable to common stock $ 1,786 $ 1,715 $ 56 $ 26 ======== ======== ======= ======= Company's reported equity- Equity in net income $ 125 $ 120 $ 8 $ 4 (Deduct) Add-Effect of adjusting Company's estimate to actual (50) 8 (4) - -------- -------- ------- ------- Amounts reported by Company $ 75 $ 128 $ 4 $ 4 ======== ======== ======= ======= MAINE YANKEE MEPCO ------------------ ---------------- (Dollars in Thousands) (Unaudited) Financial Position at Mar. 31 Dec. 31 Mar. 31 Dec. 31 1996 1995 1996 1995 -------- -------- -------- -------- FINANCIAL POSITION: As reported by investee- Total assets $574,751 $580,958 $ 8,877 $ 5,919 Less- Preferred stock 18,000 18,600 - - Long-term debt 106,999 109,999 - 870 Other liabilities and deferred credits 378,515 381,158 7,969 4,171 -------- -------- -------- -------- Net assets $ 71,237 $ 71,201 $ 908 $ 878 ======== ======== ======== ======== Company's reported equity- Equity in net assets $ 4,987 $ 4,984 $ 129 $ 125 Add (deduct) - Effect of adjusting Company's estimate to actual 27 30 (4) - -------- -------- -------- -------- Amounts reported by Company $ 5,014 $ 5,014 $ 125 $ 125 ======== ======== ======== ======== BPHA Chester ----------------- ----------------- (Dollars in Thousands) (Unaudited) Operations for Three Months Ended -------------------------------------- Mar. 31, Mar. 31, Mar. 31, Mar. 31, 1996 1995 1996 1995 -------- -------- -------- -------- OPERATIONS: As reported by investee- Operating revenues $ 2,088 $ 1,858 $ 1,222 $ 1,236 ======= ======== ======= ======= Net Income $ 799 $ 589 $ - $ - ======= ======== ======= ======= Company's reported equity in net income $ 400 $ 295 $ - $ - ======= ======== ======= ======= Financial Position at Mar. 31, Dec. 31, Mar. 31, Dec. 31, 1996 1995 1996 1995 -------- -------- -------- -------- FINANCIAL POSITION: As reported by investee- Total assets $40,502 $41,007 $29,618 $30,048 Less- Long-term debt 32,100 32,600 27,908 28,204 Other liabilities 2,450 2,255 1,710 1,844 ------- ------- -------- -------- Net assets $ 5,952 $ 6,152 $ - $ - ======= ======= ======== ======== Company's reported equity in net assets $ 2,976 $ 3,076 $ - $ - ======= ======= ======== ======== 4. NEW ACCOUNTING PRONOUNCEMENT: In March 1995 the Financial Accounting Standards Board issued Statement No. 121 (FAS 121), "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Asset to be Disposed Of", effective for financial statements for fiscal years beginning after December 15, 1995. The Company implemented this standard in the first quarter of 1995. With the cost of the Company's long-lived assets and intangibles currently being recovered through its electric rates, the effect of FAS 121 on the Company's results of operations and financial position in the first quarter of 1996 was not significant. Management cannot predict the outcome of the possibility of further competition and deregulation of the electric utility industry, or the application of this standard. BANGOR HYDRO-ELECTRIC COMPANY FORM 10-Q FOR PERIOD ENDING MARCH 31, 1996 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 January 12, 1996 was filed in the first quarter of 1996, regarding the return to operation of the Maine Yankee nuclear generating facility. BANGOR HYDRO-ELECTRIC COMPANY FORM 10-Q FOR PERIOD ENDED MARCH 31, 1996 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) Dated: May 14, 1996 /S/ Frederick S. Samp ------------------------------ Frederick S. Samp Vice President - Finance & Law (Chief Financial Officer) EX-27 2 FINANCIAL DATA SCHEDULE/BANGOR HYDRO ELECTRIC CO.
UT This schedule contains summary financial information extracted from first quarter 1996 10-Q and is qualified in its entirety by reference to such 10-Q. 0000009548 BANGOR HYDRO-ELECTRIC COMPANY 1,000 3-MOS DEC-31-1996 MAR-31-1996 PER-BOOK 238,382 30,923 41,581 256,390 0 567,276 36,575 56,706 12,459 105,740 12,164 4,734 287,176 0 35,000 0 13,747 1,615 0 0 107,100 567,276 49,266 2,352 36,460 38,812 10,454 397 10,851 6,756 4,095 393 3,702 (1,317) 23,419 13,840 .51 .51
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