Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31,June 30, 1997.
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
NONE
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the last practicable date.
Class Outstanding at April 30,July 31, 1997
Common stock, $1.00 par value 14,456,83414,461,464 shares
BLACK HILLS CORPORATION
I N D E X
Page
NUMBER
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets- 2-3
March 31,June 30, 1997, December 31, 1996
and March 31,June 30, 1996
Consolidated Statements of Income- 4
Three, Six and Twelve Months
Ended March 31,June 30, 1997 and 1996
Consolidated Statements of Cash Flows- 5
Three, Six and Twelve Months
Ended March 31,June 30, 1997 and 1996
Consolidated Statements of Shareholders' Equity- 6
Three, Six and Twelve Months Ended
March 31,June 30, 1997 and 1996
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of 8-10
Financial Position and Consolidated
Statements of Earnings 7-10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 1011
Item 6. Exhibits and Reports on Form 8-K 1011
Signatures 1112
BLACK HILLS CORPORATION
Consolidated Balance Sheets
(unaudited)
March 31 December 31 March 31
1997 1996 1996
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 17,831 $ 13,340 $ 4,390
Securities available
for sale 15,270 11,458 13,465
Receivables, net
Customers 12,603 12,961 13,059
Other 2,362 2,727 4,767
Materials, supplies,
and fuel 7,895 7,861 7,822
Prepaid expenses 1,585 2,650 1,007
------- ------- -------
57,546 50,997 44,510
------- ------- -------
Property and investments:
Electric 480,158 479,237 470,078
Coal mining 53,388 53,200 44,616
Oil and gas 46,344 45,336 41,824
Other 4,549 3,764 3,644
------- ------- -------
584,439 581,537 560,162
Less accumulated depreciation
and depletion (186,182) (181,103) (169,758)
-------- -------- --------
Net property and
investments 398,257 400,434 390,404
-------- -------- --------
Deferred charges:
Federal income taxes 8,013 7,972 7,573
Regulatory asset 3,326 3,176 2,726
Other 4,813 4,775 4,588
-------- -------- --------
16,152 15,923 14,887
-------- -------- --------
Total $471,955 $467,354 $449,801BLACK HILLS CORPORATION
Consolidated Balance Sheets
(unaudited)
June 30 December 31 June 30
1997 1996 1996
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 14,204 $ 13,340 $ 3,767
Securities available for sale 18,211 11,458 10,598
Receivables, net
Customers 11,636 12,961 11,092
Other 2,652 2,727 7,637
Materials, supplies,
and fuel 7,834 7,861 7,508
Prepaid expenses 688 2,650 775
-------- -------- --------
55,225 50,997 41,377
-------- -------- --------
Property and investments:
Electric 493,372 479,237 473,295
Coal mining 52,838 53,200 44,668
Oil and gas 49,291 45,336 42,991
Other 4,301 3,764 3,664
-------- -------- --------
599,802 581,537 564,618
Less accumulated depreciation
and depletion (200,189) (181,103) (174,836)
-------- -------- --------
Net property and
investments 399,613 400,434 389,782
-------- -------- --------
Deferred charges:
Federal income taxes 8,110 7,972 7,620
Regulatory asset 3,476 3,176 2,876
Other 4,931 4,775 4,544
-------- -------- --------
16,517 15,923 15,040
-------- -------- --------
Total $471,355 $467,354 $446,199
======== ======== ========
BLACK HILLS CORPORATION
Consolidated Balance Sheets
(unaudited)
June 30 December 31 June 30
1997 1996 1996
(in thousands)
LIABILITIES AND CAPITALIZATION
Current liabilities:
Current maturities of
long-term debt $ 1,310 $ 1,534 $ 1,468
Notes payable 23 143 1,078
Accounts payable 5,397 7,332 3,714
Accrued liabilities-
Taxes 7,509 8,633 5,857
Interest 4,003 4,035 4,046
Other 6,986 6,438 5,687
-------- -------- --------
25,228 28,115 21,850
-------- -------- --------
Deferred credits:
Federal income taxes 49,995 48,262 46,873
Investment tax credits 4,265 4,516 4,767
Reclamation costs 16,614 16,267 8,314
Regulatory liability 6,485 6,692 6,998
Other 6,111 5,636 5,507
-------- -------- --------
83,470 81,373 72,459
-------- -------- --------
Capitalization:
Common stock equity-
Common stock 14,461 14,450 14,440
Additional paid-in
capital 47,065 46,841 46,643
Retained earnings 136,967 131,884 125,488
-------- -------- --------
Total common stock equity 198,493 193,175 186,571
Long-term debt 164,164 164,691 165,319
-------- -------- --------
362,657 357,866 351,890
-------- -------- --------
Total $471,355 $467,354 $446,199
======== ======== ========
BLACK HILLS CORPORATION
Consolidated Statements of Income
(unaudited)
Three Months Six Months Twelve Months
June 30 June 30 June 30
1997 1996 1997 1996 1997 1996
(in thousands)
Operating revenues:
Electric $ 29,347 $26,978 $61,381 $57,283 $122,815 $116,054
Coal mining 7,703 7,418 15,828 15,486 31,657 30,620
Oil and gas 3,209 3,387 6,929 6,118 13,366 11,487
------- ------- ------- ------- ------- -------
40,259 37,783 84,138 78,887 167,838 158,161
------- ------- ------- ------- ------- -------
Operating expenses:
Fuel and purchased
power 8,816 7,931 18,282 16,745 35,731 36,241
Operations and
maintenance 7,524 7,635 15,086 15,084 30,734 30,569
Administrative and
general 2,264 1,843 4,542 3,940 8,682 8,909
Depreciation,
depletion,
and amortization 5,699 6,023 11,293 11,429 22,685 21,493
Taxes, other than
income taxes 3,062 3,155 6,334 6,313 12,480 11,932
------- ------- ------- ------- ------- -------
27,365 26,587 55,537 53,511 110,312 109,144
------- ------- ------- ------- ------- -------
Operating income:
Electric 9,078 7,642 20,286 18,229 41,146 35,281
Coal mining 3,103 2,994 6,533 6,299 12,468 11,954
Oil and gas 713 560 1,782 848 3,912 1,782
------- ------- ------- ------- ------- -------
12,894 11,196 28,601 25,376 57,526 49,017
------- ------- ------- ------- ------- -------
Other income and
(expense):
Interest expense (3,465) (3,462) (6,946) (6,930) (13,958)(14,113)
Investment income 459 346 829 583 1,620 1,292
Allowance for funds
used during
construction 43 134 109 250 209 1,290
Other, net (32) 127 (215) 650 883 1,774
------- ------- ------- ------- ------- -------
(2,995) (2,855) (6,223) (5,447) (11,246) (9,757)
------- ------- ------- ------- ------- -------
Income before income
taxes 9,899 8,341 22,378 19,929 46,280 39,260
Income taxes (3,137) (2,454) (7,028) (6,043) (14,565) (11,424)
------- ------- ------- ------- ------- -------
Net income
available for
common stock $ 6,762 $ 5,887 $15,350 $13,886 $31,715 $27,836
======= ======= ======= ======= ======= =======
Weighted average
common shares
outstanding 14,459 14,437 14,457 14,433 14,451 14,425
Earnings per share $0.47 $0.41 $1.06 $0.96 $2.20 $1.93
Dividends paid
per share of
common stock $0.355 $0.345 $0.710 $0.690 $1.400 $1.360
BLACK HILLS CORPORATION
Consolidated Statements of Cash Flows
(unaudited)
Three Months Six Months Twelve Months
June 30 June 30 June 30
1997 1996 1997 1996 1997 1996
(in thousands)
Operating activities:
Net Income $ 6,762 $ 5,887 $15,350 $13,886 $31,715 $27,836
Principal non-cash items-
Depreciation, depletion,
and amortization 5,699 6,023 11,293 11,429 22,685 21,493
Deferred income taxes
and investment tax
credits, net 247 384 829 913 1,947 2,235
Allowance for other
funds used during
construction (23) (83) (58) (156) (90) (819)
(Increase) decrease in
receivables, inventories,
and other current
assets 1,635 (357) 3,389 (1,186) 4,202 (5,137)
Increase (decrease) in
other current
liabilities (3,240) (5,690) (2,544) (8,546) 4,590 (6,829)
Other, net 1,294 91 (440) 373 1,402 2,146
------- ------- ------- ------- ------- -------
12,374 6,255 27,819 16,713 66,451 40,925
------- ------- ------- ------- ------- -------
Investment activities:
Property additions,
excluding allowance for
other funds used during
construction (8,022) (5,041) (9,299) (7,447) (26,240)(26,243)
Available for sale
securities purchased (6,579) (233) (12,732) (9,905) (43,670)(20,799)
Available for sale
securities sold 3,638 3,100 5,979 6,111 36,057 20,464
------- ------- ------- ------- ------- -------
(10,963) (2,174) (16,052)(11,241) (33,853)(26,578)
------- ------- ------- ------- ------- -------
Financing activities:
Dividends paid (5,134) (4,982) (10,267) (9,960) (20,236)(19,623)
Common stock issued 96 123 235 303 443 575
Net short-term
borrowings - 155 (120) 460 (1,055) (2,490)
Long-term debt issued - - - - - 15,254
Long-term debt
retied - - (751) (687) (1,313) (8,863)
------- ------- ------- ------- ------- -------
(5,038) (4,704) (10,903) (9,884) (22,161)(15,147)
------- ------- ------- ------- ------- -------
Increase (decrease)
in cash and cash
equivalents (3,627) (623) 864 (4,412) 10,437 (800)
Cash and cash
equivalents:
Beginning of period 17,831 4,390 13,340 8,179 3,767 4,567
------- ------- ------- ------- ------- -------
End of period $14,204 $ 3,767 $14,204 $ 3,767 $14,204 $ 3,767
======= ======= ======= ======= ======= =======
Supplemental disclosure
of cash flow information
Cash paid during the
period for:
Interest $ 2,458 $ 2,426 $ 6,961 $ 6,973 $13,991 $13,709
Income taxes $ 6,500 $ 6,150 $ 6,500 $ 6,750 $12,366 $10,380
Assumption of reclamation
liability in acquisition
of Clovis Point
properties $ - $ - $ - $ - $ 7,957 $ -
See accompanying notes to consolidated financial statements.
BLACK HILLS CORPORATION
Consolidated Balance Sheets
(unaudited)
March 31 December 31 March 31
1997 1996 1996
(in thousands)
LIABILITIES AND CAPITALIZATION
Current liabilities:
Current maturities of
long-term debt $ 1,310 $ 1,534 $ 1,468
Notes payable 23 143 923
Accounts payable 5,207 7,332 4,991
Accrued liabilities-
Taxes 12,725 8,633 10,849
Interest 2,996 4,035 3,010
Other 6,206 6,438 6,144
-------- -------- --------
28,467 28,115 27,385
-------- -------- --------
Deferred credits:
Federal income taxes 49,254 48,262 46,110
Investment tax credits 4,390 4,516 4,893
Reclamation costs 16,446 16,267 8,153
Regulatory liability 6,568 6,692 7,054
Other 5,897 5,636 5,343
-------- -------- --------
82,555 81,373 71,553
-------- -------- --------
Capitalization:
Common stock equity-
Common stock 14,457 14,450 14,434
Additional paid-in
capital 46,973 46,841 46,526
Retained earnings 135,339 131,884 124,584
--------- -------- --------
196,769 193,175 185,544
Long-term debt 164,164 164,691 165,319
--------- -------- --------
360,933 357,866 350,863
--------- -------- --------
Total $471,955 $467,354 $449,801
=========BLACK HILLS CORPORATION
Consolidated Statements of Shareholders' Equity
(unaudited)
Three Months Six Months Twelve Months
June 30 June 30 June 30
1997 1996 1997 1996 1997 1996
(in thousands)
Common stock:
Beginning of
period $ 14,457 $ 14,434 $ 14,450 $ 14,425 $ 14,440 $ 14,409
Issuance of
$1 par value
shares 4 6 11 15 21 31
-------- -------- -------- -------- -------- --------
End of period 14,461 14,440 14,461 14,440 14,461 14,440
-------- -------- -------- -------- -------- --------
Additional paid-in
capital:
Beginning of
period 46,973 46,526 46,841 46,355 46,643 46,099
Net proceeds over
par value of
stock issued 92 117 224 288 422 544
-------- -------- -------- -------- -------- --------
End of period 47,065 46,643 47,065 46,643 47,065 46,643
-------- -------- -------- -------- -------- --------
Retained earnings:
Beginning of
period 135,339 124,583 131,884 121,562 125,488 117,275
Net income 6,762 5,887 15,350 13,886 31,715 27,836
Cash dividends on
common stock (5,134) (4,982) (10,267) (9,960) (20,236) (19,623)
-------- -------- -------- -------- -------- --------
End of period 136,967 125,488 136,967 125,488 136,967 125,488
-------- -------- -------- -------- -------- --------
Total shareholders'
equity $198,493 $186,571 $198,493 $186,571 $198,493 $186,571
======== ========
======== ======== ======== ========
See accompanying notes to consolidated financial statements.
BLACK HILLS CORPORATION
Consolidated Statements of Income
(unaudited)
Three Months Twelve Months
March 31 March 31
1997 1996 1997 1996
(in thousands)
Operating revenues:
Electric $32,034 $30,305 $120,447 $113,065
Coal mining 8,125 8,068 31,372 31,000
Oil and gas 3,719 2,731 13,543 10,917
------- ------- -------- --------
43,878 41,104 165,362 154,982
------- ------- -------- --------
Operating expenses:
Fuel and purchased
power 9,466 8,814 34,846 38,053
Operations &
maintenance 7,353 7,448 30,247 29,458
Administrative and
general 2,476 2,096 8,872 8,863
Depreciation, depletion
and amortization 5,579 5,406 22,967 20,342
Taxes, other than
income taxes 3,298 3,158 12,599 11,496
------- ------- -------- --------
28,172 26,922 109,531 108,212
------- ------- -------- --------
Operating income:
Electric 11,208 10,587 39,711 32,584
Coal mining 3,430 3,306 12,359 12,544
Oil and gas 1,068 289 3,761 1,642
------- ------- ------- --------
15,706 14,182 55,831 46,770
------- ------- ------- --------
Other income and
(expense):
Interest expense (3,479) (3,468) (13,954) (14,098)
Investment income 369 236 1,507 1,206
Allowance for
funds used during
construction 65 116 299 3,686
Other, net (183) 526 1,035 1,654
------- ------- ------- --------
(3,228) (2,590) (11,113) (7,552)
------- ------- ------- --------
Income before income
taxes 12,478 11,592 44,718 39,218
Income taxes (3,891) (3,591) (13,880) (11,623)
------- ------- -------- --------
Net income available
for common stock $8,587 $ 8,001 $ 30,838 $ 27,595
====== ======= ======== ========
Weighted average common
shares outstanding 14,454 14,429 14,446 14,417
====== ======= ======== ========
Earnings per share $ 0.59 $ 0.55 $ 2.13 $ 1.91
======= ======= ======== ========
Dividends paid per share
of common stock $ 0.355 $ 0.345 $ 1.390 $ 1.350
======= ======= ======== ========
See accompanying notes to consolidated financial statements.
BLACK HILLS CORPORATION
Consolidated Statements of Cash Flows
(unaudited)
Three Months Twelve Months
March 31 March 31
1997 1996 1997 1996
(in thousands)
Operating activities:
Net Income $ 8,587 $ 8,001 $30,838 $27,595
Principal non-cash items-
Depreciation, depletion,
and amortization 5,579 5,406 22,967 20,342
Deferred income taxes and
investment tax credits 583 614 1,632 2,731
Allowance for other funds
used during construction (36) (73) (151) (2,299)
(Increase) decrease in
receivables, inventories,
and other current assets 1,754 (829) 2,210 (2,634)
Increase (decrease) in other
current liabilities 696 (2,856) 2,140 (4,116)
Other, net (180) 196 2,041 1,637
------- ------- ------- -------
16,983 10,459 61,677 43,256
------- ------- ------- -------
Investment activities:
Property additions,
excluding allowance for
other funds used during
construction (2,816) (2,406) (24,605) (34,011)
Available for sale
securities purchased (6,153) (9,673) (37,323) (21,165)
Available for sale
securities sold 2,341 3,012 35,518 25,925
------- ------ ------- --------
(6,628) (9,067) (26,410) (29,251)
------- ------ ------- --------
Financing activities:
Dividends paid (5,132) (4,979) (20,083) (19,470)
Common stock issued 139 180 470 609
Net short-term borrowings (120) 305 (900) (1,295)
Long-term debt issued - - - 15,254
Long-term debt retired (751) (687) (1,313) (8,877)
------- ------- ------- --------
(5,864) (5,181) (21,826) (13,779)
------- ------- ------- --------
Increase (decrease)
in cash and cash
equivalents 4,491 (3,789) 13,441 226
Cash and cash equivalents:
Beginning of period 13,340 8,179 4,390 4,164
------- ------- ------- -------
End of period $17,831 $ 4,390 $17,831 $ 4,390
======= ======= ======= =======
Supplemental disclosure
of cash flow information:
Cash paid during the
period for-
Interest $ 4,518 $ 4,547 $13,968 $13,921
Income taxes $ - $ 600 $12,016 $ 6,155
Assumption of reclamation
liability in acquisition
of Clovis Point
properties $ - $ - $7,957 $
- -
See accompanying notes to consolidated financial statements.
BLACK HILLS CORPORATION
Statements of Shareholders' Equity
(unaudited)
Three Months Twelve Months
March 31 March 31
1997 1996 1997 1996
(in thousands)
Common stock:
Beginning of period $ 14,450 $ 14,425 $ 14,434 $ 14,400
Issuance of $1 par
value shares 7 9 23 34
-------- -------- -------- --------
End of period 14,457 14,434 14,457 14,434
-------- -------- -------- --------
Additional paid-in
capital:
Beginning of period 46,841 46,355 46,526 45,951
Net proceeds over par
value of stock issued 132 171 447 575
-------- -------- -------- --------
End of period 46,973 46,526 46,973 46,526
-------- -------- -------- --------
Retained earnings:
Beginning of period 131,884 121,562 124,584 116,459
Net income 8,587 8,001 30,838 27,595
Dividend paid (5,132) (4,979) (20,083) (19,470)
-------- -------- -------- --------
End of period 135,339 124,584 135,339 124,584
-------- -------- -------- --------
Total shareholders'
equity $196,769 $185,544 $196,769 $185,544
======== ======== ======== ========
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 1996 Annual Report andon
Form 10-K filed with the Securities and Exchange Commission.
Accounting methods historically employed require certain estimates
as of interim dates. The information furnished in the
accompanying financial statements reflects all adjustments which are,
in the opinion of management, necessary for a fair presentation of the
March 31,June 30, 1997, December 31, 1996 and March
31,June 30, 1996, financial information
and are of a normal recurring nature. The results of operations for the
three and six months ended March 31, 1997,June 30, 1996, are not necessarily indicative
of the results to be expected for the full year.
(2) NEW ACCOUNTING STANDARD
During March 1997, the Financial Accounting Standards Board
released Statement of Financial Accounting Standards No. 128, Earnings
Per Share, (SFAS 128) which requires the disclosure of basic earnings
per share and diluted earnings per share. The Companycompany must adopt
SFAS 128 in the fourth quarter of 1997 and anticipates it will not
have a material impact on the financial position or the results of
operations of the Company.
(3) SUBSEQUENT EVENT
On July 25, 1997, Black Hills Corporation purchased the assets
of a wholesale natural gas and crude oil marketing company. The
purchase agreement required fixed cash payments of $7,000,000 at the
closing date and additionally allows for contingent payments up to
$1,600,000. The contingent payments are dependent on certain profit
thresholds of the acquired company. The acquisition will be
accounted for under the purchase method of accounting and as such, the
results of operations will be included in the Company's
consolidated financials from July 25, 1997 forward.
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$500,000 outstanding under these
lines of credit at March
31,on June 30, 1997. There are no compensating balance
requirements associated with these lines of credit.
In addition to the above lines of credit, Wyodak Resources Development
Corp. has guaranteed a $15,000,000 line of credit for Enserco Energy,
Inc. to use to guarantee letters of credit. Enserco pays a .125%
facility fee on this line of credit. At March
31,June 30, 1997, there were no
balances outstanding on this line of credit.
RESULTS OF OPERATIONS
Black Hills Corporation is an energy services company consisting of
three principal businesses: electric, coal mining and oil and gas
production.
Consolidated net income was $8,587,000$6,762,000 for the first
quarterthree months ended,
$15,350,000 for the six months ended and $30,838,000$31,715,000 for the twelve
months ended March 31,June 30, 1997, an increase of $586,00015 percent, 11 percent and
$3,243,000,14 percent, respectively. The increase in earnings for both the three and twelve months
ending March 31, 1997, was primarily
due to strongincreased sales growth involumes for the electric operations, and increased oil and gas prices.
Consolidated revenue increased 7 percent for both the three
month and twelve month periods while consolidated operating
expenses increased 5 percent and 1 percent, respectively, for the
same periods.
Earningsresulting
from the electric operations increased $391,000 and
$2,447,000 for the three and twelve month periods, respectively.
This increase was the result of strong growth in sales,
including the sale to MontanaMontana- Dakota Utilities, Sheridan, Wyoming load,
which commenced January 1, 1997, and earnings associated with the inclusion of Neil Simpson Unit
#2 (NS #2) in the Company's rate base. NS #2
is, an 80 MW coal-fired power plant which began commercial
operation on August 1, 1995.
Oil1995, into the Company's rate base, and
gas earnings increased $530,000 for the first quarter
and $1,435,000 for the twelve month period as a result of increased
commodity prices and an increase in oil and gas production.
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 Twelve Months Ended
March 31 March 31
1997 1996 1997 1996
REVENUE
Electric 73% 74% 73% 73%
Coal mining 19 20 19 20
Oil and gas 8 6 8 7
---- ---- ---- ----Three Months Ended Six Months Ended Twelve Months Ended
June 30 June 30 June 30
1997 1996 1997 1996 1997 1996
REVENUE
Electric 73% 71% 73% 73% 73% 74%
Coal mining 19 20 19 20 19 19
Oil and gas 8 9 8 7 8 7
--- --- --- --- --- ---
100% 100% 100% 100% 100% 100%
Three Months Ended Six Months Ended Twelve Months Ended
June 30 June 30 June 30
1997 1996 1997 1996 1997 1996
NET INCOME
Electric 62% 56% 63% 60% 62% 60%
Coal mining 33 38 31 36 30 35
Oil and gas 7 7 8 4 9 5
Other (2) (1) (2) - (1) -
--- --- --- --- --- ---
100% 100% 100% 100% 100% 100%
==== ==== ==== ====
Three Months Ended Twelve Months Ended
March 31 March 31
1997 1996 1997 1996
NET INCOME
Electric 64% 64% 61% 59%
Coal mining 29 34 31 36
Oil and gas 8 2 9 5
Other (1) - (1) -
---- ---- ---- ----
100% 100% 100% 100%
==== ==== ==== ====
Capital expenditures and depreciation, depletion, and
amortization by industry segment were as follows:
Three Months Ended Twelve Months Ended
March 31 March 31
1997 1996 1997 1996
(in thousands)
CAPITAL EXPENDITURES
(includes AFDC)
Electric $ 1,490 $ 1,061 $13,251 $ 28,541
Coal mining 205 143 1,988 1,584
Oil and gas 1,126 1,272 9,439 6,168
Other 31 3 78 17
------- ------- ------- --------
$ 2,852 $ 2,479 $24,756 $ 36,310
======= ======= ======= ========
DEPRECIATION,
DEPLETION, AND
AMORTIZATION
Electric $3,821 $3,705 $16,220 $13,004
Coal mining 761 663 3,079 3,362
Oil and gas 997 1,038 3,668 3,976
------ ------ ------- -------
$5,579 $5,406 $22,967 $20,342
====== ====== ======= =======
Three Months Ended Six Months Ended Twelve Months Ended
June 30 June 30 June 30
1997 1996 1997 1996 1997 1996
(in thousands)
CAPITAL EXPENDITURES
(includes AFDC)
Electric $4,666 $3,738 $4,711 $4,800 $12,734 $19,030
Coal mining 1,335 53 1,445 196 3,367 1,558
Oil and gas 1,981 1,327 3,107 2,599 10,093 6,468
Other 63 6 94 8 136 7
------ ------ ------ ----- ------ -------
$8,045 $5,124 $9,357 $7,603 $26,330 $27,063
DEPRECIATION,
DEPLETION, AND
AMORTIZATION
Electric $3,821 $4,099 $7,642 $7,803 $15,942 $14,442
Coal mining 787 647 1,549 1,310 3,220 2,947
Oil and gas 1,091 1,277 2,102 2,316 3,523 4,104
------ ------ ------ ------ ------- -------
$5,699 $6,023 $11,293 $11,429 $22,685 $21,493
ELECTRIC OPERATIONS
Electric revenuesrevenue increased 628 percent, 16 percent and 717 percent
for the three, six and twelve months ended June 30, 1997 primarily due to
strong growth in sales. Firm kilowatthour sales increased 14 percent
for the three and six month periods and increased 9 percent for the
twelve months ended March 31, 1997. The increase in
electric revenues was primarily due to a 14 percent and 6 percent
increase, respectively, in firm kilowatthour salesmonth period directly related to serving the Montana-Dakota
Utilities, Sheridan, Wyoming load which commenced January 1, 1997, offset by
mild weather conditions. Degree days, which is a measure of
weather trends were 1 percent below normalLoad.
Electric expenses remained relatively flat for the first quarter of
1997three and 13 percent below last year.
Electric expensessix
months ended June 30, 1997. Fuel and purchased power expense increased
611 percent for the three month
period ending March 31, 1997,second quarter, 9 percent for the year to date, and
remained relatively flatdecreased slightly for the twelve month period. The increase in fuel and
purchased power expense for the three and six month periodperiods was
primarilydirectly related to the increase in kilowatthour sales.
Non-operating income increased $191,000 and $211,000 for the three
and six month periods due to a 14 percentan increase in purchased power costs
related to serving the Montana-Dakota Utilities' Sheridan,
Wyoming load.
The electric earnings increaseinterest income from
marketable securities and decreased $453,000 for the twelve month
period due to a decrease in allowance for funds used during
construction (AFUDC). The decrease in AFUDC was a resultreflection of the
additioncompletion of the Sheridan, Wyoming, loadconstruction on NS #2 and the
earnings associated with Neil Simpson Unit #2. This earnings
increase was offset by a 25 percentthe increase in
depreciation
expenseelectric revenues.
MINING OPERATIONS
Mining revenue increased 4 percent, 2 percent and 3 percent for the
three, six and twelve month periods ending June 30, 1997, directly
related to the depreciation on Neil Simpson
Unit #2an increase in tons of coal sold of 3 percent, 2
percent and the accelerated depreciation on the Kirk Plant. The
Kirk Plant was placed in cold reserve in August 19957 percent, respectively. Mining expenses increased 4
percent, 3 percent and was
fully depreciated in the fourth quarter of 1996.
MINING OPERATIONS
Coal mining earnings decreased $251,0001 percent for the first quarterthree, six and $344,000 for the twelve month period reflecting a decreasemonths
ended June 30, 1997. The increase in non-operating income. A $500,000 gain from the sale and retirement
of property was recognized in the first quarter of 1996.
Coal mining revenues increased slightly for both periodsexpense is related to a slightthe increase
in tons of coal sold.
OIL AND GAS PRODUCTION OPERATIONS
Oil and gas earnings increased $530,000$86,000 for the firstsecond quarter and
$1,435,000$617,000 and $1,406,000 for the six month and twelve month period as a resultperiods ending
June 30, 1997. The earnings increase is due to an increase in barrels
of increased
commodity pricesoil equivalents sold and an increase in oil and gas prices.
Operating expenses decreased 12 percent for the second quarter
due to a decrease in production while revenueexpense. Operating expenses increased
362 percent and 247 percent respectively.
Commodity prices increased 24for the six month and twelve month periods
compared to the same periods last year.
Depletion expense decreased 17 percent, 11 percent and 14 percent
for the three, six and twelve month periods directly due to the
increase in gas prices and reserve values.
Nonoperating income decreased $190,000, $679,000 and $556,000 for the
three, six and twelve month periods ending March 31,June 30, 1997 as a result
of a $500,000 gain recorded from the sale and production increased 21 percent and 10 percent, respectively.
Operating expenses increased 18 percent forretirement of property in
the three month
period and increased 4 percent for the twelve month period ended
March 31, 1997 directly related to the increasefirst quarter of 1996 offset by increases in production.interest income on
marketable securities.
BLACK HILLS CORPORATION
Part II - Other Information
Item 1. LEGAL PROCEEDINGS
There are no legal proceedings to be reported on for the quarter
ending March 31,June 30, 1997.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a. EXHIBITS
None
b. REPORTS ON FORM 8-K
NoneThe Registrant filed a Form 8-K on July 25, 1997,
reporting the purchase of the assets of Jomax Partners, L.P., as
successor to and survivor of Wickford Energy Marketing, L.C., and
Wickford Energy Marketing Canada Company.
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/ ROXANN R. BASHAM
Roxann R. Basham, Corporate Secretary/TreasurerDALE E. CLEMENT
Dale E. Clement, Senior Vice President-Finance
/S/ MARK T. THIES
Mark T. Thies, Controller
(Principal Accounting Officer)
Dated: May 9,August 8, 1997