------------------------------------------------
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D. C. 20549
-----------------------------------
FORM
10-Q
x
QUARTERLY REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
FOR THE
QUARTERLY PERIOD ENDED JUNE 30, 2009
- OR
-
¨
TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
-----------------------------------
Commission
File No. 333-103749
MAINE
& MARITIMES CORPORATION
A Maine
Corporation
I.R.S.
Employer Identification No. 30-0155348
209 STATE
STREET, PRESQUE ISLE, MAINE 04769
(207)
760-2499
-----------------------------------
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes
x
. No
¨
.
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):
|
Large
accelerated filer
¨
.
|
Accelerated
filer
¨
.
|
|
|
Non-accelerated
filer
¨
|
Smaller reporting
company
x
.
|
|
|
(Do not check
if a smaller reporting company)
|
|
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). Yes
¨
. No
x
.
Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of August 13, 2009.
Common
Stock, $7.00 par value – 1,681,249 shares
MAINE & MARITIMES CORPORATION AND
SUBSIDIARIES
Statements of Consolidated Operations
(Unaudited)
(In
thousands of dollars, except share and per share information)
|
|
Three
Months Ended
June
30,
|
|
|
Six
Months Ended
June
30,
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated
Revenues
|
|
$
|
7,330
|
|
|
$
|
7,789
|
|
|
$
|
17,432
|
|
|
$
|
18,680
|
|
Unregulated
Utility Services Revenues
|
|
|
354
|
|
|
|
2,078
|
|
|
|
548
|
|
|
|
3,374
|
|
Total
Operating Revenues
|
|
|
7,684
|
|
|
|
9,867
|
|
|
|
17,980
|
|
|
|
22,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated
Operation and Maintenance
|
|
|
3,766
|
|
|
|
3,305
|
|
|
|
7,554
|
|
|
|
6,642
|
|
Unregulated
Utility Services Direct Project Expenses
|
|
|
220
|
|
|
|
2,092
|
|
|
|
354
|
|
|
|
3,210
|
|
Other
Unregulated Operation and Maintenance (1)
|
|
|
229
|
|
|
|
326
|
|
|
|
388
|
|
|
|
483
|
|
Depreciation
|
|
|
804
|
|
|
|
756
|
|
|
|
1,400
|
|
|
|
1,511
|
|
Amortization
of Stranded Costs
|
|
|
2,701
|
|
|
|
2,728
|
|
|
|
5,401
|
|
|
|
5,456
|
|
Amortization
|
|
|
42
|
|
|
|
54
|
|
|
|
72
|
|
|
|
107
|
|
Taxes
Other Than Income
|
|
|
472
|
|
|
|
452
|
|
|
|
923
|
|
|
|
906
|
|
(Benefit
of) Provision for Income Taxes—Regulated
|
|
|
(228
|
)
|
|
|
193
|
|
|
|
745
|
|
|
|
1,557
|
|
Benefit
of Income Taxes—Unregulated
|
|
|
(55
|
)
|
|
|
(175
|
)
|
|
|
(107
|
)
|
|
|
(177
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Expenses
|
|
|
7,951
|
|
|
|
9,731
|
|
|
|
16,730
|
|
|
|
19,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
(Loss) Income
|
|
|
(267
|
)
|
|
|
136
|
|
|
|
1,250
|
|
|
|
2,359
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Income (Deductions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
in Income of Associated Companies
|
|
|
33
|
|
|
|
41
|
|
|
|
61
|
|
|
|
66
|
|
Interest
and Dividend Income
|
|
|
7
|
|
|
|
1
|
|
|
|
8
|
|
|
|
5
|
|
Benefit
of (Provision for) Income Taxes
|
|
|
1
|
|
|
|
19
|
|
|
|
3
|
|
|
|
(10
|
)
|
Other—Net
|
|
|
(35
|
)
|
|
|
(97
|
)
|
|
|
(57
|
)
|
|
|
(92
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Other Income (Deductions)
|
|
|
6
|
|
|
|
(36
|
)
|
|
|
15
|
|
|
|
(31
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
Income Before Interest Charges
|
|
|
(261
|
)
|
|
|
100
|
|
|
|
1,265
|
|
|
|
2,328
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term
Debt and Notes Payable
|
|
|
455
|
|
|
|
559
|
|
|
|
906
|
|
|
|
1,214
|
|
Less: Stranded
Costs Carrying Charge
|
|
|
(305
|
)
|
|
|
(403
|
)
|
|
|
(636
|
)
|
|
|
(805
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Interest Charges
|
|
|
150
|
|
|
|
156
|
|
|
|
270
|
|
|
|
409
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(Loss) Income from Continuing Operations
|
|
|
(411
|
)
|
|
|
(56
|
)
|
|
|
995
|
|
|
|
1,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
on Sale of Discontinued Operations
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
Loss
from Operations
|
|
|
-
|
|
|
|
(20
|
)
|
|
|
-
|
|
|
|
(35
|
)
|
Income
Tax Benefit
|
|
|
-
|
|
|
|
9
|
|
|
|
-
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from Discontinued Operations
|
|
|
-
|
|
|
|
(12
|
)
|
|
|
-
|
|
|
|
(21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(Loss) Income Available for Common Stockholders
|
|
$
|
(411
|
)
|
|
$
|
(68
|
)
|
|
$
|
995
|
|
|
$
|
1,898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Shares of Common Stock Outstanding - Basic
|
|
|
1,680,574
|
|
|
|
1,678,096
|
|
|
|
1,680,137
|
|
|
|
1,677,979
|
|
Average
Shares of Common Stock Outstanding - Diluted
|
|
|
1,680,574
|
|
|
|
1,678,096
|
|
|
|
1,680,810
|
|
|
|
1,678,729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
(Loss) Earnings Per Share of Common Stock From Continuing
Operations
|
|
$
|
(0.25
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.59
|
|
|
$
|
1.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
Loss Per Share of Common Stock From Discontinued
Operations
|
|
|
-
|
|
|
|
(0.01
|
)
|
|
|
-
|
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
(Loss) Earnings Per Share of Common Stock From Net (Loss)
Income
|
|
$
|
(0.25
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
0.59
|
|
|
$
|
1.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
(Loss) Earnings Per Share of Common Stock From Continuing
Operations
|
|
$
|
(0.25
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.59
|
|
|
$
|
1.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
Loss Per Share of Common Stock From Discontinued
Operations
|
|
|
-
|
|
|
|
(0.01
|
)
|
|
|
-
|
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
(Loss) Earnings Per Share of Common Stock From Net (Loss)
Income
|
|
$
|
(0.25
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
0.59
|
|
|
$
|
1.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Unregulated operation and maintenance expense and income tax benefits
included in continuing operations is the activity of the holding company,
including operating expenses of MAM USG, other corporate costs directly
associated with unregulated operations, and other costs that cannot be
charged to the regulated utility.
|
|
See Notes
to Consolidated Financial Statements
MAINE & MARITIMES CORPORATION AND
SUBSIDIARIES
Statements of Consolidated Cash Flows
(Unaudited)
(In
thousands of dollars)
|
|
Six
Months Ended
June
30,
|
|
|
|
2009
|
|
|
2008
|
|
Cash
Flow From Operating Activities
|
|
|
|
|
|
|
Net
Income
|
|
$
|
995
|
|
|
$
|
1,898
|
|
Adjustments
to Reconcile Net Income to Net Cash Provided by
Operations:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
1,400
|
|
|
|
1,511
|
|
Amortization
of Intangibles
|
|
|
72
|
|
|
|
107
|
|
Amortization
of Seabrook
|
|
|
555
|
|
|
|
555
|
|
Amortization
of Cancelled Transmission Plant
|
|
|
-
|
|
|
|
127
|
|
Deferred
Income Taxes—Net
|
|
|
(1,379
|
)
|
|
|
408
|
|
Deferred
Investment Tax Credits
|
|
|
(9
|
)
|
|
|
(10
|
)
|
Change
in Deferred Regulatory and Debt Issuance Costs
|
|
|
4,005
|
|
|
|
2,811
|
|
Change
in Benefit Obligations
|
|
|
(276
|
)
|
|
|
153
|
|
Change
in Deferred Directors' Compensation
|
|
|
(80
|
)
|
|
|
386
|
|
Change
in Current Assets and Liabilities:
|
|
|
|
|
|
|
|
|
Accounts
Receivable and Unbilled Revenue from Utility
|
|
|
3,660
|
|
|
|
(551
|
)
|
Other
Current Assets
|
|
|
(277
|
)
|
|
|
(9
|
)
|
Accounts
Payable
|
|
|
(738
|
)
|
|
|
1,018
|
|
Other
Current Liabilities
|
|
|
267
|
|
|
|
314
|
|
Other—Net
|
|
|
(99
|
)
|
|
|
(318
|
)
|
Operating
Cash Flows from Continuing Operations
|
|
|
8,096
|
|
|
|
8,400
|
|
Operating
Cash Flows from Discontinued Operations
|
|
|
-
|
|
|
|
98
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Flow Provided By Operating Activities
|
|
|
8,096
|
|
|
|
8,498
|
|
|
|
|
|
|
|
|
|
|
Cash
Flow From Financing Activities
|
|
|
|
|
|
|
|
|
Repayments
of Long-Term Debt
|
|
|
(700
|
)
|
|
|
(4,067
|
)
|
Payments
of Capital Lease Obligations
|
|
|
(97
|
)
|
|
|
(92
|
)
|
Short-Term
Debt Repayments, Net
|
|
|
(3,200
|
)
|
|
|
(2,400
|
)
|
|
|
|
|
|
|
|
|
|
Net
Cash Flow Used For Financing Activities
|
|
|
(3,997
|
)
|
|
|
(6,559
|
)
|
|
|
|
|
|
|
|
|
|
Cash
Flow From Investing Activities
|
|
|
|
|
|
|
|
|
Change
in Restricted Investments
|
|
|
(916
|
)
|
|
|
2,393
|
|
Dividends
Paid
|
|
|
(168
|
)
|
|
|
-
|
|
Cash
Received from Sale of Discontinued Operations
|
|
|
-
|
|
|
|
573
|
|
Investment
in Fixed Assets
|
|
|
(3,530
|
)
|
|
|
(4,191
|
)
|
|
|
|
|
|
|
|
|
|
Net
Cash Flow Used For Investing Activities
|
|
|
(4,614
|
)
|
|
|
(1,225
|
)
|
|
|
|
|
|
|
|
|
|
(Decrease)
Increase in Cash and Cash Equivalents
|
|
|
(515
|
)
|
|
|
714
|
|
Cash
and Cash Equivalents at Beginning of Period
|
|
|
1,846
|
|
|
|
910
|
|
|
|
|
|
|
|
|
|
|
Cash
and Cash Equivalents at End of Period
|
|
$
|
1,331
|
|
|
$
|
1,624
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
Cash
Paid During the Period for:
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
936
|
|
|
$
|
1,336
|
|
Income
Taxes
|
|
$
|
2,391
|
|
|
$
|
1,305
|
|
Non-Cash
Activities:
|
|
|
|
|
|
|
|
|
Dividends
Payable
|
|
$
|
84
|
|
|
$
|
-
|
|
Fair
Market Value of Stock Issued to Directors and Officers
|
|
$
|
58
|
|
|
$
|
13
|
|
See Notes
to Consolidated Financial Statements
MAINE
& MARITIMES CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
(In
thousands of dollars)
|
|
June
30,
|
|
|
December
31,
|
|
|
|
2009
|
|
|
2008
|
|
ASSETS
|
|
|
|
|
|
|
Plant:
|
|
|
|
|
|
|
Electric
Plant in Service
|
|
$
|
112,167
|
|
|
$
|
109,330
|
|
Non-Utility
Plant
|
|
|
63
|
|
|
|
66
|
|
Less: Accumulated
Depreciation
|
|
|
(46,787
|
)
|
|
|
(46,011
|
)
|
|
|
|
|
|
|
|
|
|
Net
Plant in Service
|
|
|
65,443
|
|
|
|
63,385
|
|
Construction
Work-in-Progress
|
|
|
3,071
|
|
|
|
3,104
|
|
|
|
|
|
|
|
|
|
|
Total
Plant Assets
|
|
|
68,514
|
|
|
|
66,489
|
|
|
|
|
|
|
|
|
|
|
Investments
in Associated Companies
|
|
|
1,046
|
|
|
|
989
|
|
|
|
|
|
|
|
|
|
|
Net
Plant and Investments in Associated Companies
|
|
|
69,560
|
|
|
|
67,478
|
|
|
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
|
|
Cash
and Cash Equivalents
|
|
|
1,331
|
|
|
|
1,846
|
|
Accounts
Receivable (less allowance for uncollectible accounts of $196 in 2009 and
$186 in 2008)
|
|
|
5,971
|
|
|
|
9,223
|
|
Unbilled
Revenue from Utility
|
|
|
832
|
|
|
|
1,240
|
|
Inventory
|
|
|
1,195
|
|
|
|
943
|
|
Unbilled
Contract Revenue
|
|
|
254
|
|
|
|
14
|
|
Prepayments
|
|
|
254
|
|
|
|
469
|
|
|
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
|
9,837
|
|
|
|
13,735
|
|
|
|
|
|
|
|
|
|
|
Regulatory
Assets:
|
|
|
|
|
|
|
|
|
Uncollected
Maine Yankee Decommissioning Costs
|
|
|
2,754
|
|
|
|
3,248
|
|
Recoverable
Seabrook Costs
|
|
|
7,784
|
|
|
|
8,339
|
|
Regulatory
Assets—Deferred Income Taxes
|
|
|
5,397
|
|
|
|
5,611
|
|
Regulatory
Assets—Post-Retirement Medical Benefits
|
|
|
5,972
|
|
|
|
5,985
|
|
Deferred
Fuel and Purchased Energy Costs
|
|
|
22,520
|
|
|
|
26,112
|
|
Unamortized
Premium on Early Retirement of Debt
|
|
|
582
|
|
|
|
685
|
|
Deferred
Regulatory Costs
|
|
|
1,453
|
|
|
|
1,570
|
|
|
|
|
|
|
|
|
|
|
Total
Regulatory Assets
|
|
|
46,462
|
|
|
|
51,550
|
|
|
|
|
|
|
|
|
|
|
Other
Assets:
|
|
|
|
|
|
|
|
|
Unamortized
Debt Issuance Costs
|
|
|
143
|
|
|
|
169
|
|
Restricted
Investments (at cost, which approximates market)
|
|
|
925
|
|
|
|
9
|
|
Other
Assets
|
|
|
1,812
|
|
|
|
1,577
|
|
|
|
|
|
|
|
|
|
|
Total
Other Assets
|
|
|
2,880
|
|
|
|
1,755
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
128,739
|
|
|
$
|
134,518
|
|
See Notes
to Consolidated Financial Statements
MAINE & MARITIMES CORPORATION AND
SUBSIDIARIES
Capitalization and Liabilities
(Unaudited)
(In
thousands of dollars)
|
|
June
30,
|
|
|
December
31,
|
|
|
|
2009
|
|
|
2008
|
|
Capitalization
(see accompanying statement):
|
|
|
|
|
|
|
Shareholders’
Equity
|
|
$
|
47,083
|
|
|
$
|
45,048
|
|
Long-Term
Debt
|
|
|
24,629
|
|
|
|
25,425
|
|
|
|
|
|
|
|
|
|
|
Total
Capitalization
|
|
|
71,712
|
|
|
|
70,473
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
|
|
Long-Term
Debt Due Within One Year
|
|
|
1,508
|
|
|
|
1,412
|
|
Notes
Payable to Banks
|
|
|
2,800
|
|
|
|
6,000
|
|
Accounts
Payable
|
|
|
4,260
|
|
|
|
4,866
|
|
Accounts
Payable—Associated Companies
|
|
|
29
|
|
|
|
30
|
|
Accrued
Employee Benefits
|
|
|
1,477
|
|
|
|
1,608
|
|
Customer
Deposits
|
|
|
207
|
|
|
|
102
|
|
Taxes
Accrued
|
|
|
578
|
|
|
|
309
|
|
Interest
Accrued
|
|
|
81
|
|
|
|
111
|
|
Dividends
Payable
|
|
|
84
|
|
|
|
84
|
|
Unearned
Revenue
|
|
|
9
|
|
|
|
86
|
|
|
|
|
|
|
|
|
|
|
Total
Current Liabilities
|
|
|
11,033
|
|
|
|
14,608
|
|
|
|
|
|
|
|
|
|
|
Deferred
Credits and Other Liabilities:
|
|
|
|
|
|
|
|
|
Accrued
Removal Obligations
|
|
|
5,837
|
|
|
|
5,787
|
|
Carrying
Value of Interest Rate Hedge
|
|
|
2,896
|
|
|
|
4,800
|
|
Uncollected
Maine Yankee Decommissioning Costs
|
|
|
2,754
|
|
|
|
3,248
|
|
Other
Regulatory Liabilities
|
|
|
830
|
|
|
|
663
|
|
Deferred
Income Taxes
|
|
|
17,334
|
|
|
|
18,161
|
|
Accrued
Postretirement Benefits and Pension Costs
|
|
|
13,846
|
|
|
|
14,135
|
|
Investment
Tax Credits
|
|
|
30
|
|
|
|
39
|
|
Miscellaneous
|
|
|
2,467
|
|
|
|
2,604
|
|
|
|
|
|
|
|
|
|
|
Total
Deferred Credits and Other Liabilities
|
|
|
45,994
|
|
|
|
49,437
|
|
|
|
|
|
|
|
|
|
|
Commitments,
Contingencies, and Regulatory Matters (Note 8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Capitalization and Liabilities
|
|
$
|
128,739
|
|
|
$
|
134,518
|
|
See Notes
to Consolidated Financial Statements
MAINE
& MARITIMES CORPORATION AND SUBSIDIARIES
Statement of Consolidated
Shareholders’ Equity
(Unaudited)
(In
thousands of dollars, except share data)
|
|
|
|
|
Common
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Shares Issued and Outstanding
|
|
|
Par
Value Issued ($7/Share)
|
|
|
Paid-In
Capital
|
|
|
Retained
Earnings
|
|
|
Accumulated
Other Comprehensive Loss
|
|
|
Total
|
|
Balance,
December
31, 2008
|
|
|
1,678,924
|
|
|
$
|
11,752
|
|
|
$
|
1,740
|
|
|
$
|
34,426
|
|
|
$
|
(2,870
|
)
|
|
$
|
45,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock Issued
|
|
|
1,650
|
|
|
|
11
|
|
|
|
49
|
|
|
|
|
|
|
|
|
|
|
|
60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
995
|
|
|
|
|
|
|
|
995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized
Loss on Investments Available for Sale, Net of Tax Benefit of
$4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
|
6
|
|
Change
in Fair Value of Interest Rate Hedge, Net of Tax Provision of
$762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,142
|
|
|
|
1,142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Other Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend
($0.10 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(168
|
)
|
|
|
|
|
|
|
(168
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
June
30, 2009
|
|
|
1,680,574
|
|
|
$
|
11,763
|
|
|
$
|
1,789
|
|
|
$
|
35,253
|
|
|
$
|
(1,722
|
)
|
|
$
|
47,083
|
|
MAM had
five million shares of $7 per share common stock authorized, with 1,680,574 and
1,678,924 shares issued and outstanding as of June 30, 2009 and December 31,
2008, respectively. At June 30, 2009 and December 31, 2008, MAM had 500,000
shares of $0.01 per share preferred stock authorized, with none issued or
outstanding.
See Notes
to Consolidated Financial Statements.
NOTES
TO CONSOLIDATED
FINANCIAL
STATEMENTS
(Unaudited)
1. ACCOUNTING
POLICIES
Consolidation
and Basis of Presentation
The
accompanying consolidated financial statements include the accounts of Maine
& Maritimes Corporation (“MAM” or the “Company”) and the following
wholly-owned subsidiaries and affiliates:
1.
|
Maine
Public Service Company (“MPS”) and its wholly-owned inactive Canadian
subsidiary Maine & New Brunswick Electrical Power Company, Ltd
(“Me&NB”); and
|
2.
|
MAM
Utility Services Group (“MAM USG”), a wholly-owned United States
subsidiary.
|
Discontinued
operations reported for 2008 consists of the activity of The Maricor Group
(“TMG”) and its wholly-owned United States subsidiary The Maricor Group New
England, Inc. (“TMGNE”) and TMG’s wholly-owned Canadian subsidiary The Maricor
Group, Canada Ltd (“TMGC”) and TMGC’s wholly-owned Canadian subsidiary Mecel
Properties Ltd. (“Mecel”). Each of these discontinued entities has
been dissolved.
MAM was a
50% owner of Maricor Properties Ltd, a Canadian company, and its wholly-owned
Canadian subsidiary Cornwallis Court Developments Ltd.
(“Cornwallis”). MAM divested its 50% ownership of Maricor Properties
on March 31, 2008, through a share redemption agreement with Ashford
Investments, Inc. (“Ashford”).
MAM is
listed on the NYSE Amex under the symbol “MAM.”
All inter-company
transactions between MAM and its subsidiaries have been eliminated in
consolidation.
In the opinion of management, the interim
financial statements contain all adjustments necessary (consisting of normal
recurring accruals) to present fairly the financial information contained
herein. Operating results for the interim period presented are not necessarily
indicative of the results to be expected for a full year, in part due to the
seasonal nature of the business.
Management
evaluated subsequent events through August 13, 2009, the date the financial
statements were issued.
Accounting
Policies
The
Company’s accounting policies are those disclosed in its 2008 Annual Report on
Form 10-K and updated in the 2009 first quarter Form 10-Q, both of which are
hereby incorporated by this reference.
New
Accounting Pronouncements
Financial
Accounting Standards Board (“FASB”) Accounting Standards
Codification
In June
2009 the FASB issued Statement No. 168 “The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting
Principles.” The FASB Accounting Standards Codification
(“Codification”) will become the source of authoritative U.S. generally accepted
accounting principles (“GAAP”) recognized by the FASB to be applied by
nongovernmental entities. This statement is effective for financial
statements issued for interim and annual periods ending after September 15,
2009.
The
Codification will supersede all existing non-SEC accounting and reporting
standards. All other non-grandfathered non-SEC accounting literature not
included in the Codification will become non-authoritative. Following
Statement 168, the FASB will not issue new standards in the form of Statements,
FASB Staff Positions, or Emerging Issues Task Force
Abstracts. Instead, the FASB will issue Accounting Standards Updates,
which will serve only to: (
a
) update the Codification;
(
b
) provide background
information about the guidance; and (
c
) provide the bases for
conclusions on the change(s) in the Codification. This statement is
not expected to have any impact on the Company’s financial
statements.
Amendment
of FASB Interpretation No. 46(R) - Consolidation of Variable Interest Entities
and Accounting for Transfers of Financial Assets an Amendment of FASB Statement
No. 140
The FASB
has issued the following two standards which change the way entities account for
securitizations and special-purpose entities:
·
|
FASB
Statement No. 166, Accounting for Transfers of Financial Assets;
and
|
·
|
FASB
Statement No. 167, Amendments to FASB Interpretation No.
46(R).
|
Statement
166 is a revision to FASB Statement No. 140, “Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities,”
and will require more
information about transfers of financial assets, including securitization
transactions, and where entities have continuing exposure to the risks related
to transferred financial assets. It eliminates the concept of a
“qualifying special-purpose entity,” changes the requirements for derecognizing
financial assets, and requires additional disclosures.
Statement
167 is a revision to FASB Interpretation No. 46 (revised December 2003),
“Consolidation of Variable Interest Entities,”
and changes how a
reporting entity determines when an entity that is insufficiently capitalized or
is not controlled through voting (or similar rights) should be consolidated. The
determination of whether a reporting entity is required to consolidate another
entity is based on, among other things, the other entity’s purpose and design
and the reporting entity’s ability to direct the activities of the other entity
that most significantly impact the other entity’s economic
performance.
The new
standards will require a number of new disclosures. Statement 167
will require a reporting entity to provide additional disclosures about its
involvement with variable interest entities and any significant changes in risk
exposure due to that involvement. A reporting entity will be required
to disclose how its involvement with a variable interest entity affects the
reporting entity’s financial statements. Statement 166 enhances
information reported to users of financial statements by providing greater
transparency about transfers of financial assets and an entity’s continuing
involvement in transferred financial assets. Statements 166 and 167
will be effective at the start of a reporting entity’s first fiscal year
beginning after November 15, 2009, or January 1, 2010, for a calendar year-end
entity. Early application is not permitted. This statement
is not expected to have a significant effect on the Company’s financial
statements.
Subsequent
Events
The FASB
has issued FASB Statement No. 165, “Subsequent Events.”
Statement 165
establishes general standards of accounting for and disclosure of events that
occur after the balance sheet date but before financial statements are issued or
are available to be issued. Specifically, Statement 165 provides:
·
|
The
period after the balance sheet date during which management of a reporting
entity should evaluate events or transactions that may occur for potential
recognition or disclosure in the financial
statements;
|
·
|
The
circumstances under which an entity should recognize events or
transactions occurring after the balance sheet date in its financial
statements; and
|
·
|
The
disclosures that an entity should make about events or transactions that
occurred after the balance sheet
date.
|
Statement
165 is effective for interim or annual financial periods ending after June 15,
2009, and shall be applied prospectively. This statement did not have
a significant effect on the Company’s financial statements.
Fair
Value Reporting
The FASB
has issued SFAS No. 161,
“
Disclosures About Derivative Instruments and Hedging Activities, an
Amendment of FASB Statement No. 133” (“SFAS 161”)
.
SFAS 161
amends SFAS 133, “Accounting for Derivative Instruments and Hedging Activities”
(“SFAS 133”) to amend and expand the disclosure requirements of SFAS 133 to
provide greater transparency about (i) how and why an entity uses
derivative instruments, (ii) how derivative instruments and related hedge
items are accounted for under SFAS 133 and its related interpretations, and
(iii) how derivative instruments and related hedged items affect an
entity’s financial position, results of operations and cash flows. To
meet those objectives, SFAS 161 requires qualitative disclosures about
objectives and strategies for using derivatives, quantitative disclosures about
fair value amounts of gains and losses on derivative instruments and disclosures
about credit-risk-related contingent features in derivative
agreements. SFAS 161 became effective for the Company on
January 1, 2009 and the required disclosures are reported in Note 10,
“Fair Value Disclosures.”
On April
9, 2009, the FASB issued three FASB Staff Positions (“FSPs”) related to fair
value reporting:
·
|
FSP
157-4, “Determining Fair Value When the Volume and Level of Activity for
the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly.” This FSP provides
additional guidance for measuring fair value under FASB Statement of
Financial Accounting Standard (“SFAS”) No. 157, “Fair Value
Measurements.” The FSP emphasizes that the objective of fair
value measurement remains to estimate the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date under current market
conditions. The FSP further clarifies that lack of an active
market or orderly transactions may require the entity to change the
valuation technique or use multiple techniques to determine fair
value. Finally, this FSP expanded the requirement to disclose
the inputs and valuation techniques used to measure fair value in annual
reporting to also require these disclosures in interim period
reporting.
|
·
|
FSP
115-2, “Recognition and Presentation of Other-Than-Temporary Impairments
(“OTTI”).” FSP 115-2 amends the guidance in SFAS 115,
“Accounting for Certain Investments in Debt and Equity Securities,” and
SFAS 124, “Accounting for Certain Investments Held by Not-for-Profit
Organizations.” This guidance addresses investments in debt
securities only, not equity securities. Under this new model,
an OTTI is triggered if (1) an entity has the intent to sell the security,
(2) it is more likely than not that it will be required to sell the
security before recovery, or (3) it does not expect to recover the entire
amortized cost basis of the security. If the OTTI is triggered
by (1) or (2), the entire loss (cost basis less fair value) is recognized
in earnings. If the OTTI is triggered by (3), and the entity
does not intend to sell the security, only the credit loss (cost basis
less amount expected to be recovered) is recognized in
earnings. The remaining difference between the amount expected
to be recovered and fair value is recorded in other comprehensive income
(“OCI”).
|
·
|
FSP
107-1, “Interim Disclosures about Fair Value of Financial
Instruments.” FSP 107-1 amends SFAS 107, “Disclosures about
Fair Value of Financial Instruments” and Accounting Principles Board
Opinion (“APB”) No. 28, “Interim Financial Reporting,” to require
disclosures for interim reporting periods of publicly traded companies, in
addition to annual reporting
periods.
|
These
FSPs are effective for interim and annual periods ending after June 15, 2009,
with early adoption permitted if all three are adopted
concurrently. On January 1, 2008, the Company adopted FASB
Statement No. 157, “Fair Value Measurements” and has included
disclosure of the level
of inputs for determination of the fair market value of interest rate hedges as
described in Note 10 of the “Notes to Consolidated Financial
Statements.” These FSPs did not require additional disclosures at
this time.
2. INCOME
TAXES
A summary
of Federal and State income taxes charged (credited) to income is presented
below. For accounting and ratemaking purposes, income tax provisions
(benefits) included in “Operating Expenses” reflect taxes applicable to revenues
and expenses allowable for ratemaking purposes on MPS regulated activities and
unregulated activities for MAM, MAM USG and TMG. The tax effect of
items not included in rate base or normal operating activities is allocated as
“Other Income (Deductions).”
(In
thousands of dollars)
|
|
For
the Quarters Ending June 30,
|
|
|
For
the Six Months Ending June 30,
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
Current
income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
$
|
375
|
|
|
$
|
1,045
|
|
|
$
|
1,687
|
|
|
$
|
1,045
|
|
State
|
|
|
144
|
|
|
|
357
|
|
|
|
550
|
|
|
|
357
|
|
Foreign
|
|
|
(1
|
)
|
|
|
14
|
|
|
|
(1
|
)
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
current income taxes
|
|
|
518
|
|
|
|
1,416
|
|
|
|
2,236
|
|
|
|
1,416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
(678
|
)
|
|
|
(1,086
|
)
|
|
|
(1,354
|
)
|
|
|
(43
|
)
|
State
|
|
|
(120
|
)
|
|
|
(335
|
)
|
|
|
(239
|
)
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
deferred income taxes
|
|
|
(798
|
)
|
|
|
(1,421
|
)
|
|
|
(1,593
|
)
|
|
|
(31
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
credits, net
|
|
|
(4
|
)
|
|
|
(5
|
)
|
|
|
(8
|
)
|
|
|
(10
|
)
|
Total
income taxes
|
|
$
|
(284
|
)
|
|
$
|
(10
|
)
|
|
$
|
635
|
|
|
$
|
1,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocated
to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Regulated
|
|
$
|
(228
|
)
|
|
$
|
193
|
|
|
$
|
745
|
|
|
$
|
1,557
|
|
- Unregulated
|
|
|
(55
|
)
|
|
|
(175
|
)
|
|
|
(107
|
)
|
|
|
(177
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
(283
|
)
|
|
|
18
|
|
|
|
638
|
|
|
|
1,380
|
|
Discontinued
Operations
|
|
|
-
|
|
|
|
(9
|
)
|
|
|
-
|
|
|
|
(15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating
|
|
|
(283
|
)
|
|
|
9
|
|
|
|
638
|
|
|
|
1,365
|
|
Other
income
|
|
|
(1
|
)
|
|
|
(19
|
)
|
|
|
(3
|
)
|
|
|
10
|
|
Total
|
|
$
|
(284
|
)
|
|
$
|
(10
|
)
|
|
$
|
635
|
|
|
$
|
1,375
|
|
For the
six months ended June 30, 2009 and 2008, the effective income tax rates were
39.0% and 42.0%, respectively. The principal reasons for the
effective tax rate differing from the US federal income tax rate are the
earnings from investments and investment tax credit amortization.
The
Company has not accrued U.S. income taxes on the undistributed earnings of
Me&NB, as the withholding taxes due on the distribution of any remaining
amount would be principally offset by foreign tax credits. No
dividends were received from Me&NB in the first two quarters of 2009 or
2008.
In June
2006, the FASB issued FASB Interpretation Number (“FIN”) 48, “Accounting for
Uncertainty in Income Taxes, an Interpretation of FASB Statement 109.”
This statement
clarifies the criteria that an individual tax position must satisfy for some or
all of the benefits of that position to be recognized in a company’s financial
statements. FIN 48 requires a tax position must be
more-likely-than-not in order for the position to be recognized in the financial
statements. The Company does not expect that the amounts of
unrecognized tax benefits will change significantly in the next twelve months,
and no adjustments to reported tax benefits were required under FIN
48. It is the Company’s policy to accrue interest and penalties, if
applicable, related to uncertain tax positions. As of June 30, 2009
and 2008, the Company has accrued no interest or penalties related to uncertain
tax positions.
The
statutes of limitations for audits by Federal, Maine, Massachusetts and Canadian
tax authorities have expired for all tax years ending December 31, 2004, or
earlier.
As
required by SFAS 109 and FIN 48, Management of the Company has evaluated the
positive and negative evidence bearing upon the realizability of the Company’s
deferred tax assets, which consist principally of pension and post-retirement
benefits, net operating loss carryforwards, earnings on investments, and
accumulated OCI on MPS’s interest rate hedges. For the six months ended June 30,
2009, and the year ended December 31, 2008, Management evaluated the deferred
tax assets and determined a valuation allowance was needed on the earnings on
investments. Certain distributions from MPS’s investments have been
treated for tax purposes as dividend income, resulting in a deferred tax asset
of $393,000 at June 30, 2009, and $384,000 at December 31, 2008. As
this will become a capital loss for tax purposes, the Company cannot be assured
capital gains will exist to allow for the use of this loss, and a valuation
allowance has been provided.
The
following summarizes accumulated deferred income tax (assets) and liabilities
established on temporary differences under SFAS 109 as of June 30, 2009 and
December 31, 2008:
(In
thousands of dollars)
|
|
|
|
|
|
|
|
|
June 30, 2009
|
|
|
December
31, 2008
|
|
Seabrook
|
|
$
|
4,204
|
|
|
$
|
4,511
|
|
Property
|
|
|
10,704
|
|
|
|
10,385
|
|
Flexible
pricing revenue
|
|
|
(10
|
)
|
|
|
164
|
|
Deferred
fuel
|
|
|
8,984
|
|
|
|
10,417
|
|
Pension
and post-retirement benefits
|
|
|
(5,485
|
)
|
|
|
(5,458
|
)
|
Other
Comprehensive Income
|
|
|
(1,123
|
)
|
|
|
(1,888
|
)
|
Deferred
Directors' Compensation
|
|
|
(525
|
)
|
|
|
(557
|
)
|
Other
|
|
|
585
|
|
|
|
587
|
|
|
|
|
|
|
|
|
|
|
Net
Accumulated Deferred Income Tax Liability
|
|
$
|
17,334
|
|
|
$
|
18,161
|
|
3. SEGMENT
INFORMATION
The
Company is organized based on products and services. Management
monitors the operations of the Company in the following operating
segments:
·
|
Regulated
electric utility: MPS and its inactive wholly-owned Canadian
subsidiary, Me&NB;
|
·
|
Unregulated
utility services: MAM
USG;
|
·
|
Unregulated
engineering services: TMG and its subsidiaries and product and
service lines have been dissolved, but were classified as discontinued
operations in prior years;
|
·
|
Other: Corporate
costs directly associated with the unregulated subsidiaries, other costs
not allocated to the regulated utility and inter-company
eliminations.
|
The
accounting policies of the segments are the same as those described in Note 1,
“Accounting Policies.” MAM provides certain administrative support
services to MPS and MAM USG, and provided similar services to TMG and its
subsidiaries. The costs of services provided to MPS and MAM USG are
billed to MPS and MAM USG based on a combination of direct charges and
allocations. The cost of corporate services provided to the other
unregulated entities remained at the holding company, and were not allocated or
charged to the various subsidiaries.
MPS also
provides services to MAM and other affiliates, including administrative
services, such as information technology, human resources and accounting, and
operational services. The administrative services are billed to MAM
at cost through inter-company transactions. Operational services for
which MPS has an established rate for charging third parties are charged at
those established rates.
|
|
(In
thousands of dollars)
|
|
|
|
Quarter
Ended June 30, 2009
|
|
|
|
Regulated
Electric
Utility
|
|
|
Unregulated
Utility Services
|
|
|
Other
|
|
|
Total
|
|
Revenues
from External Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated
Operating Revenues
|
|
$
|
7,361
|
|
|
$
|
-
|
|
|
$
|
(31
|
)
|
|
$
|
7,330
|
|
Unregulated
Utility Operating Revenues
|
|
|
-
|
|
|
|
354
|
|
|
|
-
|
|
|
|
354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Revenues
|
|
|
7,361
|
|
|
|
354
|
|
|
|
(31
|
)
|
|
|
7,684
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated
Operation & Maintenance
|
|
|
3,766
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,766
|
|
Unregulated
Operation & Maintenance
|
|
|
-
|
|
|
|
436
|
|
|
|
13
|
|
|
|
449
|
|
Depreciation
|
|
|
801
|
|
|
|
3
|
|
|
|
-
|
|
|
|
804
|
|
Amortization
of Stranded Costs
|
|
|
2,701
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,701
|
|
Amortization
|
|
|
42
|
|
|
|
-
|
|
|
|
-
|
|
|
|
42
|
|
Taxes
Other than Income
|
|
|
472
|
|
|
|
-
|
|
|
|
-
|
|
|
|
472
|
|
Income
Taxes
|
|
|
(228
|
)
|
|
|
(35
|
)
|
|
|
(20
|
)
|
|
|
(283
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Expenses
|
|
|
7,554
|
|
|
|
404
|
|
|
|
(7
|
)
|
|
|
7,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Loss
|
|
|
(193
|
)
|
|
|
(50
|
)
|
|
|
(24
|
)
|
|
|
(267
|
)
|
Other
Income (Deductions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
in Income of Associated Companies
|
|
|
33
|
|
|
|
-
|
|
|
|
-
|
|
|
|
33
|
|
Interest
and Dividend Income
|
|
|
7
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7
|
|
Other
Deductions
|
|
|
(34
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(34
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Other Income
|
|
|
6
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
Before Interest Charges
|
|
|
(187
|
)
|
|
|
(50
|
)
|
|
|
(24
|
)
|
|
|
(261
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Charges
|
|
|
139
|
|
|
|
1
|
|
|
|
10
|
|
|
|
150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(326
|
)
|
|
$
|
(51
|
)
|
|
$
|
(34
|
)
|
|
$
|
(411
|
)
|
|
|
(In
thousands of dollars)
|
|
|
|
Quarter
Ended June 30, 2008
|
|
|
|
Regulated
|
|
|
Unregulated
|
|
|
|
|
|
|
Electric
Utility
|
|
|
Utility
Services
|
|
|
Engineering
Services
|
|
|
Other
|
|
|
Total
|
|
Revenues
from External Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated
Operating Revenues
|
|
$
|
7,805
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(16
|
)
|
|
$
|
7,789
|
|
Unregulated
Utility Operating Revenues
|
|
|
-
|
|
|
|
2,078
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,078
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Revenues
|
|
|
7,805
|
|
|
|
2,078
|
|
|
|
-
|
|
|
|
(16
|
)
|
|
|
9,867
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated
Operation & Maintenance
|
|
|
3,305
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,305
|
|
Unregulated
Operation & Maintenance
|
|
|
-
|
|
|
|
2,344
|
|
|
|
-
|
|
|
|
74
|
|
|
|
2,418
|
|
Depreciation
|
|
|
753
|
|
|
|
3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
756
|
|
Amortization
of Stranded Costs
|
|
|
2,728
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,728
|
|
Amortization
|
|
|
54
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
54
|
|
Taxes
Other than Income
|
|
|
451
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
452
|
|
Income
Taxes
|
|
|
193
|
|
|
|
(125
|
)
|
|
|
-
|
|
|
|
(50
|
)
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Expenses
|
|
|
7,484
|
|
|
|
2,222
|
|
|
|
-
|
|
|
|
25
|
|
|
|
9,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income (Loss)
|
|
|
321
|
|
|
|
(144
|
)
|
|
|
-
|
|
|
|
(41
|
)
|
|
|
136
|
|
Other
Income (Deductions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
in Income (Loss) of Associated Companies
|
|
|
42
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
41
|
|
Interest
and Dividend Income (Expense)
|
|
|
9
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(8
|
)
|
|
|
1
|
|
Other
(Deductions) Income
|
|
|
(33
|
)
|
|
|
(46
|
)
|
|
|
-
|
|
|
|
1
|
|
|
|
(78
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Other Income (Deductions)
|
|
|
18
|
|
|
|
(46
|
)
|
|
|
-
|
|
|
|
(8
|
)
|
|
|
(36
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(Loss) Before Interest Charges
|
|
|
339
|
|
|
|
(190
|
)
|
|
|
-
|
|
|
|
(49
|
)
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Charges
|
|
|
126
|
|
|
|
-
|
|
|
|
-
|
|
|
|
30
|
|
|
|
156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(Loss) from Continuing Operations
|
|
|
213
|
|
|
|
(190
|
)
|
|
|
-
|
|
|
|
(79
|
)
|
|
|
(56
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from Discontinued Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
on Sale of Discontinued Operations
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
Loss
From Operations
|
|
|
-
|
|
|
|
-
|
|
|
|
(20
|
)
|
|
|
-
|
|
|
|
(20
|
)
|
Benefit
of Income Taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
9
|
|
|
|
-
|
|
|
|
9
|
|
Loss
from Discontinued Operations
|
|
|
-
|
|
|
|
-
|
|
|
|
(12
|
)
|
|
|
-
|
|
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income (Loss)
|
|
$
|
213
|
|
|
$
|
(190
|
)
|
|
$
|
(12
|
)
|
|
$
|
(79
|
)
|
|
$
|
(68
|
)
|
|
|
(In
thousands of dollars)
|
|
|
|
Six
Months Ended June 30, 2009
|
|
|
|
Regulated
Electric
Utility
|
|
|
Unregulated
Utility Services
|
|
|
Other
|
|
|
Total
|
|
Revenues
from External Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated
Operating Revenues
|
|
$
|
17,480
|
|
|
$
|
-
|
|
|
$
|
(48
|
)
|
|
$
|
17,432
|
|
Unregulated
Utility Operating Revenues
|
|
|
-
|
|
|
|
548
|
|
|
|
-
|
|
|
|
548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Revenues
|
|
|
17,480
|
|
|
|
548
|
|
|
|
(48
|
)
|
|
|
17,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated
Operation & Maintenance
|
|
|
7,554
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,554
|
|
Unregulated
Operation & Maintenance
|
|
|
-
|
|
|
|
646
|
|
|
|
96
|
|
|
|
742
|
|
Depreciation
|
|
|
1,394
|
|
|
|
6
|
|
|
|
-
|
|
|
|
1,400
|
|
Amortization
of Stranded Costs
|
|
|
5,401
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,401
|
|
Amortization
|
|
|
72
|
|
|
|
-
|
|
|
|
-
|
|
|
|
72
|
|
Taxes
Other than Income
|
|
|
923
|
|
|
|
-
|
|
|
|
-
|
|
|
|
923
|
|
Income
Taxes
|
|
|
745
|
|
|
|
(43
|
)
|
|
|
(64
|
)
|
|
|
638
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Expenses
|
|
|
16,089
|
|
|
|
609
|
|
|
|
32
|
|
|
|
16,730
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income (Loss)
|
|
|
1,391
|
|
|
|
(61
|
)
|
|
|
(80
|
)
|
|
|
1,250
|
|
Other
Income (Deductions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
in Income of Associated Companies
|
|
|
61
|
|
|
|
-
|
|
|
|
-
|
|
|
|
61
|
|
Interest
and Dividend Income
|
|
|
8
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8
|
|
Other
Deductions
|
|
|
(54
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(54
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Other Income
|
|
|
15
|
|
|
|
-
|
|
|
|
-
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(Loss) Before Interest Charges
|
|
|
1,406
|
|
|
|
(61
|
)
|
|
|
(80
|
)
|
|
|
1,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Charges
|
|
|
246
|
|
|
|
3
|
|
|
|
21
|
|
|
|
270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income (Loss)
|
|
$
|
1,160
|
|
|
$
|
(64
|
)
|
|
$
|
(101
|
)
|
|
$
|
995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
127,743
|
|
|
$
|
1,300
|
|
|
$
|
(304
|
)
|
|
$
|
128,739
|
|
|
|
(In
thousands of dollars)
|
|
|
|
Six
Months Ended June 30, 2008
|
|
|
|
Regulated
|
|
|
Unregulated
|
|
|
|
|
|
|
Electric
Utility
|
|
|
Utility
Services
|
|
|
Engineering
Services
|
|
|
Other
|
|
|
Total
|
|
Revenues
from External Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated
Operating Revenues
|
|
$
|
18,706
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(26
|
)
|
|
$
|
18,680
|
|
Unregulated
Utility Operating Revenues
|
|
|
-
|
|
|
|
3,374
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Revenues
|
|
|
18,706
|
|
|
|
3,374
|
|
|
|
-
|
|
|
|
(26
|
)
|
|
|
22,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated
Operation & Maintenance
|
|
|
6,642
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,642
|
|
Unregulated
Operation & Maintenance
|
|
|
-
|
|
|
|
3,524
|
|
|
|
-
|
|
|
|
169
|
|
|
|
3,693
|
|
Depreciation
|
|
|
1,507
|
|
|
|
4
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,511
|
|
Amortization
of Stranded Costs
|
|
|
5,456
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,456
|
|
Amortization
|
|
|
107
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
107
|
|
Taxes
Other than Income
|
|
|
904
|
|
|
|
2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
906
|
|
Income
Taxes
|
|
|
1,557
|
|
|
|
(61
|
)
|
|
|
-
|
|
|
|
(116
|
)
|
|
|
1,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Expenses
|
|
|
16,173
|
|
|
|
3,469
|
|
|
|
-
|
|
|
|
53
|
|
|
|
19,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income (Loss)
|
|
|
2,533
|
|
|
|
(95
|
)
|
|
|
-
|
|
|
|
(79
|
)
|
|
|
2,359
|
|
Other
Income (Deductions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
in Income (Loss) of Associated Companies
|
|
|
75
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(9
|
)
|
|
|
66
|
|
Interest
and Dividend Income
|
|
|
22
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(17
|
)
|
|
|
5
|
|
Other
(Deductions) Income
|
|
|
(105
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
3
|
|
|
|
(102
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Other Deductions
|
|
|
(8
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(23
|
)
|
|
|
(31
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(Loss) Before Interest Charges
|
|
|
2,525
|
|
|
|
(95
|
)
|
|
|
-
|
|
|
|
(102
|
)
|
|
|
2,328
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Charges
|
|
|
325
|
|
|
|
-
|
|
|
|
-
|
|
|
|
84
|
|
|
|
409
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(Loss) from Continuing Operations
|
|
|
2,200
|
|
|
|
(95
|
)
|
|
|
-
|
|
|
|
(186
|
)
|
|
|
1,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from Discontinued Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
on Sale of Discontinued Operations
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
Loss
From Operations
|
|
|
-
|
|
|
|
-
|
|
|
|
(35
|
)
|
|
|
-
|
|
|
|
(35
|
)
|
Benefit
of Income Taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
15
|
|
|
|
-
|
|
|
|
15
|
|
Loss
from Discontinued Operations
|
|
|
-
|
|
|
|
-
|
|
|
|
(21
|
)
|
|
|
-
|
|
|
|
(21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income (Loss)
|
|
$
|
2,200
|
|
|
$
|
(95
|
)
|
|
$
|
(21
|
)
|
|
$
|
(186
|
)
|
|
$
|
1,898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
128,779
|
|
|
$
|
2,594
|
|
|
$
|
-
|
|
|
$
|
46
|
|
|
$
|
131,419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4. INVESTMENTS
IN ASSOCIATED COMPANIES
Maine
Yankee and MEPCO
MPS owns
5% of the common stock of Maine Yankee Atomic Power Company (“Maine Yankee”), a
jointly-owned nuclear electric power company, and 7.49% of the common stock of
MEPCO, a jointly-owned electric transmission company. Although MPS’s
ownership percentage of these entities is relatively low, it does have influence
over the operating and financial decisions of these companies through board
representation; therefore, MPS records its investment in MEPCO and Maine Yankee
using the equity method. This treatment is consistent with industry
practice for similar jointly-owned units.
No
dividends were paid by Maine Yankee in the first half of 2009 or
2008. MPS received dividends of $2,000 from MEPCO in both the first
and second quarters of 2009 and 2008.
Substantially
all earnings of Maine Yankee and MEPCO are distributed to investor
companies.
5. DILUTED
EARNINGS PER SHARE
The
dilutive earnings per share impact of outstanding stock options
was:
|
|
Quarters
Ended June 30,
|
|
|
Six
Months Ended June 30,
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
Net
(Loss) Income (in thousands)
|
|
$
|
(411
|
)
|
|
$
|
(68
|
)
|
|
$
|
995
|
|
|
$
|
1,898
|
|
Shares
Used in Computation of Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average
Common Shares Outstanding in Computation of Basic Earnings per
Share
|
|
|
1,680,574
|
|
|
|
1,678,096
|
|
|
|
1,680,137
|
|
|
|
1,677,979
|
|
Dilutive
Effect of Common Stock Options
|
|
|
-
|
|
|
|
-
|
|
|
|
673
|
|
|
|
750
|
|
Shares
Used in Computation of Earnings per Common Share Assuming
Dilution
|
|
|
1,680,574
|
|
|
|
1,678,096
|
|
|
|
1,680,810
|
|
|
|
1,678,729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(Loss) Income per Share (Basic)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
0.59
|
|
|
$
|
1.13
|
|
Net
(Loss) Income per Share (Diluted)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
0.59
|
|
|
$
|
1.13
|
|
Due to the losses incurred in the
second quarters of 2009 and 2008, the stock options were anti-dilutive for those
periods. There were 536 and 574 potentially dilutive shares in the
second quarters of 2009 and 2008, respectively.
6. DEFERRED
DIRECTORS’ COMPENSATION
The
compensation program for the MAM Board of Directors includes an option for the
director to defer some or all of his or her fees, rather than taking those fees
in cash each quarter. The first deferral option grants the director a
number of phantom shares of stock, with the number granted equivalent to the
fees earned for the quarter, divided by the closing share price on the last day
of that quarter. The cumulative deferred phantom shares are marked to
the closing share price on the last day of each quarter, and the adjustment is
recorded as expense. If applicable, any dividends paid are also
converted to an equivalent number of phantom shares, and are added to the
cumulative deferred total.
During
the second quarter of 2009, the equivalent of 658 shares was deferred, bringing
the total deferred through June 30, 2009, to the equivalent of 36,535
shares. The share price on that date was $34.75, resulting in a $1.27
million liability recorded on the Consolidated Balance Sheet under
“Miscellaneous Liabilities.” A $1 increase in MAM’s stock price will
increase the liability and expense by approximately $37,000. A $1
decrease in MAM’s stock price will decrease the liability by approximately
$37,000. This unfunded liability is payable upon termination of
services of the director. The plan allows for a lump-sum distribution
or a monthly payment over ten years. All directors currently
participating in this deferral plan have elected the ten-year payment
option.
The
second deferral option allows directors to postpone payment of their fees in
cash, and earn interest on the deferred amounts at a rate adjusted quarterly to
the five-year Treasury Note rate, which was 2.625% at June 30,
2009. The unfunded obligation under this deferral program is $26,000,
and is also recorded under “Miscellaneous Liabilities” on the Consolidated
Balance Sheets.
7. BENEFIT
PROGRAMS
The
Company provides certain pension, post-retirement and welfare benefit programs
to its employees. Benefit programs are an integral part of the
Company’s commitment to hiring and retaining employees, providing market-based
compensation that rewards individual and corporate performance. The Company
offers welfare benefit plans to all employees, consisting of health care, life
insurance, long-term disability, and accidental disability insurance. The
Company also offers a retirement savings program to most employees in the form
of a 401(k) plan. This plan allows voluntary contributions by the employee and
may contain a contribution by the Company.
U.
S. Defined Benefit Pension Plan
The
Company has a non-contributory defined benefit pension plan covering MPS and
certain former MAM employees. No employees of other unregulated
businesses are eligible for this benefit plan. Benefits under the
plan are based on employees’ years of service and compensation prior to
retirement.
On
December 31, 2006, future salary and service accruals for current participants
in the plan ceased, and any new employees hired on or after January 1, 2006, are
not eligible for the pension plan. The Company agreed to additional
employer contributions to the Retirement Savings Plan to compensate employees in
part or in full, depending on their number of years of service, for this lost
benefit. This additional contribution ranges from 5% to 25% of each
eligible employee’s gross base pay, and is immediately fully
vested. This contribution was $381,000 and $370,000 in the first half
of 2009 and 2008, respectively.
During
recent years, the Company’s policy has been to fund pension costs
accrued. In the current year, the Company is funding an amount
greater than the current year accrual due to prior underfunding. The
Company contributed $341,000 for the 2008 plan year in the first quarter of
2009, and does not anticipate any additional contributions for the 2008 plan
year. The Company also expects to contribute approximately $200,000
per quarter during 2009 for 2009 plan year estimated payments.
The
following table sets forth the plan’s net periodic benefit cost:
(In
thousands of dollars)
|
|
Pension
Benefits
|
|
|
|
Quarters
Ended June 30,
|
|
|
Six
Months Ended June 30,
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
Interest
cost
|
|
$
|
271
|
|
|
$
|
268
|
|
|
$
|
542
|
|
|
$
|
537
|
|
Expected
return on plan assets
|
|
|
(292
|
)
|
|
|
(305
|
)
|
|
|
(584
|
)
|
|
|
(609
|
)
|
Recognized
net actuarial loss
|
|
|
36
|
|
|
|
19
|
|
|
|
72
|
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
periodic benefit cost
|
|
$
|
15
|
|
|
$
|
(18
|
)
|
|
$
|
30
|
|
|
$
|
(35
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health
Care Benefits
The
Company provides certain health care benefits to eligible
employees. Eligible employees share in the cost of their medical
benefits, in addition to plan deductibles and coinsurance
payments. The plan also covers retiree medical coverage for employees
of Maine Public Service Company, the regulated utility. Employees
hired on or after October 1, 2005, are not eligible for post-retirement medical
coverage.
The
following table sets forth the plans’ net periodic benefit cost:
(In
thousands of dollars)
|
|
Health
Care Benefits
|
|
|
|
Quarters
Ended June 30,
|
|
|
Six
Months Ended June 30,
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
Service
cost
|
|
$
|
49
|
|
|
$
|
51
|
|
|
$
|
98
|
|
|
$
|
102
|
|
Interest
cost
|
|
|
139
|
|
|
|
137
|
|
|
|
278
|
|
|
|
273
|
|
Expected
return on plan assets
|
|
|
(38
|
)
|
|
|
(56
|
)
|
|
|
(76
|
)
|
|
|
(112
|
)
|
Amortization
of transition obligation
|
|
|
18
|
|
|
|
18
|
|
|
|
36
|
|
|
|
36
|
|
Amortization
of prior service cost
|
|
|
(15
|
)
|
|
|
(15
|
)
|
|
|
(30
|
)
|
|
|
(30
|
)
|
Recognized
net actuarial loss
|
|
|
50
|
|
|
|
49
|
|
|
|
100
|
|
|
|
99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
periodic benefit cost
|
|
$
|
203
|
|
|
$
|
184
|
|
|
$
|
406
|
|
|
$
|
368
|
|
8. COMMITMENTS,
CONTINGENCIES AND REGULATORY MATTERS
Federal
Energy Regulatory Commission 2009 Open Access Transmission Tariff Formula Rate
Filing
On June
15, 2009, MPS filed its updated rates under the 2009 Open Access Transmission
Tariff formula pursuant to Docket ER00-1053 for both wholesale and retail
customers. The revenue decreases were approximately $81,000 or 14%
for wholesale customers, effective June 1, 2009, and $623,000 or 20% for retail
customers, effective July 1, 2009. The decrease is primarily
associated with wheeling revenue collected from generators exporting electricity
off the MPS system during 2008. The Company and the interveners are
currently in the discovery process, and the final change in rates could differ
from the initial filing. MPS cannot determine the final outcome at
this time.
Federal
Energy Regulatory Commission 2008 Open Access Transmission Tariff Formula Rate
Filing
On June
16, 2008, MPS filed its updated rates under the 2008 Open Access Transmission
Tariff formula pursuant to Docket ER00-1053 for both wholesale and retail
customers. The revenue decreases were approximately $220,000 or 27%
for wholesale customers, effective June 1, 2008, and $631,000 or 17% for retail
customers, effective July 1, 2008. The decrease was primarily
associated with wheeling revenue collected from generators exporting electricity
off the MPS system during 2007. The interested parties in this Docket
reached and filed a settlement with FERC on May 6, 2009. The Company
expects the settlement to be approved by FERC in the near future.
Request
for Confirmation of Interpretation of Cost Allocation Manual
Under
MPUC Docket 2009-60, MPS requested confirmation of its interpretation of its
Cost Allocation Manual. The Manual provides the process for
identifying common costs of the holding company, costs that are not directly
associated with the operations of its subsidiaries and for which a
cost-causative indirect basis of allocation exists. MPS proposed to
exclude MAM USG subcontractor and materials expenses from the determination of
the common cost allocation. The Commission approved a Stipulation
signed by all interested parties on June 6, 2009. Under the approved
Stipulation, the Company will exclude stranded costs, income taxes,
depreciation, amortization, materials and one-third of subcontractor expenses
from the common cost calculation. This change does not impact the
current year net income of the corporation, but does impact segment
reporting.
MPUC
Investigation of Maine Utilities Continued Participation in ISO-NE
On April 8, 2008, the MPUC initiated an
investigation in Docket No. 2008-156 of CMP and Bangor Hydroelectric Company’s
continued participation in ISO-NE and the New England Regional Transmission
Organization. MPS is not currently a member of ISO-NE, but was made a
party to the case by the Commission in light of the potential integration of the
ISO-NE and northern Maine markets by means of the MPC Project. In
February 2008, MPS made a request to become a member of ISO-NE, subject to
certain conditions, including the inclusion of the costs of the MPC Project in
the ISO-NE regional transmission tariff. MPS participated in this
Docket.
On
January 16, 2009, the MPUC determined that the status quo relationship with
ISO-NE was inadequate. The Commission ordered CMP and Bangor Hydro to
move forward and negotiate meaningful reform to benefit Maine consumers with the
assistance of the Commission. The Commission participated actively
within the ISO-NE stakeholder process to achieve reforms. On June 30,
2009, the Commission issued an order in Docket No. 2008-156 in which it
concluded that alternatives to the Maine transmission owners’ membership in
ISO-NE, such as a Maine only ISO, would not provide cost savings to Maine’s
ratepayers and that achieving reforms within ISO-NE are currently the Maine
utilities’ best option to fulfill their energy objectives. The
Commission thus allowed CMP and BHE to go forward with an automatic two-year
renewal of the underlying Transmission Owners Agreement (“TOA”) between the
Maine Transmission Owners and ISO-NE. The Commission also outlined
further reforms it wished the Maine Transmission Owners to pursue with ISO-NE in
the context of the TOA.
Wheelabrator-Sherman
MPS was
ordered into a Power Purchase Agreement with Wheelabrator-Sherman in 1986, which
required the purchase of the entire output (up to 126,582 MWH per year) of a
17.6 MW biomass plant through December 31, 2006. Total stranded costs
included as regulatory assets under the caption “Deferred Fuel and Purchased
Energy Costs” in the Consolidated Balance Sheet related to this contract are
$22.5 million and $26.1 million at June 30, 2009, and December 31, 2008,
respectively.
Poly
Chlorinated Bi-Phenol Transformers
In
response to a Maine environmental regulation to phase out Poly Chlorinated
Bi-phenol (“PCB”) transformers, MPS has a program to eliminate transformers on
its system that do not meet the State environmental guidelines. The
Company is in the process of inspecting almost 13,000 distribution transformers
over a ten-year period. MPS is currently in its ninth year of this
ten-year program. Approximately 35% of the transformers inspected
require “in service” PCB oil sampling. In addition, transformers that pass
the inspection criteria will be refitted with new lightning arrestors and animal
guards, where necessary. The current total estimated cost of the
project is $3.2 million; as of June 30, 2009, $2.7 million of this total has
been spent. The remaining cost of the project has been accrued on the
Consolidated Balance Sheets as “Accrued Removal Obligations.”
Financial
Information System Hosting Agreement
In 2007,
the Company renegotiated its Financial Information System Hosting Agreement with
OneNeck IT Services to host and provide technical and functional support for the
integrated Oracle Financial Information System. The base hosting fees
were reduced to $537,500 per year for 2007 through 2013.
Off-Balance
Sheet Arrangements
The
Company has several operating leases for office and field equipment, vehicles
and office space, accounted for in accordance with SFAS 13, “Accounting for
Leases.” The following summarizes payments for leases for a period in
excess of one year:
|
|
Six
Months Ended
June
30,
|
|
(In
thousands of dollars)
|
|
2009
|
|
|
2008
|
|
Equipment
|
|
$
|
24
|
|
|
$
|
10
|
|
Building
|
|
|
-
|
|
|
|
97
|
|
Rights
of Way
|
|
|
28
|
|
|
|
-
|
|
Total
|
|
$
|
52
|
|
|
$
|
107
|
|
The
future minimum lease payments have not changed materially from the amounts
reported as of December 31, 2008. Please refer to MAM’s 2008 Form
10-K for these future lease payments.
9. CAPITAL
LEASES
MPS
financed certain of its 2006 and 2007 vehicle and computer equipment purchases
through capital leases, totaling $820,000. The remaining liability as
of June 30, 2009, for these capital lease arrangements is approximately
$362,000, and is recorded within “Miscellaneous Liabilities” on the Consolidated
Balance Sheet. Future minimum lease payments have not changed from
the amounts reported as of December 31, 2008. Please refer to MAM’s
2008 Form 10-K for these future lease payments.
From the
inception of the leases through December 31, 2008, the Company recorded
depreciation expense and accumulated depreciation on leased assets in accordance
with generally accepted accounting principles. FERC General
Instruction No. 20 requires this reduction in the value of computers, office
equipment and vehicles under capital lease be reported as rent expense within
Operation and Maintenance expense. The 2009 Consolidated Income
Statement reflects this reclassification of $245,000, which was recorded in the
first quarter.
10. FAIR
VALUE DISCLOSURES
Currently,
the Company uses interest rate swaps to manage its interest rate
risk. The valuation of these instruments is determined using widely
accepted valuation techniques including discounted cash flow analysis on the
expected cash flows of each derivative. This analysis reflects the
contractual terms of the derivatives, including the period to maturity, and uses
observable market-based inputs. This valuation relies on Level 2
inputs as described in FASB Statement No. 157, “Fair
Value
Measurements.” Level 2 inputs are inputs other than quoted prices
that are observable for the asset of liability, either directly or indirectly,
including quoted prices for similar assets and liabilities in active markets, as
well as other observable inputs for the asset or liability, such as interest
rates, foreign exchange rates, and yield curves that are observable at commonly
quoted intervals.
At June
30, 2009, MPS had two long-term debt issues outstanding with variable interest
rates. Pursuant to its rate order in MPUC Docket 2003-85, MPS agreed to fix its
interest rates and the MPUC allowed recovery of the fixed interest costs in
rates. On September 9, 2003, MPS executed swap agreements for
the variable-rate issues then outstanding, locking in the rates over the
remaining terms of the issues. For the two series of tax-exempt bonds
issued by the MPUFB, the effective fixed interest rates for the 1996 Series due
2021 and the 2000 Series due 2025 are 4.42% and 4.53%,
respectively. Gains or losses in the fair market value of the
interest rate swaps do not impact the Company’s net income or revenues, unless
MPS’s shareholder’s common equity falls below the minimum allowable 48% of
common equity rate, the floor established by the MPUC Order in Docket
No. 2002-676 authorizing the formation of the holding company,
MAM.
As of
June 30, 2009, the fair value of the interest rate hedges was a liability of
$2.9 million, compared to a liability of $4.8 million at December 31, 2008, a
gain in fair value of $1.9 million. This gain, less the deferred
income tax provision of $762,000 from December 31, 2008 to June 30, 2009, has
been reported as “Other Comprehensive Income” on the Consolidated Statement of
Shareholders’ Equity. The difference between the fixed rates and the
underlying variable rates on the issues was charged to interest expense, along
with the interest expense incurred on the corresponding debt
issues.
The
following table presents the notional amounts and estimated fair values of the
Company’s interest rate derivative contracts outstanding at June 30, 2009
and December 31, 2008. The Company utilizes dealer quotations to
value its interest rate derivative contracts designated as hedges.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2009
|
|
December 31, 2008
|
|
Consolidated
Balance
Sheet Location
|
Notional
Amount
|
|
Estimated
Fair Value
|
|
Notional
Amount
|
|
Estimated
Fair Value
|
Interest
rate derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
rate swaps on 1996 Series Notes
|
Other Liabilities
|
$
|
13,600
|
|
$
|
1,652
|
|
$
|
13,600
|
|
$
|
2,678
|
Interest
rate swaps on 2000 Series Notes
|
Other Liabilities
|
$
|
9,000
|
|
$
|
1,245
|
|
|
9,000
|
|
|
2,121
|
The
weighted-average rates paid and received for interest rate swaps outstanding at
June 30, 2009 were as follows:
|
|
|
|
|
|
|
|
|
Weighted-Average
|
|
|
|
Interest
Rate
Paid
|
|
|
Interest
Rate
Received
|
|
Interest
rate swaps:
|
|
|
|
|
|
|
Fair
value hedge interest rate swaps on 1996 Series Notes
|
|
|
2.31
|
%
|
|
|
4.42
|
%
|
Fair
value hedge interest rate swaps on 2000 Series Notes
|
|
|
2.43
|
%
|
|
|
4.53
|
%
|
11. DISCONTINUED
OPERATIONS
MAM
divested substantially all of its unregulated engineering operations during
2007. TMG is presented as discontinued operations in these financial
statements through its dissolution in the fourth quarter of 2008. The
net loss for TMG is a result of the operations of Mecel Properties, and is
composed of the following:
(in
thousands of dollars)
|
|
Quarter
Ended
|
|
|
Six
Months Ended
|
|
|
|
June
30, 2008
|
|
Loss
From Operations:
|
|
|
|
|
|
|
Loss
on Sale of Discontinued Operations
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
Operating
Revenue
|
|
|
6
|
|
|
|
26
|
|
Expenses
|
|
|
(26
|
)
|
|
|
(61
|
)
|
Loss
from Operations
|
|
|
(21
|
)
|
|
|
(36
|
)
|
Benefit
of Income Taxes
|
|
|
9
|
|
|
|
15
|
|
Net
Loss — Unregulated Engineering Services
|
|
$
|
(12
|
)
|
|
$
|
(21
|
)
|
TMG had
no assets or liabilities remaining at June 30, 2009 or December 31,
2008.
12. SUBSEQUENT
EVENTS
MAM USG’s
$500,000 Bank of America one-year line of credit agreement expired June 30,
2009. On July 7, 2009, MAM and MAM USG jointly entered into a $4.0
million two-year credit facility with Bank of America to replace this
line. The $4.0 million facility is structured to allow MAM and/or MAM
USG to use the credit capacity as either a line of credit or letters of
credit. MAM USG may use the letter of credit option as a way to
secure performance bonding required for some projects.
Interest
on the line of credit or any letters of credit that are drawn on is at LIBOR
plus 2.25%. There is also a 0.375% commitment fee on the unused
balance. The interest rate at June 30, 2009 was at the Bank of
America prime rate, or the optional rate of LIBOR plus 200 basis
points.
This
credit facility has certain covenants, including maintaining a MAM consolidated
interest coverage ratio of 2.5:1 on a 12-month rolling
average. Failure to comply with this covenant or a default on MPS
debt is an event of default under the terms of this agreement.
PART
1. FINANCIAL INFORMATION
Item
2. Management's Discussion and Analysis of Financial Condition and Results of
Operations
Forward-Looking Statements
This
filing contains certain “forward-looking statements” as defined in the Private
Securities Litigation Reform Act of 1995, related to the expected future
performance of our plans and objectives, such as forecasts and projections of
expected future performance or statements of Management’s plans and
objectives. These forward-looking statements may be contained in
filings with the SEC and in press releases and oral statements. We use words
such as “anticipate,” “estimate,” “predict,” “expect,” “project,” “intend,”
“plan,” “believe,” and other words and terms of similar meaning in connection
with any discussion of future operating or financial
performance. These statements are based on the current expectations,
estimates or projections of Management and are not guarantees of future
performance. Some or all of these forward-looking statements may not
turn out to be what the Company expected. Actual results will differ,
and some of the differences may be material.
Factors
that could cause actual results to differ materially from our projections
include, among other matters, legislation and regulation, construction of new
transmission facilities, financing risk for new transmission facilities, risk
from joint development agreement, contract risks at MAM USG, attraction and
retention of qualified employees, economy of the region and general economic
conditions, competitive conditions, holding company structure, interest rate and
debt covenant risk, pension plan investments, information technology,
environmental risks, aging infrastructure and reliability, weather, vandalism,
terrorism and other illegal acts, alternative generation options, and
professional liability. Therefore, no assurances can be given that
the outcomes stated in such forward-looking statements and estimates will
be achieved.
Accounting
Policies
Critical
accounting policies are disclosed in the Company’s 2008 Annual Report on Form
10-K.
Results
of Operations and Executive Overview
Net
Income and Earnings Per Share
|
|
Quarters
Ended June 30,
|
|
|
Six
Months Ended June 30,
|
|
(in
thousands except per share amounts)
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
Income
(Loss) from Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated
Electric Utility
|
|
$
|
(326
|
)
|
|
$
|
213
|
|
|
$
|
1,160
|
|
|
$
|
2,200
|
|
Unregulated
Utility Services
|
|
|
(51
|
)
|
|
|
(190
|
)
|
|
|
(64
|
)
|
|
|
(95
|
)
|
Other*
|
|
|
(34
|
)
|
|
|
(79
|
)
|
|
|
(101
|
)
|
|
|
(186
|
)
|
(Loss)
Income from Continuing Operations
|
|
|
(411
|
)
|
|
|
(56
|
)
|
|
|
995
|
|
|
|
1,919
|
|
Loss
from Discontinued Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unregulated
Engineering Services
|
|
|
-
|
|
|
|
(12
|
)
|
|
|
-
|
|
|
|
(21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(Loss) Income
|
|
$
|
(411
|
)
|
|
$
|
(68
|
)
|
|
$
|
995
|
|
|
$
|
1,898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and Diluted (Loss) Income Per Share
|
|
$
|
(0.25
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
0.59
|
|
|
$
|
1.13
|
|
*The
“Other” line includes activities of the holding company (including corporate
costs directly associated with the unregulated subsidiaries and costs not
allocated to the regulated utility or unregulated utility services) and
inter-company eliminations.
Net
income above is allocated based upon the segments as presented in Note 3,
“Segment Information,” of the Consolidated Financial Statements. The
results by segment are explained more fully in the following
sections.
The
consolidated net income of the Company was down $343,000 when compared to the
second quarter of 2008 and down $903,000 or 48% for the six months ended June
30, 2009 over the previous year. Following a similar trend as in late
2008 and for the first quarter of 2009, there are two primary reasons for this
downturn:
1.
|
Revenues
for MPS were down substantially, falling by $444,000 or 5.7% over the same
quarter last year. Year to date MPS revenues were off by $1.2
million or 6.6%. While revenues for all customer classes are
down year to date, the most significant decrease was from the commercial
customer class where the wood and lumber industry continues to struggle
within our service territory. Revenue from our large commercial
class of customers was down by approximately 34% for the first half of the
year or $786,000. Revenues were stable for residential
customers, remaining flat year to date. These trends started in
the middle of 2008 and Management cannot say for certain if, or when,
these trends may reverse.
|
2.
|
MAM
USG, the unregulated contracting subsidiary, had no material projects
during the first half of 2009, greatly reducing its
revenue. Revenue decreased $1.7 million for the second quarter
of 2009 and by $2.8 million for the first half of the year, compared to
the first half of 2008 when there were two large projects in
process. The resulting impact to net income was to decrease the
loss of $190,000 in the second quarter of 2008 to a loss of $51,000 for
the second quarter of 2009. However, with MAM USG not providing
revenues to cover otherwise fixed costs for the consolidated entity, the
overall corporation’s net income was adversely affected by approximately
$87,000 on a year-to-date basis.
|
There are
certain factors which could help offset these issues:
·
|
We
anticipate that some portion of the downturn in MPS revenue will be
collected as additional stranded costs during the next stranded cost rate
effective period pursuant to a “true-up” mechanism instituted in MPUC
Docket 2006-506 under which MPS will recognize previously uncollected
revenue for the stranded cost rate component during the
year. Management estimates that this revenue adjustment for
year-to-date revenue shortfalls will be approximately
$500,000. These stranded cost revenue shortfall amounts will be
capitalized as a regulatory asset and collected over time from
ratepayers.
|
·
|
MAM
USG has several outstanding bids on projects with developer time horizons
within the next one to three years. MAM USG is also pursuing
other commercial and industrial projects, as well as looking at additional
products and services it may be able to
provide.
|
·
|
We
continue to analyze and pursue components of the MPC project as an
additional transmission investment which would support the development of
renewable generation within our service territory as well as provide
additional capacity, stabilization, and security for existing
customers. As part of this effort, we are continuing
discussions with our partner, Central Maine Power, as well as generation
developers, state and federal regulators, and state and federal political
representatives. The Company’s recent efforts have been focused
on a 25-mile phase between the Houlton vicinity and the existing 345 KV
MEPCO line.
|
Regulated
Operations
Regulated
operations include MPS and Me&NB, the Company’s regulated subsidiary and its
inactive unregulated Canadian subsidiary:
|
|
Quarters
Ended
|
|
|
Six
Months Ended
|
|
|
|
June
30,
|
|
|
June
30,
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
Net
(Loss) Income — Regulated Electric Utility (In thousands)
|
|
$
|
(326
|
)
|
|
$
|
213
|
|
|
$
|
1,160
|
|
|
$
|
2,200
|
|
(Loss)
Earnings Per Share from Regulated Electric Utilities
|
|
$
|
(0.19
|
)
|
|
$
|
0.13
|
|
|
$
|
0.69
|
|
|
$
|
1.31
|
|
Regulated Operating Revenues
Consolidated
revenues (in thousands of dollars) and Megawatt Hours (“MWH”) for the quarters
and six months ended June 30, 2009, and 2008, are as follows:
|
|
Quarters
Ended June 30,
|
|
|
Six
Months Ended June 30,
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
|
Dollars
|
|
|
MWH
|
|
|
Dollars
|
|
|
MWH
|
|
|
Dollars
|
|
|
MWH
|
|
|
Dollars
|
|
|
MWH
|
|
Residential
|
|
$
|
3,424
|
|
|
|
40,317
|
|
|
$
|
3,561
|
|
|
|
41,212
|
|
|
$
|
7,898
|
|
|
|
94,172
|
|
|
$
|
7,906
|
|
|
|
92,634
|
|
Large
Commercial
|
|
|
694
|
|
|
|
31,979
|
|
|
|
949
|
|
|
|
37,399
|
|
|
|
1,510
|
|
|
|
62,159
|
|
|
|
2,296
|
|
|
|
75,403
|
|
Medium
Commercial
|
|
|
963
|
|
|
|
23,088
|
|
|
|
1,061
|
|
|
|
24,346
|
|
|
|
2,706
|
|
|
|
48,169
|
|
|
|
2,916
|
|
|
|
50,691
|
|
Small
Commercial
|
|
|
1,315
|
|
|
|
20,107
|
|
|
|
1,394
|
|
|
|
21,409
|
|
|
|
3,807
|
|
|
|
46,466
|
|
|
|
3,882
|
|
|
|
47,338
|
|
Other
Retail
|
|
|
229
|
|
|
|
854
|
|
|
|
231
|
|
|
|
848
|
|
|
|
455
|
|
|
|
1,706
|
|
|
|
463
|
|
|
|
1,699
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Regulated Retail
|
|
|
6,625
|
|
|
|
116,345
|
|
|
|
7,196
|
|
|
|
125,214
|
|
|
|
16,376
|
|
|
|
252,672
|
|
|
|
17,463
|
|
|
|
267,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Regulated Operating Revenue
|
|
|
736
|
|
|
|
|
|
|
|
609
|
|
|
|
|
|
|
|
1,104
|
|
|
|
|
|
|
|
1,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Regulated Revenue
|
|
$
|
7,361
|
|
|
|
|
|
|
$
|
7,805
|
|
|
|
|
|
|
$
|
17,480
|
|
|
|
|
|
|
$
|
18,706
|
|
|
|
|
|
MPS
residential customer revenue volume decreased 895 MWH or 2.2% from the second
quarter of 2008 to the second quarter of 2009. This volume decrease
resulted in $77,000 less revenue, while a decrease in average rates also reduced
residential revenue approximately $60,000, for a total decrease of
$137,000.
In the
second quarter of 2009, large commercial customer volume is down 5,420 MWH or
14.5% compared to the same period of 2008. This volume decrease
caused a $138,000 decrease in revenue, while a decrease in average rates also
decreased revenue by $117,000. The lower usage is due to various
companies in our service territory, primarily in wood- and lumber-related
industries, scaling back operations or closing. We continue our
efforts with Aroostook Partnership for Progress and Leaders Encouraging
Aroostook Development, two of northern Maine’s economic development
organizations, to encourage growth in our service territory. As well,
under its stranded cost filing in MPUC Docket No. 2006-506, MPS reconciles
actual sales volume to expected sales volume to ensure we do not over- or
under-earn on stranded cost rate base due to fluctuations in
volume. This annual adjustment, recorded in December, will partly
mitigate the large commercial customer revenue shortfall.
Medium
and small commercial customers also reduced their volume in the second quarter
of 2009 compared to the same period of 2008. The 1,258 MWH or 5.2%
decrease in medium commercial usage is attributable to a combination of fewer
customers and lower use by the remaining customers, and resulted in $98,000 less
revenue year-over-year. The 1,302 MWH or 6.1% decrease in small
commercial usage resulted in a $79,000 decrease in this revenue class
year-over-year. These decreases in sales volume have continued from
the first quarter, and are due primarily to customers ceasing or cutting back
operations, or implementing conservation efforts.
Other
retail revenue was essentially flat, at $229,000 in second quarter of 2009,
compared to $231,000 for the second quarter of 2008.
Other
regulated operating revenue is up $127,000 in the second quarter of 2009
compared to the same period of 2008, mainly due to increases in transmission
wheeling revenue and unbilled revenue of $35,000 and $95,000,
respectively. The remaining $3,000 decrease is due to other smaller
changes in other operating revenues.
Consistent
with the first quarter, residential customer revenue volume has increased for
the year to date by 1,538 MWH or 1.7% from the first half of last
year. The lower average residential customer rates this year reduced
revenue by $139,000. However, with the volume increase contributing
$131,000 more revenue than last year, overall residential revenue is down only
$8,000 year to date. Medium and small commercial customer sales
decreased $285,000 from the first half of 2008 to the first half of 2009, with
volume down 3,394 MWH or 3.5%.
Large
commercial customers have contributed $786,000 less revenue in the first half of
2009 than in the first half of 2008, on 13,244 or 17.6% fewer
MWH. The reduced sales volume to the customers identified in the
quarterly explanation above was also the largest impact
year-to-date.
Other
retail revenue is down for the year to date, approximately $8,000 and 7
MWH. Other regulated operating revenue is also down $139,000
year-over-year. Wheeling revenue was down significantly compared to
the same period of 2008 due to lower transmission rates, contributing $121,000
less revenue in the first six months. Miscellaneous service revenue
was also lower by $40,000 from 2008. These decreases were partly
offset by the increase in unbilled revenue of approximately $53,000, and other
smaller differences.
For more
information on the status of the most recent rate filings, see Part II, Item 1,
“Legal Proceedings.”
Regulated
Utility Expenses
For the
quarters and six months ended June 30, 2009, and 2008, regulated operation and
maintenance expenses are as follows:
|
|
Quarters
Ended June 30,
|
|
|
Six
Months Ended June 30,
|
|
(In
thousands of dollars)
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
Regulated
Operation and Maintenance
|
|
|
|
|
|
|
|
|
|
|
|
|
Labor
|
|
$
|
1,317
|
|
|
$
|
1,093
|
|
|
$
|
2,524
|
|
|
$
|
2,253
|
|
Benefits
|
|
|
446
|
|
|
|
203
|
|
|
|
844
|
|
|
|
597
|
|
Outside
Services
|
|
|
392
|
|
|
|
246
|
|
|
|
694
|
|
|
|
507
|
|
Holding
Company Management Costs
|
|
|
392
|
|
|
|
696
|
|
|
|
688
|
|
|
|
971
|
|
Insurance
|
|
|
146
|
|
|
|
127
|
|
|
|
273
|
|
|
|
258
|
|
Regulatory
Expenses
|
|
|
274
|
|
|
|
303
|
|
|
|
585
|
|
|
|
613
|
|
Transportation
|
|
|
187
|
|
|
|
209
|
|
|
|
376
|
|
|
|
450
|
|
Maintenance
|
|
|
165
|
|
|
|
160
|
|
|
|
309
|
|
|
|
309
|
|
Rent
|
|
|
60
|
|
|
|
28
|
|
|
|
489
|
|
|
|
40
|
|
Other
|
|
|
387
|
|
|
|
240
|
|
|
|
772
|
|
|
|
644
|
|
Total
Regulated Operation and Maintenance
|
|
$
|
3,766
|
|
|
$
|
3,305
|
|
|
$
|
7,554
|
|
|
$
|
6,642
|
|
Regulated
operation and maintenance expense increased approximately $461,000 or 14% from
the second quarter of 2008 to the second quarter of 2009. The
$467,000 increase in labor and benefits expenses represented the majority of the
increase. The increase in labor and benefits is due to several
factors: normal pay increases, an increase in the number of employees
from 138 at December 31, 2008 to 140 at June 30, 2009, a $108,000 increase in
contingent health insurance expense, and a $150,000 decrease in capitalized
labor and benefits. Employees in several departments spent more time
on capital, deferred and billable work in 2008 than in
2009.
Outside
services are up approximately $146,000, primarily due to an expansion of MPS’s
tree trimming program in response to a vegetation management study performed in
2008. Also, bad debt expense (classified within “Other” above) was up
$52,000 year-over-year. These increases were partly offset by a
$304,000 decrease in holding company management costs, partly due to a decrease
in the value of deferred directors’ compensation and to a smaller pool of other
common costs to be allocated to the utility. The remainder of the
increase in expense is due to other smaller changes in various expense
categories.
Year-to-date,
regulatory operation and maintenance expenses are up $912,000 or
13.7%. The increases include:
|
▪
|
Labor
and benefits expenses are up $518,000 year-over-year for the same reasons
mentioned above.
|
|
▪
|
Rent
expense increased $449,000 due to the reclassification of depreciation and
amortization of leased assets, described more fully in Note
9.
|
|
▪
|
Outside
services have increased $187,000, from $507,000 for the first six months
of 2008 to $694,000 for the first six months of 2009. As noted
in the first quarter, the vegetation management program has been
expanded.
|
A
decrease in holding company management costs for the first two quarters of 2009
partly offsets these increases. Holding company management costs have
decreased $283,000 year-to-date, due, in part, to the smaller cost pool to be
allocated to the regulated utility, and to the decrease in the value of deferred
directors’ compensation.
The
remainder of the increase in expense is due to other smaller changes in various
expense categories.
Stranded
cost expenses of the regulated utility are as follows:
|
|
Quarters
Ended June 30,
|
|
|
Six
Months Ended June 30,
|
|
(In
thousands of dollars)
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
Stranded
Costs
|
|
|
|
|
|
|
|
|
|
|
|
|
Maine
Yankee
|
|
$
|
70
|
|
|
$
|
588
|
|
|
$
|
139
|
|
|
$
|
1,176
|
|
Seabrook
|
|
|
385
|
|
|
|
384
|
|
|
|
769
|
|
|
|
768
|
|
Deferred
Fuel
|
|
|
2,115
|
|
|
|
1,559
|
|
|
|
4,230
|
|
|
|
3,119
|
|
Cost
Incentive Refund
|
|
|
63
|
|
|
|
63
|
|
|
|
125
|
|
|
|
125
|
|
Cancelled
Transmission Plant
|
|
|
-
|
|
|
|
64
|
|
|
|
-
|
|
|
|
128
|
|
Special
Discounts
|
|
|
68
|
|
|
|
70
|
|
|
|
138
|
|
|
|
140
|
|
Total
Stranded Costs
|
|
$
|
2,701
|
|
|
$
|
2,728
|
|
|
$
|
5,401
|
|
|
$
|
5,456
|
|
The
stranded cost expenses presented above for both 2009 and 2008 reflect the impact
of MPS’s most recent stranded cost rate case, MPUC Docket No.
2006-506. The amortization amounts for the remainder of 2009 are
expected to remain consistent with the first and second quarters. The
changes from prior year are a result of the timing of the stranded cost recovery
under the Docket, primarily related to Maine Yankee and deferred
fuel. The recovery of Maine Yankee in the Docket correlates to Maine
Yankee’s cost budget, which is decreasing over time, while the recovery of
deferred fuel is the levelizing mechanism.
Unregulated
Utility Services
Unregulated
Utility Services are comprised of the operations of MAM USG.
|
|
Quarters
Ended June 30,
|
|
|
Six
Months Ended June 30,
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
Revenue
|
|
$
|
354
|
|
|
$
|
2,078
|
|
|
$
|
548
|
|
|
$
|
3,374
|
|
Direct
Expenses
|
|
|
220
|
|
|
|
2,092
|
|
|
|
354
|
|
|
|
3,210
|
|
Gross
Profit (Loss)
|
|
|
134
|
|
|
|
(14
|
)
|
|
|
194
|
|
|
|
164
|
|
Other
Expenses
|
|
|
(179
|
)
|
|
|
(114
|
)
|
|
|
(237
|
)
|
|
|
(111
|
)
|
Common
Corporate Costs and Facilities Charges
|
|
|
(41
|
)
|
|
|
(187
|
)
|
|
|
(64
|
)
|
|
|
(209
|
)
|
Income
Tax Benefit
|
|
|
35
|
|
|
|
125
|
|
|
|
43
|
|
|
|
61
|
|
Net
Loss — Unregulated Utility Services
|
|
$
|
(51
|
)
|
|
$
|
(190
|
)
|
|
$
|
(64
|
)
|
|
$
|
(95
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
Per Share from Unregulated Utility Services
|
|
$
|
(0.03
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.06
|
)
|
MAM USG
incurred a loss of $51,000 for the second quarter of 2009, compared to a loss of
$190,000 for the second quarter of 2008. In 2008, MAM USG was
performing work on two significant wind farm projects outside of MPS’s service
territory, as well as other smaller projects. In 2009, such
development activity has slowed. As noted in MAM’s 2008 Form 10-K,
MAM USG has hired a new General Manager, and continues to seek opportunities to
provide its electrical contracting, engineering, planning, procurement and
project management services to developers, generators and others in both the
private and public sectors.
Other
Continuing Operations
|
|
Quarters
Ended
|
|
|
Six
Months Ended
|
|
|
|
June
30,
|
|
|
June
30,
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
Net
Loss — Other Continuing Operations (in thousands)
|
|
$
|
(34
|
)
|
|
$
|
(79
|
)
|
|
$
|
(101
|
)
|
|
$
|
(186
|
)
|
Loss
Per Share from Other Continuing Operations
|
|
$
|
(0.02
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.11
|
)
|
Other
continuing operations are the common costs of MAM that cannot be allocated to
MPS or MAM USG, the corporate costs of MAM directly associated with the former
unregulated businesses, and intercompany eliminations. The net loss
from this segment is $45,000 lower in the second quarter of 2009 than the second
quarter of 2008, and $85,000 less for 2009 than 2008
year-to-date. The improvement is due to a reduction in operation and
maintenance expenses of $61,000 for the quarter and $73,000 for the year-to-date
and a reduction in interest expense of $20,000 for the quarter and $63,000 for
the year-to-date. This reduction is a combination of the repayment of
debt during 2008 and into 2009, and lower interest rates on MAM’s variable rate
debt.
Interest
Expense
Interest
charges decreased by $6,000 from the second quarter of 2008 to the second
quarter of 2009, and by $139,000 for 2009 year-to-date, compared to the same
period in 2008. The decrease is primarily due to lower debt balances,
with $4.0 million of short- and long-term debt and capital lease obligations
repaid in the first half of 2009, in addition to the $6.9 million repaid during
2008. Also, interest rates have decreased on MAM and MPS’s variable
rate debt.
Income
Tax Expense / Benefit
The
regulated provision for income taxes decreased $421,000 from the second quarter
of 2008 to the second quarter of 2009, and $812,000 from the first half of 2008
to the first half of 2009, due to the decrease in net income at
MPS. The decreases in revenue of $459,000 and $1.2 million for the
quarter and year-to-date resulted in $184,000 and $499,000 reductions in income
tax expense, respectively, with the remainder of the reduction due to higher
expenses.
The
benefit of income taxes for unregulated continuing operations decreased from
$175,000 in the second quarter of 2008 to $55,000 in the second quarter of
2009. This income tax benefit also decreased from $177,000 in the
first half of 2008 to $107,000 in the first half of 2009. The
decreases are due to reductions in the losses of MAM and MAM USG.
Taxes
Other Than Income
Taxes
other than income are primarily payroll and property taxes. These
taxes increased $20,000 from the second quarter of 2008 to the second quarter of
2009, and $17,000 for the year to date from 2008 to 2009.
Off-Balance
Sheet Arrangements and Financial Information System Hosting
Agreement
Please
refer to Note 8 of the financial statements.
Liquidity
and Capital Resources
MAM has
continued the trend of improving its liquidity position as we did in the first
quarter of 2009. In the six months ended June 30, 2009, we have
reduced our consolidated short-term debt by $3.2 million, and long-term debt by
$700,000. MAM has reduced its outstanding short-term debt by $2.8
million compared with June 30, 2008.
The
Company’s cash and cash equivalents as of June 30, 2009, were $1.3 million, down
$515,000 from December 31, 2008. The “Statements of Consolidated Cash
Flows” of the Company’s Consolidated Financial Statements, as presented in Part
I, Item 1 of this Form 10-Q, reflect the Company’s sources and uses of
capital.
Cash flow
provided by operating activities for the first six months of 2009 amounted to
$8.1 million, compared to $8.4 million in the first six months of
2008. While net income was down by $903,000, the increase in
collection of stranded cost cash flows from our customers for the first two
quarters of 2009, compared to the first two quarters of 2008, of $1.2 million
and the decrease in accounts receivable of $3.0 million as a result of fewer MAM
USG projects at June 30, 2008, were the most significant positive factors making
up for the net income shortfall. These positive cash flow factors
were offset by decreases in accounts payable and in deferred taxes.
Cash flow
used for financing included the repayment of short- and long-term debt totaling
$3.9 million in the first six months of 2009, as well as $97,000 payment of
capital lease obligations. Cash flow used for financing activities
for the first six months of 2008 totaled $6.5 million from reductions in debt
and an additional $92,000 reduction for payment of capital leases.
Cash flow
used for investing activities for the first half of 2009 was $4.6 million
consisting of $3.5 million for investments in fixed assets, $168,000 for
payments of dividends, and $915,000, which was transferred to our first mortgage
bond trustee and recorded as restricted cash on our balance
sheet. This restricted cash is for a partial liquidation of our
inactive subsidiary, Me & NB, as we look to employ our capital in our
continuing businesses. We will receive this restricted cash back from
our trustee as soon as we apply subsequent property additions, which are
expected during the third quarter. For the first six months of 2008,
cash flow used for investing activity totaled $1.2 million. The $4.1
million investment in fixed assets was offset by $2.4 million of incoming cash
from the transfer of restricted cash from our FAME note trustees set aside for
repayment of debt which was retired in 2008. An additional offset in
2008 was $573,000 proceeds from the sale of some discontinued real-estate
assets.
On July
7, 2009, MAM and MAM USG reached terms on an amendment to MAM USG’s debt
agreement with Bank of America, which expired on June 30, 2009. This
amendment is disclosed in our financial statements under Note 12. MAM
and MAM USG jointly entered into the $4.0 million two-year credit facility with
Bank of America to replace the previous $500,000 line. The facility
is structured to allow MAM and/or MAM USG to use the credit capacity as either a
line of credit or letters of credit. MAM USG may use the letter of
credit option as a way to secure performance bonding required for some
projects. Interest on the line of credit or any letters of credit
that are drawn on is at LIBOR plus 2.25%. There is also a 0.375%
commitment fee on the unused balance. This credit facility has
certain covenants, including maintaining a MAM consolidated interest coverage
ratio of 2.5:1 on a 12-month rolling average. Failure to comply with
this covenant or a default on MPS debt is an event of default under the terms of
this amendment.
Regulatory
Proceedings
For
regulatory proceedings, see Part II, Item 1, “Legal Proceedings,” which is
incorporated in this section by this reference.
Item 4T. Controls and
Procedures
The
principal executive officer and principal financial officer evaluated the
effectiveness of the Company's disclosure controls and procedures as of the end
of the period covered by this report. "Disclosure controls and
procedures" are controls and other procedures of a company that are designed to
ensure that information required to be disclosed by the company in the reports
that it files or submits under the Securities Exchange Act of 1934, within the
time periods specified in the SEC rules and forms, is recorded, processed,
summarized and reported, and is accumulated and communicated to the Company's
Management, including its principal executive officer and principal financial
officer, as appropriate to allow timely decisions regarding required
disclosure. Based on their evaluation, the Company’s principal
executive officer and principal financial officer concluded that the Company's
disclosure controls and procedures are effective.
We
maintain a system of internal control over financial reporting designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with accounting principles generally accepted in the United States of America.
There was no change in our internal control over financial reporting that
occurred during the most recent fiscal quarter that materially affected, or is
reasonably likely to materially affect, our internal control over
financial reporting.
PART
II. OTHER INFORMATION
Item 1. Legal
Proceedings
Federal
Energy Regulatory Commission 2009 Open Access Transmission Tariff Formula Rate
Filing
On June
15, 2009, MPS filed its updated rates under the 2009 Open Access Transmission
Tariff formula pursuant to Docket ER00-1053 for both wholesale and retail
customers. The revenue decreases were approximately $81,000 or 14%
for wholesale customers, effective June 1, 2009, and $623,000 or 20% for retail
customers, effective July 1, 2009. The decrease is primarily
associated with wheeling revenue collected from generators exporting electricity
off the MPS system during 2008. The Company and the interveners are
currently in the discovery process, and the final change in rates could differ
from the initial filing. MPS cannot determine the final outcome at
this time.
Federal
Energy Regulatory Commission 2008 Open Access Transmission Tariff Formula Rate
Filing
On June
16, 2008, MPS filed its updated rates under the 2008 Open Access Transmission
Tariff formula pursuant to Docket ER00-1053 for both wholesale and retail
customers. The revenue decreases were approximately $220,000 or 27%
for wholesale customers, effective June 1, 2008, and $631,000 or 17% for retail
customers, effective July 1, 2008. The decrease was primarily
associated with wheeling revenue collected from generators exporting electricity
off the MPS system during 2007. The interested parties in this Docket
reached and filed a settlement with FERC on May 6, 2009. The Company
expects the settlement to be approved by FERC in the near future.
Request
for Confirmation of Interpretation of Cost Allocation Manual
Under
MPUC Docket 2009-60, MPS requested confirmation of its interpretation of its
Cost Allocation Manual. The Manual provides the process for
identifying common costs of the holding company, costs that are not directly
associated with the operations of its subsidiaries and for which a
cost-causative indirect basis of allocation exists. MPS proposed to
exclude MAM USG subcontractor and materials expenses from the determination of
the common cost allocation. The Commission approved a Stipulation
signed by all interested parties on June 6, 2009. Under the approved
Stipulation, the Company will exclude stranded costs, income taxes,
depreciation, amortization, materials and one-third of subcontractor expenses
from the common cost calculation. This change does not impact the
current year net income of the corporation, but does impact segment
reporting.
MPUC
Investigation of Maine Utilities Continued Participation in ISO-NE
On April 8, 2008, the MPUC initiated an
investigation in Docket No. 2008-156 of CMP and Bangor Hydroelectric Company’s
continued participation in ISO-NE and the New England Regional Transmission
Organization. MPS is not currently a member of ISO-NE, but was made a
party to the case by the Commission in light of the potential integration of the
ISO-NE and northern Maine markets by means of the MPC Project. In
February 2008, MPS made a request to become a member of ISO-NE, subject to
certain conditions, including the inclusion of the costs of the MPC Project in
the ISO-NE regional transmission tariff. MPS participated in this
Docket.
On
January 16, 2009, the MPUC determined that the status quo relationship with
ISO-NE was inadequate. The Commission ordered CMP and Bangor Hydro to
move forward and negotiate meaningful reform to benefit Maine consumers with the
assistance of the Commission. The Commission participated actively
within the ISO-NE stakeholder process to achieve reforms. On June 30,
2009, the Commission issued an order in Docket No. 2008-156 in which it
concluded that alternatives to the Maine transmission owners’ membership in
ISO-NE, such as a Maine only ISO, would not provide cost savings to Maine’s
ratepayers and that achieving reforms within ISO-NE are currently the Maine
utilities’ best option to fulfill their energy objectives. The
Commission thus allowed CMP and BHE to go forward with an automatic two-year
renewal of the underlying Transmission Owners Agreement (“TOA”) between the
Maine Transmission Owners and ISO-NE. The Commission also outlined
further reforms it wished the Maine Transmission Owners to pursue with ISO-NE in
the context of the TOA.
The Risk
Factors identified in Item 1A. of MAM’s 2008 Form 10-K and MAM’s 2009 Form 10-Q
are incorporated herein by reference. The following risk factors
include new risk factors identified during the quarter, as well as risk factors
that have changed materially since year-end.
Financing
Risks
MAM and
its subsidiaries have financial and other covenants on their financing
arrangements. In the event of a default, the lenders could require
immediate repayment of the debt. A default could also trigger
increases in interest rates, difficulty obtaining other sources of financing and
cross-default provisions with the debt agreements. The Company was in
compliance with all debt covenants as of June 30, 2009.
MAM, MAM
USG and MPS have interest rate risk due to variable interest rates on financing
arrangements. The Company has mitigated a portion of this risk by
fixing interest rates on three MPS variable rate debt issues with an interest
rate swap transaction on September 9, 2003.
The
one-year term of MAM USG’s $500,000 working capital line of credit expired on
June 30, 2009. MAM and MAM USG jointly entered into a $4.0 million
two-year credit facility with Bank of America to replace this
line. The $4.0 million facility is structured to allow MAM and/or MAM
USG to use the credit capacity as either a line of credit or letters of
credit. MAM USG may use the letter of credit option as a way to
secure performance bonding required for some projects. Both the line
of credit and letters of credit will be considered by lenders in assessing the
total credit available to MAM USG. Particularly in today’s economy,
MAM USG may be unable to contract for certain projects due to its limited credit
capacity.
Interest
on the line of credit or any letters of credit that are drawn on is at LIBOR
plus 2.25%. There is also a 0.375% commitment fee on the unused
balance.
This
credit facility has certain covenants, including maintaining a MAM consolidated
interest coverage ratio of 2.5:1 on a 12-month rolling
average. Failure to comply with this covenant or a default on MPS
debt is an event of default under the terms of this facility.
Legislation
and Regulation
MPS is a
regulated utility, operating its distribution activity under the jurisdiction of
the Maine Public Utilities Commission and transmission activity under the
jurisdiction of the Federal Energy Regulatory Commission. The MPUC and FERC
regulate the rates MPS is allowed to charge its customers. This includes
determination of our allowed rate of return and rate structure, construction and
operation of facilities, approval of depreciation and amortization rates and
recovery of certain incremental costs, such as storm damage. The timing of
rate changes and the results of regulatory proceedings could materially impact
our results.
MPS
adjusts its transmission rates annually; the most recent change was on
July 1, 2009. Distribution and stranded cost rates did not change
during 2008. In 2009, MPS anticipates a rate filing for stranded cost
rates to be effective January 1, 2010. The change in any rates could have a
positive or negative impact on earnings and cash flow, but the ultimate impact
is unknown at this time. MPS does not anticipate any adjustments to
distribution rates will occur in 2009.
MPS is
also subject to local regulations, which may impact the location of our
transmission and distribution facilities, and our ability to make repairs and
upgrades to our facilities.
Other
changes in legislation and regulation could impact MAM’s earnings and operations
positively or negatively. Such changes could include changes in tax rates
or changes in environmental or workplace laws.
Interest
Rate and Debt Covenant Risk
MAM, MAM
USG and MPS have financial and other covenants on their financing arrangements.
In the event of a default, the lenders could require immediate repayment of the
debt. A default could also trigger increases in interest rates,
difficulty obtaining other sources of financing and cross-default provisions
with the debt agreements. The Company was in compliance with all debt
covenants as of June 30, 2009.
MAM and
MPS have interest rate risk due to variable interest rates on financing
arrangements. The Company has mitigated a portion of this risk by
fixing interest rates on three MPS variable rate debt issues with a derivative
interest rate swap transaction on September 9, 2003.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3.
Defaults upon Senior Securities
None
Item 4.
Submission of Matters to a Vote of Security Holders
At the
2009 Annual Meeting of the Shareholders of Maine & Maritimes Corporation
held on May 12, 2009, two matters were voted upon.
First was
the election of the following directors for terms ending in 2012, with the
following results:
|
|
For
|
|
|
Withheld
|
|
|
Total
Shares Voted
|
|
Robert
E. Anderson
|
|
|
1,066,507
|
|
|
|
515,344
|
|
|
|
1,581,851
|
|
Michael
W. Caron
|
|
|
1,570,292
|
|
|
|
11,560
|
|
|
|
1,581,852
|
|
Nathan
L. Grass
|
|
|
1,559,089
|
|
|
|
22,762
|
|
|
|
1,581,851
|
|
Second,
the ratification of the appointment of Caturano and Company, P.C., formerly
Vitale, Caturano & Company as the Company’s independent auditors for the
fiscal year ended December 31, 2009, was submitted to the shareholders for
approval. The vote results were as follows:
|
|
Number
of Votes
|
|
For
the Proposal
|
|
|
1,566,341
|
|
Against
the Proposal
|
|
|
13,009
|
|
Abstentions
|
|
|
2,502
|
|
Item 5. Other
Information
None
The
following exhibits are attached:
·
|
Exhibit 32
Certification of Financial Reports
Pursuant to 18 USC Section 1350
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
MAINE
& MARITIMES CORPORATION
(Registrant)
Date: August
13, 2009
/s/ Randi
J. Arthurs
-----------------------
Randi J.
Arthurs
Vice
President Accounting, Controller
and
Assistant Treasurer
30
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