UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) October 26, 1999
THE MONTANA POWER COMPANY
(Exact name of registrant as specified in its charter)
Montana 1-4566 81-0170530
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
40 East Broadway, Butte, Montana 59701
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (406) 723-5421
Exhibit Index is found on page 11.
ITEM 5. Other Events.
Financial Results
THIRD QUARTER 1999 COMPARED WITH THIRD QUARTER 1998
Consolidated net income was $0.26 per share in the third quarter
compared with third quarter 1998 consolidated net income of $0.33 per share
(adjusted for the two-for-one stock split effective August 6, 1999). A
contract settlement in the third quarter 1998 increased nonutility earnings
for that quarter by approximately $0.07 per share (after taxes and adjusted
for the two-for-one stock split effective August 6, 1999). Utility earnings
for the third quarter were $0.01 per share versus third quarter 1998 utility
earnings of $0.10 per share. Nonutility earnings for the third quarter
increased $0.02 per share to $0.25 per share, compared with nonutility
earnings of $0.23 per share for the third quarter 1998.
Utility earnings decreased during the third quarter 1999 versus third
quarter 1998 mainly because of increased expenses, primarily in electric
utility operations. As discussed below, nearly $3,000,000 of the electric
utility's increased expenses were the result of information system
implementation costs.
Every nonutility business contributed to that sector's strong third
quarter 1999 operating performance. Specifically, as compared with the third
quarter 1998, income from coal operations and income from oil and natural gas
operations increased. Third quarter 1999 results for independent power
operations decreased as compared with the same period in 1998 due to a
contract settlement that had a material favorable effect on third quarter 1998
results. Our growing telecommunications business again contributed solid
earnings.
Electric Utility and Natural Gas Utility
Income from electric utility operations for the third quarter 1999
decreased approximately $12,800,000 compared with income from operations for
the third quarter 1998. Income from natural gas utility operations for the
third quarter 1999 decreased approximately $1,100,000 compared with the third
quarter 1998.
Electric Utility
Revenues from electric utility operations decreased approximately
$2,500,000 partly because a number of industrial customers chose other
commodity suppliers, reflecting our ongoing exit from the electric-generation
business. This exercise of choice began in July 1998 in accordance with the
Montana Electric Industry Restructuring and Customer Choice Act passed in 1997
(Electric Act). Despite lower prices in the secondary markets, increased
sales of surplus power in these markets - and the associated transmission
revenues - reduced the effects of the overall decreased revenues.
Before July 1, 1998, the utility bought and sold electricity in the
secondary markets. Beginning July 1, 1998, our nonutility began to perform
this activity for the utility. As a result, we reflect revenues earned from
the transmission of electricity sold in the secondary markets in the
"intersegment" line of the segmented schedule of revenues and expenses.
Power-supply expenses increased approximately $1,100,000 primarily due
to increased steam maintenance and generation costs. The utility's
discontinuance of secondary purchases partially offset these increases.
Transmission and distribution expenses increased approximately
$2,100,000 primarily because of an increase in wheeling costs from
transmitting the sales of surplus power to markets outside our transmission
area. As mentioned above, transmission revenues associated with the sales of
surplus power also have increased.
Selling, general, and administrative expenses increased approximately
$5,900,000 mainly because of the following items:
? Costs of approximately $1,500,000 incurred to train staff and to
adapt business processes to implement a new Enterprise Resource-
Planning (ERP) information system and similar costs of approximately
$1,300,000 for a new Enterprise Customer-Care (E-CIS) information
system. The ERP system will provide future benefits through better
coordination and management of our information resources. We expect
the electric utility to incur approximately $500,000 in expense in
the fourth quarter 1999 and approximately $1,000,000 of expense in
2000 as we continue to implement the ERP system, and we expect to
have fully implemented the system by September 2000. We implemented
the E-CIS system in September 1999. It is Y2K-ready and will provide
future benefits by allowing us to better manage our transition to
customer choice of energy supply;
? Approximately $1,700,000 relating to energy efficiency and public-
purpose programs in compliance with the Universal System Benefits
Charge (USBC) requirements of the Electric Act. In accordance with
the Electric Act, we collect the costs associated with the energy
efficiency and public-purpose programs through a separate component
of rates;
? An increase of approximately $550,000 in rent expense for our
automated meter-reading equipment;
? An increase of approximately $600,000 in incentive compensation
accruals; and
? Increases in other administrative costs of approximately $1,450,000
were essentially offset by reduced pension-trust payments of
approximately $1,200,000.
Taxes other than income taxes and depreciation expense increased a total
of approximately $1,100,000, representing increased investment in plant and
higher property values.
As required by the Electric Act, a rate moratorium was established for
all customers pursuant to which rates cannot be increased, except under
limited circumstances, until July 1, 2000. We expect to submit a filing with
the Montana Public Service Commission (PSC) in the first half of 2000 to
request increased rates as appropriate.
Natural Gas Utility
Revenues from natural gas utility operations decreased approximately
$700,000 mainly because of price and volume decreases. Expenses associated
with natural gas utility operations increased a total of approximately
$400,000. Costs for the ERP system of approximately $400,000 and the E-CIS
system of approximately $450,000 were partially offset by other decreases in
selling, general and administrative expenses.
On August 12, 1999, we filed a natural gas rate case with the PSC that
reflects a request for increased annual revenues of $15,400,000, with a
proposed interim increase of $11,500,000. After commission review, an interim
increase is expected to become effective before the end of the year and will
remain in effect until the final order is received. The filing also proposes
(1) an alternative rate plan, (2) "trackers" to reflect property taxes and
replacement facilities in rates on a more timely basis, (3) a change in the
allocation of costs to customer classes, and (4) rate-design changes that
include recovery of distribution charges through a fixed monthly system
charge. We expect a decision on this filing, which represents our first
transmission and distribution gas filing in a deregulated and customer-choice
environment, before the end of the second quarter 2000.
Nonutility - Coal; Oil & Natural Gas; Independent Power Operations;
Telecommunications; and Other
Nonutility financial results improved during the third quarter 1999
versus the third quarter 1998. Specifically, income from coal operations
increased approximately $1,800,000, or 28%. Income from oil and natural gas
operations increased approximately $3,600,000, or 85%. Income from
independent power operations decreased approximately $14,400,000, but the
decrease was attributable to the materially positive results of last year's
third-quarter contract settlement between a power purchaser and an
independent-power partnership in which Continental Energy Services was a
partner. Finally, income from telecommunications operations increased
approximately $2,800,000 mainly due to higher private-line revenues and
revenues from dark-fiber sales.
Coal
Northwestern Resources' lignite revenues increased approximately
$5,600,000 because prices rose 26%, which more than offset a 5% decrease in
volumes. Higher reimbursable mining costs accounted for the large price
increase. Western Energy's revenues increased approximately $7,700,000
primarily because Western Energy paid approximately $7,900,000 in one-time
refunds in the third quarter 1998 to the owners of Colstrip Units 3 and 4 to
settle contract disputes.
Operations and maintenance expense increased due to higher (1)
royalties, (2) reclamation costs, (3) equipment rental costs, and (4)
overburden stripping costs. Taxes other than income rose due to the increased
revenue received for lignite and coal sold in 1999 and a property tax refund
received at the Jewett Mine in the third quarter of 1998.
Oil & Natural Gas
Increased income from oil and natural gas operations resulted from
higher oil and natural gas prices and increased natural gas volumes sold.
These increases more than offset decreases in oil volumes sold.
Independent Power Operations
Continental Energy Services continues to benefit from higher revenues in
generating projects in which it holds equity interests, with revenues
increasing approximately $1,600,000 mainly as a result of improved operations.
Continental Energy Services also received additional proceeds of approximately
$450,000 in the third quarter 1999 relating to the third quarter 1998 contract
settlement between a power purchaser and one of Continental Energy Services'
independent-power investments. Revenues from unconsolidated investments
decreased approximately $15,300,000 mainly because of two events: (1) the
third-quarter 1998 revenues resulting from the contract settlement, and (2)
the loss of revenues as a result of the fourth quarter 1998 sale of a project
in which Continental Energy Services was a partner. Operations and
maintenance expense increased because, in the third quarter 1998, Continental
Energy Services capitalized previously expensed project-development costs,
which reduced third quarter 1998 operations and maintenance expense.
Amortization expense decreased approximately $5,100,000 as a result of the
recognition of amortization expense in the third quarter 1998 associated with
the contract settlement discussed above.
Telecommunications
In January 1999, a Touch America customer exercised an option and made a
$257,000,000 prepayment of all amounts due for the remaining twelve-year
initial term of a capacity agreement. The amount of the prepayment was
discounted for early payment and results in approximately $24,000,000 less in
annual operating revenues than we would have realized had the customer not
exercised its option. As a result, private-line revenues (revenues from sales
on Touch America's fiber-optic network) under that contract for the third
quarter 1999 were approximately $6,000,000 less than they would have been
without the prepayment.
Revenues from dark-fiber sales were approximately $7,000,000 higher
compared with the same period in 1998 because Touch America recognized
approximately $8,000,000 in dark-fiber revenues from existing agreements
during the third quarter 1999. Touch America also expects dark-fiber sales in
the fourth quarter from other agreements under negotiation. With recent
interpretations issued by the Financial Accounting Standards Board, we are
evaluating how to properly account for these future sales.
After adjusting private-line revenues for the accounting effects of the
prepayment and excluding the dark-fiber sales revenues, revenues from
telecommunications operations increased approximately $3,200,000. The
increase in operating revenues, after the above adjustments, principally
consists of several elements. First, it reflects increased private-line
revenues of approximately $2,000,000 due to higher sales of fiber capacity.
Second, long-distance revenues increased approximately $900,000 as a result of
(1) long-distance customer and minute sales, and (2) internet-service revenues
resulting from customer growth.
Operations and maintenance expense increased approximately $1,000,000.
The increased expense is attributable chiefly to increased private-line and
long-distance sales.
Interest Expense and Other Income
The use of the funds received from the prepayment referred to above
contributed to decreased interest expense. The increase in other income of
approximately $1,300,000 is largely attributable to increased intersegment
interest income earned on loans from nonutility operations to utility
operations.
Income Taxes
Due to an estimated lower effective tax rate for 1999, we reduced income
tax expense for the third quarter.
YEAR-TO-DATE 1999 COMPARED WITH YEAR-TO-DATE 1998
Year-to-date earnings through September 30, 1999 were $0.78 per share,
compared with year-to-date earnings through September 30, 1998 of $0.84 per
share (adjusted for the two-for-one stock split effective August 6, 1999). The
1999 year-to-date $0.78 per share consists of (1) utility earnings of $0.19
per share (down from $0.32 per share for the nine months ended September 30,
1998), and (2) nonutility earnings of $0.59 per share, up $0.07 from the $0.52
per share for the nine months ended September 30, 1998. Although 1999 year-
to-date earnings are down when compared with 1998 year-to-date earnings,
strong operating performance from all nonutility businesses contributed to
overall improvement in that sector of our business.
Electric Utility and Natural Gas Utility
Income from electric utility operations for the nine months ended
September 30, 1999, decreased approximately $13,700,000 compared with income
from operations for the nine months ended September 30, 1998. Income from
natural gas utility operations for the nine months ended September 30, 1999,
compared with the nine months ended September 30, 1998, decreased
approximately $600,000.
Electric Utility
Revenues from electric utility operations increased approximately
$4,200,000 compared with year-to-date 1998. Although industrial customers
continue to choose other commodity suppliers - through the exercise of choice,
which began in July 1998 in accordance with the Electric Act - sales of
surplus power in the secondary markets increased, even though prices were down
slightly compared with year-to-date 1998. These increased sales also
contributed to increased transmission revenues.
As mentioned in the discussion of the third quarter above, the utility
bought and sold electricity in the secondary markets before July 1, 1998.
Beginning July 1, 1998, the nonutility now performs this activity. As a
result, we reflect revenues earned from the transmission of electricity sold
in the secondary markets in the "intersegment" line of the segmented schedule
of revenues and expenses.
Expenses associated with electric utility operations increased
approximately $18,000,000 compared to the nine months ended September 30,
1998. These expenses (power supply expenses up approximately $1,500,000;
transmission and distribution wheeling expenses up approximately $7,400,000;
selling, general, and administrative up approximately $6,000,000; and property
taxes and depreciation up approximately $3,100,000) increased for essentially
the same reasons mentioned in the discussion of the third quarter.
Natural Gas Utility
Revenues increased $1,700,000 mainly because of higher transportation
revenues, customer growth, and increased prices to recover gas-supply costs.
Selling, general, and administrative costs increased approximately $700,000
primarily because of expensed costs for implementing both the ERP system and
the E-CIS system, as discussed above.
As discussed above, we have filed a rate case requesting increased
revenues. We expect a decision from the PSC before the end of the second
quarter 2000.
Income Taxes
Income taxes increased year-to-date due to accelerated recognition of
tax credits in the first quarter 1998 as authorized by the PSC.
Nonutility - Coal; Oil and Natural Gas; Independent Power Operations;
Telecommunications; and Other
Nonutility financial results improved for the nine months ended
September 30, 1999 versus year-to-date 1998. Income from coal operations was
up approximately $2,100,000. Income from oil and natural gas operations
increased approximately $4,400,000, or 49%. Income from independent power
operations decreased approximately $8,100,000, but the decrease resulted from
the third-quarter 1998 contract settlement and capitalization of previously
expensed project-development costs mentioned in the discussion of the third
quarter. The decrease of approximately $7,100,000 in income from
telecommunications operations is a reflection of the effects of the capacity
prepayment; as discussed below, telecommunications operations continued to
grow and to contribute to earnings through its private-line, dark-fiber and
long-distance businesses.
Coal
Northwestern Resources' lignite revenues increased approximately
$12,200,000 because prices improved 11% and volumes rose 3%. Higher
reimbursable mining costs accounted for the price increase. Western Energy's
revenues increased approximately $4,800,000. A nonrecurring second quarter
1999 refund of approximately $2,700,000 issued by Western Energy to one of its
customers for final pit reclamation funds previously collected partially
offset the revenue increase mentioned in the discussion of the third quarter.
Operations and maintenance expense increased due to higher (1)
royalties, (2) equipment rental costs, and (3) overburden stripping costs.
Taxes other than income rose due to the increased revenue received for lignite
and coal sold in 1999 and a property tax refund received at the Jewett Mine in
the third quarter of 1998. Western Energy's depreciation expense decreased
approximately $1,700,000 primarily due to (1) additional depreciation recorded
on idle equipment in the second quarter of 1998, and (2) equipment at the
Rosebud Mine being fully depreciated late in the first quarter of 1998,
resulting in lower depreciation expense in 1999.
Oil and Natural Gas
Increased income from oil and natural gas operations resulted from
higher oil and natural gas prices and increased natural gas volumes sold.
These two events more than offset decreases in oil volumes sold.
Independent Power Operations
Continental Energy Services continues to benefit from higher revenues in
generation projects in which it holds equity interests, with revenues
increasing approximately $1,700,000 as a result of improved operations.
Continental Energy Services also received additional proceeds of approximately
$1,500,000 in 1999 relating to the third quarter 1998 contract settlement
between a power purchaser and one of Continental Energy Services' independent-
power partnerships. Revenues from unconsolidated investments decreased
approximately $14,100,000 mainly because of the two events discussed above in
the third quarter section. Amortization expense decreased approximately
$5,900,000 because of the contract settlement discussed above.
Telecommunications
Private-line revenues for the nine months ended September 30, 1999, were
approximately $17,000,000 less than they would have been without the
prepayment mentioned in the discussion of the third quarter. Revenues from
dark-fiber sales were approximately $3,400,000 higher compared with the same
period in 1998. As stated above, Touch America also expects dark-fiber sales
in the fourth quarter from other agreements under negotiation. With recent
interpretations issued by the Financial Accounting Standards Board, we are
evaluating how to properly account for these future sales.
After adjusting private-line revenues for the accounting effects of the
prepayment and excluding the dark-fiber sales revenues, 1999 year-to-date
revenues from telecommunications operations increased approximately 20% when
compared with 1998 year-to-date revenues. With the same adjustments, 1999
year-to-date income from telecommunications operations increased approximately
22% versus 1998 year-to-date income from telecommunications operations.
The increase in operating revenues, after the above adjustments,
consists of several elements. First, the increase reflects higher private-
line revenues of approximately $6,000,000. These increased revenues are
attributable to increased sales of fiber capacity. It also includes increased
long-distance revenues, including internet-service and equipment-service
revenues, of approximately $6,500,000. These revenues increased as a result
of increased long-distance customer and minute sales and customer growth.
Private-line, equipment-service, and long-distance operations and
maintenance expense increased approximately $5,900,000 chiefly as a result of
increased sales. Taxes other than income taxes decreased approximately
$1,500,000 primarily because of lower property taxes. In June 1999, we
received state property tax assessed values for 1998 and 1999 and reviewed the
amounts accrued for Touch America for the year. Based on this review, we
released approximately $700,000 in June 1999, reducing 1999 property tax
expense.
Interest Expense and Other Income
The use of the funds received from the prepayment contributed to
decreased interest expense, and investment income earned on these funds
accounted for $4,400,000 of the $7,300,000 increase in other income. The
remaining increase is largely the result of increased intersegment interest
income earned on loans from nonutility operations to utility operations.
Income Taxes
Due to an estimated lower effective tax rate for 1999, we reduced income
tax expense.
TWELVE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED WITH TWELVE MONTHS ENDED
SEPTEMBER 30, 1998
During the twelve months ended September 30, 1999, consolidated earnings
were $1.41 per share. For the twelve months ended September 30, 1998,
consolidated earnings were $1.30 per share (adjusted for the two-for-one stock
split effective August 6, 1999). The $1.41 per share for the twelve months
ended September 30, 1999, consists of (1) utility earnings of $0.34 per share
(compared with $0.55 per share for the twelve months ended September 30,
1998), and (2) nonutility earnings of $1.07 per share, an increase of 43%
compared with $0.75 per share for the twelve months ended September 30, 1998.
This Form 8-K may contain forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements should be read with the cautionary statements and important factors
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1998, at Item 7, "Management's Discussion and Analysis of
Financial Conditions and Results of Operations - Safe Harbor for Forward-
Looking Statements." Forward-looking statements are all statements other than
statements of historical fact, including, without limitation, those that are
identified by the use of the words "expects," "believes," "anticipates" and
similar expressions.
On June 22, 1999, the Board of Directors approved, effective August 6,
1999, a two-for-one split of the Company's outstanding common stock to all
shareholders of record on July 16, 1999. All 1998 earnings-per-share
information has been adjusted for the split.
For comparative purposes, the following table shows the breakdown of
consolidated basic net income per share by principal business segment:
Quarter Ended
September 30, September 30,
1999 1998*
Utility Operations $ 0.01 $ 0.10
Nonutility Operations 0.25 0.23
Consolidated $ 0.26 $ 0.33
Nine Months Ended
September 30, September 30,
1999 1998*
Utility Operations $ 0.19 $ 0.32
Nonutility Operations 0.59 0.52
Consolidated $ 0.78 $ 0.84
Twelve Months Ended
September 30, September 30,
1999 1998*
Utility Operations $ 0.34 $ 0.55
Nonutility Operations 1.07 0.75
Consolidated $ 1.41 $ 1.30
* Adjusted for the two-for-one stock split effective August 6, 1999.
ITEM 7. Financial Statements and Exhibits.
99a Preliminary Consolidated Statements of Income for the Quarters Ended
September 30, 1999 and 1998; Nine Months Ended September 30, 1999 and
1998; and Twelve Months Ended September 30, 1999 and 1998.
99b Preliminary Utility Operations Schedule of Revenues and Expenses for the
Quarters Ended September 30, 1999 and 1998; Nine Months Ended
September 30, 1999 and 1998; and Twelve Months Ended September 30, 1999
and 1998.
99c Preliminary Nonutility Operations Schedule of Revenues and Expenses for
the Quarters Ended September 30, 1999 and 1998; Nine Months Ended
September 30, 1999 and 1998; and Twelve Months Ended September 30, 1999
and 1998.
99d Preliminary Operating Statistics for the Quarters Ended September 30,
1999 and 1998.
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, a duly authorized signatory.
THE MONTANA POWER COMPANY
(Registrant)
By /s/ J. P. Pederson
J. P. Pederson
Vice President and Chief
Financial Officer
Dated: October 26, 1999
Exhibit Index
Exhibit Page
99a Preliminary Consolidated Statements of Income for the Quarters
Ended September 30, 1999 and 1998; Nine Months Ended
September 30, 1999 and 1998; and Twelve Months Ended
September 30, 1999 and 1998. 12
99b Preliminary Utility Operations Schedule of Revenues and Expenses
for the Quarters Ended September 30, 1999 and 1998; Nine Months
Ended September 30, 1999 and 1998; and Twelve Months Ended
September 30, 1999 and 1998. 13
99c Preliminary Nonutility Operations Schedule of Revenues and
Expenses for the Quarters Ended September 30, 1999 and 1998;
Nine Months Ended September 30, 1999 and 1998; and Twelve Months
Ended September 30, 1999 and 1998. 14-15
99d Preliminary Operating Statistics for the Quarters Ended
September 30, 1999 and 1998. 16
Exhibit 99a
PRELIMINARY CONSOLIDATED STATEMENT OF INCOME
The Montana Power Company and Subsidiaries
Quarter Ended Nine Months Ended 12 Months Ended
September 30, September 30, September 30,
1999 1998 1999 1998 1999 1998
Thousands of Dollars
REVENUES $335,977 $313,172 $967,246 $869,579 $ 1,360,017 $1,163,001
EXPENSES:
Operations 171,370 139,762 479,779 374,288 642,259 503,803
Maintenance 21,971 20,738 61,918 60,724 82,259 77,273
Selling, general, and
administrative 36,072 26,284 100,245 89,222 139,765 122,866
Taxes other than income taxes 25,519 22,256 76,625 72,582 100,224 94,499
Depreciation, depletion, and
amortization 27,600 31,285 82,955 86,072 111,149 112,637
282,532 240,325 801,522 682,888 1,075,656 911,078
INCOME FROM OPERATIONS 53,445 72,847 165,724 186,691 284,361 251,923
INTEREST EXPENSE AND OTHER:
Interest 12,492 14,662 38,993 43,564 56,280 58,836
Distributions on company obligated
mandatorily redeemable preferred
securities of subsidiary trust 1,373 1,373 4,119 4,119 5,492 5,492
Other (income) deductions - net 120 (1,179) (6,375) (3,026) (8,158) (23,443)
13,985 14,856 36,737 44,657 53,614 40,885
INCOME TAXES 10,248 21,188 40,702 46,813 72,063 64,386
NET INCOME 29,212 36,803 88,285 95,221 158,684 146,652
DIVIDENDS ON PREFERRED STOCK 923 923 2,768 2,768 3,690 3,690
NET INCOME AVAILABLE FOR
COMMON STOCK $ 28,289 $ 35,880 $ 85,517 $ 92,453 $ 154,994 $ 142,962
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC (000) 110,201 110,026* 110,177 109,914* 110,159 109,778*
BASIC EARNINGS PER SHARE OF
COMMON STOCK $ 0.26 $ 0.33* $ 0.78 $ 0.84* $ 1.41 $ 1.30*
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - DILUTED (000) 110,934 110,254* 110,984 110,083* 110,858 109,931*
DILUTED EARNINGS PER SHARE OF
COMMON STOCK $ 0.26 $ 0.33* $ 0.77 $ 0.84* $ 1.40 $ 1.30*
* 1998 figures adjusted for the two-for-one stock split effective August 6, 1999.
Exhibit 99b
PRELIMINARY UTILITY OPERATIONS
Quarter Ended Nine Months Ended 12 Months Ended
September 30, September 30, September 30,
1999 1998 1999 1998 1999 1998
Thousands of Dollars
ELECTRIC UTILITY:
REVENUES:
Revenues $105,082 $ 108,585 $327,059 $327,820 $449,959 $440,169
Intersegment revenues 3,238 2,258 9,706 4,712 12,570 5,995
108,320 110,843 336,765 332,532 462,529 446,164
EXPENSES:
Power supply 29,306 28,242 98,871 97,405 139,261 139,877
Transmission and distribution 12,011 9,913 34,419 27,036 47,186 36,208
Selling, general, and
administrative 16,885 10,953 44,448 38,393 59,081 51,428
Taxes other than income taxes 12,526 11,764 37,815 35,936 48,195 44,698
Depreciation and amortization 13,557 13,185 40,730 39,554 57,701 52,615
84,285 74,057 256,283 238,324 351,424 324,826
INCOME FROM ELECTRIC OPERATIONS 24,035 36,786 80,482 94,208 111,105 121,338
NATURAL GAS UTILITY:
REVENUES:
Revenues (other than including
gas supply cost revenues) 10,374 11,330 51,995 51,364 75,745 84,080
Gas supply cost revenues 2,806 2,447 23,920 22,763 33,094 28,763
Intersegment revenues 112 179 448 531 696 680
13,292 13,956 76,363 74,658 109,535 113,523
EXPENSES:
Gas supply costs 2,806 2,447 23,920 22,763 33,094 28,763
Other production, gathering, and
exploration 516 398 1,650 1,557 2,380 2,799
Transmission and distribution 3,206 3,651 10,509 11,091 14,974 14,942
Selling, general, and
administrative 5,090 4,786 15,621 14,877 20,925 19,886
Taxes other than income taxes 3,230 3,251 10,500 9,953 14,631 13,137
Depreciation, depletion, and
amortization 2,320 2,207 6,960 6,614 9,051 9,186
17,168 16,740 69,160 66,855 95,055 88,713
INCOME FROM GAS OPERATIONS (3,876) (2,784) 7,203 7,803 14,480 24,810
INTEREST EXPENSE AND OTHER:
Interest 14,789 13,570 43,669 40,695 59,332 54,778
Distributions on company obligated
mandatorily redeemable preferred
securities of subsidiary trust 1,373 1,373 4,119 4,119 5,493 5,492
Other (income) deductions - net (228) (1,138) (2,545) (1,932) (4,286) (8,676)
15,934 13,805 45,243 42,882 60,539 51,594
INCOME BEFORE INCOME TAXES 4,225 20,197 42,442 59,129 65,046 94,554
INCOME TAXES 2,620 8,344 19,289 21,462 24,386 30,411
DIVIDENDS ON PREFERRED STOCK 923 923 2,768 2,768 3,690 3,690
UTILITY NET INCOME AVAILABLE FOR
COMMON STOCK $ 682 $ 10,930 $ 20,385 $ 34,899 $ 36,970 $ 60,453
Exhibit 99c
PRELIMINARY NONUTILITY OPERATIONS
Quarter Ended Nine Months Ended 12 Months Ended
September 30, September 30, September 30,
1999 1998 1999 1998 1999 1998
Thousands of Dollars
COAL:
REVENUES:
Revenues $ 52,589 $40,391 $ 144,806 $128,869 $193,898 $174,240
Intersegment revenues 9,783 8,645 29,523 28,501 39,818 38,793
62,372 49,036 174,329 157,370 233,716 213,033
EXPENSES:
Operations and maintenance 40,768 32,839 109,630 97,030 145,563 129,340
Selling, general, and
administrative 4,653 3,664 14,415 13,085 21,919 19,246
Taxes other than income taxes 6,561 3,895 19,575 17,007 26,618 23,857
Depreciation, depletion, and
amortization 1,906 1,995 5,590 7,262 4,924 11,604
53,888 42,393 149,210 134,384 199,024 184,047
INCOME FROM COAL
OPERATIONS 8,484 6,643 25,119 22,986 34,692 28,986
OIL AND NATURAL GAS:
REVENUES:
Revenues 96,922 63,823 242,476 155,273 308,519 204,300
Intersegment revenues 4,551 3,763 12,863 13,396 17,449 16,286
101,473 67,586 255,339 168,669 325,968 220,586
EXPENSES:
Operations and maintenance 81,487 52,643 206,554 125,700 264,421 168,539
Selling, general, and
administrative 4,852 4,377 13,812 14,382 20,354 17,585
Taxes other than income taxes 1,652 1,301 4,229 3,613 5,524 4,605
Depreciation, depletion, and
amortization 5,734 5,080 17,253 15,928 23,584 20,081
93,725 63,401 241,848 159,623 313,883 210,810
INCOME FROM OIL AND NATURAL
GAS OPERATIONS 7,748 4,185 13,491 9,046 12,085 9,776
INDEPENDENT POWER:
REVENUES:
Revenues 18,758 18,154 55,726 54,533 74,899 73,241
Earnings from unconsolidated
investments 5,565 20,829 15,029 29,180 70,801 36,221
Intersegment Revenues 476 444 1,139 1,625 1,528 1,872
24,799 39,427 71,894 85,338 147,228 111,334
EXPENSES:
Operations and maintenance 16,523 12,068 48,434 47,909 60,961 64,472
Selling, general, and
administrative 1,221 873 3,032 3,028 4,750 4,226
Taxes other than income taxes 465 464 1,384 1,363 1,788 1,763
Depreciation, depletion, and
amortization 781 5,857 2,342 8,229 3,117 9,089
18,990 19,262 55,192 60,529 70,616 79,550
INCOME FROM INDEPENDENT POWER
OPERATIONS 5,809 20,165 16,702 24,809 76,612 31,784
Exhibit 99c
PRELIMINARY NONUTILITY OPERATIONS (continued)
Quarter Ended Nine Months Ended 12 Months Ended
September 30, September 30, September 30,
1999 1998 1999 1998 1999 1998
Thousands of Dollars
TELECOMMUNICATIONS:
REVENUES:
Revenues $ 19,274 $ 21,716 $60,403 $ 63,924 $ 84,225 $85,679
Earnings from unconsolidated
investments 8,167 1,229 10,267 6,873 14,304 7,253
Intersegment Revenues 179 297 533 800 1,032 1,011
27,620 23,242 71,203 71,597 99,561 93,943
EXPENSES:
Operations and maintenance 8,015 7,025 25,843 19,937 33,017 26,134
Selling, general, and
administrative 3,217 2,483 8,887 8,089 12,970 11,301
Taxes other than income taxes 907 1,315 2,332 3,874 2,081 5,597
Depreciation, depletion, and
amortization 2,292 2,035 6,816 5,284 8,621 6,737
14,431 12,858 43,878 37,184 56,689 49,769
INCOME FROM TELECOMMUNICATIONS
OPERATIONS 13,189 10,384 27,325 34,413 42,872 44,174
OTHER OPERATIONS:
REVENUES:
Revenues 16,440 24,668 35,565 28,980 54,572 28,005
Intersegment revenues 455 206 1,456 770 1,669 2,917
16,895 24,874 37,021 29,750 56,241 30,922
EXPENSES:
Operations and maintenance 17,122 25,879 36,009 31,137 55,571 30,822
Selling, general, and
administrative 529 335 1,556 1,150 2,617 4,878
Taxes other than income taxes 178 266 790 836 1,386 842
Depreciation, depletion, and
amortization 1,010 926 3,264 3,201 4,153 3,325
18,839 27,406 41,619 36,324 63,727 39,867
LOSS FROM OTHER OPERATIONS (1,944) (2,532) (4,598) (6,574) (7,486) (8,945)
INTEREST EXPENSE AND OTHER:
Interest 729 2,448 4,087 7,037 8,470 9,407
Other (income) deductions - net (2,678) (1,397) (12,593) (5,262) (15,396) (20,116)
(1,949) 1,051 ( 8,506) 1,775 ( 6,926) (10,709)
INCOME BEFORE INCOME TAXES 35,235 37,794 86,545 82,904 165,701 116,484
INCOME TAXES 7,628 12,844 21,413 25,350 47,677 33,975
NONUTILITY NET INCOME AVAILABLE
FOR COMMON STOCK $27,607 $24,950 $65,132 $57,554 $118,024 $82,509
Exhibit 99d
PRELIMINARY OPERATING STATISTICS
Quarter Ended Nine Months Ended
September 30, September 30,
1999 1998 Change % 1999 1998 Change %
ELECTRIC UTILITY GENERATION (MWhs):
Hydroelectric 931,895 1,019,814 (87,919) (9)% 2,932,179 2,878,549 53,630 2 %
Coal Fired 1,308,562 1,257,906 50,656 4 % 3,558,263 3,263,362 294,901 9 %
Total 2,240,457 2,277,720 (37,263) (2)% 6,490,442 6,141,911 348,531 6 %
HEATING DEGREE DAYS: 494 193 301 156% 4,875 4,693 182 4 %
Normal 408 Normal 5,115
COAL SALES (thousand of tons):
Montana 2,686 2,769 (83) (3)% 7,759 7,819 (60) (1)%
Texas 2,405 2,530 (125) (5)% 6,613 6,395 218 3 %
Total 5,091 5,299 (208) (4)% 14,372 14,214 158 1 %
NONUTILITY OIL & GAS PRODUCTION SALES VOLUMES:
Oil (Bbls) 125,184 139,442 (14,258) (10%) 375,268 461,940 (86,672) (19%)
Natural Gas (Mcfs) 6,983,155 6,249,030 734,125 12% 20,718,255 19,133,313 1,584,942 8%
N G Liquids (Bbls) 130,838 147,674 (16,836) (11%) 383,678 461,189 (77,511) (17%)
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