United States
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, 2004.
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 001-31303
Black Hills Corporation
Incorporated in South Dakota
IRS Identification Number 46-0458824
625 Ninth Street
Rapid City, South
Dakota 57701
Registrant’s telephone number (605) 721-1700
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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes X No___
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.
Class Outstanding at April 30, 2004
Common stock, $1.00 par value 32,416,379 shares
1
TABLE OF CONTENTS
| Page | |||||
|---|---|---|---|---|---|
| PART 1. FINANCIAL INFORMATION | |||||
Item 1. Financial Statements |
|||||
Condensed Consolidated Statements of Income - | |||||
| Three Months Ended March 31, 2004 and 2003 | 3 | ||||
Condensed Consolidated Balance Sheets - | |||||
| March 31, 2004, December 31, 2003 and March 31, 2003 | 4 | ||||
Condensed Consolidated Statements of Cash Flows - | |||||
| Three Months Ended March 31, 2004 and 2003 | 5 | ||||
Notes to Condensed Consolidated Financial Statements | 6- | 26 | |||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 26- | 37 | |||
Item 3. Quantitative and Qualitative Disclosures about Market Risk | 38- | 39 | |||
Item 4. Controls and Procedures | 39 | ||||
PART II. OTHER INFORMATION | |||||
Item 1. Legal Proceedings | 40 | ||||
Item 6. Exhibits and Reports on Form 8-K | 40- | 41 | |||
Signatures | 42 | ||||
Exhibit Index | 43 | ||||
2
| Three Months Ended March 31 |
||||||||
|---|---|---|---|---|---|---|---|---|
| 2004 |
2003 | |||||||
| (in thousands, except per share amounts) |
||||||||
Operating revenues |
$ | 274,328 | $ | 291,445 | ||||
| Operating expenses: | ||||||||
| Fuel and purchased power | 172,906 | 188,685 | ||||||
| Operations and maintenance | 24,455 | 23,082 | ||||||
| Administrative and general | 18,010 | 17,783 | ||||||
| Depreciation, depletion and amortization | 22,272 | 19,047 | ||||||
| Taxes, other than income taxes | 8,431 | 7,385 | ||||||
| 246,074 | 255,982 | |||||||
| Equity in earnings (losses) of unconsolidated subsidiaries | (249 | ) | 456 | |||||
| Operating income | 28,005 | 35,919 | ||||||
| Other income (expense): | ||||||||
| Interest expense | (14,351 | ) | (12,302 | ) | ||||
| Interest income | 392 | 142 | ||||||
| Other expense | (103 | ) | (132 | ) | ||||
| Other income | 389 | 316 | ||||||
| (13,673 | ) | (11,976 | ) | |||||
| Income from continuing operations before minority interest, income taxes and | ||||||||
| change in accounting principles | 14,332 | 23,943 | ||||||
| Minority interest | (42 | ) | -- | |||||
| Income taxes | (4,326 | ) | (8,278 | ) | ||||
| Income from continuing operations before change in accounting principles | 9,964 | 15,665 | ||||||
| Income (loss) from discontinued operations, net of taxes | (178 | ) | 1,193 | |||||
| Change in accounting principles, net of taxes | -- | (2,680 | ) | |||||
| Net income | 9,786 | 14,178 | ||||||
| Preferred stock dividends | (88 | ) | (57 | ) | ||||
| Net income available for common stock | $ | 9,698 | $ | 14,121 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 32,291 | 27,041 | ||||||
| Diluted | 32,811 | 27,411 | ||||||
| Earnings per share: | ||||||||
| Basic- | ||||||||
| Continuing operations | $ | 0.31 | $ | 0.58 | ||||
| Discontinued operations | (0.01 | ) | 0.04 | |||||
| Change in accounting principles | -- | (0.10 | ) | |||||
| Total | $ | 0.30 | $ | 0.52 | ||||
| Diluted- | ||||||||
| Continuing operations | $ | 0.30 | $ | 0.58 | ||||
| Discontinued operations | -- | 0.04 | ||||||
| Change in accounting principles | -- | (0.10 | ) | |||||
| Total | $ | 0.30 | $ | 0.52 | ||||
| Dividends paid per share of common stock | $ | 0.31 | $ | 0.30 | ||||
The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated financial statements.
3
| March 31 2004 |
December 31 2003 |
March 31 2003 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except share amounts) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 191,484 | $ | 172,771 | $ | 63,095 | |||||
| Restricted cash | 1,070 | 1,350 | 1,070 | ||||||||
| Receivables (net of allowance for doubtful accounts | |||||||||||
| of $7,582; $7,345 and $3,929, respectively) | 205,052 | 201,992 | 210,825 | ||||||||
| Notes receivable | 239 | 554 | 554 | ||||||||
| Materials, supplies and fuel | 50,980 | 44,895 | 23,482 | ||||||||
| Derivative assets | 23,214 | 26,804 | 31,881 | ||||||||
| Prepaid income taxes | -- | 18,940 | -- | ||||||||
| Deferred income taxes | 5,350 | 4,229 | 131 | ||||||||
| Other assets | 5,678 | 8,324 | 6,460 | ||||||||
| Assets of discontinued operations | 3,876 | 3,893 | 175,599 | ||||||||
| 486,943 | 483,752 | 513,097 | |||||||||
| Investments | 27,560 | 27,347 | 20,282 | ||||||||
| Property, plant and equipment | 1,898,072 | 1,882,697 | 1,782,250 | ||||||||
| Less accumulated depreciation and depletion | (463,564 | ) | (440,275 | ) | (390,510 | ) | |||||
| 1,434,508 | 1,442,422 | 1,391,740 | |||||||||
| Other assets: | |||||||||||
| Derivative assets | 257 | 1,002 | 496 | ||||||||
| Goodwill | 30,144 | 30,144 | 23,922 | ||||||||
| Intangible assets (net of accumulated amortization | |||||||||||
| of $19,252, $18,423 and $16,601, respectively) | 39,241 | 40,070 | 77,023 | ||||||||
| Other | 36,717 | 38,488 | 21,414 | ||||||||
| 106,359 | 109,704 | 122,855 | |||||||||
| $ | 2,055,370 | $ | 2,063,225 | $ | 2,047,974 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 200,000 | $ | 162,722 | $ | 183,726 | |||||
| Accrued income taxes | 5,973 | 5,816 | 133 | ||||||||
| Accrued liabilities | 68,160 | 66,629 | 78,126 | ||||||||
| Current maturities of long-term debt | 15,723 | 17,659 | 16,543 | ||||||||
| Notes payable | -- | -- | 336,517 | ||||||||
| Derivative liabilities | 30,326 | 32,967 | 35,839 | ||||||||
| Liabilities of discontinued operations | 493 | 467 | 103,818 | ||||||||
| 320,675 | 286,260 | 754,702 | |||||||||
| Long-term debt, net of current maturities | 822,289 | 868,459 | 541,271 | ||||||||
| Deferred credits and other liabilities: | |||||||||||
| Deferred income taxes | 129,194 | 125,041 | 123,456 | ||||||||
| Derivative liabilities | 2,894 | 3,247 | 5,912 | ||||||||
| Other | 64,918 | 65,782 | 66,981 | ||||||||
| 197,006 | 194,070 | 196,349 | |||||||||
| Minority interest in subsidiaries | 4,731 | 4,689 | -- | ||||||||
| Stockholders' equity: | |||||||||||
| Preferred stock - no par Series 2000-A; 21,500 | |||||||||||
| shares authorized; Issued and outstanding: 6,839; | |||||||||||
| 7,771 and 5,177 shares, respectively | 7,167 | 8,143 | 5,549 | ||||||||
| Common stock equity- | |||||||||||
| Common stock $1 par value; 100,000,000 | |||||||||||
| shares authorized; | |||||||||||
| Issued 32,552,878; 32,447,765 and 27,627,211 | |||||||||||
| shares, respectively | 32,553 | 32,448 | 27,627 | ||||||||
| Additional paid-in capital | 382,782 | 379,271 | 259,878 | ||||||||
| Retained earnings | 304,249 | 304,567 | 286,655 | ||||||||
| Treasury stock at cost - 144,001; 150,048 and | |||||||||||
| 166,649 shares, respectively | (3,435 | ) | (3,560 | ) | (3,850 | ) | |||||
| Accumulated other comprehensive loss | (12,647 | ) | (11,122 | ) | (20,207 | ) | |||||
| 703,502 | 701,604 | 550,103 | |||||||||
| Total stockholders' equity | 710,669 | 709,747 | 555,652 | ||||||||
| $ | 2,055,370 | $ | 2,063,225 | $ | 2,047,974 | ||||||
The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated financial statements.
4
| Three Months Ended March 31 |
||||||||
|---|---|---|---|---|---|---|---|---|
| 2004 |
2003 | |||||||
| (in thousands) | ||||||||
| Operating activities: | ||||||||
| Net income available for common | $ | 9,698 | $ | 14,121 | ||||
| Adjustments to reconcile net income available for common to net cash | ||||||||
| provided by operating activities: | ||||||||
| Income (loss) from discontinued operations | 178 | (1,193 | ) | |||||
| Depreciation, depletion and amortization | 22,272 | 19,047 | ||||||
| Net change in derivative assets and liabilities | (1,139 | ) | (333 | ) | ||||
| Deferred income taxes | 3,886 | 2,965 | ||||||
| Undistributed earnings in associated companies | (234 | ) | (336 | ) | ||||
| Change in accounting principles | -- | 2,680 | ||||||
| Change in operating assets and liabilities- | ||||||||
| Accounts receivable and other current assets | 12,329 | (42,043 | ) | |||||
| Accounts payable and other current liabilities | 38,966 | 35,280 | ||||||
| Other operating activities | 179 | 3,063 | ||||||
| 86,135 | 33,251 | |||||||
| Investing activities: | ||||||||
| Property, plant and equipment additions | (13,544 | ) | (25,042 | ) | ||||
| Increase in notes recei | ||||||||