Washington, D. C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
March 31, 2003
(Date of earliest event reported)
BLACK HILLS POWER, INC.
(Exact name of Registrant as specified in its charter)
| South Dakota | 1-7978 | 46-0111677 | ||||||
| (State of Incorporation) | (Commission File No.) | (IRS Employer | ||||||
| (Identification Number) | ||||||||
625 Ninth Street
P. O. Box 1400
Rapid City, South Dakota 57709
(605) 721-1700
Item 2. Acquisition or Disposition of Assets
On March 31, 2003, the Registrant distributed a non-cash dividend to its parent company, Black Hills Corporation (the Parent). The dividend included 10,000 common shares of Black Hills Generation, Inc. (“BH Generation”) (formerly Black Hills Energy Capital, Inc.), which represents 100 percent ownership of BH Generation. As a result of the dividend, the Registrant therefore no longer operates in the independent power generation business. After the dividend, the Registrant’s sole business is the regulated electric utility. The Registrant’s investment in BH Generation at the time of the distribution was $55.5 million.
Item 7. Financial Statements and Exhibits.
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
The following unaudited pro forma condensed financial information has been prepared to assist in your analysis of the financial effects of the disposition of BH Generation in the form of a non-cash dividend, and presents the Registrant’s balance sheet and statement of income as if the Registrant’s investment in BH Generation was discontinued operations. The unaudited pro forma condensed financial information should be read in conjunction with the 2002 audited financial statements and related notes included in the Registrant’s Form 10-K for the year 2002.
The unaudited pro forma condensed balance sheet has been prepared assuming that the non-cash dividend took place on December 31, 2002. The unaudited condensed statement of income has been prepared assuming that the non-cash dividend took place on January 1, 2002.
For the year ended December 31, 2002
(in thousands, except per share amounts)
| Historical | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Black Hills Power Consolidated | Less Black Hills Generation | Plus Pro Forma Adjustments | Pro Forma Amounts | |||||||||||
| Operating revenues | $ | 287,453 | $ | 125,267 | $ | -- | $ | 162,186 | ||||||
| Operating expenses: | ||||||||||||||
| Fuel and purchased power | 60,620 | 15,878 | -- | 44,742 | ||||||||||
| Operations and maintenance | 35,069 | 10,734 | -- | 24,335 | ||||||||||
| Administrative and general | 31,691 | 21,650 | -- | 10,041 | ||||||||||
| Depreciation and amortization | 43,933 | 26,434 | -- | 17,499 | ||||||||||
| Taxes, other than income taxes | 10,341 | 2,932 | -- | 7,409 | ||||||||||
| 181,654 | 77,628 | -- | 104,026 | |||||||||||
| Equity in earnings of unconsolidated subsidiaries | 4,339 | 4,339 | -- | -- | ||||||||||
| Operating income | 110,138 | 51,978 | -- | 58,160 | ||||||||||
| Other (expense) income: | ||||||||||||||
| Interest expense | (47,865 | ) | (34,203 | ) | -- | (13,662 | ) | |||||||
| Interest income | 825 | 91 | -- | 734 | ||||||||||
| Other expense | (312 | ) | -- | -- | (312 | ) | ||||||||
| Other income | 2,334 | 1,970 | -- | 364 | ||||||||||
| (45,018 | ) | (32,142 | ) | -- | (12,876 | ) | ||||||||
| Income from continuing operations before minority | ||||||||||||||
| interest, income taxes and change in accounting | ||||||||||||||
| principle | 65,120 | 19,836 | -- | 45,284 | ||||||||||
| Minority interest | (3,162 | ) | (3,162 | ) | -- | -- | ||||||||
| Income taxes | (21,675 | ) | (6,608 | ) | -- | (15,067 | ) | |||||||
| Income from continuing operations before | ||||||||||||||
| change in accounting principle | $ | 40,283 | $ | 10,066 | $ | -- | $ | 30,217 | ||||||
December 31, 2002
(in thousands)
| Historical | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Black Hills Power Consolidated | Less Black Hills Generation | Plus Pro Forma Adjustments | Pro Forma Amounts | |||||||||||
| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 45,042 | $ | 44,524 | $ | -- | $ | 518 | ||||||
| Restricted cash | 1,070 | 1,070 | -- | -- | ||||||||||
| Receivables - | ||||||||||||||
| Customers | 35,942 | 24,097 | -- | 11,845 | ||||||||||
| Affiliates | 53,984 | -- | 269 | (1) | 54,253 | |||||||||
| Other | 5,596 | 1,050 | -- | 4,546 | ||||||||||
| Materials, supplies and fuel | 16,206 | 6,463 | -- | 9,743 | ||||||||||
| Prepaid expenses | 2,372 | 2,372 | -- | -- | ||||||||||
| Deferred income taxes | 2,709 | (2,688 | ) | -- | 5,397 | |||||||||
| Other | 325 | 325 | -- | -- | ||||||||||
| 163,246 | 77,213 | 269 | 86,302 | |||||||||||
| Investments | 14,531 | 11,850 | -- | 2,681 | ||||||||||
| Property and equipment | 1,504,898 | 890,972 | -- | 613,926 | ||||||||||
| Less accumulated depreciation | (301,054 | ) | (89,062 | ) | -- | (211,992 | ) | |||||||
| 1,203,844 | 801,910 | -- | 401,934 | |||||||||||
| Other assets: | ||||||||||||||
| Regulatory asset | 4,350 | -- | -- | 4,350 | ||||||||||
| Goodwill | 30,562 | 30,562 | -- | -- | ||||||||||
| Intangible assets | 77,661 | 77,661 | -- | -- | ||||||||||
| Other | 16,864 | 9,705 | -- | 7,159 | ||||||||||
| 129,437 | 117,928 | -- | 11,509 | |||||||||||
| $ | 1,511,058 | $ | 1,008,901 | $ | 269 | $ | 502,426 | |||||||
| LIABILITIES AND STOCKHOLDER'S EQUITY | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Current maturities of long-term debt | $ | 22,131 | $ | 19,036 | $ | -- | $ | 3,095 | ||||||
| Notes payable | 50,000 | 50,000 | -- | -- | ||||||||||
| Notes payable - affiliate | 454,824 | 454,823 | -- | 1 | ||||||||||
| Accounts payable | 28,653 | 14,000 | -- | 14,653 | ||||||||||
| Accounts payable - affiliate | 2,990 | 675 | 269 | (1) | 2,584 | |||||||||
| Accrued liabilities | 22,796 | 7,221 | -- | 15,575 | ||||||||||
| Derivative liabilities | 9,345 | 9,345 | -- | -- | ||||||||||
| 590,739 | 555,100 | 269 | 35,908 | |||||||||||
| Long-term debt, net of current maturities | 557,195 | 345,153 | -- | 212,042 | ||||||||||
| Deferred credits and other liabilities: | ||||||||||||||
| Deferred income taxes | 101,046 | 42,507 | -- | 58,539 | ||||||||||
| Regulatory liability | 5,395 | -- | -- | 5,395 | ||||||||||
| Derivative liabilities | 7,844 | 7,844 | -- | -- | ||||||||||
| Other | 24,154 | 7,698 | -- | 16,456 | ||||||||||
| 138,439 | 58,049 | -- | 80,390 | |||||||||||
| Minority interest in subsidiaries | 6,457 | 6,457 | -- | -- | ||||||||||
| Stockholder's equity: | ||||||||||||||
| Common stock $1 par value; 50,000,000 shares | ||||||||||||||
| authorized; | 23,416 | -- | -- | 23,416 | ||||||||||
| Issued: 23,416,396 shares in 2002 | ||||||||||||||
| Additional paid-in capital | 80,961 | 41,412 | -- | 39,549 | ||||||||||
| Retained earnings | 131,906 | 12,170 | -- | 119,736 | ||||||||||
| Accumulated other comprehensive loss | (18,055 | ) | (9,440 | ) | -- | (8,615 | ) | |||||||
| 218,228 | 44,142 | -- | 174,086 | |||||||||||
| $ | 1,511,058 | $ | 1,008,901 | $ | 269 | $ | 502,426 | |||||||
(amounts in thousands)
1. To add back $269 for intercompany payables and receivables which were previously omitted in the consolidation process.
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 hereunto duly authorized.
| BLACK HILLS POWER, INC. |
| By: /s/Mark T. Thies Mark T. Thies Sr. Vice President and Chief Financial Officer |
Date: April 11, 2003
