-----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, NxXyKFhrun1FS4n4K5GT1+uYW0n0BPNtLjnbmTHPxGybIMMK6YVj7j9UcBc6Pt5T KjM3/ECRjDEMlEHrZGWi/g== 0000009548-94-000020.txt : 19941122 0000009548-94-000020.hdr.sgml : 19941122 ACCESSION NUMBER: 0000009548-94-000020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941110 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANGOR HYDRO ELECTRIC CO CENTRAL INDEX KEY: 0000009548 STANDARD INDUSTRIAL CLASSIFICATION: 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: 94558885 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 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter ended SEPTEMBER 30, 1994 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 - 7,156,658 Shares September 30, 1994 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 SEPTEMBER 30, 1994 PART I - FINANCIAL INFORMATION PAGE Cover Page Index Consolidated Statements of Income Management's Discussion and Analysis of Financial Statements Consolidated Balance Sheets - September 30, 1994 and December 31, 1993 Consolidated Statements of Retained Earnings Consolidated Statements of Cash Flows Notes to the Consolidated Financial Statements PART II - OTHER INFORMATION Item 6 - Exhibits and Reports on Form 8-K Signature Page BANGOR HYDRO-ELECTRIC COMPANY CONSOLIDATED STATEMENTS OF INCOME 000's Omitted Except Per Share Amounts 3 Months Ended 9 Months Ended Sept. 30, Sept. 30, Sept. 30, Sept. 30, 1994 1993 1994 1993 ---------- -------- --------- ---------- ELECTRIC OPERATING REVENUES: Base rate revenue 22,493 18,965 63,181 57,058 Fuel charge revenue 20,082 24,511 65,433 76,645 ---------- -------- --------- ---------- 42,575 43,476 128,614 133,703 ---------- -------- --------- ---------- OPERATING EXPENSES: Fuel for generation 20,076 24,435 65,464 76,417 Purchased power 3,882 3,700 10,448 10,865 Other operation and maintenance 7,341 6,595 25,315 20,196 Depreciation and amortization 1,357 1,244 3,950 3,733 Amortization of Seabrook Nuclear Unit 424 424 1,274 1,274 Amortization of costs to terminate purchased power contract 972 -- 2,267 -- Taxes - Property and payroll 1,125 1,035 3,493 3,072 State income 297 230 394 582 Federal income 1,512 1,417 2,834 3,903 ---------- -------- --------- ---------- 36,986 39,080 115,439 120,042 ---------- -------- --------- ---------- OPERATING INCOME 5,589 4,396 13,175 13,661 ---------- -------- --------- ---------- OTHER INCOME Allowance for equity funds used during construction 248 800 1,013 1,599 Other, net of applicable income taxes 52 172 35 344 ---------- -------- --------- ---------- 300 972 1,048 1,943 ---------- -------- --------- ---------- INCOME BEFORE INTEREST EXPENSE 5,889 5,368 14,223 15,604 ---------- -------- --------- ---------- INTEREST EXPENSE: Long-term debt 2,675 2,876 8,089 7,692 Other 363 252 1,075 744 Allowance for borrowed funds used during construction (221) (1,004) (1,116) (1,750) ---------- -------- --------- ---------- 2,817 2,124 8,048 6,686 ---------- -------- --------- ---------- NET INCOME 3,072 3,244 6,175 8,918 DIVIDENDS ON PREFERRED STOCK 413 414 1,239 1,232 ---------- -------- --------- ---------- EARNINGS APPLICABLE TO COMMON STOCK 2,659 2,830 4,936 7,686 == ======= ======== ========= ========== WEIGHTED AVERAGE NUMBER OF SHARES 7,151 6,207 6,870 5,741 == ======= ======== ========= ========== EARNINGS PER COMMON SHARE, based on the weighted average number of shares outstanding during the period .37 .46 .72 1.34 == ======= ======== ========= ========== DIVIDENDS DECLARED PER COMMON SHARE .33 .33 .99 .99 == ======= ======== ========= ========== 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, 1993 ("1993 Form 10-K") should be read in conjunction with the comments below. EARNINGS Earnings for the quarter ended September 30, 1994 were $.37 per common share compared to $.46 per common share for the same period in 1993. The third quarter results brought earnings for the first nine months of 1994 to $.72 per common share compared to $1.34 per common share for the same period in 1993. The 1994 earnings per share numbers are both based on a greater number of common shares outstanding than in 1993. Although earnings in the third quarter of 1994 were sufficient to cover the quarterly dividend, the Company does not anticipate 1994 earnings will exceed the annual dividend rate of $1.32 primarily due to the one-time charge to earnings associated with the early retirement plan incurred in the first quarter of 1994. Despite a base rate increase that took effect March 1, 1994, earnings continue to be affected by a lower rate of growth than was assumed in the decision of the Maine Public Utilities Commission (MPUC) authorizing the base rate increase. In addition, some revenue erosion is occurring as a result of strategies implemented by the Company to reduce rates where necessary in order to prevent the loss of certain customer loads altogether. The Company's best opportunity for improving financial performance is to implement changes in the regulatory environment that supports the Company's efforts to increase sales and expand market share. The Alternative Marketing Plan (AMP), mentioned below, the Company is pursuing at the MPUC, addresses these changes. This proposal coupled with the successful disposition of another of the Company's high-cost non-utility generator (NUG) contracts could provide the best chance for improving earnings in 1995. Failing that, the Company may rely on the traditional approach of seeking rate increases in order to enhance shareholder returns to an adequate level. These matters are discussed further in the following section. IMPORTANT CURRENT ACTIVITIES On July 19, 1994 the Company filed testimony in support of a proposed alternative form of regulation to govern rate levels and pricing flexibility policies. The Company has called the proposal an Alternative Marketing Plan or AMP. AMP is comprised of several interrelated components needed to improve the Company's competitive position over the next several years, including: 1) maintaining the current price levels of our general tariffs for a period up to five years, 2) allowing the Company the ability to reduce prices to any customer or segment of customers as necessary to compete for the retention of "at risk" customers and to expand market share, where appropriate, 3) eliminating the separate "fuel cost adjustment" rates, 4) eliminating summer/winter seasonal rate differentials, and 5) allowing for appropriate accounting treatment, and the retention of savings for the benefit of customers and stockholders, in the event of additional NUG contract buyouts or other resolutions of those high costs. In general, approval of a plan like AMP would mean the Company would gain a greater opportunity to manage its business and enhance the chances for greater profitability in the competitive environment which has evolved. To do so, however, the Company must step out, at least to some extent, from the protective arena of traditional rate-of-return regulation; and with the Company's rates already at relatively high levels under that traditional regulatory approach, Management believes this is an appropriate time to be pressing for alternatives. The processing of AMP at the MPUC has not been as expeditious as the Company had hoped, and it now appears that a final decision will not be issued until late January of 1995. Consequently, it may be necessary for the Company to file for increases in base rates in the traditional manner, an eleven month process once the notice is filed. Though the Company does not believe further rate increases at this time would be as effective as the AMP proposal, it is quite possible that both paths should be pursued in parallel in order to best provide for adequate financial returns for the shorter term. REVENUES The base rate revenue increase of $3.5 million or 18.6% was primarily the result of the 15.9% base rate increase effective March 1, 1994 as well as a 1% increase in kilowatt hour (KWH) sales. This increase was also favorably impacted by a 3% increase in KWH sales in the third quarter of 1994 as well as the change in the electric rate in the first quarter of 1994 for the Company's largest industrial customer, Holtrachem (formerly LCP), whose contribution to base revenue for the quarter ended September 30, 1994 was $1.08 million greater than the third quarter of 1993. In the 1994 quarter $450,000 of income associated with the Company's revenue sharing arrangement with Holtrachem has been recorded as base revenues, while in the 1993 quarter, revenue sharing amounts were recorded as other income. This increase in base revenue was offset somewhat by the impact of a special contract rate with the Company's second largest industrial customer, James River, which was implemented in the first quarter of 1994. Base rate revenue for this customer decreased by $137,000 or 16.8% in the 1994 quarter as compared to 1993. Fuel charge revenue decreased by $4.4 million or 18.1% in the third quarter of 1994 over the same quarter of 1993. This decrease was due principally to the 12.5% fuel rate decrease effective in November 1993, as well as the impact of the special contract with James River. Also off-system sales resulted in additional fuel charge revenue of $3.4 million for the third quarter of 1994 as compared to $4.6 million for the same quarter of 1993. EXPENSES As a result of the deferred fuel accounting methodology followed by the Company, retail fuel expense is recorded to match the retail fuel cost adjustment portion of fuel charge revenue. Fuel expense was also impacted by off-system sales, resulting in an increase of $3.4 million in fuel expense for the quarter ended September 30, 1994 as compared to an increase of $4.6 million for the third quarter of 1993. Purchased power expense increased by $182,000 or 4.9% in the third quarter of 1994 as compared to the same quarter of 1993. The increase was principally due to costs associated with an unplanned outage at the Maine Yankee nuclear plant in August 1994. Other operation and maintenance (O&M) expense increased $746,000 or 11.3% in the third quarter of 1994. This expense increase was impacted by the Company charging to operations, beginning in March 1994, the full amount of other postretirement benefit expense under Financial Accounting Standards Board Statement Number 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions" (FASB 106), which amounted to $346,000 in the third quarter of 1994. Also amortizations of certain deferred charges allowed in the most recent base rate case amounted to $240,000 of expense in the 1994 quarter. In addition, in the third quarter of 1994, other medical costs increased $231,000, and pension income decreased $106,000 as compared to the third quarter of 1993. These increases were offset by a $216,000 decrease in O&M payroll. The decreased payroll is a result of the early retirement program implemented during the first quarter of 1994, offset by a 3.5% wage rate increase for bargaining unit employees effective January 1, 1994. Depreciation and amortization expense increased by $113,000 or 9.1% due to an increase in depreciable property. Effective March 1, 1994 in connection with the recent base rate increase, the Company began amortizing deferred costs associated with the Beaver Wood Joint Venture (Beaver Wood) purchased power contract termination over a nine year period. Amortization expense amounted to $972,000 in the third quarter of 1994. Property and payroll taxes increased $90,000 or 8.7% as a result of higher levels of property taxes due to greater property levels and increased property tax rates. Income taxes increased $162,000 or 9.8% due principally to greater taxable income in the third quarter of 1994. AFDC decreased, the equity portion by $552,000 or 69.0% and the borrowed portion by $783,000 or 78.0%. A large part of this reduction was due to carrying costs accrued in 1993 on costs associated with the Beaver Wood purchased power contract termination, which took place in June 1993. In the third quarter of 1993, approximately $1.03 million in Beaver Wood buyout carrying costs were recorded. In the third quarter of 1994 no such carrying cost were recorded, as effective with the new base rates implemented March 1, 1994, the Company discontinued the accrual of these carrying costs, since the recovery of the contract termination costs (including carrying costs and a return on the unamortized balance) is included in the revised rates. Also impacting decreased AFDC in the 1994 quarter was the cessation of accruing AFDC on costs related to the Basin Mills project effective December 1993. In the third quarter of 1993 $126,000 of AFDC was recorded on Basin Mills costs. In the third quarter of 1994 AFDC on construction work in progress decreased $104,000 as compared to 1993 due to decreased levels of construction activity. Other income, net of applicable taxes, decreased by $120,000 or 69.8% due primarily to the revenue sharing arrangement with Holtrachem. In the third quarter of 1993 all revenue sharing associated with Holtrachem was recorded as other income, while in the third quarter of 1994 all revenue sharing from this customer was recorded as base rate revenue. Long-term debt interest expense decreased by $201,000 or 7.0% due principally to September 1993 redemption of the remaining principal balances of the following first mortgage bonds: 9.25% series due 2001, 8.25% series due 1999, and the 8.6% series due 2003. Interest expense was also reduced as a result of regular and optional sinking fund payments on the Company's 12.25% series first mortgage bonds in 1994. Other interest expense, which is composed primarily of interest expense on short term borrowings, increased by $111,000 or 44.1% due principally to increased interest rates, as well as a $2.9 million increase in average short term borrowings outstanding in the 1994 quarter. NINE MONTHS OF 1994 VERSUS NINE MONTHS OF 1993 Base rate revenue increased $6.1 million or 10.7% in 1994 due to 15.9% base rate increase on March 1, 1994. This increase was offset by the impact of the previously mentioned special contract rates with Holtrachem and James River. While KWH sales to Holtrachem decreased by 4.8% in the first nine months of 1994, base rate revenue decreased by 15.3%, excluding $460,000 of revenue sharing which was also recorded as base rate revenue in 1994. In 1993 all revenue sharing associated with Holtrachem was recorded as other income. KWH sales to James River increased by 17.9%, but base rate revenue for this customer decreased by 14.6%. Exclusive of the impact of these two special contracts, firm sales increased by 1.5% in 1994. Fuel charge revenue decreased by $11.2 million or 14.6% in 1994. This decrease was due principally to the 12.5% fuel rate decrease effective in November 1993, as well as the impact of the special contract with James River. Also, off-system sales resulted in additional fuel charge revenue of $9.7 million for the 1994 period as compared to $12.3 million for 1993. Purchased power expense decreased $417,000 or 3.8% due to lower capacity and transmission costs associated with the Maine Yankee nuclear plant in 1994, offset by the impact of the outage in the third quarter of 1994. Other O&M expense increased $5.1 million or 25.4% for the nine months ended September 30, 1994 as compared to the same period for 1993. This expense has increased due primarily to the early retirement program implemented in the first quarter of 1994, which resulted in approximately $2.8 million in expense being charged to operations. Other postretirement benefits under FASB 106 amounted to $877,000 in the 1994 period, and other medical costs increased by $494,000 over the 1993 period. In addition, previously mentioned base rate case amortizations amounted to $575,000 for the nine months ended September 30, 1994. Also increasing other O&M was a decrease in pension income of $317,000 as compared to 1993. These increases in other O&M were partially offset by a decrease in O&M payroll of $73,000 in the 1994 period as compared to 1993. The decrease was principally a result of the impact of the early retirement program in the first quarter of 1994, offset by the January 1, 1994 wage rate increase of 3.5% for bargaining unit employees. Depreciation and amortization expense increased by $217,000 or 5.8% due to an increase in depreciable property in 1994. Amortization of the costs associated with the buyout of the Beaver Wood purchased power contract amounted to $2.3 million for the nine months ended September 30, 1994. Property and payroll taxes increased $421,000 or 13.7% for the nine months ended September 30, 1994 as compared to the same period in 1993 due to higher levels of taxable property and increased property tax rates. Income taxes decreased $881,000 for the 1994 period due principally to lower taxable income. The effective income tax rate was 30% for both the 1994 and 1993 periods. AFDC decreased, the equity portion by $586,000 or 36.7% and the borrowed portion by $634,000 or 36.2% for the nine months ended September 30, 1994 as compared to 1993. As previously noted, the decrease is principally a result of the accrual of carrying costs associated with the Beaver Wood purchased power contract buyout, which were $588,000 greater in the 1994 period. Also $354,000 in AFDC was accrued on Basin Mills costs in 1993, with none recorded in 1994. Other income, net of applicable taxes, decreased by $309,000 in 1994 due principally to a change in Holtrachem's electric rate in the first quarter of 1994. Long term debt interest expense increased $397,000 or 5.2% due to the June 1993 issuance of $15 million of first mortgage bonds at an interest rate of 7.3% and the issuance of $14.3 million of first mortgage bonds at an interest rate of 12.25%. The latter bonds were issued in exchange for other lenders' debt in connection with the buyout of the Beaver Wood purchased power contract. These were partially offset by regular and optional sinking fund payments on the 12.25% series first mortgage bonds in 1994, as well as the redemption of the remaining principal balances of the following first mortgage bonds: 9.25% series due 2001, 8.25% series due 1999, and the 8.6% series due 2003. Other interest expense increased $331,000 or 44.5% for the nine months ended September 30, 1994 as compared to the same period in 1993. The increase is attributable to a $6.4 million increase in average short-term debt borrowings outstanding in the 1994 period as well as higher short-term interest rates. LIQUIDITY AND CAPITAL RESOURCES The Consolidated Statements of Cash Flows reflect events in the first nine months of 1994 and 1993 as they affect the Company's liquidity. Net cash provided by operations was $20.8 million for the first nine months of 1994 compared with $26.2 million for the first nine months of 1993. The decrease was due to a $2.0 million decrease in net receivables, and unbilled revenue in 1994 as compared to a $6.0 million decrease in 1993. Also decreasing cash flows from operations was a $3.3 million decrease in accounts payable in 1994 as compared to a $632,000 increase in 1993. Deferred fuel, purchased power and interest costs decreased $2.3 million for the 1994 period as compared to a $4.0 million decrease for the 1993 period. In July 1994 the Company received a $1 million payment from Beaver Wood associated with the June 1993 contract termination, which called for Beaver Wood to pay the Company $1 million at the time of settling the transaction as well as $1 million annually for the next six years (1994 through 1999). On March 30, 1994 the Company completed a common stock offering that raised approximately $14.1 million with the issuance and sale of 867,500 shares of common stock. The proceeds from the sale were utilized to reduce the Company's outstanding short-term debt. During the second quarter of 1994 shareholders approved a proposal to increase the amount of additional common stock, $5 par value, and preferred stock, $100 par value, that the Company is authorized to issue, by 2.5 million shares and 200,000 shares, respectively. As previously discussed, external funds in the amount of $15 million were provided by the issue of first mortgage bonds in 1993. The documents governing these bonds do not provide for sinking fund payments. The proceeds from the bond issuance were used to reduce short-term debt balances and fund the Company's construction program. Under the Company's Dividend Reinvestment and Common Stock Purchase Plan the Company realized a common stock investment of $998,000 through the issuance of 63,764 new common shares in the first nine months of 1994 as compared to $850,000 in the comparable 1993 period through the issue of 44,079 shares. The Company's bank borrowings are provided through a $25 million revolving credit facility as well as $30 million in lines of credit. Effective May 26, 1994 the Company renegotiated its revolving credit agreement with the participating banks for a period of one year, with an option to renew for one additional year. As previously discussed, the Company made regular and optional sinking fund payments on certain of the higher rate coupon bonds and also redeemed the remaining principal balances of three series of first mortgage bonds in September 1993. BANGOR HYDRO-ELECTRIC COMPANY CONSOLIDATED BALANCE SHEETS 000's Omitted (Unaudited) ASSETS Sept. 30, Dec. 31, 1994 1993 --------- --------- INVESTMENT IN UTILITY PLANT: Electric plant in service, at original cost $ 270,550 $ 250,123 Less - Accumulated depreciation and amortization 74,927 71,184 -- ----------- --------- $ 195,623 $ 178,939 Construction in progress 22,347 26,602 -- ----------- --------- $ 217,970 $ 205,541 Investments in corporate joint ventures: Maine Yankee Atomic Power Company $ 4,754 $ 4,756 Maine Electric Power Company, Inc. 125 125 -- ----------- --------- $ 222,849 $ 210,422 -- ----------- --------- OTHER INVESTMENTS, principally at cost $ 3,308 $ 4,474 -- ----------- --------- CURRENT ASSETS: Cash and cash equivalents $ 1,400 $ 2,387 Accounts receivable, net of reserve 17,461 18,763 Unbilled revenue receivable 6,421 7,162 Inventories, at average cost: Material and supplies 2,876 3,220 Fuel oil 452 635 Prepaid expenses 997 1,574 Deferred fuel and interest costs 1,478 2,569 Deferred purchased power costs 626 1,796 Current deferred income taxes 819 -- -- ----------- --------- Total current assets $ 32,530 $ 38,106 -- ----------- --------- DEFERRED CHARGES: Investment in Seabrook Nuclear Project, net of accumulated amortization of $22,952 in 1994 and $21,678 in 1993 $ 35,890 $ 37,164 Costs to terminate purchased power contract 37,710 40,302 Deferred regulatory asset 34,994 33,068 Prepaid pension costs 1,840 2,398 Demand-side management costs 3,304 3,691 Other 3,936 3,896 -- ----------- --------- Total deferred charges $ 117,674 $ 120,519 -- ----------- --------- Total assets $ 376,361 $ 373,521 = ========= = ========= See notes to the consolidated financial statements. BANGOR HYDRO-ELECTRIC COMPANY CONSOLIDATED BALANCE SHEETS 000's Omitted (Unaudited) Sept. 30, Dec. 31, STOCKHOLDERS' INVESTMENT AND LIABILITIES 1994 1993 --------- --------- CAPITALIZATION: Common stock, par $5 per share - Authorized - 10,000,000 shares in 1994 and 7,500,000 shares in 1993 Outstanding - 7,156,658 shares in 1994 and 6,225,394 shares in 1993 $ 35,783 $ 31,127 Amounts paid in excess of par value 55,778 45,431 Retained earnings 15,260 17,386 -- ----------- --------- $ 106,821 $ 93,944 Preferred stock, non-participating, cumulative, par value $100 per share, authorized - 600,000 shares in 1994 and 400,000 shares in 1993 Not redeemable or redeemable solely at the option of the Company $ 4,734 $ 4,734 Subject to mandadory redemption requirements - 8.76% non-voting not redeemable prior to December 27, 1994, 150,000 shares authorized 15,222 15,168 and outstanding Long-term debt, exclusive of current sinking fund 116,367 119,126 requirements -- ----------- --------- Total capitalization $ 243,144 $ 232,972 -- ----------- --------- CURRENT LIABILITIES: Notes payable - banks $ 25,000 $ 36,000 -- ----------- --------- Other current liabilities - Current sinking fund requirements of long-term debt $ 1,461 $ 1,297 Accounts payable 12,703 15,961 Dividends payable 2,757 2,449 Accrued interest 2,438 3,706 Customers' deposits 485 498 -- ----------- --------- Total other current liabilities $ 19,844 $ 23,911 -- ----------- --------- Total current liabilities $ 44,844 $ 59,911 -- ----------- --------- Deferred income taxes - Seabrook $ 18,657 $ 19,176 Other accumulated deferred income taxes 53,631 47,001 Deferred regulatory liability 9,060 9,347 Unamortized investment tax credits 2,138 2,272 Other 4,887 2,842 -- ----------- --------- Total deferred credits and reserves $ 88,373 $ 80,638 -- ----------- --------- Total Stockholders' Investment and Liabilities $ 376,361 $ 373,521 = ========= = ========= See notes to the consolidated financial statements. BANGOR HYDRO-ELECTRIC COMPANY CONSOLIDATED STATEMENTS OF RETAINED EARNINGS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993 000's Omitted (Unaudited) 1994 1993 --------- --------- BALANCE AT JANUARY 1 $ 17,386 $ 21,639 ADD - NET INCOME 6,175 8,918 --------- --------- $ 23,561 $ 30,557 --------- --------- DEDUCT: Dividends - Preferred stock $ 1,185 $ 1,185 Common stock 7,062 5,889 Other 54 47 --------- --------- $ 8,301 $ 7,121 --------- --------- BALANCE AT SEPTEMBER 30 $ 15,260 $ 23,436 = ======= = ======= See notes to the consolidated financial statements. BANGOR HYDRO-ELECTRIC COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993 000's Omitted (Unaudited) 1994 1993 -------- -------- CASH FLOWS FROM OPERATIONS: NET INCOME $ 6,175 $ 8,918 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 3,950 3,733 Amortization of Seabrook Nuclear Project 1,274 1,274 Amortization of costs to terminate purchased power contract 2,267 --- Base rate case amortizations included in operations & maintenance 704 130 Allowance for equity funds used during construction (1,013) (1,599) Deferred income tax provision 3,718 5,305 Deferred income taxes on Seabrook Nuclear Project (311) (308) Deferred investment tax credits (134) (134) Changes in assets and liabilities: Deferred fuel, purchased power and interest costs 2,261 3,953 Receivables, net and unbilled revenue 2,043 6,039 Income tax refunds receivable --- (2,425) Materials, supplies and fuel oil 527 532 Prepaid pension costs (1,113) (255) Early retirement plan costs 2,801 --- Accounts payable (3,258) 632 Accrued interest (1,268) (225) Accrued current income taxes --- 2,378 Accrued postretirement benefit costs 620 --- Other current assets and liabilities, net 296 971 Other, net 1,240 (2,711) --------- --------- Net Cash Provided By Operations $ 20,779 $ 26,208 --------- --------- CASH FLOWS FROM INVESTING: Construction expenditures $(15,198) $(21,626) Payment received related purchased power contract termination 1,000 (23,712) Allowance for borrowed funds used during construction (1,116) (1,750) --------- --------- Net Cash Used in Investing $(15,314) $(47,088) --------- --------- CASH FLOWS FROM FINANCING: Dividends on preferred stock $ (1,185) $ (1,185) Dividends on common stock (6,754) (5,629) Issuance of long-term debt --- 15,000 Issuance of common stock: Public offering (867,500 shares in 1994 and 745,000 shares in 1993) 14,084 14,803 Dividend reinvestment plan (63,764 shares in 1994 and 44,079 in 1993) 998 850 Payments on long-term debt (2,595) (15,147) Change in short-term debt, net (11,000) 12,000 --------- --------- Net Cash (Used in) Provided by Financing $ (6,452) $ 20,692 --------- --------- NET CHANGE IN CASH AND CASH EQUIVALENTS $ (987) $ (188) CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 2,387 1,488 --------- --------- CASH AND CASH EQUIVALENTS - END OF NINE MONTHS $ 1,400 $ 1,300 ========= ========= CASH PAID DURING THE NINE MONTHS FOR: INTEREST (Net of Amount Capitalized) $ 8,089 $ 4,807 INCOME TAXES --- --- ========= ========= See notes to the consolidated financial statements. BANGOR HYDRO-ELECTRIC COMPANY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1994 (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. These statements should be read in conjunction with the consolidated financial statements and the notes thereto and all other information included in the 1993 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 September 30, 1994 and the results of operations and cash flows for the periods ended September 30, 1994 and 1993. The Company's significant accounting policies are described in the Notes to the Consolidated Financial Statements included in its 1993 Form 10-K filed with the Securities and Exchange NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -(CONTINUED): (1) BASIS OF PRESENTATION AND ACCOUNTING POLICIES - (Continued): 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: NINE MONTHS ENDED SEPTEMBER 30, 1994 1993 AMOUNT % AMOUNT % (Dollars in Thousands) Federal income tax provision at statutory rate $3,212 34% $4,686 34% Less permanent reductions in tax expense resulting from statutory exclusions from taxable income 323 4 426 4 ------ -- ------ -- Federal income tax provision before effect of temporary differences $2,889 30% $4,260 30% Less temporary differences that are flowed through for rate- making and accounting purposes 20 - 64 - ------ -- ------ -- Federal income tax provision $2,869 30% $4,196 30% ====== == ====== == NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED): 3) INVESTMENT IN MAINE YANKEE AND MEPCO: Condensed financial information for Maine Yankee Atomic Power Company ("Maine Yankee") and Maine Electric Power Company, Inc. ("MEPCO") is as follows: MAINE YANKEE MEPCO ----------------- ---------------- (Dollars in Thousands) (Unaudited) Operations for Nine Months Ended ------------------------------------ Sept.30, Sept.30, Sept.30, Sept.30, 1994 1993 1994 1993 -------- -------- -------- ------- OPERATIONS: As reported by investee- Operating revenues $128,496 $146,626 $17,572 $ 9,157 ======== ======== ======= ======== Earnings applicable to common stock $ 5,283 $ 6,282 $ 79 $ 79 ======= ======= ======= ======== Company's reported equity- Equity in net income $ 370 $ 440 $ 11 $ 11 Deduct-Effect of adjusting Company's estimate to actual (14) (23) - - ------- ------- ------- -------- Amounts reported by Company $ 356 $ 417 $ 11 $ 11 ======= ======= ======= ======== NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED): (3) INVESTMENT IN MAINE YANKEE AND MEPCO - (Continued): MAINE YANKEE MEPCO ------------------ ---------------- (Dollars in Thousands) (Unaudited) Financial Position at Sept.30, Dec. 31, Sept.30, Dec. 31, 1994 1993 1994 1993 -------- -------- ------- ------- FINANCIAL POSITION: As reported by investee- Total assets $533,700 $544,364 $ 5,487 $ 7,060 Less- Preferred stock 19,800 20,400 - - Long-term debt and long-term note 208,147 211,063 1,730 2,590 Other Liabilities and deferred credits 238,215 244,790 3,757 3,592 -------- -------- -------- ------- Net assets $ 67,538 $ 68,111 $ 878 $ 878 ======== ======== ======== ======= Company's reported equity- Equity in net assets $ 4,728 $ 4,768 $ 125 $ 125 Add (deduct) - Effect of adjusting Company's estimate to actual 26 (32) - - -------- -------- -------- ------- Amounts reported by Company $ 4,754 $ 4,736 $ 125 $ 125 ======== ======== ======== ======= (4) RECLASSIFICATIONS: Certain 1993 amounts have been reclassified to conform with presentation used in Form 10-Q for the quarter ended September 30, 1994. BANGOR HYDRO-ELECTRIC COMPANY FORM 10-Q FOR PERIOD ENDING SEPTEMBER 30, 1994 PART II ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K EXHIBITS - None REPORTS ON FORM 8-K ------------------- No reports on Form 8-K were filed during the quarter for which this report is submitted. BANGOR HYDRO-ELECTRIC COMPANY FORM 10-Q FOR PERIOD ENDED SEPTEMBER 30, 1994 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: November 10, 1994 /S/ Robert C. Weiser -------------------------------- Robert C. Weiser Treasurer (Chief Financial Officer) EX-27 2
UT This schedule contains summary financial information extracted from Bangor Hydro-Electric Company's third quarter 1994 10Q and is qualified in its entirety by reference to such 10Q. 0000009548 BANGOR HYDRO-ELECTRIC COMPANY 1,000 9-MOS DEC-31-1994 SEP-30-1994 PER-BOOK 195,623 30,534 32,530 117,674 0 376,361 35,783 55,778 15,260 106,821 15,222 4,734 116,367 0 25,000 0 1,461 0 0 0 106,756 376,361 128,614 3,228 112,211 115,439 13,175 1,048 14,223 8,048 6,175 1,239 4,936 7,062 9,258 20,779 $0.72 $0.72
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