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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
( X ) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Fee required)
For the fiscal year ended December 31, 1993
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (No fee required)
For the transition period from _______________ to _______________
Commission File No. 0-692
NORTHWESTERN PUBLIC SERVICE COMPANY
(Exact name of registrant as specified in its charter)
Delaware 46-0172280
(State of Incorporation) (IRS Employer Identification No.)
33 Third Street SE
Huron, South Dakota 57350-1318
(Address of principal office) (Zip Code)
605-352-8411
(Registrant's telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $3.50 par value New York Stock Exchange
(Title of each class) (Name of each exchange
on which registered)
Securities registered pursuant to Section 12(g) of the Act:
Preferred Stock, Par Value $100
(Title of Class)
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. ( X ) Yes ( ) No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. ( X )
State the aggregate market value of the voting stock held by
nonaffiliated of the registrant:
$203,924,265 as of February 23, 1994
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date:
Common Stock, Par Value $3.50
7,677,232 shares outstanding at February 23, 1994
DOCUMENTS INCORPORATED BY REFERENCE:
1993 Annual Report to Stockholders . . . . . . . . Parts I and II
Proxy Statement for 1994 Annual Meeting . . . . . . . . Parts I and III
2
PART I
ITEM 1. BUSINESS
(a) GENERAL DEVELOPMENT OF BUSINESS
Northwestern Public Service Company ("Company") is an electric and gas
utility engaged in generating, transmitting, distributing, and selling
electric energy in eastern South Dakota, where it furnishes electric
service to 54,288 customers in more than 100 communities and adjacent rural
areas. The Company also purchases, distributes, sells, and transports
natural gas to 73,228 customers in four communities in Nebraska and 53
communities in eastern South Dakota. The Company, through its
subsidiaries, is also engaged in certain nonutility operations as described
on page 7. The Company was incorporated under the laws of the State of
Delaware in 1923 and is qualified to do business in the states of South
Dakota, Nebraska, Iowa, and North Dakota. The Company does not serve
customers in North Dakota or Iowa. The Company has its principal office at
33 Third Street SE, Huron, South Dakota 57350-1318. Its telephone number
is 605-352-8411.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The information required by this item 1(b) is incorporated by
reference to Note 11 of the "Notes to Consolidated Financial Statements" on
page 28 of the Company's 1993 Annual Report to Stockholders, filed as an
Exhibit hereto.
(c) NARRATIVE DESCRIPTION OF BUSINESS
Pursuant to the South Dakota Public Utilities Act, the South Dakota
Public Utilities Commission ("PUC") assigned as the Company's electric
service territory the communities and adjacent rural areas in which the
Company provides electric service in South Dakota. The Company has the
right to provide electric service to present and future electric customers
in its assigned service territory for so long as the service provided is
deemed adequate. Under the South Dakota Public Utilities Act, effective
July 1, 1976, the Company is not required to obtain or renew municipal
franchises to provide electric service within its assigned service
territory.
The Company has nonexclusive municipal franchises to provide gas
service in the Nebraska and South Dakota communities in which it provides
such service. The maximum term permitted under Nebraska law for such
franchises is 25 years while the maximum term permitted under South Dakota
law is 20 years. The Company's policy is to seek renewal of a franchise in
the last year of its term. The franchises expire at various dates between
1994 and 2018. The Company has never been denied the renewal of any of
these franchises and does not anticipate that any future renewals would be
withheld.
3
CONSTRUCTION PROGRAM
Construction expenditures in 1993 amounted to approximately
$19,708,000. Of such sum, approximately $7,388,000 represents extensions
and improvements to the Company's electric transmission and distribution
systems, approximately $1,288,000 represents expenditures at the three
large baseload plants in which the Company is a joint owner, and
approximately $947,000 represents additions to the Company's internal
generating units for peak load generating capacity. Approximately
$6,796,000 represents extensions and improvements to the Company's gas
distribution systems and approximately $832,000 represents additions to the
Company's internal units for peak load gas production. The remaining
amount represents expenditures for the Company's transportation vehicles,
and for general use facilities.
The Company's estimate of construction expenditures for 1994 is
$17,900,000. Approximately $1,200,000 is expected to be spent for
continuing improvements to the three major baseload plants in which the
Company is a joint owner. Approximately $7,900,000 is budgeted for
extensions and improvements to the Company's electric transmission and
distribution lines, and approximately $2,900,000 represents extensions,
improvements, and expansion of the gas distribution systems. Approximately
$2,500,000 is budgeted for work on a combination warehouse and operations
facility expected to provide cost savings and operating efficiencies. The
remaining amount represents expenditures for the Company's transportation
vehicles, general use facilities, and upgrades to computer software and
equipment.
Construction expenditures for the next five years are expected to
approximate $72 million. Information relating to capital requirements and
construction financing is incorporated by reference to "Management's
Discussion and Analysis" on pages 16-18 of the Company's 1993 Annual Report
to Stockholders, filed as an Exhibit hereto.
ELECTRIC BUSINESS
The Company shares in the ownership of the Big Stone Electric
Generating Plant ("Big Stone"), located near Big Stone City in northeastern
South Dakota. In North Dakota, the Company maintains transmission
facilities to interconnect with electric transmission lines of other
utilities and shares in the ownership of the Coyote I Electric Generating
Plant ("Coyote I"), located near Beulah, North Dakota. In Iowa, the
company shares in the ownership of Neal Electric Generating Unit #4 ("Neal
#4"), located near Sioux City.
FUEL SUPPLY. Lignite and sub-bituminous coal were utilized by the
Company as fuel for virtually all of the electric energy generated during
1993. North Dakota lignite is the primary fuel at Big Stone and Coyote I.
During 1993, the average heating value of lignite burned was 6,059 BTU per
pound at Big Stone and 6,936 BTU per pound at Coyote I. The sulfur content
of this lignite is typically between 0.80% and 1.2%. Neal #4 burns Wyoming
sub-bituminous coal which had an average heating value of 8,421 BTU per
pound during 1993. Typically, the sulphur content of this coal is between
0.30% and 0.40%.
4
The Company's fuel costs have remained relatively stable. The average
costs of fuels burned are shown below for the periods indicated:
Cost Per Million BTU % of 1993
Year Ended December 31 Megawatt Hours
Fuel Type 1991 1992 1993 Generated
--------- ---- ---- ---- --------------
Lignite - Big Stone $1.15 $1.16 $1.12 46%
Lignite - Coyote I** .86 .81 .84 23%
Sub-bituminous - Neal #4 .76 .77 .76 31%
Natural Gas 2.14 2.62 2.37 *
Oil 4.03 4.29 3.90 *
*Less than one-half of one percent.
**Includes pollution control reagent.
During 1993, the average delivered cost per ton of lignite was $13.50
to Big Stone and $10.71 to Coyote I. The average cost for coal delivered
to Neal #4 was $12.13 per ton for 1993. Such amounts include severance
taxes imposed by the state of North Dakota on lignite and a production tax
imposed by the state of Wyoming on other coal. While the effect on the
Company's fuel costs of future changes in severance or production taxes
cannot be predicted, any unforeseen changes in the Company's fuel costs may
be passed on to its customers through the operation of the fuel adjustment
clause. This feature of the Company's electric rates is more fully
discussed in the section entitled "Regulation".
The continued delivery of lignite and sub-bituminous coal to the three
large steam generating units in which the Company is part owner is
reasonably assured by contracts covering various periods of the operating
lives of these units. The Big Stone contract provides for adequate
supplies of lignite through purchases under the primary contract, which
expires in 1995. The Company is evaluating several fuel supply sources for
the Big Stone plant for the period 1995 through 1999 including North Dakota
lignite and Wyoming sub-bituminous coal. The contract for delivery of
lignite to the Coyote I plant, which expires in 2016, provides for an
adequate fuel supply for the estimated economic life of that plant. Neal
#4 receives Wyoming sub-bituminous coal under a long-term contract which
expires in 1998. In 1994, the Company, along with the other owners of Neal
#4, will begin to study options for the supply of coal for periods beyond
the expiration date.
Following test burns in 1990 and 1991, the owners of the Big Stone
plant received approval from the South Dakota Department of Environment and
Natural Resources to burn tire derived fuel ("TDF") and refuse derived fuel
("RDF"). The quantity of TDF and RDF that was burned in 1993 and that is
expected to be burned in 1994 is insignificant when compared to total coal
consumption at the plant.
5
The fossil fuel supplies for the Big Stone and Neal #4 plants are
delivered via unit trains belonging to the respective plants' owners and
locomotives of the Burlington Northern Railroad and the Chicago and
Northwestern Railroad, respectively. The lignite supply for Coyote I is
delivered via conveyor at this "mine-mouth" plant.
While the Company has no firm contract for diesel fuel for its other
electric generating plants, it has been able to purchase its diesel fuel
requirements in recent years from local suppliers and currently has in
storage an amount adequate to satisfy its normal requirements for such
fuel.
Additional information relating to jointly owned plants is
incorporated by reference to Note 7 of the "Notes to Consolidated
Statements" on page 26 of the Company's 1993 Annual Report to Stockholders
filed as an Exhibit hereto.
ELECTRIC SALES. The Company has relatively few large customers in its
service territory. By customer category, 33% of 1993 total electric sales
was from residential sales, 49% was from commercial and industrial sales,
1% was from street lighting and sales to public authorities, and 17% was
from sales for resale.
Sales for resale primarily include power pool sales to other
utilities. Power pool sales fluctuate from year to year depending on a
number of factors including the Company's availability of excess short-term
generation and the ability to sell the excess power to other utilities in
the power pool. The Company also sells power and energy at wholesale to
certain municipalities for resale and to various governmental agencies. In
1993, these sales accounted for less than 1% of total electric sales.
INTERCONNECTIONS AND POOLING AGREEMENTS. The Company has
interconnections with the transmission facilities of Otter Tail Power
Company ("Otter Tail"), Montana-Dakota Utilities Co. ("MDU"), Northern
States Power Company ("NSP") and WAPA; and has emergency interconnections
with transmission facilities of East River Electric Cooperative, Inc. and
West Central Electric Cooperative.
The Company is also a party to the Mid-Continent Area Power Pool
("MAPP") Agreement which forms a large area pool arrangement consisting of
45 utilities and power suppliers having transmission interconnections
located in a 9-state area in the North Central region of the United States
and in two Canadian provinces. The objective of MAPP is to accomplish
coordination of planning and operation of generation and interconnecting
transmission facilities to provide reliable and economical electric service
to members' customers, consistent with reasonable utilization of natural
resources and protection of the environment. While benefiting from the
advantages of the planning, coordination, and operations of MAPP, each
member has the right and obligation to own or otherwise provide the
facilities to meet its own requirements. The MAPP Agreement was accepted
for filing by the FERC.
6
These interconnections and pooling agreements enable the Company to
arrange purchases or sales of substantial quantities of electric power and
energy with other pool members and to participate in the benefits of pool
arrangements.
GAS BUSINESS
The Company owns and operates natural gas distribution systems serving
34,941 retail customers in 53 communities in eastern South Dakota, for
which it purchases gas from various gas marketing firms. The company has
service agreements with Northern Natural Gas Company ("NNG") providing for
firm transportation of natural gas. While NNG has eliminated nearly all of
its gas supply activities, the Company has supply contracts in place and
peak shaving capacity to meet its system needs.
The Company owns and operates natural gas distribution systems serving
38,287 retail customers in the village of Alda and the cities of Grand
Island, Kearney, and North Platte, Nebraska. It purchases much of its
natural gas for these systems from KN Gas Supply Co. under a seven-year
service agreement entered in 1993. The Company also purchases certain
quantities of gas for its Nebraska customers from various gas marketing
firms.
Both NNG and KN Interstate Gas Transmission Co. ("KN") have completed
restructuring proceedings with the FERC under Order 636 in which their
transportation, sales, and storage services were changed. The Company has
operated under the restructured environment during the winter of 1993-94.
Both NNG and KN provide firm and interruptible transportation service
on a nondiscriminatory basis. This allows gas distribution companies, such
as the Company, and individual customers to purchase gas directly from
producers, third parties, and various gas marketing entities and transport
it through the NNG and KN pipelines. During 1993, the company purchased
6,823,000 mcf (or 88% of its total requirements in South Dakota) and
2,938,000 mcf (or 41% of its requirements in Nebraska) from such other
sources for the Company's system supply.
REGULATION
The Company is a "public utility" within the meaning of the Federal
Power Act and the South Dakota Public Utilities Act and, as such, is
subject to the jurisdiction of, and regulation by, FERC with respect to
issuance of securities, the PUC with respect to electric service
territories, and both FERC and the PUC with respect to rates, service,
accounting records, and in other respects. The State of Nebraska has no
centralized regulatory agency which has jurisdiction over the Company's
operations in that state; however, the Company's natural gas rates are
subject to regulation by the municipalities in which it operates.
7
Under the South Dakota Public Utilities Act, enacted in 1975, a
requested rate increase may be implemented by the Company 30 days after the
date of its filing unless its effectiveness is suspended by the PUC and, in
such event, can be implemented subject to refund with interest six months
after the date of filing, unless sooner authorized by the PUC. The
Company's electric rate schedules provide that it may pass along to all
classes of customers qualified increases or decreases in the cost of fuel
used in its generating stations and in the cost of fuel included in
purchased power. A purchased gas adjustment provision in its gas rate
schedules permits the company to pass along to gas customers increases or
decreases in the cost of purchased gas.
The Company had no major general rate cases pending in South Dakota or
Nebraska during the three years ended December 31, 1993.
EMPLOYEES
At December 31, 1993, the Company had 473 employees. A three-year
collective bargaining agreement which expires June 30, 1995, covers 272
operating and clerical employees. The Company has never experienced a work
stoppage or strike and considers its relationship with its employees to be
very good.
NONUTILITY OPERATIONS
The Company has three wholly owned subsidiaries. Grant, Inc., which
holds title to property not used in the Company's utility business, was
incorporated under the laws of the State of South Dakota in 1972 and is
authorized to do business in the states of South Dakota and Nebraska.
Northwestern Systems, Inc. (NSI) was incorporated under the laws of the
State of South Dakota in 1986 to help market and develop the Company-
designed Customer Service System. In December 1992, NSI acquired a 60%
common stock ownership interest in a company that develops, manufacturers,
and markets multi-image photographic printers, related equipment, and
technologies. On October 1, 1993, NSI acquired the remaining 40% common
stock interest in that company. Northwestern Networks, Inc. was also
incorporated under the laws of South Dakota in 1986 for the purpose of
investing in a privately held entity that offers entertainment and
interactive information services to the lodging industry. Additional
information relating to nonutility business is incorporated by reference to
"Management's Discussion and Analysis" on pages 16-18 of the Company's 1993
Annual Report to Stockholders filed as an exhibit hereto.
ENVIRONMENTAL MATTERS
The Company is subject to regulation with regard to air and water
quality, solid waste disposal, and other environmental considerations by
Federal, state, and local government authorities. The application of
governmental requirements to protect the environment involves or may
involve review, certification, issuance of permits, or similar action by
government agencies or authorities, including the United States
8
Environmental Protection Agency ("EPA"), the South Dakota Department of
Water and Natural Resources, the North Dakota State Department of Health,
and the Iowa Department of Environmental Quality, as well as compliance
with decisions of the courts. Such requirements, particularly with regard
to emissions into the air and water, may substantially increase the cost to
the Company of construction and operation of electric generating
facilities. Such requirements may also necessitate additional investments
in new equipment at existing installations.
CLEAN AIR ACT. The Clean Air Act Amendments of 1990 (the Clean Air
Act) which stipulate limitations on sulfur dioxide and nitrogen oxide
emissions from certain coal-fired power plants will require the purchase of
additional emission allowances or a reduction in sulfur dioxide emissions
beginning in the year 2000 from Big Stone. The Company believes Big Stone
can most economically meet the sulfur dioxide emission requirements of the
Clean Air Act by switching its fuel source from North Dakota lignite to low-
sulfur western sub-bituminous coal available in the region. The Company's
other baseload plants, Coyote I and Neal #4, are expected to comply with
the sulfur dioxide emission limitations through the use of existing flue
gas scrubbing and low sulfur coal without the need for additional emission
allowances.
With regard to the Clean Air Act's nitrogen oxide emission
requirements, the Neal #4 wall-fired boiler is expected to meet the
emission limitations for such boilers. The Clean Air Act does not yet
specify nitrogen oxide limitations for boilers with cyclone burners such as
those used at Big Stone and Coyote I because practical low-nitrogen oxide
cyclone burner technology does not exist. It requires the EPA to establish
nitrogen oxide emission limitations before 1997 for cyclone boilers
including consideration that the cost to accomplish such limits be
comparable to retrofitting low-nitrogen oxide burner technology to other
types of boilers. In addition, it also requires future studies to
determine what controls, if any, should be imposed on coal-fired boilers to
control emissions of certain air toxics other than sulfur and nitrogen
oxides. Because of the uncertain nature of cyclone boiler nitrogen oxide
and air toxic emission limits, the Company cannot now determine the
additional costs, if any, it may incur due to these provisions of the Clean
Air Act.
PCBs. EPA has issued rules which regulate the continued use of
electrical equipment containing polychlorinated biphenyls (PCBs). In
addition, in 1990 the South Dakota Board of Minerals and the Environment
adopted regulations governing the treatment, storage, and disposal of PCBs.
The Company will use some PCB-contaminated equipment for its remaining
useful life, and the EPA and South Dakota regulations will govern the use
and disposal of this equipment.
STORAGE TANKS. In 1987, the South Dakota Water Management Board
adopted regulations imposing requirements upon the owners and operators of
aboveground and underground storage tanks. The Company's fuel oil storage
facilities at its generating plants in South Dakota are affected by the
aboveground tank regulations, and the Company has instituted procedures for
compliance.
9
COMPLIANCE. In addition to the Clean Air Act, the Company is also
subject to other environmental regulations. The Company believes that it
is in compliance with all presently applicable environmental protection
requirements and regulations. However, the Company is unable to forecast
the effect which future environmental regulations may ultimately have upon
the cost of its facilities and operations. The Company is conducting an
investigation of a former gas manufacturing site, and if waste materials
are found, the Company plans to take remedial action. Recovery of any
costs incurred will be sought from insurance carriers and through the
regulatory process. No administrative or judicial proceedings involving
the company are now pending or known by the Company to be contemplated
under presently effective environmental protection requirements.
SITING. The states of South Dakota, North Dakota, and Iowa have
enacted laws with respect to the siting of large electric generating plants
and transmission lines. The South Dakota PUC, the North Dakota Public
Service Commission, and the Iowa Utilities Board have been granted
authority in their respective states to issue site permits for nonexempt
facilities.
ITEM 2. PROPERTIES
ELECTRIC PROPERTY
The Company's electric properties consist of an interconnected and
integrated system. The Company, Otter Tail, and MDU jointly own Big Stone,
a 455,783 kilowatt ("kw") nameplate capacity lignite-fueled electric
generating plant and related transmission facilities. Big Stone is
operated by Otter Tail for the benefit of the owners. The Company owns
23.4% of the Big Stone Plant.
The Company is one of four power suppliers which jointly own Coyote I,
a 455,783 kw nameplate capacity lignite-fueled electric generating plant
and related transmission facilities located near Beulah, North Dakota. The
Company has a 10% interest in Coyote I, which is operated by MDU for the
benefit of the owners.
The Company is one of 14 power suppliers which jointly own Neal #4, a
639,999 kw nameplate capacity coal-fueled electric generating plant and
related transmission facilities located near Sioux City, Iowa. Midwest
Power Systems, Inc. is principal owner of Neal #4 and is the operator of
the unit. The Company has an 8.7% interest in Neal #4.
The Company has an undivided interest in these jointly owned
facilities and is responsible for its proportionate share of the capital
and operating costs while being entitled to its proportionate share of the
power generated. Each participant finances its own investment. The
Company's interest in each plant is reflected in the Consolidated Balance
Sheet on a pro rata basis, and its share of operating expenses is reflected
in the Consolidated Statement of Income and Retained Earnings.
10
In addition to its interest in Big Stone, Coyote I, and Neal #4, the
Company owns and operates 19 oil and gas-fired units for peaking and
reserve capacity.
As of December 31, 1993, the aggregate nameplate capacity of all
Company-owned electric generating units is 334,994 kw, with an aggregate
net summer peaking capacity of 307,442 kw and a net winter peaking capacity
of 328,210 kw. The Company's maximum peak hourly demand of 251,493 kw
occurred on July 17, 1991. In 1993, the Company's peak hourly demand was
237,188 kw.
The Company's interconnected transmission system consists of 318.5
miles operating at 115 kilovolts ("kv") and 894.8 miles operating at 69 kv
and 34.5 kv. The Company also owns three segments of transmission line,
which are not tied to its internal system, in connection with its joint
ownership in the three large steam generating plants. These lines consist
of 18.2 miles of 230 kv line from Big Stone, 25.4 miles of 345 kv line from
Neal #4, and 23.1 miles of 345 kv line from Coyote I. In addition to these
lines, the Company owns 1,701.7 miles of distribution lines serving
customers in more than 100 communities and adjacent rural areas. The
company owns 40 transmission substations with a total rated capacity of
1,128,917 kilovolt amperes ("kva"), two mobile substations with a total
rated capacity of 5,500 kva and 78 distribution substations with a total
rated capacity of 331,906 kva.
GAS PROPERTY
On December 31, 1993, the Company owned 888 miles of distribution
mains and appurtenant facilities in South Dakota. The Company also owns
propane-air facilities in Aberdeen, Brookings, Huron, and Mitchell, South
Dakota, having a total rated capacity of 15,500 mcf per day, which are
operated for standby and peak shaving purposes only.
On December 31, 1993, the Company owned 631 miles of distribution
mains and appurtenant facilities in Nebraska. The Company also owns
propane-air facilities at Kearney and North Platte, Nebraska, having a
total rated capacity of 11,500 mcf per day, which are operated for standby
and peak shaving purposes only.
ITEM 3. LEGAL PROCEEDINGS
The Company is not currently involved in any pending major litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No issues were submitted to a vote of security holders during the last
quarter of the period covered by this report.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
The information required by this Item 5 is shown in the table below.
Common stock was registered in the names of 8,231 stockholders at
December 31, 1993. The payment of dividends is subject to the restrictions
described in Note 5 of the "Notes to Consolidated Financial Statements" on
page 25 of the Company's 1993 Annual Report to Stockholders, filed as an
Exhibit hereto.
QUARTERLY COMMON STOCK INFORMATION
1993 High Low Dividends
---- ---- --- ---------
First $29 1/2 $26 1/4 $.405
Second 31 1/2 28 3/4 .405
Third 33 1/2 29 1/4 .405
Fourth 32 1/2 28 1/2 .415
1992 High Low Dividends
---- ---- --- ---------
First $28 3/4 $25 1/4 $.395
Second 27 1/2 24 5/8 .395
Third 28 1/4 23 1/2 .395
Fourth 28 1/4 25 1/4 .405
ITEM 6. SELECTED FINANCIAL DATA
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
(in thousands, except per share amounts)
Operating Revenues $153,257 $119,197 $122,900 $115,980 $117,671
Net Income 15,191 13,721 14,815 17,506 16,123
Earnings Per Common Share 1.96 1.77 1.88 2.23 2.04
Dividends Per Common Share 1.630 1.590 1.535 1.475 1.415
Total Assets 343,574 308,194 297,761 283,073 272,260
Long-Term Debt 127,200 106,572 93,236 79,469 80,702
Redeemable Preferred Stock 70 100 2,990 3,185 3,380
Selected financial data includes the operating results and balance sheet
amounts for Lucht Engineering, Inc. effective December 1, 1992, the date of
acquisition. Additional information relating to Lucht Engineering, Inc. is
incorporated by reference to "Management's Discussion and Analysis" on
pages 16-18 of the Company's 1993 Annual Report to Stockholders, filed as
an Exhibit hereto.
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ITEM 7. MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
The information required by this Item 7 is incorporated by reference
to "Management's Discussion and Analysis" on pages 16-18 and to Note 9 of
the "Notes to Consolidated Financial Statements" on page 27 of the
Company's 1993 Annual Report to Stockholders, filed as an Exhibit hereto.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item 8 is incorporated by reference
to the Company's financial statements and related footnotes on pages 20-28
of the Company's 1993 Annual Report to Stockholders, filed as an Exhibit
hereto.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in accountants or disagreements on
accounting principles or practices or financial statement disclosures.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) IDENTIFICATION OF DIRECTORS
The information regarding directors required by this Item 10 and
paragraphs (a) and (e) of Item 401 of Regulation S-K is incorporated by
reference to the information under "Election of Directors" in the Company's
definitive Proxy Statement dated March 15, 1994, and filed with the
Commission pursuant to Regulation 14A under the Securities Exchange Act of
1934 within 120 days after the close of the Company's fiscal year ended
December 31, 1993.
(b) & (e) IDENTIFICATION AND BUSINESS EXPERIENCE OF EXECUTIVE OFFICERS
R. A. Wilkens, Chairman of the Board, age 65
Chairman of the Board of Directors since February 1994. Formerly Chief
Executive Officer from 1990-1994; formerly President from 1980-1994.
M. D. Lewis, President and Chief Executive, age 46
President and Chief Executive Officer since February 1994; formerly
Executive Vice President-Corporate Services 1992-1994; formerly Vice
President-Corporate Services 1987-1992; Assistant Vice President-Corporate
Services 1985-1987.
W. D. Craig, Vice President-Gas Operations, age 57
Vice President-Gas Operations since September 1988, formerly Assistant Vice
President-Gas Operations June, 1988-September 1988; Manager-Gas Operations
March 1988-June 1988. Joined the Company in 1988. Formerly President &
COO of Hoosier Gas Corporation 1987-1988. Formerly Director-Gas Operations
of SIGECO 1985-1987.
A. D. Dietrich, Vice President-Legal, Corporate Secretary and Assistant
Treasurer, age 43
Vice President-Legal since May 1990; Assistant Treasurer since December
1990; Corporate Secretary since October 1989. Formerly Assistant Corporate
Secretary September 1989-October 1989; Corporate Attorney 1978-1989.
A. R. Donnell, Vice President-Electric Operations, age 50
Vice President-Electric Operations since July 1987; formerly Assistant Vice
President-Electric Operations June 1987-July 1987; Manager-Electric
Distribution 1985-June 1987; Manager-Special Projects 1977-1985.
T. A. Gulbranson, Vice President-Corporate Services, age 46
Vice President-Corporate Services since May 1993; formerly Vice President-
Community Development 1988-1993; formerly Division Manager-Webster 1983-
1988.
R. R. Hylland, Vice President-Finance and Corporate Development and
Treasurer, age 33
Vice President-Finance and Corporate Development and Treasurer since May
1993; formerly Vice President-Finance and Treasurer 1991-1994; formerly
Treasurer and Controller December 1990-April 1991; Controller and Assistant
Treasurer November 1989-December 1990; Controller July 1989-November 1989.
Joined the Company in July 1989. Formerly Senior Audit and Financial
Consulting Manager with Arthur Andersen & Co.
R. F. Leyendecker, Vice President-Rates & Regulation, age 48
Vice President-Rates & Regulation since 1987; formerly Assistant Vice
President-Rates & Regulation 1985-1987.
W. K. Lotsberg, Vice President-Consumer Affairs, age 51
Vice President-Consumer Affairs since March 1989; formerly Manager-Public
Affairs from 1980 to 1989.
D. C. Oberlander, Controller, age 48
Controller since April 1991; formerly Assistant Controller December 1990-
April 1991; Manager-Information Systems 1979-1990.
14
All of the executive officers of the registrant serve at the
discretion of the Board and are elected annually by the Board of Directors
following the Annual Meeting of Stockholders except for the positions of
Controller, Assistant Treasurer and Assistant Corporate Secretary, which
are appointed by the Board of Directors. No family relationships exist
between any officers of the Company.
(c) IDENTIFICATION OF CERTAIN SIGNIFICANT EMPLOYEES
None
(d) FAMILY RELATIONSHIPS
None
(f) INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
None
(g) PROMOTERS AND CONTROL PERSONS
None
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 is incorporated by reference
to the information under "Compensation of Directors and Executive Officers"
in the Company's definitive Proxy Statement dated March 15, 1994, and filed
with the Commission pursuant to Regulation 14A under the Securities
Exchange Act of 1934 within 120 days after the close of the Company's
fiscal year ended December 31, 1993.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item 12 is incorporated by reference
to the information under "Securities Ownership by Directors and Officers"
in the Company's definitive Proxy Statement dated March 15, 1994, and filed
with the Commission pursuant to Regulation 14A under the Securities
Exchange Act of 1934 within 120 days after the close of the Company's
fiscal year ended December 31, 1993.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has no relationships or transactions covered by this item.
15
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) DOCUMENTS FILED AS PART OF THIS REPORT
1. Financial Statements
See Table of Contents on page 17.
2. Financial Statement Schedules
See Table of Contents on page 17.
3. Exhibit Index
See Exhibit Index on pages 24-34.
(b) REPORTS ON FORM 8-K
On October 21, 1993, the Company filed a report on Form 8-K, reporting
under "Item 5 - Other Events" that LodgeNet Entertainment Corporation
("LEC") completed an initial public offering. LEC is a firm in which the
Company's wholly owned subsidiary, Northwestern Networks, Inc., ("NNI")
holds an investment. As a result of the initial public offering, NNI's
convertible preferred stock was converted to 1,121,000 shares of LEC common
stock, and NNI's 15% cumulative preferred stock was redeemed.
(c) EXHIBITS
See Exhibit Index on pages 24-34.
16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
NORTHWESTERN PUBLIC SERVICE COMPANY
/s/ M. D. Lewis
- ---------------------------------------
M. D. Lewis, Director and President and Chief Executive Officer
March 15, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ R. A. Wilkens
- ---------------------------------------
R. A. Wilkens, Chairman of the Board of Directors
- ---------------------------------------
/s/ M. D. Lewis
M. D. Lewis, Director and President and Chief Executive Officer
/s/ R. R. Hylland
- ---------------------------------------
R. R. Hylland, Vice President-Finance & Corporate Development & Treasurer
(Principal Financial Officer)
/s/ Don C. Oberlander
- ---------------------------------------
Don C. Oberlander, Controller (Principal Accounting Officer)
/s/ Herman Lerdal
- ---------------------------------------
Herman Lerdal, Director
/s/ Larry F. Ness
- ---------------------------------------
Larry F. Ness, Director
/s/ A. D. Schmidt
- ---------------------------------------
A. D. Schmidt, Director
/s/ Raymond M. Schutz
- ---------------------------------------
Raymond M. Schutz, Director
/s/ Bruce I. Smith
- ---------------------------------------
Bruce I. Smith, Director
/s/ Calvin Vaudrey
- ---------------------------------------
Calvin Vaudrey, Director
/s/ W. W. Wood
- ---------------------------------------
W. W. Wood, Director
17
TABLE OF CONTENTS
FINANCIAL STATEMENTS, SUPPLEMENTARY FINANCIAL DATA,
SUPPLEMENTAL FINANCIAL SCHEDULES INCLUDED IN
ANNUAL REPORT (FORM 10-K)
FOR THE YEAR ENDED DECEMBER 31, 1993
The following items are included in this annual report by reference
to the registrant's Annual Report to Stockholders for the year ended
December 31, 1993:
Page in
Annual Report
to Stockholders
---------------
Financial Statements:
Consolidated Statement of Income and Retained Earnings
for the Three Years Ended December 31, 1993 20
Consolidated Statement of Cash Flows
for the Three Years Ended December 31, 1993 21
Consolidated Balance Sheet, December 31, 1993 and 1992 22
Consolidated Statement of Capitalization,
December 31, 1993 and 1992 23
Notes to Consolidated Statements 24-28
Quarterly Unaudited Financial Data
for the Two Years Ended December 31, 1993 28
Report of Independent Public Accountants 19
The following supplemental financial data included herein should be
read in conjunction with the financial statements referenced above:
Page in
Form 10-K
---------
Report of Independent Public Accountants on Schedules 18
Supplemental Financial Schedules:
Schedule I - Other Investments 19
Schedule V - Property, Plant and Equipment 20
Schedule VI - Accumulated Depreciation and Amortization
of Property, Plant and Equipment 21
Schedule VIII - Valuation and Qualifying Accounts 22
Schedule IX - Short-Term Borrowings 23
Schedules other than those listed above are omitted because of the
absence of the conditions under which they are required or because the
information required is included in the financial statements or the notes
thereto.
18
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Northwestern Public Service Company:
We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements included in Northwestern Public
Service Company's annual report to shareholders incorporated by reference
in this Form 10-K, and have issued our report thereon dated February 1,
1994. Our audit was made for the purpose of forming an opinion on those
statements taken as a whole. The supplemental financial information and
schedules listed in the table of contents of financial statements are the
responsibility of the Company's management and are presented for purposes
of complying with the Securities and Exchange Commission's rules and are
not part of the basic financial statements. This information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, fairly states in all material
respects the financial data required to be set forth therein in relation to
the basic financial statements taken as a whole.
/s/ Arthur Andersen & Co.
- ---------------------------------------
Arthur Andersen & Co.
Minneapolis, Minnesota,
February 1, 1994
19
NORTHWESTERN PUBLIC SERVICE COMPANY AND SUBSIDIARIES
SCHEDULE I - OTHER INVESTMENTS
Column A Column B Column C Column D Column E
-------------- --------- ---------- ------------ -------------
Market Value Amount in
Number of at Dec. 31, 1993
Name of Issuer Shares Cost Dec. 31, 1993 Balance Sheet
-------------- --------- ---------- ------------ -------------
PREFERRED STOCK
- ---------------
Appalachian Power Co. 7.800% 3,732 $ 390,367 $ 401,657 $ 390,367
Atlantic City Electric 8.200% 10,000 1,025,718 1,100,000 1,025,718
Cincinnati Gas & Electric 7.375% 8,000 800,000 848,000 800,000
Cleveland Electric 8.800% 2,000 2,135,335 1,970,000 2,135,335
Connecticut Light & Power 9.000% 24,000 630,600 639,000 630,600
Delmarva Power & Light Co. 7.750% 18,100 494,583 486,438 494,583
Detroit Edison 7.750% 26,500 687,675 675,750 687,675
Duke Power Co. 6.375% 40,000 1,000,000 990,000 1,000,000
Duke Power Co. 7.040% 5,000 525,050 510,000 525,050
Duke Power Co. 7.120% 11,400 1,195,575 1,185,600 1,195,575
Duke Power Co. 7.850% 7,000 751,730 759,500 751,730
Duke Power Co. 7.500% 12,500 1,259,375 1,350,000 1,259,375
Duquesne Light Co. 7.500% 9,375 896,438 944,531 896,438
Florida Power & Light 8.625% 20,000 2,197,900 2,195,000 2,197,900
Houston Power & Light 8.500% 8,985 923,418 918,716 923,418
Jersey Central 8.480% 10,000 999,700 1,100,000 999,700
Jersey Central 8.650% 10,000 1,126,325 1,135,000 1,126,325
Louisiana Power & Light 8.000% 15,000 1,517,267 1,674,375 1,517,267
Montana Power Co. 6.875% 12,500 1,250,000 1,221,875 1,250,000
Morgan Stanley Group 7.375% 60,000 1,533,900 1,537,500 1,533,900
Northern Indiana Public Service 6.500% 7,500 763,295 796,875 763,295
Ohio Edison Co. 7.750% 50,000 1,302,500 1,268,750 1,302,500
Oklahoma Gas & Electric 4.800% 8,800 651,552 650,100 651,552
Oklahoma Gas & Electric 4.200% 11,900 771,596 766,063 771,596
PacifiCorp 7.700% 15,000 1,508,718 1,665,000 1,508,718
Pennsylvania Power & Light 7.000% 12,011 1,168,194 1,207,106 1,168,194
Philadelphia Electric Co. 7.480% 4,700 495,780 477,638 495,780
Public Service of Colorado 8.400% 8,774 882,840 890,561 882,840
Public Service Electric & Gas Co. 7.440% 5,000 559,400 561,250 559,400
Rochester Gas & Electric 8.250% 4,800 488,478 489,600 488,478
San Diego Gas & Electric 7.050% 43,500 1,133,775 1,196,250 1,133,775
Texas Utilities Electric Co. 6.980% 15,000 1,586,100 1,537,500 1,586,100
Virginia Electric & Power 7.300% 9,382 912,634 975,728 912,634
West Virginia Water Co. 9.500% 2,160 212,652 225,180 212,652
Western Massachusetts Electric 7.600% 12,316 288,687 321,756 288,687
----------- ------------ -------------
34,067,157 34,672,299 34,067,157
PRIVATELY HELD INVESTMENTS
- --------------------------
LodgeNet Entertainment Corporation
Common Stock 1,121,000 1,368,142 16,394,625 1,368,142
Subordinated Note, Variable Rate 6,000,000 6,000,000 6,000,000
Other Investments 3,416,435 3,416,435 3,416,435
----------- ------------ -------------
$44,851,734 $ 60,483,359 $ 44,851,734
=========== ============ =============
The market value of LodgeNet Entertainment Corp. Common Stock is based on the year-end market
price as quoted on the NASDAQ Exchange. The market value of the LodgeNet Entertainment Corporation
Subordinated Note is not established through a public market. Further information related to these
investments is incorporated by reference to "Management's Discussion and Analysis" on pages 16-18
and Note 1 of the "Notes to Consolidated Financial Statements" on page 24 of the Company's 1993
Annual Report to Stockholders, filed as an exhibit hereto.
20
NORTHWESTERN PUBLIC SERVICE COMPANY AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
Column A Column B Column C Column D Column E Column F
- --------------------------------------------- ------------- ------------ ------------ ------------- -------------
Balance Other Charges
Beginning Additions Add (Deduct) Balance
Classification of Period at Cost Retirements End of Period
- --------------------------------------------- ------------- ------------ ------------ ------------- -------------
FOR THE YEAR ENDED DECEMBER 31, 1993
- ------------------------------------
UTILITY PLANT, at original cost:
ELECTRIC-
Production $ 135,985,240 $ 11,839,761 $ (762,332) $ (6,410) $ 147,056,259
Transmission 56,960,370 595,227 (81,155) 650,506 58,124,948
Distribution 72,269,961 4,711,271 (579,763) (646,928) 75,754,541
General 7,999,975 940,426 (204,926) (118,955) 8,616,520
Construction work in progress 3,542,403 928,432 0 0 4,470,835
Completed construction not classified 11,440,611 (8,483,882) 0 0 2,956,729
------------- ------------ ------------ ------------- -------------
Total 288,198,560 10,531,235 (1,628,176) (121,787) 296,979,832
------------- ------------ ------------ ------------- -------------
GAS-
Manufactured gas production 2,072,304 25,233 (1,497) 98 2,096,138
Distribution 37,829,690 4,868,057 (136,088) 0 42,561,659
General 4,148,046 528,394 (68,937) (18,622) 4,588,881
Construction work in progress 1,156,189 1,257,135 0 2,413,324
Completed construction not classified 2,689,198 1,478,693 0 0 4,167,891
------------- ------------ ------------ ------------- -------------
Total 47,895,427 8,157,512 (206,522) (18,524) 55,827,893
------------- ------------ ------------ ------------- -------------
COMMON-
General 14,798,045 1,518,620 (668,077) 140,311 15,788,899
Construction work in progress 926,277 (417,306) 0 0 508,971
------------- ------------ ------------ ------------- -------------
Total 15,724,322 1,101,314 (668,077) 140,311 16,297,870
------------- ------------ ------------ ------------- -------------
Total utility plant $ 351,818,309 $ 19,790,061 $ (2,502,775) $ 0 $ 369,105,595
============= ============ ============ ============= =============
FOR THE YEAR ENDED DECEMBER 31, 1992
- ------------------------------------
UTILITY PLANT, at original cost:
ELECTRIC-
Production $ 135,510,143 $ 719,371 $ (244,274) $ 0 $ 135,985,240
Transmission 55,414,015 2,021,369 (354,638) (120,376) 56,960,370
Distribution 66,897,734 6,241,903 (990,052) 120,376 72,269,961
General 6,887,302 1,162,190 (31,752) (17,765) 7,999,975
Construction work in progress 6,497,046 (2,954,643) 0 0 3,542,403
Completed construction not classified 6,720,860 4,719,751 0 0 11,440,611
------------- ------------ ------------ ------------- -------------
Total 277,927,100 11,909,941 (1,620,716) (17,765) 288,198,560
------------- ------------ ------------ ------------- -------------
GAS-
Manufactured gas production 2,062,144 11,044 (884) 0 2,072,304
Distribution 34,680,946 3,232,663 (83,919) 0 37,829,690
General 3,558,429 622,178 (54,289) 21,728 4,148,046
Construction work in progress 169,117 987,072 0 0 1,156,189
Completed construction not classified 1,974,855 714,343 0 0 2,689,198
------------- ------------ ------------ ------------- -------------
Total 42,445,491 5,567,300 (139,092) 21,728 47,895,427
------------- ------------ ------------ ------------- -------------
COMMON-
General 14,457,220 645,244 (300,456) (3,963) 14,798,045
Construction work in progress 275,335 650,942 0 0 926,277
------------- ------------ ------------ ------------- -------------
Total 14,732,555 1,296,186 (300,456) (3,963) 15,724,322
------------- ------------ ------------ ------------- -------------
Total utility plant $ 335,105,146 $ 18,773,427 $ (2,060,264) $ 0 $ 351,818,309
============= ============ ============ ============= =============
FOR THE YEAR ENDED DECEMBER 31, 1991
- ------------------------------------
UTILITY PLANT, at original cost:
ELECTRIC-
Production $ 134,748,824 $ 2,495,206 $ (1,699,570) $ (34,317) $ 135,510,143
Transmission 53,454,219 2,195,480 (337,579) 101,895 55,414,015
Distribution 62,787,254 5,195,027 (1,020,315) (64,232) 66,897,734
General 5,894,663 1,076,085 (93,289) 9,843 6,887,302
Construction work in progress 5,160,594 1,336,452 0 0 6,497,046
Completed construction not classified 1,400,569 5,320,291 0 0 6,720,860
------------- ------------ ------------ ------------- -------------
Total 263,446,123 17,618,541 (3,150,753) 13,189 277,927,100
------------- ------------ ------------ ------------- -------------
GAS-
Manufactured gas production 2,053,346 9,398 (600) 0 2,062,144
Distribution 32,480,146 2,317,967 (117,167) 0 34,680,946
General 3,250,026 517,239 (211,748) 2,912 3,558,429
Construction work in progress 479,559 (310,442) 0 0 169,117
Completed construction not classified 0 1,974,855 0 0 1,974,855
------------- ------------ ------------ ------------- -------------
Total 38,263,077 4,509,017 (329,515) 2,912 42,445,491
------------- ------------ ------------ ------------- -------------
COMMON-
General 14,134,649 1,253,483 (914,811) (16,101) 14,457,220
Construction work in progress 237,568 37,767 0 0 275,335
------------- ------------ ------------ ------------- -------------
Total 14,372,217 1,291,250 (914,811) (16,101) 14,732,555
------------- ------------ ------------ ------------- -------------
Total utility plant $ 316,081,417 $ 23,418,808 $ (4,395,079) $ 0 $ 335,105,146
============= ============ ============ ============= =============
All Other Charges were property reclassifications.
21
NORTHWESTERN PUBLIC SERVICE COMPANY AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
Column A Column B Column C Column D Column E Column F
- --------------------------------- ------------- ------------ ------------ --------- -------------
Additions
Balance Charged to
Beginning Costs and Other Balance
Description of Period Expenses Retirements Changes End of Period
- --------------------------------- ------------- ------------ ------------ --------- -------------
FOR THE YEAR ENDED DECEMBER 31, 1993
- ------------------------------------
Electric plant $ 98,798,982 $ 9,261,801 $ (2,135,335) $ 0 $ 105,925,448
Gas plant 18,229,267 1,573,416 (299,933) 0 19,502,750
Common plant 4,445,279 677,268 (648,936) 0 4,473,611
Limited term utility investments 611,909 96,756 0 0 708,665
------------- ------------ ------------ --------- -------------
$ 122,085,437 $ 11,609,241 $ (3,084,204) $ 0 $ 130,610,474
============= ============ ============ ========= =============
FOR THE YEAR ENDED DECEMBER 31, 1992
- ------------------------------------
Electric plant $ 91,592,656 $ 8,896,493 $ (1,690,167) $ 0 $ 98,798,982
Gas plant 17,005,316 1,412,942 (188,991) 0 18,229,267
Common plant 4,086,031 659,403 (300,155) 0 4,445,279
Limited term utility investments 521,008 90,901 0 0 611,909
------------- ------------ ------------ --------- -------------
$ 113,205,011 $ 11,059,739 $ (2,179,313) $ 0 $ 122,085,437
============= ============ ============ ========= =============
FOR THE YEAR ENDED DECEMBER 31, 1991
- ------------------------------------
Electric plant $ 86,356,154 $ 8,401,014 $ (3,164,512) $ 0 $ 91,592,656
Gas plant 16,126,315 1,268,139 (389,138) 0 17,005,316
Common plant 4,215,079 689,391 (818,439) 0 4,086,031
Limited term utility investments 419,793 101,215 0 0 521,008
------------- ------------ ------------ --------- -------------
$ 107,117,341 $ 10,459,759 $ (4,372,089) $ 0 $ 113,205,011
============= ============ ============ ========= =============
22
NORTHWESTERN PUBLIC SERVICE COMPANY AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
Column A Column B Column C Column D Column E
- ---------------------------- ----------- --------------------- --------- -----------
Additions
---------------------
Balance Charged to Charged Balance
Beginning Costs and to Other Deductions End
Description of Period Expenses Expenses of Period
- ---------------------------- --------- ---------- --------- --------- -----------
FOR THE YEAR ENDED DECEMBER 31, 1993
- ------------------------------------
RESERVES DEDUCTED
FROM APPLICABLE ASSETS:
Uncollectible accounts $ 300,000 $ 249,455 $ 0 $(149,455) $ 400,000
=========== ========= ======== ========= ===========
OTHER DEFERRED CREDITS:
Reserve for decommissioning $ 6,264,998 $ 504,633 $ 0 $ 0 $ 6,769,631
=========== ========= ======== ========= ===========
FOR THE YEAR ENDED DECEMBER 31, 1992
- ------------------------------------
RESERVES DEDUCTED
FROM APPLICABLE ASSETS:
Uncollectible accounts $ 300,000 $ 93,033 $ 0 $ (93,033) $ 300,000
=========== ========= ======== ========= ===========
OTHER DEFERRED CREDITS:
Reserve for decommissioning $ 5,760,197 $ 504,801 $ 0 $ 0 $ 6,264,998
=========== ========= ======== ========= ===========
FOR THE YEAR ENDED DECEMBER 31, 1991
- ------------------------------------
RESERVES DEDUCTED
FROM APPLICABLE ASSETS:
Uncollectible accounts $ 300,000 $ 156,871 $ 0 $(156,871) $ 300,000
=========== ========= ======== ========= ===========
OTHER DEFERRED CREDITS:
Reserve for decommissioning $ 5,262,242 $ 497,955 $ 0 $ 0 $ 5,760,197
=========== ========= ======== ========= ===========
All deductions from reserves were for purposes for which such reserves were created.
23
NORTHWESTERN PUBLIC SERVICE COMPANY AND SUBSIDIARIES
SCHEDULE IX - SHORT-TERM BORROWINGS
Column A Column B Column C Column D Column E Column F
- --------------------- ---------- --------- ------------ ----------- ---------
Average Weighted
Weighted Maximum Amount Average
Balance Average Amount Outstanding Interest Rate
Category of Aggregate at End Interest Outstanding During 1993 During 1993
Short-Term Borrowings of Period Rate During 1993
- --------------------- ---------- --------- ------------ ----------- ---------
FOR THE YEAR ENDED DECEMBER 31, 1993
- ------------------------------------
Commercial Paper $ 0 0.00% $ 10,000,000 $ 4,833,333 3.28%
========== ========= ============ =========== =========
Calculated using the average of month end balances.
Calculated using the actual days and interest rates the commercial paper was outstanding.
24
EXHIBIT INDEX TO ANNUAL REPORT ON FORM 10-K
FOR YEAR ENDED DECEMBER 31, 1993
(3) ARTICLES OF INCORPORATION AND BY-LAWS
3(a)(1)
Registrant's Restated Certificate of Incorporation, dated February 7, 1990,
is incorporated by reference to Exhibit 3(a)(1) to Form 10-K for the year
ended December 31, 1989, Commission File No. 0-692.
3(a)(2)
Certificate of Retirement of Preferred Stocks, dated January 13, 1992, is
incorporated by reference to Exhibit 3(a)(2) to Form 10-K for the year
ended December 31, 1991, Commission File No. 0-692.
3(b)
Registrant's By-Laws, as amended, dated December 1, 1990, are incorporated
by reference to Exhibit 3(b) to Form 10-K for the year ended December 31,
1990, Commission File No. 0-692.
(4) INDENTURES AND POLLUTION CONTROL FACILITY OBLIGATIONS
4(a)(1)
Indenture, dated August 1, 1940, executed by the Company to The Chase
Manhattan Bank (N.A.) and J. J. O'Connell, as Trustees, and supplemental
and amendatory indentures thereto are incorporated by reference to
Exhibit 2 to Form 12-K for the year ended December 31, 1970, Commission
File No. 2-4472.
4(a)(2)
Supplemental Indenture, dated August 1, 1972, executed by the Company to
The Chase Manhattan Bank (N.A.) and J. J. O'Connell, as Trustees, is
incorporated by reference to Exhibit 2 to Form 8-K for the month of August,
1972, Commission File No. 2-4472.
4(a)(3)
Supplemental Indenture, dated July 1, 1973, executed by the Company to The
Chase Manhattan Bank (N.A.) and J. J. O'Connell, as Trustees, is
incorporated by reference to Exhibit 1 to Form 8-K for the month of July,
1973, Commission File No. 2-4472.
25
4(a)(4)
Supplemental Indenture, dated November 14, 1974, executed by the Company to
The Chase Manhattan Bank (N.A.) and J. J. O'Connell, as Trustees, is
incorporated by reference to Exhibit 1 to Form 8-K for the month of
November, 1974, Commission File No. 2-4472.
4(a)(5)
Supplemental Indenture, dated May 1, 1975, executed by the Company to The
Chase Manhattan Bank (N.A.) and J. J. O'Connell, as Trustees, is
incorporated by reference to Exhibit 2 to Form 8-K for the month of May,
1975, Commission File No. 2-4472.
4(a)(6)
Supplemental Indenture, dated June 1, 1977, executed by the Company to The
Chase Manhattan Bank (N.A.) and J. J. O'Connell, as Trustees, is
incorporated by reference to Exhibit 2(a)(34) to Registration Statement on
Form S-7 (Reg. No. 2-58825).
4(a)(7)
Supplemental Indenture, dated July 1, 1978, executed by the Company to The
Chase Manhattan Bank (N.A.) and J. J. O'Connell, as Trustees, is
incorporated by reference to Exhibit 2(a)(43) to Registration Statement on
Form S-7 (Reg. No. 2-63083).
4(a)(8)
Supplemental Indenture, dated December 1, 1978, executed by the Company to
The Chase Manhattan Bank (N.A.) and J. J. O'Connell, as Trustees, is
incorporated by reference to Exhibit 11 to Form 10-K for the year ended
December 31, 1978, Commission File No. 0-692.
4(a)(9)
Registrant's Supplemental Indenture, dated May 6, 1987, is incorporated by
reference to Exhibit 3(a) to Form 10-Q for the quarter ended September 30,
1987, Commission File No. 0-692.
4(a)(10)
Supplemental Indenture, dated November 1, 1989, executed by the Company to
the Chase Manhattan Bank (N.A.) and Vincent J. Marino, as Trustees, is
incorporated by reference to Exhibit 4(a)(10) to Form 10-K for the year
ended December 31, 1989, Commission File No. 0-692.
26
4(a)(11)(i)
Supplemental Indenture, dated July 15, 1991, executed by the Company to the
Chase Manhattan Bank (N.A.) and C. J. Heinzelmann, as Trustees, is
incorporated by reference to Exhibit 4(a)(11)(i) to Form 8-K, dated
August 1, 1991, Commission File No. 0-692.
4(a)(12)
Supplemental Indenture, dated November 15, 1991, is incorporated by
reference to Exhibit 4(a)(12) to Form 10-K for the year ended December 31,
1991, Commission File No. 0-692.
4(a)(13)
Supplemental Indenture, dated September 1, 1992, executed by the Company to
the Chase Manhattan Bank (N.A.) and C. J. Heinzelmann, as Trustees, is
incorporated by reference to Exhibit 4(a)(11)(i) to Form 8-K, dated
September 18, 1992, Commission File No. 0-692.
4(a)(14)
Underwriting Agreement dated August 16, 1993 among the Company, Morgan
Stanley & Co. Incorporated, Lehman Brothers Inc. and NatWest Capital
Markets Limited, is incorporated by reference to Exhibit 1 of Registrant's
Report on Form 8-K, dated August 16, 1993, Commission File No. 0-692.
4(a)(15)
General Mortgage Indenture and Deed of Trust dated as of August 1, 1993
from the Company to The Chase Manhattan Bank (National Association), as
Trustee, is incorporated by reference to Exhibit 4(a) of Form 8-K, dated
August 16, 1993, Commission File No. 0-692.
4(a)(16)
Supplemental Indenture dated as of August 15, 1993 to the General Mortgage
Indenture and Deed of Trust dated as of August 1, 1993 executed by the
Company to The Chase Manhattan Bank (National Association), as Trustee, is
incorporated by reference to Exhibit 4(b) of Form 8-K, dated August 16,
1993, Commission File No. 0-692.
4(a)(17)
Supplemental Indenture dated August 15, 1993 to the Indenture dated
August 1, 1940 from the Company to The Chase Manhattan Bank (National
Association) and C. J. Heinzelmann, as successor Trustees, is incorporated
by reference to Exhibit 4(c) of Form 8-K, dated August 16, 1993, Commission
File No. 0-692.
27
4(b)(1)
Copy of Sale Agreement between Company and Mercer County, North Dakota,
dated June 1, 1993, related to issuance of Pollution Control Refunding
Revenue Bonds (Northwestern Public Service Company Project) Series 1993, is
incorporated by reference to Exhibit 4(b)(1) of Registrant's report on Form
10-Q for the quarter ending June 30, 1993, Commission File No. 0-692.
4(b)(2)
Copy of Loan Agreement between Company and Grant County, South Dakota,
dated June 1, 1993, related to issuance of Pollution Control Refunding
Revenue Bonds (Northwestern Public Service Company Project) Series 1993A,
is incorporated by reference to Exhibit 4(b)(2) of Registrant's report on
Form 10-Q for the quarter ending June 30, 1993, Commission File No. 0-692.
4(b)(3)
Copy of Loan Agreement between Company and Grant County, South Dakota,
dated June 1, 1993, related to issuance of Pollution Control Refunding
Revenue Bonds (Northwestern Public Service Company Project) Series 1993B,
is incorporated by reference to Exhibit 4(b)(3) of Registrant's report on
Form 10-Q for the quarter ending June 30, 1993, Commission File No. 0-692.
4(b)(4)
Copy of Loan Agreement between Company and City of Salix, Iowa, dated June
1, 1993, related to issuance of Pollution Control Refunding Revenue Bonds
(Northwestern Public Service Company Project) Series 1993, is incorporated
by reference to Exhibit 4(b)(4) of Registrant's report on Form 10-Q for the
quarter ending June 30, 1993, Commission File No. 0-692.
(10) MATERIAL CONTRACTS
10(a)(1)(i)
Copy of Big Stone Plant Agreement, an agreement between Otter Tail Power
Company, Montana-Dakota Utilities Co. and Northwestern Public Service
Company for sharing ownership of generating plant, dated January 7, 1970,
is incorporated by reference to Exhibit 6 to Form 12-K for the year ended
December 31, 1971, Commission File No. 2-4472.
10(a)(1)(ii)
Copy of Supplemental Agreement No. 1 to Big Stone Plant Agreement, dated
July 1, 1983, is incorporated by reference to Exhibit 10(a)(1)(ii) to
Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(a)(1)(iii)
Copy of Supplemental Agreement No. 2 to Big Stone Plant Agreement, dated
March 1, 1985, is incorporated by reference to Exhibit 10(a)(1)(iii) to
Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
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10(a)(1)(iv)
Copy of Supplemental Agreement No. 3 to Big Stone Plant Agreement, dated
March 31, 1986, is incorporated by reference to Exhibit 10(a)(1)(iv) to
Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(a)(2)(i)
Copy of Big Stone Plant Coal Agreement between Otter Tail Power Company,
Montana-Dakota Utilities Co., and Northwestern Public Service Company and
Knife River Coal Mining Company, dated January 1, 1972, is incorporated by
reference to Exhibit 5 to Form 10-K for the year ended December 31, 1980.
10(a)(2)(ii)
Copy of Amendment to Big Stone Plant Coal Agreement, dated June 25, 1992,
is incorporated by reference to Exhibit 10(a)(2)(ii) to Form 10-K for the
year ended December 31, 1992, commission File No. 0-692.
10(a)(3)(i)
Copy of Big Stone Plant Transmission Facilities Agreement between Otter
Tail Power Company, Montana-Dakota Utilities Co., and Northwestern Public
Service Company, dated April 3, 1972, is incorporated by reference to
Exhibit 10(a)(3)(i) to Form 10-K for the year ended December 31, 1988,
Commission File No. 0-692.
10(a)(3)(ii)
Copy of Supplement No. 1 to Big Stone Plant Transmission Facilities
Agreement, dated October 1, 1974, is incorporated by reference to
Exhibit 10(a)(3)(ii) to Form 10-K for the year ended December 31, 1988,
Commission File No. 0-692.
10(a)(3)(iii)
Copy of Supplement No. 2 to Big Stone Plant Transmission Facilities
Agreement, dated June 10, 1976, is incorporated by reference to
Exhibit 10(a)(3)(iii) to Form 10-K for the year ended December 31, 1988,
Commission File No. 0-692.
10(a)(3)(iv)
Copy of Supplement No. 3 to Big Stone Plant Transmission Facilities
Agreement, dated October 1, 1982, is incorporated by reference to
Exhibit 10(a)(3)(iv) to Form 10-K for the year ended December 31, 1988,
Commission File No. 0-692.
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10(a)(3)(v)
Copy of Supplement No. 4 to Big Stone Plant Transmission Facilities
Agreement, dated October 1, 1982, is incorporated by reference to
Exhibit 10(a)(3)(v) to Form 10-K for the year ended December 31, 1988,
Commission File No. 0-692.
10(a)(3)(vi)
Copy of Supplement No. 5 to Big Stone Plant Transmission Facilities
Agreement, dated March 1, 1985, is incorporated by reference to
Exhibit 10(a)(3)(vi) to Form 10-K for the year ended December 31, 1988,
Commission File No. 0-692.
10(a)(3)(vii)
Copy of Supplement No. 6 to Big Stone Plant Transmission Facilities
Agreement, dated March 31, 1986, is incorporated by reference to
Exhibit 10(a)(3)(vii) to Form 10-K for the year ended December 31, 1988,
Commission File No. 0-692.
10(b)(1)(i)
Copy of Amendment to Ownership Agreement for George Neal Generating Station
Unit 4, dated October 30, 1975, to reflect Registrant's ownership interest
of 50,000 KW (8.681%), is incorporated by reference to Exhibit 10 to
Form 12-K for the year ended December 31, 1975, Commission File No. 2-4472.
10(b)(1)(ii)
Copy of Second Amendment to Ownership Agreement for George Neal Generating
Station Unit 4, dated October 30, 1975, is incorporated by reference to
Exhibit 10(b)(1)(ii) to Form 10-K for the year ended December 31, 1988,
Commission File No. 0-692.
10(b)(1)(iii)
Copy of Third Amendment to Ownership Agreement for George Neal Generating
Station Unit 4, dated December 31, 1984, is incorporated by reference to
Exhibit 10(b)(1)(iii) to Form 10-K for the year ended December 31, 1988,
Commission File No. 0-692.
10(b)(2)(i)
Copy of Coal Sales and Purchase Agreement, between Iowa Public Service
Company (as agent for the owners of the George Neal Generating Station
Unit 4) and Carter Oil Company, dated September 29, 1977, is incorporated
by reference to Exhibit 13 to Form 10-K for the year ended December 31,
1977, Commission File No. 0-692.
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10(b)(2)(ii)
Copy of Notice of Election to Extend Coal Contract with Carter Oil
Company, dated November 2, 1978, is incorporated by reference to
Exhibit 10(b)(2)(ii) to Form 10-K for the year ended December 31, 1988,
Commission File No. 0-692.
10(b)(2)(iii)
Copy of revised Exhibit "A", dated May 1, 1986 to Coal Sales and Purchase
Agreement, dated September 29, 1977, is incorporated by reference to
Exhibit 10(b)(2)(iii) to Form 10-K for the year ended December 31, 1990,
Commission File No. 0-692.
10(b)(3)(i)
Copy of Transmission Facilities and Operating Agreement for George Neal
Generating Station Unit 4, entered by and between Iowa Public Service
Company, Northwestern Public Service Company, & other plant owners, dated
October 24, 1984, is incorporated by reference to Exhibit 10(b)(3)(i) to
Form 10-K for the year ended December 31, 1988, Commission File No. 0-692.
10(b)(3)(ii)
Copy of First Amendment to Transmission Facilities and Operating Agreement
for George Neal Generating Station Unit 4, dated December 31, 1984, is
incorporated by reference to Exhibit 10(b)(3)(ii) to Form 10-K for the year
ended December 31, 1988, Commission File No. 0-692.
10(c)(1)(i)
Copy of Agreement for Sharing Ownership of Generating Unit No. 1, Coyote
Station, by and between Otter Tail Power Company, Minnkota Power
Cooperative, Inc., Montana-Dakota Utilities Co., Minnesota Power & Light
Company, & Northwestern Public Service Company, dated December 31, 1977, is
incorporated by reference to Exhibit 15 to Form 10-K for the year ended
December 31, 1978, Commission File No. 0-692.
10(c)(1)(ii)
Copy of Supplemental Agreement No. 1 to Agreement for Sharing Ownership of
Generating Unit No. 1, Coyote Station, dated December 31, 1977, is
incorporated by reference to Exhibit 16 to Form 10-K for the year ended
December 31, 1978, Commission File No. 0-692.
10(c)(1)(iii)
Copy of Amendment No. 2 to Agreement for Sharing Ownership of Generating
Unit No. 1, Coyote Station, Amendment No. 1 to Coyote 1 Station
Transmission Facilities Agreement, and Amendment No. 2 to Coyote Plant Coal
Agreement, dated March 1, 1981, is incorporated by reference to
Exhibit 10(c)(1)(iii) to Form 10-K for the year ended December 31, 1988,
Commission File No. 0-692.
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10(c)(1)(iv)
Copy of Amendment No. 3 to Agreement for Sharing Ownership of Generating
Unit No. 1, Coyote Station, Amendment No. 2 to Coyote 1 Station
Transmission Facilities Agreement, and Amendment No. 5 to Coyote Plant Coal
Agreement, dated September 5, 1985, is incorporated by reference to
Exhibit 10(c)(1)(iv) to Form 10-K for the year ended December 31, 1988,
Commission File No. 0-692.
10(c)(2)(i)
Copy of Coyote Plant Coal Agreement, by and between Otter Tail Power
Company, Minnkota Power Cooperative, Inc., Montana-Dakota Utilities Co.,
Minnesota Power & Light Company, & Northwestern Public Service Company and
Knife River Coal Mining Company, and Addendum to Coyote Plant Coal
Agreement, both dated January 1, 1978, are incorporated by reference to
Exhibit 17 to Form 10-K for the year ended December 31, 1979, Commission
File No. 0-692.
10(c)(2)(ii)
Copy of Addendum to Coyote Plant Coal Agreement, dated March 10, 1980, is
incorporated by reference to Exhibit 10(c)(2)(ii) to Form 10-K for the year
ended December 31, 1988, Commission File No. 0-692.
10(c)(2)(iii)
Copy of Amendment to Coyote Plant Coal Agreement, dated May 28, 1981, is
incorporated by reference to Exhibit 10(c)(2)(iii) to Form 10-K for the
year ended December 31, 1988, Commission File No. 0-692.
10(c)(2)(iv)
Copy of Fourth Amendment to Coyote Plant Coal Agreement, dated August 19,
1985, is incorporated by reference to Exhibit 10(c)(2)(iv) to Form 10-K for
the year ended December 31, 1988, Commission File No. 0-692.
10(c)(3)(i)
Copy of Coyote 1 Station Transmission Facilities Agreement, by and between
Otter Tail Power Company, Minnkota Power Cooperative, Inc., Montana-Dakota
Utilities Co., Minnesota Power Company, & Northwestern Public Service
Company, dated November 30, 1978, is incorporated by reference to
Exhibit 10(c)(3)(i) to Form 10-K for the year ended December 31, 1988,
Commission File No. 0-692.
10(c)(3)(ii)
Copy of Amendment No. 2 to Coyote Station Transmission Facilities
Agreement, dated January 1, 1983, is incorporated by reference to
Exhibit 10(c)(3)(ii) to Form 10-K for the year ended December 31, 1988,
Commission File No. 0-692.
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10(c)(3)(iii)
Copy of System Interconnection Agreement, by and between Otter Tail Power
Company, Montana-Dakota Utilities Co., & Northwestern Public Service
Company, dated September 26, 1988, is incorporated by reference to
Exhibit 10(c)(3)(iii) to Form 10-K for the year ended December 31, 1988,
Commission File No. 0-692.
10(d)
Mid-Continent Area Power Pool Agreement, dated March 31, 1972, as amended
through January 1, 1991, is incorporated by reference to Exhibit 10(d) to
Form 10-K for the year ended December 31, 1991, Commission File No. 0-692.
10(e)(1)
Interconnection Contract between Registrant and Western Area Power
Administration, dated April 1, 1984, is incorporated by reference to
Exhibit 4 to Form 10-K for the year ended December 31, 1984, Commission
File No. 0-692.
10(e)(2)
Supplement No. 6 to Interconnection Contract between Registrant and Western
Area Power Administration, dated February 5, 1987, is incorporated by
reference to Exhibit 10(e)(2) to Form 10-K for the year ended December 31,
1988, Commission File No. 0-692.
10(e)(3)
Supplement No. 5 to Interconnection Contract between Registrant and Western
Area Power Administration, dated June 1, 1987, is incorporated by reference
to Exhibit 10(e)(3) to Form 10-K for the year ended December 31, 1988,
Commission File No. 0-692.
10(g)(1)
Supplemental Income Security (Retirement) Plan for Directors, Officers and
Managers, as amended July 1, 1986, is incorporated by reference to
Exhibit 10(g)(1) to Form 10-K for the year ended December 31, 1988,
Commission File No. 0-692.
10(g)(2)
Deferred Compensation Plan for Non-employee Directors adopted November 6,
1985, is incorporated by reference to Exhibit 10(g)(2) to Form 10-K for the
year ended December 31, 1988, Commission File No. 0-692.
33
10(g)(3)
Form of Severance Agreement for Officers is incorporated by reference to
Exhibit 5 to Form 10-Q for the quarter ended March 31, 1986, Commission
File 0-692.
10(g)(4)
Pension Equalization Plan, dated August 5, 1987, is incorporated by
reference to Exhibit 10(g)(4) to Form 10-K for the year ended December 31,
1988, Commission File No. 0-692.
10(g)(5)
Director Retirement Plan dated November 4, 1987, as amended February 2,
1994 (exhibit filed herewith).
10(g)(6)
Annual Performance Incentive Plan for Officers, dated February 1, 1989, as
amended February 2, 1994 (exhibit filed herewith).
10(g)(7)
Long-term Incentive Compensation Plan ("Phantom Stock Unit Plan") for
Directors and Officers, dated February 1, 1989, as amended February 2, 1994
(exhibit filed herewith)
10(g)(8)
Supplemental Pension Agreement for W. D. Craig, dated May 3, 1989, is
incorporated by reference to Exhibit 10(g)(9) to Form 10-K for the year
ended December 31, 1989, Commission File No. 0-692.
(13) REPORT FURNISHED TO SECURITY HOLDERS
13(a)
Annual Report for fiscal year ended December 31, 1993, furnished to
stockholders of record on March 1, 1994 (exhibit filed herewith).
(21) SUBSIDIARIES OF REGISTRANT
21(a)
Grant, Inc., a South Dakota corporation, is a wholly owned subsidiary of
Registrant which does business under the name of Grant, Inc.
21(b)
Northwestern Systems, Inc., a South Dakota corporation, is a wholly owned
subsidiary of Registrant which does business under the name of Northwestern
Systems, Inc.
34
21(c)
Northwestern Networks, Inc., a South Dakota corporation, is a wholly owned
subsidiary of Registrant which does business under the name of Northwestern
Networks, Inc.
(22) OTHER DOCUMENTS OR STATEMENTS TO SECURITY HOLDERS
22(a)
Proxy materials dated March 15, 1994, furnished to common stockholders of
record on March 7, 1994 (exhibit filed with SEC on March 18, 1994).