Securities and Exchange Commission
Washington, DC 20549
FORM 10-Q/A
Amendment No. 1
(Mark One)
/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1996
or
/ / Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File No. 1-3548
Minnesota Power & Light Company
A Minnesota Corporation
IRS Employer Identification No. 41-0418150
30 West Superior Street
Duluth, Minnesota 55802
Telephone - (218) 722-2641
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 and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
Common Stock, no par value,
32,571,548 shares outstanding
as of September 30, 1996
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This Amendment No. 1 to Minnesota Power & Light Company's (Company)
Quarterly Report on Form 10-Q for the quarter ended September 30, 1996 (Form
10-Q) is being filed to reflect a reclassification of distributions on Company
obligated mandatorily redeemable preferred securities of subsidiary MP&L
Captial I. This Amendment No. 1 includes only those portions of the Form 10-Q
which have been changed as a result of such reclassification.
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-1-
Minnesota Power
Consolidated Statement of Income
In Thousands Except Per Share Amounts - Unaudited
Quarter Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------------------------
Operating Revenue and Income
Electric operations $ 133,480 $ 131,036 $ 394,200 $ 371,486
Water operations 20,848 16,678 63,124 50,093
Automobile auctions 50,464 30,492 135,372 30,492
Investments 10,358 7,915 33,631 28,074
--------- ---------- --------- ---------
Total operating revenue and income 215,150 186,121 626,327 480,145
--------- ---------- --------- ---------
Operating Expenses
Fuel and purchased power 50,937 46,087 142,871 130,510
Operations 90,676 75,696 263,741 198,812
Administrative and general 38,571 29,768 112,918 65,018
Interest expense 16,074 13,246 44,593 35,735
--------- ---------- --------- ---------
Total operating expenses 196,258 164,797 564,123 430,075
--------- ---------- --------- ---------
Income (Loss) from Equity Investments 2,832 2,339 9,441 (1,570)
--------- ---------- --------- ---------
Operating Income from Continuing Operations 21,724 23,663 71,645 48,500
Distributions on Redeemable Preferred
Securities of Subsidiary 1,509 - 3,220 -
Income Tax Expense (Benefit) 2,701 7,978 17,777 (1,915)
--------- ---------- --------- ---------
Income from Continuing Operations 17,514 15,685 50,648 50,415
Income from Discontinued Operations - 33 - 2,874
--------- ---------- --------- ---------
Net Income 17,514 15,718 50,648 53,289
Dividends on Preferred Stock 487 800 1,921 2,400
--------- ---------- --------- ---------
Earnings Available for Common Stock $ 17,027 $ 14,918 $ 48,727 $ 50,889
========= ========== ========= =========
Average Shares of Common Stock 29,428 28,512 29,091 28,443
Earnings Per Share of Common Stock
Continuing operations $ .58 $ .52 $ 1.68 $ 1.69
Discontinued operations - .00 - .10
------ ------ ------ ------
Total $ .58 $ .52 $ 1.68 $ 1.79
====== ====== ====== ======
Dividends Per Share of Common Stock $ .51 $ .51 $ 1.53 $ 1.53
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The accompanying notes are an integral part of this statement.
-2-
Minnesota Power
Consolidated Statement of Cash Flows
In Thousands - Unaudited
Nine Months Ended
September 30,
1996 1995
- -------------------------------------------------------------------------------------------------------------------
Operating Activities
Net income $ 50,648 $ 53,289
Depreciation and amortization 49,310 40,269
Deferred income taxes (5,161) (28,491)
Deferred investment tax credits (1,503) (1,437)
Pre-tax gain on sale of plant (1,073) -
Pre-tax loss on disposal of discontinued operations - 1,760
Changes in operating assets and liabilities
excluding the effects of discontinued operations
Trading securities (38,652) 20,127
Notes and accounts receivable (55,426) (6,748)
Fuel, material and supplies 1,208 (1,015)
Accounts payable 12,522 16,560
Other current assets and liabilities 7,986 13,977
Other - net 17,150 (8,388)
---------- ---------
Cash from operating activities 37,009 99,903
---------- ---------
Investing Activities
Proceeds from sale of investments in securities 32,488 77,997
Proceeds from sale of plant 5,311 -
Proceeds from sale of discontinued operations - 107,633
Additions to investments (84,138) (43,405)
Additions to plant (71,894) (73,053)
Acquisition of subsidiaries - net of cash acquired (44,013) (129,083)
Changes to other assets - net 5,358 (447)
---------- ---------
Cash for investing activities (156,888) (60,358)
---------- ---------
Financing Activities
Issuance of long-term debt 190,549 18,805
Issuance of Company obligated mandatorily
redeemable preferred securities of subsidiary
MP&L Capital I - net 72,270 -
Issuance of common stock 14,271 2,158
Changes in notes payable 51,063 10,006
Reductions of long-term debt (139,042) (9,074)
Redemption of preferred stock (17,568) -
Dividends on preferred and common stock (46,303) (45,974)
---------- ---------
Cash from (for) financing activities 125,240 (24,079)
---------- ---------
Change in Cash and Cash Equivalents 5,361 15,466
Cash and Cash Equivalents at Beginning of Period 31,577 27,001
---------- ---------
Cash and Cash Equivalents at End of Period $ 36,938 $ 42,467
========== =========
Supplemental Cash Flow Information
Cash paid during the period for
Interest (net of capitalized) $ 43,164 $ 40,249
Income taxes $ 17,338 $ 20,534
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The accompanying notes are an integral part of this statement.
-3-
Note 1. Business Segments
In Thousands
Investments
-------------------- Corporate
Electric Water Automobile Portfolio & Real Charges
Consolidated Operations Operations Auctions <F1> Reinsurance Estate & Other
------------ ---------- ---------- ------------ ------------ ------ ---------
Quarter Ended September 30, 1996
- --------------------------------
Operating revenue and income $215,150 $133,480 $ 20,848 $ 50,464 $5,334 $ 5,345 $ (321)
Operation and other expense 163,386 100,073 13,637 42,395 732 4,623<F2> 1,926
Depreciation and amortization
expense 16,798 10,412 3,079 3,299 - 8 -
Interest expense 16,074 5,681 3,112 2,880 - 363 4,038
Income from equity investments 2,832 - - - 2,832 - -
-------- -------- -------- -------- ------ ------- -------
Operating income (loss) 21,724 17,314 1,020 1,890 7,434 351 (6,285)
Distributions on redeemable
preferred securities of
subsidiary 1,509 424 - - - - 1,085
Income tax expense (benefit) 2,701 6,343 292 1,158 2,202 (3,553)<F3> (3,741)
-------- -------- -------- -------- ------ ------- -------
Net income $ 17,514 $ 10,547 $ 728 $ 732 $5,232 $ 3,904 $(3,629)
======== ======== ======== ======== ====== ======= ========
Quarter Ended September 30, 1995
- --------------------------------
Operating revenue and income $186,121 $131,036 $ 16,678 $ 30,492 $3,813 $ 4,373 $ (271)
Operation and other expense 136,609 92,902 11,699 25,650 593 3,721 2,044
Depreciation and amortization
expense 14,942 10,089 2,502 2,291 - 60 -
Interest expense 13,246 5,650 2,497 907 2 1 4,189
Income from equity investments 2,339 - - - 2,339 - -
-------- -------- -------- -------- ------ ------- -------
Operating income (loss)
from continuing operations 23,663 22,395 (20) 1,644 5,557 591 (6,504)
Income tax expense (benefit) 7,978 9,187 (123) 856 1,468 292 (3,702)
-------- -------- -------- -------- ------ ------- -------
Income (loss) from
continuing operations 15,685 $ 13,208 $ 103 $ 788 $4,089 $ 299 $(2,802)
======== ======== ======== ====== ======= =======
Income from
discontinued operations 33
--------
Net income $ 15,718
========
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<FN>
<F1> Purchased 80 percent on July 1, 1995, another 3 percent on January 31, 1996 and the remaining 17 percent on
August 21, 1996.
<F2> Includes $800,000 of minority interest relating to the recognition of tax benefits. (See Note 3.)
<F3> Includes $4 million of tax benefits. (See Note 3.)
</FN>
-4-
Note 1. Business Segments (Continued)
In Thousands
Investments
---------------------- Corporate
Electric Water Automobile Portfolio & Real Charges
Consolidated Operations Operations Auctions <F1> Reinsurance Estate & Other
------------ ---------- ---------- ------------ ------------ ------ ---------
Nine Months Ended September 30, 1996
Operating revenue and income $ 626,327 $ 394,200 $ 63,124 $135,372 $ 13,939 $ 20,626 $ (934)
Operation and other expense 470,220 297,594 39,081 113,623 1,986 11,681<F2> 6,255
Depreciation and amortization
expense 49,310 31,424 9,286 8,554 - 46 -
Interest expense 44,593 16,897 9,456 6,188 1 851 11,200
Income from equity investments 9,441 - - - 9,441 - -
---------- --------- --------- -------- --------- -------- --------
Operating income (loss) 71,645 48,285 5,301 7,007 21,393 8,048 (18,389)
Distributions on redeemable
preferred securities of
subsidiary 3,220 904 - - - - 2,316
Income tax expense (benefit) 17,777 17,710 1,750 3,822 5,099 (1,972)<F3> (8,632)
---------- --------- --------- -------- --------- -------- --------
Net income $ 50,648 $ 29,671 $ 3,551 $ 3,185 $ 16,294 $ 10,020 $(12,073)
========== ========= ========= ======== ========= ======== ========
Total assets $2,145,637 $ 980,187 $ 339,544 $479,254 $ 260,658 $ 84,202 $ 1,792
Accumulated depreciation $ 661,643 $ 536,707 $ 119,272 $ 5,664 - - -
Accumulated amortization $ 6,970 - - $ 6,028 - $ 942 -
Construction work in progress $ 38,279 $ 11,813 $ 14,786 $ 11,680 - - -
Nine Months Ended September 30, 1995
Operating revenue and income $ 480,145 $ 371,486 $ 50,093 $ 30,492 $ 16,775 $ 13,076 $ (1,777)
Operation and other expense 354,071 271,672 34,448 25,650 2,243 14,347<F2> 5,711
Depreciation and amortization
expense 40,269 30,225 7,573 2,291 - 180 -
Interest expense 35,735 16,720 7,483 907 6 3 10,616
Income (loss) from
equity investments (1,570) - - - 6,958 - (8,528)<F4>
---------- --------- --------- -------- --------- -------- --------
Operating income (loss)
from continuing operations 48,500 52,869 589 1,644 21,484 (1,454) (26,632)
Income tax expense (benefit) (1,915) 22,020 (170) 856 3,418 (17,131)<F3> (10,908)
---------- --------- --------- -------- --------- -------- --------
Income (loss) from
continuing operations 50,415 $ 30,849 $ 759 $ 788 $ 18,066 $ 15,677 $(15,724)
========= ========= ======== ========= ======== ========
Income from
discontinued operations 2,874
----------
Net income $ 53,289
==========
Total assets $1,932,822 $ 997,599 $ 308,348 $343,267 $ 229,592 $ 53,266 $ 750
Accumulated depreciation $ 617,532 $ 519,862 $ 96,713 $ 957 - - -
Accumulated amortization $ 1,949 - - $ 1,297 - $ 652 -
Construction work in progress $ 69,135 $ 12,488 $ 20,258 $ 36,389 - - -
- -----------------------
<FN>
<F1> Purchased 80 percent on July 1, 1995, another 3 percent on January 31, 1996 and the remaining 17 percent on August 21, 1996.
<F2> Includes $1.2 and $3.7 million of minority interest relating to the recognition of tax benefits in 1996 and 1995,
respectively. (See Note 3.)
<F3> Includes $6 and $18.4 million of tax benefits in 1996 and 1995, respectively. (See Note 3.)
<F4> Includes an $8.5 million pre-tax provision for exiting the equipment manufacturing business.
</FN>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
-5-
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.
Minnesota Power & Light Company
-------------------------------
(Registrant)
January 22, 1997 D. G. Gartzke
-------------------------------
D. G. Gartzke
Senior Vice President - Finance
and Chief Financial Officer
January 22, 1997 Mark A. Schober
-------------------------------
Mark A. Schober
Corporate Controller
-6-