File No. 69-78
-----
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM U-3A-2
Statement by Holding Company Claiming Exemption Under
Rule U-3A-2 from the Provisions of the Public Utility
Holding Company Act of 1935
To Be Filed Annually Prior to March 1
MINNESOTA POWER & LIGHT COMPANY
-------------------------------
(Name of company)
hereby files with the Securities Exchange Commission pursuant to Rule 2, its
statement claiming exemption as a holding company from the provisions of the
Public Utility Holding Company Act of 1935, and submits the following
information:
1. Name, State of organization, location and nature of business of
claimant and every subsidiary thereof, other than any exempt wholesale generator
(EWG) or foreign utility company in which claimant directly or indirectly holds
an interest.
State of
Name Organization Location Nature of Business
- ---- ------------ -------- ------------------
Minnesota Power & Light Company Minnesota Duluth, MN Electric Utility
Superior Water, Light and Power Wisconsin Superior, WI Electric, Gas and
Company Water Utility
Energy Land, Incorporated Wisconsin Duluth, MN Inactive
Capital Re Corporation Delaware New York, NY Financial Guaranty
Reinsurance and
Insurance
RendField Land Company, Inc. Minnesota Duluth, MN Land Holding
UtilEquip, Incorporated Minnesota Duluth, MN Inactive
Minnesota Power Enterprises, Minnesota Duluth, MN Product and Marketing
Inc. Coordination
Rainy River Energy Corporation Minnesota Duluth, MN Contract Services
Synertec, Incorporated Minnesota Duluth, MN Contract Services
Minnesota Pulp, Incorporated Minnesota Duluth, MN Dissolved
Minnesota Pulp II, Incorporated Minnesota Duluth, MN Dissolved
Lakeview Financial Corporation I Minnesota Duluth, MN Inactive
Lakeview Financial Corporation II Minnesota Duluth, MN Inactive
-1-
Upper Minnesota Properties, Minnesota Duluth, MN Affordable Housing
Inc. Projects and Economic
Development
Upper Minnesota Properties- Minnesota Duluth, MN Affordable Housing
Meadowlands, Inc. Project
Upper Minnesota Properties- Minnesota Duluth, MN Affordable Housing
Irving, Inc. Project
Upper Minnesota Properties- Minnesota Duluth, MN Economic Development
Development, Inc.
BNI Coal, Ltd. North Dakota Bismarck, ND Coal Mining
MP Affiliate Resources, Inc. Minnesota Duluth, MN Administrative
Operations
Minnesota Power Services Group, Minnesota Duluth, MN Product Development
Inc.
Electric Outlet, Inc. Minnesota Duluth, MN Retailer
Minnesota Power Telecom, Minnesota Duluth, MN Fiberoptic
Inc. Communications
MP Real Estate Holdings, Inc. Minnesota Duluth, MN Real Estate
MP&L Capital I Minnesota Duluth, MN Trust
PCUC Acquisition Sub, Inc. Minnesota Duluth, MN Inactive
MP Water Resources Group, Minnesota Orlando, FL Water and Wastewater
Inc.
Fibercore, Incorporated Minnesota Duluth, MN Inactive
Heater Utilities, Inc. South Carolina Cary, NC Water and Wastewater
Treatment Utility
LaGrange Waterworks Corporation North Carolina Fayetteville, NC Water Utility
Brookwood Water Corporation North Carolina Fayetteville, NC Water Utility
Upstate Heater Utilities, Inc. South Carolina Anderson, SC Water Utility
Florida Water Services Florida Orlando, FL Water and Wastewater
Corporation Treatment Utility
Florida Gas Services Corporation Florida Orlando, FL Liquefied Propane Gas
Distributor
Instrumentation Services, Inc. Florida Orlando, FL Predictive Maintenance
Services
-2-
Predictive Maintenance and North Carolina Orlando, FL Inactive
Operational Services, Inc.
U.S. Maintenance and Management Florida Orlando, FL Full Maintenance
Services Corporation Services
Americas' Water Services Florida Orlando, FL Contract Operations
Corporation Services
Florida Water Consumer Products Florida Orlando, FL Residential Water
Corporation Products and Services
Lehigh Acquisition Corporation Delaware Lehigh Acres, FL Subdivider, Developer
Lehigh Corporation Florida Lehigh Acres, FL Subdivider, Developer
Lehigh Land & Investment, Inc. Florida Lehigh Acres, FL Inactive
Cliffside Properties, Inc. California Lehigh Acres, FL Inactive
Palm Coast Holdings, Inc. Florida Palm Coast, FL Subdivider, Developer
Sugarmill Woods Communities, Inc. Florida Homosassa, FL Subdivider, Developer
Enterprise Lehigh, Inc. Florida Lehigh Acres, FL Subdivider, Developer
Interlachen Lakes Estates, Inc. Florida Interlachen, FL Subdivider, Developer
Sundowner Properties, Inc. Pennsylvania Williston, FL Subdivider, Developer
SRC of Florida, Inc. Florida Lehigh Acres, FL Subdivider, Developer
MP Automotive Services, Inc. Minnesota Duluth, MN Automotive Services
ADESA Houston, Inc. Texas Houston, TX Vehicle Auction
ADESA San Antonio, Inc. Texas San Antonio, TX Vehicle Auction
ADESA Corporation Indiana Indianapolis, IN Vehicle Auction -
Corporate Operation
ADESA Southern Indiana, Inc. Indiana Columbus, IN Vehicle Auction
A.D.E. of Birmingham, Inc. Alabama Moody, AL Vehicle Auction
ADESA Ohio, Inc. Ohio Cleveland, OH Vehicle Auction
Franklin, OH
Auto Dealers Exchange of Tennessee Memphis, TN Vehicle Auction
Memphis, Inc.
A.D.E. of Lexington, Inc. Kentucky Lexington, KY Vehicle Auction
-3-
Auto Dealers Exchange of Massachusetts Framingham, MA Vehicle Auction
Concord, Inc.
Greater Buffalo Auto Auction, Inc. New York Akron, NY Vehicle Auction
ADESA Indianapolis, Inc. Indiana Plainfield, IN Vehicle Auction
Great Rigs Incorporated Indiana Moody, AL Vehicle Transport
ADESA Funding Corporation Indiana Indianapolis, IN Inactive
A.D.E. Management Company Indiana Indianapolis, IN Vehicle Auction
Management Company
A.D.E. of Jacksonville, Inc. Florida Jacksonville, FL Vehicle Auction
A.D.E. of Knoxville, Inc. Tennessee Knoxville, TN Vehicle Auction
ADESA Charlotte, Inc. North Carolina Charlotte, NC Vehicle Auction
ADESA Texas, Inc. Texas Austin, TX Vehicle Auction
Dallas, TX
Auto Banc Corporation New Jersey Manville, NJ Wholesale Vehicle
Redistributor
ADESA New Jersey, Inc. New Jersey Manville, NJ Vehicle Auction
ADESA Wisconsin, Inc. Wisconsin Portage, WI Vehicle Auction
ADESA Sacramento, Inc. California Sacramento, CA Vehicle Auction
ADESA Pennsylvania, Inc. Pennsylvania Pittsburgh, PA Vehicle Auction
Automotive Finance Corporation Indiana Indianapolis, IN Financial Services
AFC Funding Corporation Indiana Indianapolis, IN Financial Services
ADESA Canada, Inc. Quebec Vars, Ontario, Vehicle Auction
Canada Corporate Operations
ADESA Montreal, Inc. Quebec St. Eustache, Vehicle Auction
Quebec, Canada
3095-1115 Quebec Inc. Quebec St. Eustache, Inactive
Quebec, Canada
ADESA Halifax, Inc. Nova Scotia Lr. Sackville, Vehicle Auction
Nova Scotia,
Canada
Professional Auto Remarketing Ontario Vars, Ontario, Vehicle Remarketing
Canada, Inc. Canada
-4-
ADESA Moncton, Inc. New Brunswick Moncton, New Vehicle Auction
Brunswick, Canada
ADESA Ottawa, Inc. Ontario Vars, Ontario, Vehicle Auction
Canada
ADESA Remarketing Services, Inc. Ontario Vars, Ontario, Vehicle Remarketing
Canada
Footnotes
Subsidiary of Minnesota Power & Light Company.
Contributed less than 1 percent of consolidated net income for the year ended December 31, 1997.
Consisted of less than 1 percent of consolidated assets at December 31, 1997.
Minnesota Power & Light Company has a 21 percent ownership interest in
Capital Re Corporation (Capital Re). Capital Re is an investment
accounted for by the equity method.
Subsidiary of RendField Land Company, Inc.
Subsidiary of Minnesota Power Enterprises, Inc.
MP Water Resources Group, Inc. had an 80 percent ownership interest in this corporation. At
Dec. 31, 1997 ownership was transferred to MP Real Estate Holdings, Inc.
Subsidiary of Minnesota Power Services Group, Inc.
Subsidiary of Upper Minnesota Properties, Inc.
Subsidiary of MP Water Resources Group, Inc.
Subsidiary of Heater Utilities, Inc.
Heater Utilities, Inc. is, at the request of the North Carolina Utilities Commission, the
emergency operator of Scotsdale Water and Sewer, Inc. and Mobile Hills Estates. Both are
small water utilities in North Carolina.
Subsidiary of Instrumentation Services, Inc.
Subsidiary of Lehigh Acquisition Corporation.
SRC of Florida, Inc. is a 50 percent partner in Guardian Title of Lehigh, a title company in
Lehigh Acres, FL.
Subsidiary of Lehigh Corporation.
Lehigh Corporation owns 100 percent of J.W. Ford, Inc., an investment accounted for under
the equity method. J.W. Ford, Inc. owned 50 percent of Joel/Bell Property, Inc. a land
management company in Lehigh Acres, FL. that was dissolved in 1997. Lehigh Corporation is
also a 40 percent participant in Westminster L.L.P. which is involved in residential
development in Lehigh Acres, FL.
Sold or dissolved in 1997.
Subsidiary of MP Automotive Services, Inc.
-5-
Subsidiary of ADESA Corporation.
ADESA Canada, Inc. owns 20 percent of Impact Auto Auctions Ltd.
Subsidiary of ADESA Canada, Inc.
Subsidiary of Automotive Finance Corporation.
Subsidiary of A.D.E. Management Company.
ADESA Corporation owns 51 percent of ADESA South Florida, L.L.C. which
is an automobile auction in Opa-Locka, FL; 95 percent of Great Rigs
Incorporated; and 51 percent of ADESA Southern Indiana, Inc.
ADESA Indianapolis, Inc. owns 5 percent of Great Rigs Incorporated.
Subsidiary of ADESA Ottawa, Inc.
In process of dissolution.
-6-
2. A brief description of the properties of claimant and each of its
subsidiary public utility companies used for the generation, transmission, and
distribution of electric energy for sale, or for the production, transmission,
and distribution of natural or manufactured gas, indicating the location of
principal generating plants, transmission lines, producing fields, gas
manufacturing plants, and electric and gas distribution facilities, including
all such properties which are outside the State in which claimant and its
subsidiaries are organized and all transmission or pipelines which deliver or
receive electric energy or gas at the borders of such State.
Claimant - Minnesota Power & Light Company
Reference is made to Annual Report Form 10-K (File No. 1-3548), filed
by the claimant with the Commission on March 28, 1997, for the fiscal year ended
December 31, 1996, particularly pages 21 and 22, which is hereby incorporated by
reference in this statement.
Subsidiary - Superior Water, Light and Power Company
Same reference as under claimant.
3. The following information for the last calendar year with respect
to claimant and each of its subsidiary public utility companies:
(a) Number of kWh of electric energy sold (at retail or wholesale),
and Mcf. of natural or manufactured gas distributed at retail.
Electricity Gas
Minnesota Power & Light Company 9,256,580,358 None
Superior Water, Light and Power Company 554,816,879 26,899,614
Florida Water Services Corporation None 25,494
(Liquefied Propane Gas)
(b) Number of kWh of electric energy and Mcf. of natural or
manufactured gas distributed at retail outside the State in which each such
company is organized.
None
(c) Number of kWh of electric energy and Mcf. of natural or
manufactured gas sold at wholesale outside the State in which each such company
is organized, or at the State line.
Electricity Gas
Minnesota Power & Light Company 1,425,102,000 None
Superior Water, Light and Power Company None None
Florida Water Services Corporation None None
-7-
(d) Number of kWh of electric energy and Mcf. of natural or
manufactured gas purchased outside the State in which each company is organized
or at the State line.
Electricity Gas
Minnesota Power & Light Company 6,103,893,608 None
Superior Water, Light and Power Company 564,200,178 None
Florida Water Services Corporation* None None
* Purchased only liquefied propane gas and all such purchases were made from
local distributors and delivered in Florida.
4. The following information for the reporting period with respect to
claimant and each interest it holds directly or indirectly in an EWG or a
foreign utility company, stating monetary amounts in United States dollars:
Not applicable to Minnesota Power & Light Company
-8-
Exhibits
Exhibit A is the consolidating balance sheet of the claimant and its subsidiary
companies at the close of such calendar year, together with a consolidating
statement of income and consolidating statement of retained earnings of the
claimant and its subsidiary companies for the last calendar year.
Exhibit A-1 is the consolidating financial statements for Minnesota Power
Enterprises, Inc. (MP Enterprises). These statements are combined in the
consolidating financial statements of Minnesota Power & Light Company which are
filed as Exhibit A.
Exhibit A-2 - Consolidating financial statements for Minnesota Power Services
Group, Inc. are combined in the consolidating financial statements of MP
Enterprises which are filed as Exhibit A-1. These statements have been excluded
from this exhibit because each subsidiary within this consolidated group is not
material to Minnesota Power & Light Company's consolidating financial
statements.
Exhibit A-3 is the consolidating financial statements for MP Water Resources
Group, Inc. (MP Water Resources). These statements are combined in the
consolidating financial statements of Minnesota Power & Light Company which are
filed as Exhibit A.
Exhibit A-4 - Consolidating financial statements for MP Real Estate Holdings,
Inc. are combined in the consolidating financial statements of Minnesota Power &
Light Company which are filed as Exhibit A. Consolidating financial statements
for MP Real Estate Holdings, Inc. have been excluded from this exhibit because
for 1997 the material subsidiary, Lehigh Acquisition Corporation, is included in
other exhibits. The consolidated statement of income for Lehigh Acquisition
Corporation is combined with the consolidating financial statements of MP Water
Resources and filed as Exhibit A-3. The consolidating balance sheet is presented
as MP Real Estate in the consolidating financial statements of Minnesota Power &
Light Company filed as Exhibit A. The assets of Lehigh Acquisition Corporation
were transferred from MP Water Resources to MP Real Estate Holdings, Inc. on
December 31, 1997.
Exhibit A-5 is the consolidating financial statements for Lehigh Acquisition
Corporation. The consolidated statement of income is combined with the
consolidating financial statements of MP Water Resources and filed as Exhibit
A-3. The consolidating balance sheet is combined with the consolidating
financial statements of MP Real Estate Holdings, Inc. See Exhibit A-4.
Exhibit A-6 is the consolidating financial statements for Heater Utilities, Inc.
These statements are combined in the consolidated financial statements for MP
Water Resources and filed as Exhibit A-3.
Exhibit A-7 is the consolidating financial statements for MP Automotive
Services, Inc. These statements are combined in the consolidating financial
statements of Minnesota Power & Light Company which are filed as Exhibit A.
Exhibit A-8 - Consolidating financial statements for ADESA Corporation are
combined in the consolidating financial statements for MP Automotive Services,
Inc. and are filed as Exhibit A-7. Consolidating financial statements for ADESA
Corporation have been excluded from this exhibit because the majority of the
subsidiaries included in this consolidation are not material to Minnesota Power
& Light Company. This exhibit was also excluded due to the competitive nature
of the business.
Exhibit A-9 - Consolidating financial statements for RendField Land Company,
Inc. are combined in the consolidating financial statements of Minnesota Power &
Light Company which are filed as Exhibit A. These statements have been excluded
from this exhibit because each subsidiary within this consolidated group is not
material to Minnesota Power & Light Company's consolidating financial
statements.
Exhibit A-10 - Consolidating financial statements for Upper Minnesota
Properties, Inc. are combined in the consolidating financial statements of MP
Enterprises which are filed as Exhibit A-1. These statements have been excluded
from this exhibit because each subsidiary within this consolidated group is not
material to Minnesota Power & Light Company's consolidating financial
statements.
Exhibit A-11 is a list of abbreviations used in the Exhibits.
Exhibit B is the Financial Data Schedule.
Exhibit C is not applicable to Minnesota Power & Light Company.
-9-
The above-named claimant has caused this statement to be duly executed
on its behalf by its authorized officer on this 24th day of February 1998.
MINNESOTA POWER & LIGHT COMPANY
------------------------------------
(Name of Claimant)
[CORPORATE SEAL]
By D.G. Gartzke
---------------------------------
Senior Vice President -
Finance and Chief Financial Officer
Attest:
Mark A. Schober
- ------------------------------------
Controller
Name, title, and address of officer to whom notices and correspondence
concerning this statement should be addressed:
David G. Gartzke Senior Vice President - Finance and Chief Financial Officer
- ----------------- -----------------------------------------------------------
(Name) (Title)
Minnesota Power & Light Company
30 West Superior Street
Duluth, Minnesota 55802
-----------------------
(Address)
-10-
Exhibit A
Page 1 of 6
Minnesota Power - Consolidated
Minnesota Power Consolidated Balance Sheet
Current Period: Dec-97
YTD Dec-97 Minnesota Cons. MP Cons. Water
Consolidated Elimination Power SWL&P Enterprises Resources
-------------- ------------- -------------- ---------- ----------- -----------
Plant and Other Assets
Electric 1,234,550,937 3,043,726 1,206,893,354 24,613,858 0 0
Electric Miscellaneous 23,699,040 0 17,189,443 88,908 6,420,689 0
Gas 15,875,239 1,323,530 0 14,551,709 0 0
Water (SWLP) 19,343,291 2,366,015 0 16,977,276 0 0
Coal 40,903,971 0 0 0 40,903,971 0
Common 0 (6,733,271) 0 6,733,271 0 0
-------------- -------------- -------------- ---------- ----------- -----------
Total Electric Operations 1,334,372,478 0 1,224,082,797 62,965,021 47,324,660 0
-------------- -------------- -------------- ---------- ----------- -----------
Water 425,111,770 0 0 0 0 425,111,770
Water Miscellaneous 10,459,112 0 0 0 0 10,459,112
-------------- -------------- -------------- ---------- ----------- -----------
Total Water Operation 435,570,882 0 0 0 0 435,570,882
-------------- -------------- -------------- ---------- ----------- -----------
Auto Restribution 174,189,000 0 0 0 0 0
Afford Housing & Other
-------------- -------------- -------------- ---------- ----------- -----------
Total Investment Operations 0 0 0 0 0 0
-------------- -------------- -------------- ---------- ----------- -----------
Total Plant 1,944,132,360 0 1,224,082,797 62,965,021 47,324,660 435,570,882
Accumulated Depreciation (697,497,068) 0 (517,915,568) (22,217,429) (21,973,985) (122,890,086)
Construction Work in Progress 26,211,330 0 10,625,538 232,091 407,626 9,574,075
-------------- -------------- -------------- ---------- ----------- -----------
Net Plant 1,272,846,622 0 716,792,766 40,979,683 25,758,301 322,254,871
Securities Investments 73,908,721 (306,720) 73,968,263 0 0 247,179
Equity Investments 118,759,527 0 118,754,527 0 5,000 0
Real Estate 55,539,476 0 0 0 0 0
Other 4,651,908 0 3,948,231 1,344 0 0
Investment in Subsidiaries 0 (581,839,554) 581,839,553 0 0 0
-------------- -------------- -------------- ---------- ----------- -----------
Total Plant and Assets 1,525,706,253 (582,146,274) 1,495,303,340 40,981,027 25,763,300 322,502,050
-------------- -------------- -------------- ---------- ----------- -----------
Current Assets
Cash 40,057,452 1 2,417,209 277,273 3,824,747 3,494,699
Temporary Cash Investments 1,701,356 0 87,387 0 472,968 1,141,000
Trading Securities 123,533,059 (999,476) 124,532,535 0 0 0
Customer Accounts Receivable 154,781,574 0 39,402,863 5,561,958 4,019,574 11,742,152
Reserve for Uncol Accounts (12,559,034) 0 (1,167,319) (301,239) 0 (437,476)
Notes Receivable 1,524,327 0 335,840 0 0 155,408
Accounts Receivable - Other 14,796,427 (431,410) 6,556,015 624,783 36,648 779,650
Accounts Receivable - Associates (1) (292,341,031) 54,546,638 0 16,047,235 29,301,712
Cons. MP Energy MP CNRD,
Automotive Land Real Estate LFC1, MPC1
----------- ----------- ----------- -----------
Plant and Other Assets
Electric 0 0 0 0
Electric Miscellaneous 0 0 0 0
Gas 0 0 0 0
Water (SWLP) 0 0 0 0
Coal 0 0 0 0
Common 0 0 0 0
----------- ----------- ----------- -----------
Total Electric Operations 0 0 0 0
----------- ----------- ----------- -----------
Water 0 0 0 0
Water Miscellaneous 0 0 0 0
----------- ----------- ----------- -----------
Total Water Operation 0 0 0 0
----------- ----------- ----------- -----------
Auto Restribution 174,189,000 0 0 0
Afford Housing & Other
----------- ----------- ----------- -----------
Total Investment Operations 0 0 0 0
----------- ----------- ----------- -----------
Total Plant 174,189,000 0 0 0
Accumulated Depreciation (12,500,000) 0 0 0
Construction Work in Progress 5,372,000 0 0 0
----------- ----------- ----------- -----------
Net Plant 167,061,000 0 0 0
Securities Investments 0 0 0 0
Equity Investments 0 0 0 0
Real Estate 0 0 55,539,476 0
Other 0 0 0 702,333
Investment in Subsidiaries 1 0 0 0
----------- ----------- ----------- -----------
Total Plant and Assets 167,061,001 0 55,539,476 702,333
----------- ----------- ----------- -----------
Current Assets
Cash 27,309,000 5,845 2,713,423 15,256
Temporary Cash Investments 0 0 0 0
Trading Securities 0 0 0 0
Customer Accounts Receivable 94,055,027 0 0 0
Reserve for Uncol Accounts (10,653,000) 0 0 0
Notes Receivable 1,033,079 0 0 0
Accounts Receivable - Other 0 0 7,224,745 5,996
Accounts Receivable - Associates 89,067,121 10,658,282 4,071,029 88,649,015
Exhibit A
Page 2 of 6
Minnesota Power - Consolidated
Minnesota Power Consolidated Balance Sheet
Current Period: Dec-97
YTD Dec-97 Minnesota Cons. MP
Consolidated Elimination Power SWL&P Enterprises
-------------- -------------- -------------- ---------- -----------
Fuel Stock 8,985,993 0 8,985,993 0 0
Plant & Operating Supplies 16,055,661 0 9,330,047 1,340,537 3,495,503
Prepayments 6,382,560 0 1,587,534 891,344 71,946
Other Current & Accrued Assets 13,469,035 0 11,220,545 616,147 1,404
-------------- -------------- -------------- ---------- -----------
Total Current Assets 368,728,409 (293,771,916) 257,835,286 9,010,802 27,970,025
-------------- -------------- -------------- ---------- -----------
Deferred Charges 108,365,812 3,131,903 70,378,001 1,427,441 5,128,955
-------------- -------------- -------------- ---------- -----------
Intangibles
Goodwill 158,939,892 0 0 0 0
Other 10,576,503 0 0 0 659,503
-------------- -------------- -------------- ---------- -----------
Total Intangibles 169,516,395 0 0 0 659,503
-------------- -------------- -------------- ---------- -----------
-------------- -------------- -------------- ---------- -----------
Total Assets 2,172,316,869 (872,786,287) 1,823,516,627 51,419,271 59,521,783
============== ============== ============== ========== ===========
Cons. Water Cons. MP Energy MP CNRD,
Resources Automotive Land Real Estate LFC1, MPC1
----------- ----------- ----------- ----------- ------------
Fuel Stock 0 0 0 0 0
Plant & Operating Supplies 858,575 1,031,000 0 0 0
Prepayments 821,336 3,010,400 0 0 0
Other Current & Accrued Assets 1,418,094 0 0 212,845 0
----------- ----------- ----------- ----------- ------------
Total Current Assets 49,275,150 204,852,627 10,664,126 14,222,042 88,670,266
----------- ----------- ----------- ----------- ------------
Deferred Charges 20,896,080 7,386,000 0 0 17,432
----------- ----------- ----------- ----------- ------------
Intangibles
Goodwill 0 157,925,000 0 1,014,892 0
Other 0 9,917,000 0 0 0
----------- ----------- ----------- ----------- ------------
Total Intangibles 0 167,842,000 0 1,014,892 0
----------- ----------- ----------- ----------- ------------
----------- ----------- ----------- ----------- ------------
Total Assets 392,673,280 547,141,627 10,664,126 70,776,410 89,390,032
=========== =========== =========== =========== ============
Exhibit A
Page 3 of 6
Minnesota Power - Consolidated
Minnesota Power Consolidated Balance Sheet
Current Period: Dec-97
YTD Dec-97 Minnesota Cons. MP
Consolidated Elimination Power SWL&P Enterprises
-------------- ------------- -------------- ---------- -----------
Capitalization
Common Equity
Common Stock & PD in Capital 416,033,112 (495,297,709) 416,033,111 5,800,000 26,234,451
Loan to Leveraged ESOP (65,848,290) 0 (65,848,290) 0 0
Unrealized Gains-Investments 5,468,656 0 5,468,656 0 0
Cumul Translation Adjustment (832,000) 0 0 0 0
Retained Earnings 296,125,422 (86,541,844) 296,125,415 12,416,047 1,985,166
Preferred Stock
5% 11,491,693 0 11,491,693 0 0
$6.70 Series 10,000,000 0 10,000,000 0 0
$7.125 Series 10,000,000 0 10,000,000 0 0
QUIPS 75,000,000 0 0 0 0
Long-Term Debt
Bonds 536,493,423 (400,000) 408,180,000 10,600,000 0
Other Long-Term Debt 150,122,136 (78,611,999) 88,819,866 7,350,000 14,894,683
Unamortized Discount - Debt (1,230,373) 0 (1,105,608) (124,765) 0
-------------- -------------- -------------- ---------- -----------
Total Capitalization 1,442,823,779 (660,851,552) 1,179,164,844 36,041,282 43,114,300
-------------- -------------- -------------- ---------- -----------
Current Liabilities
Notes Payable 129,084,146 0 128,741,267 0 0
Current Maturities 4,748,450 1,511,998 0 0 2,241,003
Accounts Payable
Accounts Payable - Other 78,656,686 (1,642,837) 26,132,839 1,067,244 527,251
Accounts Payable - Associates 0 (214,613,948) 154,994,340 2,208,259 7,425,318
Accrued Taxes
Federal Income Taxes 11,047,080 0 5,924,401 251,070 458,325
State Income Taxes 1,353,958 0 1,156,545 4,582 (218,815)
Other Accrued Taxes 41,232,957 0 31,328,868 110,875 504,327
Accrued Dividends & Interest
Interest Accrued 13,209,170 0 8,336,409 274,976 225,980
Dividends Declared 487,323 0 487,323 0 0
Other
Customer Deposits 2,512,487 0 350,824 17,839 0
Tax Collections Payable 656,775 0 576,675 67,729 12,372
Misc Current & Accrued Liabilities 42,156,884 (321,851) 17,433,899 1,593,424 1,121,361
-------------- -------------- -------------- ---------- -----------
Total Current Liabilities 325,145,915 (215,066,638) 375,463,390 5,595,998 12,297,121
-------------- -------------- -------------- ---------- -----------
Deferred Credits
Cont in Aid of Const 102,565,114 0 0 1,333,977 0
Accum Deferred Income Taxes 120,053,451 0 127,835,848 2,338,211 1,781,749
Accum Def Inv Tax Credits 31,268,690 0 28,685,818 909,644 0
Other
Minority Interest 14,467,396 0 0 0 1,552
Other Deferred Credits 135,992,524 3,131,903 112,366,727 5,200,159 2,327,062
-------------- -------------- -------------- ---------- -----------
Total Deferred Credits 404,347,175 3,131,903 268,888,393 9,781,991 4,110,363
-------------- -------------- -------------- ---------- -----------
Total Liab & Capitalization 2,172,316,869 (872,786,287) 1,823,516,627 51,419,271 59,521,783
============== ============== ============== ========== ===========
Cons. Water Cons. MP Energy MP CNRD,
Resources Automotive Land Real Estate LFC1, MPC1
----------- ----------- ----------- ----------- ------------
Capitalization
Common Equity
Common Stock & PD in Capital 63,605,714 333,035,847 2,500 58,621,698 7,997,500
Loan to Leveraged ESOP 0 0 0 0 0
Unrealized Gains-Investments 0 0 0 0 0
Cumul Translation Adjustment 0 (832,000) 0 0 0
Retained Earnings 55,723,562 22,673,994 6,390,152 0 (12,647,071)
Preferred Stock
5% 0 0 0 0 0
$6.70 Series 0 0 0 0 0
$7.125 Series 0 0 0 0 0
QUIPS 0 0 0 0 75,000,000
Long-Term Debt
Bonds 118,113,423 0 0 0 0
Other Long-Term Debt 14,246,821 98,914,000 0 4,508,765 0
Unamortized Discount - Debt 0 0 0 0 0
----------- ----------- ----------- ----------- -----------
Total Capitalization 251,689,520 453,791,841 6,392,652 63,130,463 70,350,429
----------- ----------- ----------- ----------- -----------
Current Liabilities
Notes Payable 0 334,000 0 8,879 0
Current Maturities 555,452 439,997 0 0 0
Accounts Payable
Accounts Payable - Other 5,495,526 46,100,034 0 788,444 188,185
Accounts Payable - Associates 2,562,459 23,495,673 3,541,574 1,004,184 19,382,141
Accrued Taxes
Federal Income Taxes (207,440) 4,592,213 7,330 74,891 (53,710)
State Income Taxes (149,558) (55,080) 722,570 0 (106,287)
Other Accrued Taxes 8,452,623 820,805 0 7,455 8,004
Accrued Dividends & Interest
Interest Accrued 2,841,561 1,530,245 0 0 0
Dividends Declared 0 0 0 0 0
Other
Customer Deposits 2,143,824 0 0 0 0
Tax Collections Payable 0 0 0 0 0
Misc Current & Accrued Liabilities 5,179,452 14,991,943 0 2,158,656 0
----------- ----------- ----------- ----------- -----------
Total Current Liabilities 26,873,898 92,249,830 4,271,474 4,042,509 19,418,333
----------- ----------- ----------- ----------- -----------
Deferred Credits
Cont in Aid of Const 101,231,137 0 0 0 0
Accum Deferred Income Taxes 4,324,059 1,029,956 0 (16,877,642) (378,731)
Accum Def Inv Tax Credits 1,673,228 0 0 0 0
Other
Minority Interest 0 70,000 0 14,395,844 0
Other Deferred Credits 6,881,438 0 0 6,085,236 0
----------- ----------- ----------- ----------- -----------
Total Deferred Credits 114,109,862 1,099,956 0 3,603,438 (378,731)
----------- ----------- ----------- ----------- -----------
Total Liab & Capitalization 392,673,280 547,141,627 10,664,126 70,776,410 89,390,032
=========== =========== =========== =========== ===========
Exhibit A
Page 4 of 6
Minnesota Power - Consolidated
Minnesota Power Consolidated Statement of Income
Current Period: Dec-97
YTD Dec-97 Minnesota Cons. MP
Consolidated Elimination Power SWL&P Enterprises
-------------- ------------- -------------- ---------- -----------
Revenue and Income
Electric Operations
Electric 474,043,685 (17,227,747) 467,273,549 23,997,883 0
Electric - Misc 19,224,292 (67,512) 14,583,517 508,564 4,199,724
AFDC - Equity 0 0 0 0 0
Gas 13,707,755 0 0 13,707,755 0
Water (SWL&P) 4,219,025 0 0 4,219,025 0
Coal 30,660,344 0 0 0 30,660,344
-------------- ------------- -------------- ---------- -----------
Total Electric Operations 541,855,100 (17,295,259) 481,857,065 42,433,226 34,860,068
Water Operations
Water 78,069,089 0 0 0 0
Water - Misc 17,210,582 0 0 0 0
AFDC - Equity 246,268 0 0 0 0
-------------- ------------- -------------- ---------- -----------
Total Water Operations 95,525,939 0 0 0 0
Auto Redistribution 255,487,999 0 0 0 0
Investments
Investment 21,842,105 (7,562,989) 11,329,758 0 0
Real Estate 38,803,716 0 0 0 0
Other 106,351 (114,587) 0 0 0
Equity in Subs 0 (39,907,281) 39,907,282 0 0
-------------- ------------- -------------- ---------- -----------
Total Investments 60,752,173 (47,584,857) 51,237,040 0 0
-------------- ------------- -------------- ---------- -----------
Total Operating Revenue and Income 953,621,211 (64,880,116) 533,094,105 42,433,226 34,860,067
Operating Expenses
Fuel 75,974,108 0 75,974,108 0 0
Purchased Power 118,087,529 (16,557,366) 118,087,529 16,557,366 0
Operations
Operation 273,296,678 (686,666) 85,215,369 15,608,965 22,113,316
Maintenance 34,647,327 0 24,635,075 763,729 1,740,000
Depreciation 70,842,825 0 40,911,267 1,949,382 2,392,442
Property Taxes 36,104,083 0 29,121,197 796,330 47,288
Other Taxes 10,674,816 0 4,957,702 289,431 634,972
Administrative and General 152,039,622 (114,587) 25,816,496 1,303,110 4,871,110
Minority Interest 2,309,390 0 0 0 (94)
Interest Expense
Interest on Long-Term Debt 49,281,104 0 27,494,827 1,223,140 1,260,355
Other Interest Expense 14,251,999 (7,412,965) 19,737,319 311,637 79,588
Amort of Interest Expense 1,146,066 0 1,108,407 37,659 0
AFDC - Debt (419,633) 0 (77,986) 0 0
-------------- ------------- -------------- ---------- -----------
Total Operating Expenses 838,235,914 (24,771,584) 452,981,308 38,840,749 33,138,975
Cons. Water Cons. MP Energy MP CNRD,
Resources Automotive Land Real Estate LFC1, MPC1
----------- ----------- --------- ----------- ------------
Revenue and Income
Electric Operations
Electric 0 0 0 0 0
Electric - Misc 0 0 0 0 0
AFDC - Equity 0 0 0 0 0
Gas 0 0 0 0 0
Water (SWL&P) 0 0 0 0 0
Coal 0 0 0 0 0
----------- ----------- --------- ----------- ------------
Total Electric Operations 0 0 0 0 0
Water Operations
Water 78,069,089 0 0 0 0
Water - Misc 17,210,582 0 0 0 0
AFDC - Equity 246,268 0 0 0 0
----------- ----------- --------- ----------- ------------
Total Water Operations 95,525,939 0 0 0 0
Auto Redistribution 0 255,487,999 0 0 0
Investments
Investment 4,533,109 5,996,072 1,307,405 0 6,238,750
Real Estate 38,803,716 0 0 0 0
Other 230,517 0 0 0 (9,579)
Equity in Subs 0 0 0 0 0
----------- ----------- --------- ----------- ------------
Total Investments 43,567,343 5,996,072 1,307,405 0 6,229,171
----------- ----------- --------- ----------- ------------
Total Operating Revenue and Income 139,093,282 261,484,071 1,307,405 0 6,229,171
Operating Expenses
Fuel 0 0 0 0 0
Purchased Power 0 0 0 0 0
Operations
Operation 40,758,694 110,287,000 0 0 0
Maintenance 5,441,523 2,067,000 0 0 0
Depreciation 11,622,734 13,967,000 0 0 0
Property Taxes 4,235,139 1,896,000 0 0 8,130
Other Taxes 4,792,712 0 0 0 0
Administrative and General 28,041,865 91,983,761 126,355 0 11,513
Minority Interest 2,309,484 0 0 0 0
Interest Expense
Interest on Long-Term Debt 11,454,757 7,848,026 0 0 0
Other Interest Expense 437,847 26,793 11,788 0 1,059,992
Amort of Interest Expense 0 0 0 0 0
AFDC - Debt (341,647) 0 0 0 0
----------- ----------- --------- ----------- ------------
Total Operating Expenses 108,753,108 228,075,579 138,143 0 1,079,635
Exhibit A
Page 5 of 6
Minnesota Power - Consolidated
Minnesota Power Consolidated Statement of Income
Current Period: Dec-97
YTD Dec-97 Minnesota Cons. MP
Consolidated Elimination Power SWL&P Enterprises
-------------- ------------- -------------- ---------- -----------
Income from Equity Investments 14,829,154 0 14,829,154 0 0
-------------- ------------- -------------- ---------- -----------
Operating Income 130,214,451 (40,108,532) 94,941,951 3,592,477 1,721,092
Distribution - QUIPS (6,037,499) 201,251 0 0 0
Income Tax (Expense) (46,599,507) 0 (17,364,505) (1,331,792) 264,074
-------------- ------------- -------------- ---------- -----------
Net Income 77,577,445 (39,907,281) 77,577,446 2,260,685 1,985,166
Preferred Dividends (1,949,290) 0 (1,949,290) 0 0
-------------- ------------- -------------- ---------- -----------
Earnings Available for Common 75,628,155 (39,907,281) 75,628,156 2,260,685 1,985,166
============== ============= ============== ========== ===========
Cons. Water Cons. MP Energy MP CNRD,
Resources Automotive Land Real Estate LFC1, MPC1
----------- ----------- ----------- ----------- ------------
Income from Equity Investments 0 0 0 0 0
----------- ----------- ----------- ----------- -----------
Operating Income 30,340,174 33,408,492 1,169,262 0 5,149,536
Distribution - QUIPS 0 0 0 0 (6,238,750)
Income Tax (Expense) (12,033,784) (16,537,990) (42,642) 0 447,132
----------- ----------- ----------- ----------- ------------
Net Income 18,306,390 16,870,502 1,126,620 0 (642,082)
Preferred Dividends 0 0 0 0 0
----------- ----------- ----------- ----------- -----------
Earnings Available for Common 18,306,390 16,870,502 1,126,620 0 (642,082)
=========== =========== =========== =========== ===========
Exhibit A
Page 6 of 6
Minnesota Power & Light Company and Subsidiaries
Consolidating Statement of Retained Earnings
for the Year Ended December 31, 1997
Superior Consolidated
Eliminations Minnesota Water, Light Consolidated MP Water
Consolidated and Power & Light and Power MP Resources
Total Adjustments Company Company Enterprises Group, Inc.
----- ----------- ------- ------- ----------- ------------
Balance at Beginning of Period $ 282,959,751 $ (147,218,574) $282,959,751 $11,755,362 $ 10,418,619 $124,640,539
Additions
Net Income (Loss) from
Statement of Income 77,577,445 (39,907,278) 77,577,445 2,260,685 1,985,166 18,306,392
------------- -------------- ------------ ----------- ------------ ------------
360,537,196 (187,125,852) 360,537,196 14,016,047 12,403,785 142,946,931
------------- -------------- ------------ ----------- ------------ ------------
Deductions
Dividends - Cash
5% Preferred Stock
($5.00 per share) 566,790 566,790
Serial (A) Preferred Stock
($6.70 per share) 670,000 670,000
Serial Preferred Stock
($7.125 per share) 712,500 712,500
Common Stock 62,462,491 (1,600,000) 62,462,491 1,600,000
Other (98,984,006) 10,418,619 87,223,369
------------- -------------- ------------ ----------- ------------ ------------
Total Deductions 64,411,781 (100,584,006) 64,411,781 1,600,000 10,418,619 87,223,369
------------- -------------- ------------ ----------- ------------ ------------
Balance at End of Period $ 296,125,415 $ (86,541,846) $296,125,415 $12,416,047 $ 1,985,166 $ 55,723,562
------------- -------------- ------------ ----------- ------------ ------------
Consolidated Consolidated
MP RendField,
Automotive Energy Land MP Lakeview,
Services, Inc. Incorporated Real Estate MP&L Capital
-------------- ------------ ----------- ------------
Balance at Beginning of Period $ 5,803,495 $5,263,532 $ 0 $(10,662,973)
Additions
Net Income (Loss) from
Statement of Income 16,870,499 1,126,619 0 (642,083)
----------- ----------- --------- ------------
22,673,994 6,390,151 0 (11,305,056)
----------- ----------- --------- ------------
Deductions
Dividends - Cash
5% Preferred Stock
($5.00 per share)
Serial (A) Preferred Stock
($6.70 per share)
Serial Preferred Stock
($7.125 per share)
Common Stock
Other 1,342,018
----------- ----------- --------- -------------
Total Deductions 1,342,018
----------- ----------- --------- -------------
Balance at End of Period $22,673,994 $ 6,390,151 $ 0 $ (12,647,074)
----------- ----------- --------- -------------
Includes balances from subsidiaries reorganized during 1997.
Dividends from Superior Water, Light and Power Company.
Transfers due to 1997 reorganization.
Exhibit A-1
Page 1 of 5
Minnesota Power - Consolidated
MP Enterprises Consolidated Balance Sheet
Current Period: Dec-97
YTD-Dec-97 MP Consol Rainy
Consolidated Eliminations Enterprises BNI Coal Services River
------------ ------------ ------------ ------------ ------------ -----------
Plant and Other Assets
Electric 0 0 0 0 0 0
Electric Miscellaneous 6,420,689 0 0 0 331,334 313,012
Gas 0 0 0 0 0 0
Water (SWLP) 0 0 0 0 0 0
Coal 40,903,971 0 0 40,903,971 0 0
Common 0 0 0 0 0 0
----------- ------------ ------------ ------------ ------------ -----------
Total Electric Operations 47,324,660 0 0 40,903,971 331,334 313,012
----------- ------------ ------------ ------------ ------------ -----------
Water 0 0 0 0 0 0
Water Miscellaneous 0 0 0 0 0 0
----------- ------------ ------------ ------------ ------------ -----------
Total Water Operation 0 0 0 0 0 0
----------- ------------ ------------ ------------ ------------ -----------
Auto Restribution 0 0 0 0 0 0
Afford Housing & Other
----------- ------------ ------------ ------------ ------------ -----------
Total Investment Operations 0 0 0 0 0 0
----------- ------------ ------------ ------------ ------------ -----------
Total Plant 47,324,660 0 0 40,903,971 331,334 313,012
Accumulated Depreciation (21,973,985) 0 0 (21,310,735) (116,970) (18,781)
Construction Work in Progress 407,626 0 0 0 0 0
----------- ------------ ------------ ------------ ------------ -----------
Net Plant 25,758,301 0 0 19,593,237 214,364 294,231
Securities Investments 0 0 0 0 0 0
Equity Investments 5,000 0 0 0 0 0
Real Estate 0 0 0 0 0 0
Other 0 0 0 0 0 0
Investment in Subsidiaries 0 (25,498,776) 25,498,776 0 0 0
----------- ------------ ------------ ------------ ------------ -----------
Total Plant and Assets 25,763,300 (25,498,776) 25,498,776 19,593,237 214,364 294,231
----------- ------------ ------------ ------------ ------------ -----------
Current Assets
Cash 3,824,747 0 0 3,683,645 4,813 21,814
Temporary Cash Investments 472,968 0 0 442,968 0 0
Trading Securities 0 0 0 0 0 0
Customer Accounts Receivable 4,019,574 0 0 3,652,942 172,968 32,940
Reserve for Uncol Accounts 0 0 0 0 0 0
Notes Receivable 0 0 0 0 0 0
Accounts Receivable - Other 36,648 0 0 0 36,648 0
Accounts Receivable - Associates 16,047,235 (2,020,000) 4,914,194 348 58,200 4,000,537
Consol MP MP
UMPI Synertec Telecom Affiliates
------------ ----------- ----------- -----------
Plant and Other Assets
Electric 0 0 0 0
Electric Miscellaneous 5,109,443 55,218 611,683 0
Gas 0 0 0 0
Water (SWLP) 0 0 0 0
Coal 0 0 0 0
Common 0 0 0 0
------------ ----------- ----------- -----------
Total Electric Operations 5,109,443 55,218 611,683 0
------------ ----------- ----------- -----------
Water 0 0 0 0
Water Miscellaneous 0 0 0 0
------------ ----------- ----------- -----------
Total Water Operation 0 0 0 0
------------ ----------- ----------- -----------
Auto Restribution 0 0 0 0
Afford Housing & Other
------------ ----------- ----------- -----------
Total Investment Operations 0 0 0 0
------------ ----------- ----------- -----------
Total Plant 5,109,443 55,218 611,683 0
Accumulated Depreciation (466,503) (50,524) (10,472) 0
Construction Work in Progress 0 0 407,626 0
------------ ----------- ----------- -----------
Net Plant 4,642,939 4,694 1,008,836 0
Securities Investments 0 0 0 0
Equity Investments 5,000 0 0 0
Real Estate 0 0 0 0
Other 0 0 0 0
Investment in Subsidiaries 0 0 0 0
------------ ----------- ----------- -----------
Total Plant and Assets 4,647,939 4,694 1,008,836 0
------------ ----------- ----------- -----------
Current Assets
Cash 95,245 19,933 0 (704)
Temporary Cash Investments 30,000 0 0 0
Trading Securities 0 0 0 0
Customer Accounts Receivable 9,413 151,310 0 0
Reserve for Uncol Accounts 0 0 0 0
Notes Receivable 0 0 0 0
Accounts Receivable - Other 0 0 0 0
Accounts Receivable - Associates 2,449,037 4,568,044 2,053,800 23,075
Exhibit A-1
Page 2 of 5
Minnesota Power - Consolidated
MP Enterprises Consolidated Balance Sheet
Current Period: Dec-97
YTD-Dec-97 MP Consol Rainy
Consolidated Eliminations Enterprises BNI Coal Services River
------------ ------------ ------------ ------------ ------------ -----------
Fuel Stock 0 0 0 0 0 0
Plant & Operating Supplies 3,495,503 0 0 3,137,569 357,933 0
Prepayments 71,946 0 0 62,828 0 4,127
Other Current & Accrued Assets 1,404 0 0 1,404 0 0
----------- ------------ ------------ ------------ ------------ -----------
Total Current Assets 27,970,025 (2,020,000) 4,914,194 10,981,705 630,564 4,059,418
----------- ------------ ------------ ------------ ------------ -----------
Deferred Charges 5,128,955 0 0 5,082,269 0 0
----------- ------------ ------------ ------------ ------------ -----------
Intangibles
Goodwill 0 0 0 0 0 0
Other 659,503 0 0 0 659,503 0
----------- ------------ ------------ ------------ ------------ -----------
Total Intangibles 659,503 0 0 0 659,503 0
----------- ------------ ------------ ------------ ------------ -----------
----------- ------------ ------------ ------------ ------------ -----------
Total Assets 59,521,783 (27,518,776) 30,412,970 35,657,211 1,504,430 4,353,650
=========== ============ ============ ============ ============ ===========
Consol MP MP
UMPI Synertec Telecom Affiliates
------------ ----------- ----------- -----------
Fuel Stock 0 0 0 0
Plant & Operating Supplies 0 0 0 0
Prepayments 4,991 0 0 0
Other Current & Accrued Assets 0 0 0 0
------------ ----------- ----------- -----------
Total Current Assets 2,588,686 4,739,286 2,053,800 22,371
------------ ----------- ----------- -----------
Deferred Charges 46,686 0 0 0
------------ ----------- ----------- -----------
Intangibles
Goodwill 0 0 0 0
Other 0 0 0 0
------------ ----------- ----------- -----------
Total Intangibles 0 0 0 0
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------
Total Assets 7,283,312 4,743,979 3,062,636 22,371
============ =========== =========== ===========
Exhibit A-1
Page 3 of 5
Minnesota Power - Consolidated
MP Enterprises Consolidated Balance Sheet
Current Period: Dec-97
YTD-Dec-97 MP Consol Rainy
Consolidated Eliminations Enterprises BNI Coal Services River
------------ ------------ ----------- ------------ ------------ -----------
Capitalization
Common Equity
Common Stock & PD in Capital 26,234,451 (15,467,914) 26,234,451 2,027,426 1,482,082 1,350,000
Loan to Leveraged ESOP 0 0 0 0 0 0
Unrealized Gains-Investments 0 0 0 0 0 0
Cumul Translation Adjustment 0 0 0 0 0 0
Retained Earnings 1,985,166 (10,030,862) 1,985,167 12,531,545 (1,054,810) (1,886,325)
Preferred Stock
5% 0 0 0 0 0 0
$6.70 Series 0 0 0 0 0 0
$7.125 Series 0 0 0 0 0 0
QUIPS 0 0 0 0 0 0
Long-Term Debt
Bonds 0 0 0 0 0 0
Other Long-Term Debt 14,894,683 0 0 12,630,671 0 0
Unamortized Discount - Debt 0 0 0 0 0 0
----------- ------------ ----------- ------------ ------------ -----------
Total Capitalization 43,114,300 (25,498,776) 28,219,619 27,189,641 427,273 (536,325)
----------- ------------ ----------- ------------ ------------ -----------
Current Liabilities
Notes Payable 0 0 0 0 0 0
Current Maturities 2,241,003 0 0 2,066,181 0 0
Accounts Payable
Accounts Payable - Other 527,251 0 0 465,234 41,400 0
Accounts Payable - Associates 7,425,318 (2,020,000) 2,222,951 212,919 704,928 4,996,379
Accrued Taxes
Federal Income Taxes 458,325 0 20,410 237,887 232,900 (20,490)
State Income Taxes (218,815) 0 (50,010) 75,545 (153,510) (39,850)
Other Accrued Taxes 504,327 0 0 491,278 0 0
Accrued Dividends & Interest
Interest Accrued 225,980 0 0 181,197 0 0
Dividends Declared 0 0 0 0 0 0
Other
Customer Deposits 0 0 0 0 0 0
Tax Collections Payable 12,372 0 0 0 12,030 0
Misc Current & Accrued Liabilities 1,121,361 0 0 1,109,631 (822) 0
----------- ------------ ----------- ------------ ------------ -----------
Total Current Liabilities 12,297,121 (2,020,000) 2,193,351 4,839,872 836,927 4,936,039
----------- ------------ ----------- ------------ ------------ -----------
Deferred Credits
Cont in Aid of Const 0 0 0 0 0 0
Accum Deferred Income Taxes 1,781,749 0 0 1,300,635 240,231 (46,065)
Accum Def Inv Tax Credits 0 0 0 0 0 0
Other
Minority Interest 1,552 0 0 0 0 0
Other Deferred Credits 2,327,062 0 0 2,327,062 0 0
----------- ------------ ----------- ------------ ------------ -----------
Total Deferred Credits 4,110,363 0 0 3,627,697 240,231 (46,065)
----------- ------------ ----------- ------------ ------------ -----------
Total Liab & Capitalization 59,521,783 (27,518,776) 30,412,970 35,657,211 1,504,430 4,353,650
=========== ============ =========== ============ ============ ===========
Consol MP MP
UMPI Synertec Telecom Affiliates
------------ ----------- ----------- ----------
Capitalization
Common Equity
Common Stock & PD in Capital 3,524,189 5,074,217 2,000,000 10,000
Loan to Leveraged ESOP 0 0 0 0
Unrealized Gains-Investments 0 0 0 0
Cumul Translation Adjustment 0 0 0 0
Retained Earnings 946,544 (410,788) (95,307) 0
Preferred Stock
5% 0 0 0 0
$6.70 Series 0 0 0 0
$7.125 Series 0 0 0 0
QUIPS 0 0 0 0
Long-Term Debt
Bonds 0 0 0 0
Other Long-Term Debt 2,264,012 0 0 0
Unamortized Discount - Debt 0 0 0 0
------------ ----------- ----------- ----------
Total Capitalization 6,734,745 4,663,429 1,904,693 10,000
------------ ----------- ----------- ----------
Current Liabilities
Notes Payable 0 0 0 0
Current Maturities 174,821 0 0 0
Accounts Payable
Accounts Payable - Other 20,617 0 0 0
Accounts Payable - Associates 29,587 95,121 1,171,402 12,030
Accrued Taxes
Federal Income Taxes (48,842) 42,750 (6,290) 0
State Income Taxes (35,430) 3,090 (18,650) 0
Other Accrued Taxes 13,049 0 0 0
Accrued Dividends & Interest
Interest Accrued 44,783 0 0 0
Dividends Declared 0 0 0 0
Other
Customer Deposits 0 0 0 0
Tax Collections Payable 0 0 0 341
Misc Current & Accrued Liabilities 12,552 0 0 0
------------ ----------- ----------- ----------
Total Current Liabilities 211,136 140,961 1,146,462 12,371
------------ ----------- ----------- ----------
Deferred Credits
Cont in Aid of Const 0 0 0 0
Accum Deferred Income Taxes 335,878 (60,410) 11,480 0
Accum Def Inv Tax Credits 0 0 0 0
Other
Minority Interest 1,552 0 0 0
Other Deferred Credits 0 0 0 0
------------ ----------- ----------- ----------
Total Deferred Credits 337,430 (60,410) 11,480 0
------------ ----------- ----------- ----------
Total Liab & Capitalization 7,283,312 4,743,979 3,062,636 22,371
============ =========== =========== ==========
Exhibit A-1
Page 4 of 5
Minnesota Power - Consolidated
MP Enterprises Consolidated Statement of Income
Current Period: Dec-97
YTD-Dec-97 MP Consol Rainy
Consolidated Eliminations Enterprises BNI Coal Services River
------------ ------------ ------------ ------------ ------------ -----------
Revenue and Income
Electric Operations
Electric 0 0 0 0 0 0
Electric - Misc 4,199,724 0 27,637 0 724,529 2,555,619
AFDC - Equity 0 0 0 0 0 0
Gas 0 0 0 0 0 0
Water (SWL&P) 0 0 0 0 0 0
Coal 30,660,344 0 0 30,660,344 0 0
----------- ------------ ------------ ------------ ------------ -----------
Total Electric Operations 34,860,068 0 27,637 30,660,344 724,529 2,555,619
Water Operations
Water 0 0 0 0 0 0
Water - Misc 0 0 0 0 0 0
AFDC - Equity 0 0 0 0 0 0
----------- ------------ ------------ ------------ ------------ -----------
Total Water Operations 0 0 0 0 0 0
Auto Redistribution 0 0 0 0 0 0
Investments
Investment 0 0 0 0 0 0
Real Estate 0 0 0 0 0 0
Other 0 0 0 0 0 0
Equity in Subs 0 (2,284,325) 2,284,325 0 0 0
----------- ------------ ------------ ------------ ------------ -----------
Total Investments 0 (2,284,325) 2,284,325 0 0 0
----------- ------------ ------------ ------------ ------------ -----------
Total Operating Revenue and Income 34,860,067 (2,284,325) 2,311,962 30,660,344 724,528 2,555,619
Operating Expenses
Fuel 0 0 0 0 0 0
Purchased Power 0 0 0 0 0 0
Operations
Operation 22,113,316 0 20,950 18,933,381 663,675 2,219,221
Maintenance 1,740,000 0 0 1,740,000 0 0
Depreciation 2,392,442 0 0 1,942,527 277,429 12,520
Property Taxes 47,288 0 0 31,303 4,677 0
Other Taxes 634,972 0 0 634,972 0 0
Administrative and General 4,871,110 0 516,944 1,321,062 1,577,711 849,296
Minority Interest (94) 0 0 0 0 0
Interest Expense
Interest on Long-Term Debt 1,260,355 0 0 1,091,351 0 0
Other Interest Expense 79,588 0 0 25,482 0 0
Amort of Interest Expense 0 0 0 0 0 0
AFDC - Debt 0 0 0 0 0 0
----------- ------------ ------------ ------------ ------------ -----------
Total Operating Expenses 33,138,975 0 537,894 25,720,076 2,523,491 3,081,037
Consol MP MP
UMPI Synertec Telecom Affiliates
------------ ----------- ----------- -----------
Revenue and Income
Electric Operations
Electric 0 0 0 0
Electric - Misc 348,170 527,213 16,555 0
AFDC - Equity 0 0 0 0
Gas 0 0 0 0
Water (SWL&P) 0 0 0 0
Coal 0 0 0 0
------------ ----------- ---------- -----------
Total Electric Operations 348,170 527,213 16,555 0
Water Operations
Water 0 0 0 0
Water - Misc 0 0 0 0
AFDC - Equity 0 0 0 0
------------ ----------- ---------- -----------
Total Water Operations 0 0 0 0
Auto Redistribution 0 0 0 0
Investments
Investment 0 0 0 0
Real Estate 0 0 0 0
Other 0 0 0 0
Equity in Subs 0 0 0 0
------------ ----------- ---------- -----------
Total Investments 0 0 0 0
------------ ----------- ---------- -----------
Total Operating Revenue and Income 348,171 527,213 16,555 0
Operating Expenses
Fuel 0 0 0 0
Purchased Power 0 0 0 0
Operations
Operation 177,112 0 112,053 (13,075)
Maintenance 0 0 0 0
Depreciation 146,386 3,108 10,472 0
Property Taxes 11,308 0 0 0
Other Taxes 0 0 0 0
Administrative and General 113,040 423,386 56,596 13,075
Minority Interest (94) 0 0 0
Interest Expense
Interest on Long-Term Debt 169,004 0 0 0
Other Interest Expense 54,106 0 0 0
Amort of Interest Expense 0 0 0 0
AFDC - Debt 0 0 0 0
------------ ----------- ---------- -----------
Total Operating Expenses 670,861 426,494 179,122 0
Exhibit A-1
Page 5 of 5
Minnesota Power - Consolidated
MP Enterprises Consolidated Statement of Income
Current Period: Dec-97
YTD-Dec-97 MP Consol Rainy
Consolidated Eliminations Enterprises BNI Coal Services River
------------ ------------ ------------ ------------ ------------ -----------
Income from Equity Investments 0 0 0 0 0 0
----------- ------------ ------------ ------------ ------------ -----------
Operating Income 1,721,092 (2,284,325) 1,774,067 4,940,268 (1,798,963) (525,418)
Distribution - QUIPS 0 0 0 0 0 0
Income Tax (Expense) 264,074 0 211,100 (1,369,921) 744,153 217,178
----------- ------------ ------------ ------------ ------------ -----------
Net Income 1,985,166 (2,284,325) 1,985,167 3,570,347 (1,054,810) (308,240)
Preferred Dividends 0 0 0 0 0 0
----------- ------------ ------------ ------------ ------------ -----------
Earnings Available for Common 1,985,166 (2,284,325) 1,985,167 3,570,347 (1,054,810) (308,240)
=========== ============ ============ ============ ============ ===========
Consol MP MP
UMPI Synertec Telecom Affiliates
----------- ----------- ----------- -----------
Income from Equity Investments 0 0 0 0
----------- ----------- ----------- -----------
Operating Income (322,691) 100,720 (162,567) 0
Distribution - QUIPS 0 0 0 0
Income Tax (Expense) 435,980 (41,676) 67,260 0
----------- ----------- ---------- -----------
Net Income 113,289 59,044 (95,307) 0
Preferred Dividends 0 0 0 0
----------- ----------- ---------- -----------
Earnings Available for Common 113,289 59,044 (95,307) 0
=========== =========== =========== ===========
Exhibit A-2
Page 1 of 1
Minnesota Power Services Group, Inc.
Consolidating financial statements for Minnesota Power
Services Group, Inc. have been excluded from this exhibit
because each subsidiary within this consolidated group is not
material to Minnesota Power & Light Company's consolidating
financial statements.
Exhibit A-3
Page 1 of 3
Minnesota Power - Consolidated
MP Water Resources Consolidated Balance Sheet
Current Period: Dec-97
YTD Dec-97 MP Water Florida Instr Ser Florida
Consolidated Eliminations Resources Water Res Heater (ISI) LAC Gas Services
------------ ------------- ----------- ------------ ----------- --------- ------ ------------
Assets
Utility Plant- Water 425,111,770 0 0 371,204,980 53,906,790 0 0 0
Accumulated Depreciation (120,698,902) 0 0 (105,399,682) (15,299,220) 0 0 0
Construction Work in Progress 9,574,075 0 0 9,563,730 0 0 0 10,345
------------ ------------- ----------- ----------- ----------- --------- ------ ----------
Net Utility Plant 313,986,943 0 0 275,369,028 38,607,570 0 0 10,345
------------ ------------- ----------- ----------- ----------- --------- ------ ----------
Nonutility Property & Investments
Nonutility & Other
Nonutility Plant 10,459,112 0 0 5,547,097 10,520 2,296,913 0 2,604,582
Accum Depreciation-
Non Utility (2,191,184) 0 0 0 0 (821,890) 0 (1,369,294)
Goodwill 0 0 0 0 0 0 0 0
Other 0 0 0 0 0 0 0 0
Investments 247,179 0 0 0 247,179 0 0 0
Investment in Assoc Company 0 (104,340,462) 104,340,462 0 0 0 0 0
------------ ------------- ----------- ----------- ----------- --------- ------ ----------
Total Non utility Prop & Inv 8,515,107 (104,340,462) 104,340,462 5,547,097 257,698 1,475,023 0 1,235,288
------------ ------------- ----------- ----------- ----------- --------- ------ ----------
Current Assets
Cash 3,494,699 0 180,338 1,914,451 644,702 455,208 0 300,000
Temporary Cash Investments 1,141,000 0 0 0 1,141,000 0 0 0
Trade Accounts Receivable
Customer Accounts Receivable 11,742,152 0 0 8,015,042 949,305 2,705,032 0 72,772
Accum Provision for
Uncol Acct (437,476) 0 0 (418,265) (19,211) 0 0 0
Other Accounts Receivable
Notes Receivable 155,408 0 0 0 155,408 0 0 0
Other Account Receivable 779,650 0 0 350,744 428,905 0 0 0
Accounts Rec from Assoc 29,301,712 (8,639,567) 14,988,806 20,194,696 2,608,168 94,601 0 55,008
Plant and Operating Supplies 858,575 0 0 113,061 424,112 163,117 0 158,285
Prepayments 821,336 0 0 147,569 672,623 1,144 0 0
Other Current Assets 1,418,094 0 0 571,545 759,697 86,853 0 0
------------ ------------- ----------- ----------- ----------- --------- ------ ----------
Total Current Assets 49,275,150 (8,639,567) 15,169,144 30,888,844 7,764,709 3,505,954 0 586,066
------------ ------------- ----------- ----------- ----------- --------- ------ ----------
Deferred Debits
Accum Deferred Income Taxes 16,468,483 0 0 16,457,541 0 10,942 0 0
Other 20,896,080 0 0 20,094,995 0 801,085 0 0
------------ ------------- ----------- ----------- ----------- --------- ------ ----------
Total Deferred Debits 37,364,563 0 0 36,552,536 0 812,027 0 0
------------ ------------- ----------- ----------- ----------- --------- ------ ----------
Total Assets 409,141,763 (112,980,029) 119,509,606 348,357,506 46,629,978 5,793,004 0 1,831,699
============ ============= =========== =========== =========== ========= ====== ==========
Exhibit A-3
Page 2 of 3
Minnesota Power - Consolidated
MP Water Resources Consolidated Balance Sheet
Current Period: Dec-97
YTD Dec-97 MP Water Florida Instr Ser Florida
Consolidated Eliminations Resources Water Res Heater (ISI) LAC Gas Services
------------ ------------ ----------- ----------- ---------- --------- ----- ------------
Capitalization
Common Equity
Common Stock & Paid in Capital 63,605,714 (83,660,581) 63,605,714 76,337,777 5,819,036 9,140 0 1,494,628
Retained Earnings 55,723,562 (20,679,881) 55,723,555 13,641,218 6,783,384 229,950 0 25,336
Bonds 118,113,423 0 0 118,113,423 0 0 0 0
Other Long Term Debt 14,246,821 0 0 0 14,246,821 0 0 0
------------ ------------ ----------- ----------- ---------- --------- ----- ---------
Total Capitalization 251,689,520 (104,340,462) 119,329,268 208,092,419 26,849,241 239,090 0 1,519,964
------------ ------------ ----------- ----------- ---------- --------- ----- ---------
Current Liabilities
Notes Payable 0 0 0 0 0 0 0 0
Current Maturities 555,452 0 0 194,529 360,924 0 0 0
Accounts Payable
Accounts Payable 5,495,526 0 0 3,975,078 211,045 1,309,404 0 0
Acct Payable Assoc Co 2,562,459 (4,650,761) 180,338 2,737,590 64,252 3,931,040 0 300,000
Accrued Taxes
Federal Income Taxes (207,440) 0 0 0 3,001 (210,441) 0 0
State Income Taxes (149,558) 0 0 0 (149,558) 0 0 0
Other Accrued Taxes 8,452,623 0 0 7,970,940 89,581 384,492 0 7,611
Accrued Interest 2,841,561 0 0 2,841,561 0 0 0 0
Other
Customer Deposits 2,143,824 0 0 1,838,717 305,107 0 0 0
Tax Collections Payable 0 0 0 0 0 0 0 0
Misc Curr & Accrued Liabilities 5,179,452 0 0 3,367,071 1,743,760 68,622 0 0
------------ ------------ ----------- ----------- ---------- --------- ----- ---------
Total Current Liabilities 26,873,898 (4,650,761) 180,338 22,925,484 2,628,111 5,483,116 0 307,611
------------ ------------ ----------- ----------- ---------- --------- ----- ---------
Deferred Credits
Contributions in Aid of Constru 101,231,137 0 0 82,238,762 18,988,251 0 0 4,124
Deferred Income Taxes 20,792,542 0 0 22,557,369 (1,835,625) 70,798 0 0
Deferred Investment Tax Credits 1,673,228 0 0 1,673,228 0 0 0 0
Other
Minority Interest 0 0 0 0 0 0 0 0
Other Deferred Credits 6,881,438 (3,988,806) 0 10,870,244 0 0 0 0
------------ ------------ ----------- ----------- ---------- --------- ----- ---------
Total Deferred Credits 130,578,345 (3,988,806) 0 117,339,603 17,152,626 70,798 0 4,124
------------ ------------ ----------- ----------- ---------- --------- ----- ---------
Total Liabilities and
Capitalization 409,141,763 (112,980,029) 119,509,606 348,357,506 46,629,978 5,793,004 0 1,831,699
============ ============ =========== =========== ========== ========= ===== =========
Exhibit A-3
Page 3 of 3
Minnesota Power - Consolidated
MP Water Resources Consolidated Statement of Income
Current Period: Dec-97
YTD Dec-97 MP Water Florida Instr Ser Florida
Consolidated Eliminations Resources Water Res Heater (ISI) LAC Gas Services
------------ ------------ ------------ ----------- ---------- --------- ---------- ------------
Revenue
Water 78,069,089 0 0 68,874,642 9,194,447 0 0 0
Water Misc 14,962,937 (2,467,408) 0 7,598,586 837,605 8,001,341 0 992,813
AFDC 246,268 0 0 246,268 0 0 0 0
------------ ------------ ------------ ---------- ---------- --------- ---------- -----------
Total Water Operations 93,278,295 (2,467,408) 0 76,719,496 10,032,053 8,001,341 0 992,813
------------ ------------ ------------ ---------- ---------- --------- ---------- -----------
Investment 6,780,754 (1,641,395) 6,174,504 1,530,891 716,753 0 0 0
Real Estate 38,803,716 0 0 0 0 0 38,803,716 0
Other 230,517 0 230,517 0 0 0 0 0
Gain on Sale 0 0 0 0 0 0 0 0
Equity in Subs 0 (17,373,996) 17,373,996 0 0 0 0 0
------------ ------------ ------------ ---------- ---------- --------- ---------- -----------
Total Inv and Other Income 45,814,987 (19,015,391) 23,779,018 1,530,891 716,753 0 38,803,716 0
------------ ------------ ------------ ---------- ---------- --------- ---------- -----------
Total Oper Revenue and Income 139,093,282 (21,482,799) 23,779,018 78,250,387 10,748,806 8,001,341 38,803,716 992,813
------------ ------------ ------------ ---------- ---------- --------- ---------- -----------
Operating Expenses
Operation 40,758,694 (2,467,408) 0 26,421,593 3,393,479 5,715,753 7,010,253 685,023
Maintenance 5,441,523 0 0 5,242,167 199,356 0 0 0
Depreciation 11,622,734 0 289,968 9,222,557 1,466,117 389,527 153,169 101,395
Property Taxes 4,235,139 0 0 4,113,458 121,681 0 0 0
Other Taxes 4,792,712 0 0 4,227,419 539,341 0 0 25,952
Admin and General 28,041,865 0 2,910,751 7,924,802 2,060,109 2,387,487 12,620,079 138,636
Minority Interest 2,309,484 2,309,484 0 0 0 0 0 0
Interest Expense
Interest on LTD 11,454,757 (1,641,395) 1,287,600 9,969,088 1,007,979 0 831,485 0
Other Interest Exp 437,847 0 78,621 257,887 72,081 28,699 0 559
Amort of Debt Exp 0 0 0 0 0 0 0 0
AFDC-Debt (341,647) 0 0 (341,647) 0 0 0 0
------------ ------------ ------------ ---------- ---------- --------- ---------- -----------
Total Operating Expenses 108,753,108 (1,799,319) 4,566,941 67,037,324 8,860,144 8,521,466 20,614,986 951,566
------------ ------------ ------------ ---------- ---------- --------- ---------- -----------
Operating Income 30,340,174 (19,683,480) 19,212,077 11,213,063 1,888,662 (520,125) 18,188,730 41,247
Income Tax Expense (12,033,784) 0 (905,687) (3,957,745) (782,430) 269,302 (6,641,313) (15,911)
------------ ------------ ------------ ---------- ---------- --------- ---------- -----------
Net Income 18,306,390 (19,683,480) 18,306,390 7,255,318 1,106,232 (250,823) 11,547,417 25,336
============ ============ ============ ========== ========== ========= ========== ===========
Exhibit A-4
Page 1 of 1
MP Real Estate Holdings, Inc.
Consolidating financial statements for MP Real Estate
Holdings, Inc. have been excluded from this exhibit because
for 1997 the material subsidiary, Lehigh Acquisition Corporation,
is included in other exhibits. The consolidated statement of
income for Lehigh Acquisition Corporation is combined with the
consolidating financial statements of MP Water Resources and
filed as Exhibit A-3. The consolidating balance sheet is
presented as MP Real Estate in the consolidating financial
statements of Minnesota Power & Light Company filed as Exhibit A.
The assets of Lehigh Acquisition Corporation were transferred
from MP Water Resources to MP Real Estate Holdings, Inc. on
December 31, 1997.
Exhibit A-5
Page 1 of 6
LEHIGH ACQUISITION CORPORATION AND SUBSIDIARIES CONSOLIDATING BALANCE SHEET AS OF 31-Dec-97
INCOME STATEMENT FOR THE 12 MONTHS ENDED 31-Dec-97
COMBINED
ENTITIES CONSOLIDATED
PURCHASE ACCOUNTING ADJUSTED FOR LEHIGH ELIMINATIONS LEHIGH
COMBINED ADJUSTMENTS PURCHASE ACQUISITION AND ACQUISITION
ENTITIES DR CR ADJUSTMTS CORPORATION ADJUSTMENTS CORPORATION
----------- ---------- ---------- ------------ ----------- ------------ -----------
ASSETS
Cash and cash equivalents 5,520,568 5,520,568 172,903 5,693,471
Inventory and supplies
Residential construction in progress
Trade and miscellaneous accounts rec 549,057 549,057 549,057
Contracts receivable-postacquisition:
Homesites, net of allowance for cancels 5,496,960 5,496,960 5,496,960
Timeshare 406,599 406,599 406,599
Commercial notes 15,404,423 15,404,423 15,404,423
----------- ---------- ---------- ----------- ----------- ------------ -----------
Total contracts receivable-postacq 21,307,982 21,307,982 21,307,982
----------- ---------- ---------- ----------- ----------- ------------ -----------
Contracts receivable-preacquisition 6,440,385 235,303 6,675,688 6,675,688
Due from affiliates:
Water and wastewater connections 4,061,029 4,061,029 4,061,029
Tax share 4,449,399 (4,403,399) 46,000
Other 13,711,999 13,711,999 (13,711,999)
----------- ---------- ---------- ----------- ----------- ------------ -----------
Total due from affiliates 17,773,028 17,773,028 4,449,399 (18,115,398) 4,107,029
----------- ---------- ---------- ----------- ----------- ------------ -----------
Investments/advances to subsidiaries 64,191,274 (64,191,274)
Property and equipment 1,684,571 2,760,653 4,445,224 4,445,224
Less accum depreciation (1,082,501) 2,529,939 (3,612,440) (3,612,440)
Less bargain differential-PP&E 140,073 (140,073) (140,073)
----------- ---------- ---------- ----------- ----------- ------------ -----------
Net property and equipment 602,070 2,760,653 2,670,012 692,711 692,711
----------- ---------- ---------- ----------- ----------- ------------ -----------
Land, land improvements and CIP 42,000,142 4,671,722 46,671,864 46,671,864
Less bargain differential-land 4,589,704 21,174,529 (16,584,825) (16,584,825)
----------- ---------- ---------- ----------- ----------- ------------ -----------
Net land, land improvements 42,000,142 9,261,426 21,174,529 30,087,039 30,087,039
----------- ---------- ---------- ----------- ----------- ------------ -----------
Investment in joint venture 923,396 451,699 471,697 471,697
Deferred Income Tax 16,877,642 16,877,642
Other assets 212,845 212,845 212,845
----------- ---------- ---------- ----------- ----------- ------------ -----------
95,329,473 12,038,858 83,290,615 85,691,218 (82,306,672) 86,675,161
=========== ========== ========== =========== =========== ============ ===========
LIAB, CAP STOCK AND R/E (DEFICIT)
Trade accounts payable 602,060 602,060 602,060
Customer Deposits
Accrued expenses:
Real estate taxes 7,455 7,455 7,455
Other 3,245,922 3,245,922 3,245,922
----------- ---------- ---------- ----------- ----------- ------------ -----------
Total accrued expenses 3,253,377 3,253,377 3,253,377
----------- ---------- ---------- ----------- ----------- ------------ -----------
Due to affiliates:
Utility fee credit 1,250,000 1,250,000 1,250,000
Tax share 4,403,400 4,403,400 (4,403,400)
Other 13,711,999 (13,711,999)
----------- ---------- ---------- ----------- ----------- ------------ -----------
Total due to affiliates 5,653,400 5,653,400 13,711,999 (18,115,399) 1,250,000
----------- ---------- ---------- ----------- ----------- ------------ -----------
Contingency reserves 3,851,274 3,851,274 3,851,274
Deferred income 888,014 258,682 1,146,696 1,146,696
Income taxes payable 74,891 74,891 74,891
Notes payable 8,879 8,879 8,879
Notes payable - long term 4,508,765 4,508,765 4,508,765
Minority interest
Common stock and R/E (deficit):
Common stock 21,100 21,100 117 (21,100) 117
Capital in excess of par value 88,738,150 56,219,827 32,518,323 5,952,293 (32,518,323) 5,952,293
Retained earnings (deficit) (12,270,437) 43,922,287 31,651,850 66,026,809 (31,651,850) 66,026,809
----------- ---------- ---------- ----------- ----------- ------------ -----------
Total C/S and R/E (deficit) 76,488,813 56,219,827 43,922,287 64,191,273 71,979,219 (64,191,273) 71,979,219
----------- ---------- ---------- ----------- ----------- ------------ -----------
95,329,473 12,038,858 83,290,615 85,691,218 (82,306,672) 86,675,161
=========== ========== ========== =========== =========== ============ ===========
Exhibit A-5
Page 2 of 6
LEHIGH ACQUISITION CORPORATION AND SUBSIDIARIES CONSOLIDATING BALANCE SHEET AS OF 31-Dec-97
INCOME STATEMENT FOR THE 12 MONTHS ENDED 31-Dec-97
COMBINED
ENTITIES
ADJUSTED CONSOLIDATED
PURCHASE ACCOUNTING FOR LEHIGH ELIMINATIONS LEHIGH
COMBINED ADJUSTMENTS PURCHASE ACQUISITION AND ACQUISITION
ENTITIES DR CR ADJUSTMTS CORPORATION ADJUSTMENTS CORPORATION
----------- ----------- ----------- ----------- ----------- ------------ ------------
Revenues:
Lots with roads only 1,738,722 1,738,722 1,738,722
Builder lots (serviced) 2,013,404 2,013,404 2,013,404
Other lot sales 7,696,954 7,696,954 7,696,954
Less estimated uncollectible sales (328,785) (328,785) (328,785)
----------- ----------- ----------- ---------- ---------- ----------- ----------
Net homesite sales 11,120,295 11,120,295 11,120,295
----------- ----------- ----------- ---------- ---------- ----------- ----------
Commercial/bulk land sales 20,340,091 832,685 21,172,776 21,172,776
Timeshare sales
Residential sales
Discount earned on acquired receivables 2,601,855 1,024,319 3,626,174 3,626,174
Bargain differential earned:
Lots with roads only 2,516,244 2,516,244 2,516,244
Builder lots (serviced) 837,208 837,208 837,208
Timeshare
Commercial/bulk land 1,217,146 1,217,146 1,217,146
Receivables
Property and equipment
----------- ----------- ----------- ---------- ---------- ----------- ----------
Total bargain differential earned 4,570,598 4,570,598 4,570,598
----------- ----------- ----------- ---------- ---------- ----------- ----------
Finance income 1,312,333 1,312,333 13,378 1,325,711
Operating revenues - subsidiaries 200,842 19,257 220,099 220,099
Other revenues 4,887,582 3,548,921 1,338,661 1,338,661
----------- ----------- ----------- ---------- ---------- ----------- ----------
Total revenues 40,462,998 3,548,921 6,446,859 43,360,936 13,378 43,374,314
----------- ----------- ----------- ---------- ---------- ----------- ----------
Cost of Sales:
Lots with roads only 6,174,977 3,023,014 3,151,963 3,151,963
Builder lots (serviced) 1,637,255 308,435 1,945,690 1,945,690
Other lot sales 1,448,757 1,448,757 1,448,757
Commercial/bulk land sales 4,314,245 720,196 5,034,441 5,034,441
Timeshare sales
Residential sales
----------- ----------- ----------- ---------- ---------- ----------- ----------
Total cost of sales 13,575,234 1,028,631 3,023,014 11,580,851 11,580,851
----------- ----------- ----------- ---------- ---------- ----------- ----------
Expenses:
Selling expenses 6,174,105 6,174,105 6,174,105
Property taxes 2,724,681 2,724,681 2,724,681
General and administrative expenses 3,960,578 273,144 3,687,434 (210,449) 3,476,985
Operating expenses - subsidiaries 40,043 15,107 24,936 24,936
Other expenses 259,372 40,000 219,372 219,372
Depreciation 158,314 5,256 153,058 111 153,169
Interest expense 657,425 657,425 174,060 831,485
----------- ----------- ----------- ---------- ---------- ----------- ----------
Total expenses 13,974,518 333,507 13,641,011 (36,278) 13,604,733
----------- ----------- ----------- ---------- ---------- ----------- ----------
Income (loss) before income taxes,
minority interest, and equity in
earnings of subsidiaries 12,913,246 4,577,552 9,803,380 18,139,074 49,656 18,188,730
Provision for (reduction) income taxes:
Current 5,134,232 5,134,232 (5,186,762) (52,530)
Deferred 6,693,843 6,693,843
----------- ----------- ----------- ---------- ---------- ----------- ----------
5,134,232 5,134,232 1,507,081 6,641,313
Income (loss) before minority
interest and equity in earnings of
consolidated subsidiaries 7,779,014 4,577,552 9,803,380 13,004,842 (1,457,425) 11,547,417
Minority interest
----------- ----------- ----------- ---------- ---------- ----------- ----------
Net income (loss) before equity in
earnings of consolidated subsidiaries 7,779,014 4,577,552 9,803,380 13,004,842 (1,457,425) 11,547,417
Equity in earnings of subsidiaries 13,004,842 (13,004,842)
----------- ----------- ----------- ---------- ---------- ----------- ----------
Net income (loss) 7,779,014 4,577,552 9,803,380 13,004,842 11,547,417 (13,004,842) 11,547,417
R/E (deficit) begin of period (15,349,451) 38,696,459 23,347,008 54,479,392 (23,347,008) 54,479,392
Dividends from (advances to) subs (4,700,000) (4,700,000) 4,700,000
----------- ----------- ----------- ---------- ---------- ----------- ----------
R/E (deficit) end of period (12,270,437) 43,922,287 31,651,850 66,026,809 (31,651,850) 66,026,809
=========== =========== =========== ========== ========== =========== ==========
Exhibit A-5
Page 3 of 6
COMBINED ENTITIES CONSOLIDATING BALANCE SHEET AS OF 31-Dec-97
INCOME STATEMENT FOR THE 12 MONTHS ENDED 31-Dec-97
LEHIGH
CORPORATION INTERLACHEN SUNDOWNER TOTAL
AND LAKES PROPERTIES, SRC OF COMBINED
SUBSIDIARIES ESTATES INC. FLORIDA ENTITIES
------------- ----------- ----------- -------- --------- ----------- ----------
ASSETS
Cash and cash equivalents 5,474,994 25,849 19,725 5,520,568
Inventory and supplies
Residential construction in progress
Trade and miscellaneous accounts rec 490,008 25,161 33,888 549,057
Contracts receivable-postacquisition:
Homesites, net of allowance for cancels 5,222,584 102,052 172,324 5,496,960
Timeshare 406,599 406,599
Commercial notes 15,404,423 15,404,423
---------- ---------- ---------- -------- --------- ---------- -----------
Total contracts receivable-postacq 21,033,606 102,052 172,324 21,307,982
---------- ---------- ---------- -------- --------- ---------- -----------
Contracts receivable-preacquisition 6,440,385 6,440,385
Due from affiliates:
Water and wastewater connections 4,061,029 4,061,029
Tax share
Other 12,229,564 567,912 563,469 351,054 13,711,999
---------- ---------- ---------- -------- --------- ---------- -----------
Total due from affiliates 16,290,593 567,912 563,469 351,054 17,773,028
---------- ---------- ---------- -------- --------- ---------- -----------
Investments/advances to subsidiaries
Property and equipment 1,684,571 1,684,571
Less accum depreciation (1,082,501) (1,082,501)
Less bargain differential-PP&E
---------- ---------- ---------- -------- --------- ---------- -----------
Net property and equipment 602,070 602,070
---------- ---------- ---------- ------- -------- ---------- -----------
Land, land improvements and CIP 41,958,154 41,988 42,000,142
Less bargain differential-land
---------- ---------- ---------- -------- --------- ---------- -----------
Net land, land improvements 41,958,154 41,988 42,000,142
---------- ---------- ---------- -------- --------- ---------- -----------
Investment in joint venture 923,396 923,396
Deferred Income Tax
Other assets 212,845 212,845
---------- ---------- ---------- -------- --------- ---------- -----------
93,426,051 720,974 831,394 351,054 95,329,473
========== ========== ========== ======== ========= ========== ===========
LIAB, CAP STOCK AND R/E (DEFICIT)
Trade accounts payable 602,060 602,060
Customer Deposits
Accrued expenses:
Real estate taxes 7,455 7,455
Other 3,244,862 1,060 3,245,922
---------- ---------- ---------- -------- --------- ---------- -----------
Total accrued expenses 3,252,317 1,060 3,253,377
---------- ---------- ---------- -------- --------- ---------- -----------
Due to affiliates:
Utility fee credit 1,250,000 1,250,000
Tax share 4,403,400 4,403,400
Other
---------- ---------- ---------- ------- -------- --------- -----------
Total due to affiliates 5,653,400 5,653,400
---------- ---------- ---------- -------- --------- --------- -----------
Contingency reserves 3,851,274 3,851,274
Deferred income 888,014 888,014
Income taxes payable 74,891 74,891
Notes payable 8,879 8,879
Notes payable - long term 4,508,765 4,508,765
Minority interest
Common stock and R/E (deficit):
Common stock 500 20,000 500 100 21,100
Capital in excess of par value 79,290,534 2,089,678 7,249,487 108,451 88,738,150
Retained earnings (deficit) (4,704,583) (1,388,704) (6,419,653) 242,503 (12,270,437)
---------- ---------- ---------- -------- --------- --------- -----------
Total C/S and R/E (deficit) 74,586,451 720,974 830,334 351,054 76,488,813
---------- ---------- ---------- ------- --------- --------- -----------
93,426,051 720,974 831,394 351,054 95,329,473
========== ========== ========== ======== ========= ========= ===========
Exhibit A-5
Page 4 of 6
COMBINED ENTITIES CONSOLIDATING BALANCE SHEET AS OF 31-Dec-97
INCOME STATEMENT FOR THE 12 MONTHS ENDED 31-Dec-97
LEHIGH
CORPORATION INTERLACHEN SUNDOWNER TOTAL
AND LAKES PROPERTIES, SRC OF COMBINED
SUBSIDIARIES ESTATES INC. FLORIDA ENTITIES
------------ ----------- ----------- -------- --------- --------- ------------
Revenues:
Lots with roads only 1,738,722 1,738,722
Builder lots (serviced) 2,013,404 2,013,404
Other lot sales 7,696,954 7,696,954
Less estimated uncollectible sales (328,785) (328,785)
---------- --------- ---------- -------- --------- --------- -----------
Net homesite sales 11,120,295 11,120,295
---------- --------- ---------- -------- --------- --------- -----------
Commercial/bulk land sales 20,340,091 20,340,091
Timeshare sales
Residential sales
Discount earned on acquired receivables 2,014,947 277,889 309,019 2,601,855
Bargain differential earned:
Lots with roads only
Builder lots (serviced)
Timeshare
Commercial/bulk land
Receivables
Property and equipment
---------- --------- --------- -------- --------- -------- -----------
Total bargain differential earned
---------- --------- --------- -------- --------- -------- -----------
Finance income 1,284,669 11,616 16,048 1,312,333
Operating revenues - subsidiaries 32,353 143,415 25,074 200,842
Other revenues 4,887,582 4,887,582
---------- --------- --------- -------- --------- -------- -----------
Total revenues 39,647,584 321,858 468,482 25,074 40,462,998
---------- --------- --------- -------- --------- -------- -----------
Cost of Sales:
Lots with roads only 6,174,977 6,174,977
Builder lots (serviced) 1,637,255 1,637,255
Other lot sales 1,448,757 1,448,757
Commercial/bulk land sales 4,314,245 4,314,245
Timeshare sales
Residential sales
---------- ---------- ---------- -------- --------- --------- -----------
Total cost of sales 13,575,234 13,575,234
---------- ---------- ---------- -------- --------- --------- -----------
Expenses:
Selling expenses 6,165,548 3,822 4,735 6,174,105
Property taxes 2,708,292 4,526 11,863 2,724,681
General and administrative expenses 3,720,455 120,123 120,000 3,960,578
Operating expenses - subsidiaries 24,386 15,107 550 40,043
Other expenses 259,372 259,372
Depreciation 158,314 158,314
Interest expense 657,425 657,425
---------- ---------- ---------- -------- --------- --------- -----------
Total expenses 13,693,792 128,471 151,705 550 13,974,518
---------- ---------- ---------- -------- --------- --------- -----------
Income (loss) before income taxes,
minority interest, and equity in
earnings of subsidiaries 12,378,558 193,387 316,777 24,524 12,913,246
Provision for (reduction) income taxes:
Current 5,124,177 10,055 5,134,232
Deferred
---------- ---------- ---------- -------- --------- --------- -----------
5,124,177 10,055 5,134,232
Income (loss) before minority
interest and equity in earnings of
consolidated subsidiaries 7,254,381 193,387 316,777 14,469 7,779,014
Minority interest
---------- ---------- ---------- -------- --------- --------- -----------
Net income (loss) before equity in
earnings of consolidated subsidiaries 7,254,381 193,387 316,777 14,469 7,779,014
Equity in earnings of subsidiaries
---------- ---------- ---------- -------- --------- --------- -----------
Net income (loss) 7,254,381 193,387 316,777 14,469 7,779,014
R/E (deficit) begin of period (7,258,964) (1,582,091) (6,736,430) 228,034 (15,349,451)
Dividends from (advances to) subs (4,700,000) (4,700,000)
---------- ---------- ---------- -------- --------- --------- -----------
R/E (deficit) end of period (4,704,583) (1,388,704) (6,419,653) 242,503 (12,270,437)
========== ========== ========== ======== ========= ========= ===========
Exhibit A-5
Page 5 of 6
LEHIGH CORPORATION AND SUBSIDIARIES CONSOLIDATING BALANCE SHEET AS OF 31-Dec-97
INCOME STATEMENT FOR THE 12 MONTHS ENDED 31-Dec-97
SUGARMILL PALM TOTAL LEHIGH
WOODS COAST CLIFFSIDE CORPORATION
COMMUNITIES, HOLDINGS, PROPERTIES ENTERPRISE LEHIGH AND
INC. INC. INC. LEHIGH,INC. CORPORATION ELIMINATIONS SUBSIDIARIES
------------ ----------- ---------- ------------ ----------- ------------ ------------
ASSETS
Cash and cash equivalents 223,205 1,719,018 2,246 3,530,525 5,474,994
Inventory and supplies
Residential construction in progress
Trade and miscellaneous accounts rec 188,274 37,844 263,890 490,008
Contracts receivable-postacquisition:
Homesites, net of allowance for
cancels 571,448 3,149,492 1,501,644 5,222,584
Timeshare 406,599 406,599
Commercial notes 7,415,051 1,350,000 6,639,372 15,404,423
---------- ----------- ---------- ---------- ----------- ----------- ----------
Total contracts receivable-postacq 571,448 10,564,543 1,350,000 8,547,615 21,033,606
---------- ----------- ---------- ---------- ----------- ----------- ----------
Contracts receivable-preacquisition 5,696,000 744,385 6,440,385
Due from affiliates:
Water and wastewater connections 4,061,029 4,061,029
Tax share 56,400 (56,400)
Other 816,874 3,302,877 150,595 17,071,550 (9,112,332) 12,229,564
---------- ----------- ---------- ---------- ----------- ----------- ----------
Total due from affiliates 816,874 3,302,877 206,995 21,132,579 (9,168,732) 16,290,593
---------- ----------- ---------- ---------- ----------- ----------- ----------
Investments/advances to subsidiaries 72,473,416 (72,473,416)
Property and equipment 7,919 94,015 1,582,637 1,684,571
Less accum depreciation (1,662) (16,654) (1,064,185) (1,082,501)
Less bargain differential-PP&E
---------- ----------- ---------- ---------- ----------- ----------- ----------
Net property and equipment 6,257 77,361 518,452 602,070
---------- ----------- ---------- ---------- ----------- ----------- ----------
Land, land improvements and CIP 2,917,265 20,147,215 18,893,674 41,958,154
Less bargain differential-land
---------- ----------- ---------- ---------- ----------- ----------- ----------
Net land, land improvements 2,917,265 20,147,215 18,893,674 41,958,154
---------- ----------- ---------- ---------- ----------- ----------- ----------
Investment in joint venture 923,396 923,396
Deferred Income Tax
Other assets 54,118 101,066 1,800 55,861 212,845
---------- ----------- ---------- ---------- ----------- ----------- ----------
4,589,167 38,493,477 3,302,877 1,598,885 127,083,793 (81,642,148) 93,426,051
========== =========== ========== ========== =========== =========== ==========
LIAB, CAP STOCK AND R/E (DEFICIT)
Trade accounts payable 4,514 540,500 28,211 28,835 602,060
Customer Deposits
Accrued expenses:
Real estate taxes 2,479 4,976 7,455
Other 69,136 2,021,507 24,500 1,129,719 3,244,862
---------- ----------- ---------- ---------- ----------- ----------- ----------
Total accrued expenses 71,615 2,026,483 24,500 1,129,719 3,252,317
---------- ----------- ---------- ---------- ----------- ----------- ----------
Due to affiliates:
Utility fee credit 1,250,000 1,250,000
Tax share 52,600 1,227,900 3,179,300 (56,400) 4,403,400
Other 9,112,332 (9,112,332)
---------- ----------- ---------- ---------- ----------- ----------- ----------
Total due to affiliates 52,600 10,340,232 4,429,300 (9,168,732) 5,653,400
---------- ----------- ---------- ---------- ----------- ----------- ----------
Contingency reserves 1,189,675 2,661,599 3,851,274
Deferred income 438,471 261,969 187,574 888,014
Income taxes payable 11,915 62,976 74,891
Notes payable 8,879 8,879
Notes payable - long term 4,508,765 4,508,765
Minority interest
Common stock and R/E (deficit):
Common stock 500 500 1,000 50 500 (2,050) 500
Capital in excess of par value 6,903,938 13,602,350 909,424 699,567 79,290,534 (22,115,279) 79,290,534
Retained earnings (deficit) (2,455,915) 6,221,996 2,392,453 408,086 39,272,458 (50,543,661) (4,704,583)
---------- ----------- ---------- ---------- ----------- ----------- ----------
Total C/S and R/E (deficit) 4,448,523 19,824,846 3,302,877 1,107,703 118,563,492 (72,660,990) 74,586,451
---------- ----------- ---------- ---------- ----------- ----------- ----------
4,589,167 38,493,477 3,302,877 1,598,885 127,083,793 (81,642,148) 93,426,051
========== =========== ========== ========== =========== =========== ==========
Exhibit A-5
Page 6 of 6
LEHIGH CORPORATION AND SUBSIDIARIES CONSOLIDATING BALANCE SHEET AS OF 31-Dec-97
INCOME STATEMENT FOR THE 12 MONTHS ENDED 31-Dec-97
SUGARMILL PALM TOTAL LEHIGH
WOODS COAST CLIFFSIDE CORPORATION
COMMUNITIES, HOLDINGS, PROPERTIES ENTERPRISE LEHIGH AND
INC. INC. INC. LEHIGH,INC. CORPORATION ELIMINATIONS SUBSIDIARIES
------------ ----------- ---------- ----------- ----------- ------------ ------------
Revenues:
Lots with roads only 1,738,722 1,738,722
Builder lots (serviced) 2,013,404 2,013,404
Other lot sales 2,042,275 5,654,679 7,696,954
Less estimated uncollectible sales (700) (328,085) (328,785)
---------- ---------- --------- --------- ---------- ----------- -----------
Net homesite sales 2,041,575 5,326,594 3,752,126 11,120,295
---------- ---------- --------- --------- ---------- ----------- -----------
Commercial/bulk land sales 70,000 15,825,751 340,564 4,291,350 (187,574) 20,340,091
Timeshare sales
Residential sales
Discount earned on acquired receivables 1,691,310 323,637 2,014,947
Bargain differential earned:
Lots with roads only
Builder lots (serviced)
Timeshare
Commercial/bulk land
Receivables
Property and equipment
---------- ---------- --------- --------- ---------- ----------- -----------
Total bargain differential earned
---------- ---------- --------- --------- ---------- ----------- -----------
Finance income 34,210 508,078 41,030 701,351 1,284,669
Operating revenues - subsidiaries
Other revenues (423) 4,888,005 4,887,582
---------- ---------- --------- --------- ---------- ----------- -----------
Total revenues 2,145,785 23,351,310 381,594 13,956,469 (187,574) 39,647,584
---------- ---------- --------- --------- ---------- ----------- -----------
Cost of Sales:
Lots with roads only 6,174,977 6,174,977
Builder lots (serviced) 1,637,255 1,637,255
Other lot sales 652,163 796,594 1,448,757
Commercial/bulk land sales 24,086 2,825,132 1,465,027 4,314,245
Timeshare sales
Residential sales
---------- ---------- --------- --------- ---------- ----------- -----------
Total cost of sales 676,249 3,621,726 9,277,259 13,575,234
---------- ---------- --------- --------- ---------- ----------- -----------
Expenses:
Selling expenses 602,626 4,674,589 888,333 6,165,548
Property taxes 148,385 1,625,446 934,461 2,708,292
General and administrative expenses 285,690 1,749,028 1,685,737 3,720,455
Operating expenses - subsidiaries 1,360 23,026 24,386
Other expenses 259,372 259,372
Depreciation 1,150 15,282 141,882 158,314
Interest expense 68 656,110 1,247 657,425
---------- ---------- --------- --------- ---------- ----------- -----------
Total expenses 1,037,919 8,720,455 1,360 23,026 3,911,032 13,693,792
---------- ---------- --------- --------- ---------- ----------- -----------
Income (loss) before income taxes,
minority interest, and equity in
earnings of subsidiaries 431,617 11,009,129 (1,360) 358,568 768,178 (187,574) 12,378,558
Provision for (reduction) income taxes:
Current 204,715 4,968,576 (17,976) (31,138) 5,124,177
Deferred
---------- ---------- --------- --------- ---------- ----------- -----------
204,715 4,968,576 (17,976) (31,138) 5,124,177
Income (loss) before minority
interest and equity in earnings of
consolidated subsidiaries 226,902 6,040,553 16,616 389,706 768,178 (187,574) 7,254,381
Minority interest
---------- ---------- --------- --------- ---------- ----------- -----------
Net income (loss) before equity in
earnings of consolidated subsidiaries 226,902 6,040,553 16,616 389,706 768,178 (187,574) 7,254,381
Equity in earnings of subsidiaries 11,712,031 (11,712,031)
---------- ---------- --------- --------- ---------- ----------- -----------
Net income (loss) 226,902 6,040,553 16,616 389,706 12,480,209 (11,899,605) 7,254,381
R/E (deficit) begin of period (2,682,817) 181,443 2,375,837 18,380 31,492,249 (38,644,056) (7,258,964)
Dividends from (advances to) subs (4,700,000) (4,700,000)
---------- ---------- --------- --------- ---------- ----------- -----------
R/E (deficit) end of period (2,455,915) 6,221,996 2,392,453 408,086 39,272,458 (50,543,661) (4,704,583)
========== ========== ========= ========= ========== =========== ===========
Exhibit A-6
Page 1 of 3
HEATER UTILITIES, INC.
CONSOLIDATED BALANCE SHEET
December 31, 1997
BROOKWOOD UPSTATE EMERGENCY
HEATER LAGRANGE WATER HEATER UTILITY
UTILITIES WATERWORKS CORPORATION UTILITIES OPERATIONS ELIMINATIONS CONSOLIDATED
------------ ------------ ----------- ---------- ---------- ------------ ------------
ASSETS
Property Plant and Equipment
Utility Plant 42,572,963 4,275,874 8,600,944 1,504,144 84,052 57,037,978
Non Utility Property 10,520 10,520
------------ ------------ ---------- ---------- ------- ----------- ------------
42,583,483 4,275,874 8,600,944 1,504,144 84,052 0 57,048,497
Acquisition Adjustment (3,054,649) (37,682) 66,470 (105,326) (3,131,187)
Allowance for Depreciation (10,744,267) (1,287,009) (2,814,698) (448,614) (4,632) (15,299,220)
------------ ------------ ---------- ---------- ------- ----------- ------------
(13,798,916) (1,324,691) (2,748,228) (553,940) (4,632) 0 (18,430,407)
Investments
Other Investments 2,882,019 2,882,019
Investments In Subs. 2,089,865 (2,089,865) 0
------------ ------------ ---------- ---------- ------- ----------- ------------
4,971,884 0 0 0 0 (2,089,865) 2,882,019
Current Assets
Cash 574,042 9,292 56,272 75 639,681
Working Funds 3,899 340 29 750 5,018
Investment in CD's 971,000 90,000 30,000 50,000 1,141,000
Customer Accounts Receivable 668,156 75,645 151,176 44,232 10,096 949,305
Allowance for Doubtful Accounts (12,970) (1,656) (3,059) (1,525) (19,211)
Notes Receivable-Assoc. Co. 2,842,403 6,219 (2,842,403) 6,219
Notes Receivable 50,391 95,492 3,307 149,189
Other Accounts Receivable 393,491 2,862 5,879 402,233
Accounts Receivable - Assoc. Co. (172,037) 3,604 (202,064) 370,497 (0)
Materials & Supplies 336,380 8,122 65,266 14,344 424,112
Prepayments 85,217 1,973 3,422 2,723 218 93,552
------------ ------------ ---------- ---------- ------- ----------- ------------
5,739,970 285,674 116,447 110,599 10,314 (2,471,906) 3,791,098
Other Assets & Deferred Charges
Deferred Rate Case Charges 97,851 10,371 300 108,522
Deferred Finance Charges 751,011 751,011
Miscellaneous Prepaids 371,975 2,796 93,020 2,152 1,106 471,049
------------ ------------ ---------- ---------- ------- ----------- -----------
Total Other Assets & Deferred Charges 1,220,837 2,796 103,391 2,452 1,106 0 1,330,582
Regulatory Assets 0 7,101 1,085 0 8,186
------------ ------------ ---------- ---------- ------- ----------- -----------
Total Assets 40,717,258 3,239,654 6,079,655 1,064,341 90,839 (4,561,771) 46,629,975
============ ============ ========== ========== ======= =========== ===========
Exhibit A-6
Page 2 of 3
HEATER UTILITIES, INC.
CONSOLIDATED BALANCE SHEET
December 31, 1997
BROOKWOOD UPSTATE EMERGENCY
HEATER LAGRANGE WATER HEATER UTILITY
UTILITIES WATERWORKS CORPORATION UTILITIES OPERATIONS ELIMINATIONS CONSOLIDATED
----------- --------------- ----------- ----------- ---------- ------------ ------------
LIABILITIES & SHAREHOLDERS' EQUITY
Shareholders' Equity
Stock (13,500) 21,214 (7,500) (1,000) (12,714) (13,500)
Additional Paid In Capital (5,805,536) (213,428) (464,864) 678,293 (5,805,536)
Retained Earnings (6,108,187) (1,092,379) (1,170,407) 169,518 (7,921) 1,424,287 (6,785,090)
----------- -------------- ---------- --------- -------- ---------- -----------
(11,927,223) (1,071,164) (1,391,335) (296,346) (7,921) 2,089,865 (12,604,126)
Long-Term Debt (14,246,820) 0 (2,314,476) (527,926) 2,842,403 (14,246,820)
Current Liabilities
Accounts Payable - Vendors (176,832) (41,718) (40,805) (6,985) (1,767) (268,107)
Accounts Payable to Assoc. Co. (2,010) (31,909) 567,351 (84,780) (80,165) (370,497) (2,010)
Accounts Payable - MP&L (3,472) 0 0 0 (3,472)
Income Taxes Payable - Federal 28,410 (64,617) (34,380) 67,586 (3,001)
Income Taxes Payable - State 94,747 4,873 35,982 13,956 149,558
Other Accrued Taxes (61,289) (8,178) (16,343) (2,862) (910) (89,581)
Customer Deposits (29,721) (113,062) (162,324) (305,107)
Other Accrued Expenses (917,214) (399,873) (257,298) (155,583) (1,729,969)
Current Portion of L-T Debt (360,924) 0 (360,924)
----------- -------------- ---------- ---------- -------- --------- -----------
Total Current Liabilities (1,428,306) (654,482) 92,183 (168,667) (82,842) (370,497) (2,612,612)
CIAC (14,079,780) (2,175,226) (2,620,199) (112,971) (75) (18,988,251)
Accumulated Deferred Income Taxes 972,228 661,219 160,482 41,695 1,835,625
Regulatory Liabilities (7,357) 0 (6,309) (125) (13,791)
----------- -------------- ---------- ---------- -------- --------- -----------
Total Liabilities (40,717,258) (3,239,654) (6,079,655) (1,064,341) (90,839) 4,561,771 (46,629,975)
=========== ============== ========== ========== ======== ========= ===========
Exhibit A-6
Page 3 of 3
HEATER UTILITIES, INC.
CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1997
HEATER LAGRANGE BROOKWOOD UPSTATE EMERGENCY
UTILITIES WATERWORKS WATER CORP HEATER OPERATIONS TOTAL
----------- ---------- ---------- --------- ----------- ----------
Operating Revenues
Water 5,354,654 871,636 1,528,593 352,611 62,678 8,170,172
Sewer 656,422 656,422
Other 250,176 10,728 81,106 25,354 489 367,853
----------- ---------- --------- --------- --------- ----------
Total Operating Revenues 6,261,253 882,364 1,609,698 377,965 63,167 9,194,447
Operating Revenue Deductions
Operations and Maintenance 2,206,151 339,219 475,281 168,407 21,284 3,210,343
Administrative and General 1,201,813 278,782 437,029 122,357 20,127 2,060,109
Taxes Other Than Income 374,564 53,317 98,095 9,522 3,843 539,341
Property Taxes 59,019 14,618 25,551 22,161 332 121,681
Depreciation 1,059,895 80,486 259,816 56,713 9,208 1,466,117
----------- ---------- --------- --------- --------- ----------
Total Operating Revenue Deductions 4,901,443 766,422 1,295,772 379,160 54,795 7,397,592
Income From Operations 1,359,811 115,942 313,927 (1,196) 8,372 1,796,856
Other Income
Interest Income 508,229 194,835 8,186 5,504 716,753
Other Non-Utility Income 643,390 117,693 73,217 3,105 200 837,605
Other Income Deductions
Interest Expense 766,122 60,779 194,926 54,352 3,881 1,080,061
Other Non-Utility Deductions 369,029 1,012 6,992 5,205 254 382,491
----------- ---------- --------- --------- --------- ----------
Total Other Income and Income Deductions 16,468 250,737 (120,516) (50,948) (3,935) 91,807
Net Income (Loss) Before Income Taxes 1,376,279 366,679 193,411 (52,143) 4,437 1,888,663
Estimated Income Taxes 599,809 126,744 77,340 (19,689) (1,773) 782,431
----------- ---------- --------- --------- --------- ----------
Net Profit (Loss) 776,470 239,936 116,071 (32,454) 6,210 1,106,232
=========== ========== ========= ========= ========= ==========
Exhibit A-7
Page 1 of 3
Minnesota Power - Consolidated
MP Automotive Consolidated Working Papers Balance Sheet
Current Period: Dec-97
YTD Dec-97 MP Automotive
Consolidated Eliminations Services ADESA Corp
------------ ------------- -------------- -----------
Current Assets
Cash 27,309,000 0 0 27,309,000
Accounts Receivable
Minnesota Power 89,067,119 0 89,067,119 0
ADESA 1 (29,194,301) 14,482,407 14,711,895
Other 0 0 0 0
Trade 94,055,027 0 0 94,055,027
Allow-Doubtful Acct (10,653,000) 0 0 (10,653,000)
Inventory 1,031,000 0 0 1,031,000
Notes Receivable 1,033,079 (19,100,000) 19,100,000 1,033,079
Prepayments 3,010,400 0 4,400 3,006,000
Other Current Assets 0 0 0 0
------------ ------------- -------------- -----------
Total Current Assets 204,852,627 (48,294,301) 122,653,927 130,493,001
Investment in Subsidiary 1 (272,204,785) 272,204,786 0
Auto Plant - Net 161,689,000 0 0 161,689,000
CWIP 5,372,000 0 0 5,372,000
Deferred Cost 7,386,000 0 0 7,386,000
Goodwill 166,987,000 0 0 166,987,000
Goodwill Amortization (9,062,000) 0 0 (9,062,000)
Intangible Assets 15,240,000 0 0 15,240,000
Intangible Amortization (5,323,000) 0 0 (5,323,000)
------------ ------------- -------------- -----------
Total Other Assets 342,289,001 (272,204,785) 272,204,786 342,289,000
------------ ------------- -------------- -----------
Total Assets 547,141,627 (320,499,086) 394,858,712 472,782,001
============ ============= ============== ===========
Exhibit A-7
Page 2 of 3
Minnesota Power - Consolidated
MP Automotive Consolidated Working Papers Balance Sheet
Current Period: Dec-97
YTD Dec-97 MP Automotive
Consolidated Eliminations Services ADESA Corp
------------ ------------- -------------- -----------
Liabilities and
Stockholder's Equity
Current Liabilities
Accounts Payable
ADESA 1 (48,294,301) 14,711,895 33,582,407
Minnesota Power 23,495,673 0 23,495,673 0
Other 46,100,034 0 72,215 46,027,819
Current Maturities 439,997 0 0 439,997
Notes Payable 334,000 0 0 334,000
Accrued Income Taxes 4,537,133 0 878,133 3,659,000
Accrued Other Taxes 820,805 0 0 820,805
Accrued Other Liabilities 16,522,188 0 0 16,522,188
------------ ------------- -------------- -----------
Total Current Liabilities 92,249,830 (48,294,301) 39,157,915 101,386,216
------------ ------------- -------------- -----------
Long Term Debt 98,914,000 0 0 98,914,000
Deferred Income Taxes 1,029,956 0 (9,044) 1,039,000
Minority Interest 70,000 0 0 70,000
------------ ------------- -------------- -----------
Total Other Liabilities 100,013,956 0 (9,044) 100,023,000
------------ ------------- -------------- -----------
Total Liabilities 192,263,786 (48,294,301) 39,148,871 201,409,216
------------ ------------- -------------- -----------
Stockholder's Equity
Common Stock, Without Par
xxxx Shares Authorized
Issued and Outstanding 333,035,847 (254,685,780) 333,035,847 254,685,780
Retained Earnings 22,673,994 (17,519,005) 22,673,994 17,519,005
Cum Translation ADJ (832,000) 0 0 (832,000)
------------ ------------- -------------- -----------
Total Stockholder's Equity 354,877,841 (272,204,785) 355,709,841 271,372,785
------------ ------------- -------------- -----------
Total Liabilities and
Stockholder's Equity 547,141,627 (320,499,086) 394,858,712 472,782,001
============ ============= ============== ===========
Exhibit A-7
Page 3 of 3
Minnesota Power - Consolidated
MP Automotive Consolidating Statement of Income
Current Period: Dec-97
YTD Dec-97 MP Automotive
Consolidated Eliminations Services ADESA Corp
------------ ------------- -------------- -----------
Income
Auto Redistribution 254,038,000 0 0 254,038,000
Equity in Sub Earnings 0 (13,980,000) 13,980,000 0
Interest 7,446,071 (2,030,974) 8,027,045 1,450,000
Miscellaneous 0 0 0 0
------------ ------------- -------------- -----------
Total Income 261,484,071 (16,010,974) 22,007,045 255,488,000
------------ ------------- -------------- -----------
Expenses
Direct Auction 110,287,000 0 0 110,287,000
Maintenance 2,067,000 0 0 2,067,000
Property Taxes 1,896,000 0 0 1,896,000
Depreciation/Amortization 13,967,000 0 0 13,967,000
Interest Expense 7,874,819 (2,030,974) 26,793 9,879,000
Adm and General 91,983,761 0 3,027,761 88,956,000
------------ ------------- -------------- -----------
Total Expenses 228,075,579 (2,030,974) 3,054,553 227,052,000
------------ ------------- -------------- -----------
Income (Loss) Before Taxes 33,408,492 (13,980,000) 18,952,492 28,436,000
Minority Interest 0 0 0 0
Inc Tx (Exp) Benefit (16,537,990) 0 (2,081,990) (14,456,000)
------------ ------------- -------------- -----------
Net Income (Loss) 16,870,502 (13,980,000) 16,870,502 13,980,000
============ ============= ============== ===========
Exhibit A-8
Page 1 of 1
ADESA Corporation
Consolidating financial statements for ADESA Corporation
have been excluded from this exhibit because the majority of
the subsidiaries included in this consolidation are not material to
Minnesota Power & Light Company. This exhibit was also excluded due
to the competitive nature of the business. Summarized consolidated
information is included in the consolidating financial statements
of MP Automotive Services, Inc. filed as Exhibit A-7.
nature of the information.
Exhibit A-9
Page 1 of 1
RendField Land Company, Inc.
Consolidating financial statements for RendField Land
Company, Inc. have been excluded from this exhibit because
each subsidiary within this consolidated group is not material
to Minnesota Power & Light Company's consolidating financial
statements.
Exhibit A-10
Page 1 of 1
Upper Minnesota Properties, Inc.
Consolidating financial statements for Upper Minnesota
Properties, Inc. have been excluded from this exhibit because
each subsidiary within this consolidated group is not material
to Minnesota Power & Light Company's consolidating financial
statements.
Exhibit A-11
Page 1 of 1
Abbreviations Used in Exhibits
Exhibit A
Minnesota Power & Light Company (Minnesota Power)
Superior Water, Light and Power Company (SWL&P)
Consolidated Minnesota Power Enterprises, Inc. (Cons. MP Enterprises)
Consolidated MP Water Resources Group, Inc. (Cons. Water Resources)
Consolidated MP Automotive Services, Inc. (Cons. MP Automotive)
Energy Land, Incorporated (Energy Land)
MP Real Estate Holdings, Inc. (MP Real Estate)
Consolidated RendField Land Company, Inc. (CNRD)
Lakeview Financial Corporation I (LFCI)
MP&L Capital I (MPC1)
Exhibit A-1
Minnesota Power Enterprises, Inc. (MP Enterprises)
BNI Coal, Ltd. (BNI Coal)
Consolidated Minnesota Power Services Group, Inc. (Consol Services)
Rainy River Energy Corporation (Rainy River)
Consolidated Upper Minnesota Properties, Inc. (Consol UMPI)
Synertec, Incorporated (Synertec)
Minnesota Power Telecom, Inc. (MP Telecom)
MP Affiliate Resources, Inc. (MP Affiliates)
Exhibit A-2
No abbreviations used
Exhibit A-3
MP Water Resources Group, Inc. (MP Water Resources)
Florida Water Services Corporation (Florida Water Res)
Heater Utilities, Inc. (Heater)
Instrumentation Services, Inc. (ISI)
Lehigh Acquisition Corporation (LAC)
Florida Gas Services Corporation (Florida Gas Services)
Exhibit A-4
No abbreviations used
Exhibit A-5
Interlachen Lake Estates, Inc. (Interlachen Lake Estates)
SRC of Florida, Inc. (SRC of Florida)
Exhibit A-6
Heater Utilities, Inc. (Heater Utilities)
LaGrange Waterworks Corporation (LaGrange Waterworks)
Upstate Heater Utilities, Inc. (Upstate Heater Utilities)
Exhibit A-7
MP Automotive Services, Inc. (MP Automotive Services)
ADESA Corporation (ADESA Corp)
Exhibit A-8, A-9, A-10
No abbreviations used
OPUR3
1,000,000
YEAR
DEC-31-1997
JAN-01-1997
DEC-31-1997
PER-BOOK
2,172
954
78
