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 March 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 1-2385
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THE DAYTON POWER AND LIGHT COMPANY
(Exact name of registrant as specified in its charter)
OHIO 31-0258470
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Courthouse Plaza Southwest
Dayton, Ohio 45402
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(Address of principal executive offices)
(937) 224-6000
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(Registrant's telephone number, including area code)
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
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The registrant meets the conditions set forth in General Instruction
H(1)(a) and (b) of Form 10-Q and is therefore filing this form with
the reduced disclosure format.
Indicate the number of shares of the issuer's classes of common stock,
as of the latest practicable date.
Common Stock, $.01 par value 41,172,173 Shares
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(Title of each class) (Outstanding at March 31, 1997)
THE DAYTON POWER AND LIGHT COMPANY
INDEX
Page No.
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Part I - Financial Information
Item 1. Financial Statements
Consolidated Statement of Results of Operations 1
Consolidated Statement of Cash Flows 2
Consolidated Balance Sheet 3
Notes to Consolidated Financial Statements 5
Operating Statistics 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
Part II - Other Information 10
Signatures 11
i
CONSOLIDATED STATEMENT OF RESULTS OF OPERATIONS
The Dayton Power and Light Company
Three Months Ended
March 31
------------------
1997 1996
---- ----
--millions--
Income
- ------
Utility service revenues --
Electric $253.1 $264.6
Gas and other 104.2 104.4
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Total Utility Service Revenues 357.3 369.0
Interest and other income 2.1 1.8
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Total Income 359.4 370.8
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Expenses
- --------
Fuel and purchased power 55.1 61.6
Gas purchased for resale 66.9 64.6
Operation and maintenance 51.8 55.6
Depreciation and amortization 31.4 29.2
Amortization of regulatory assets, net 4.2 4.1
General taxes 33.6 32.2
Interest expense 21.8 22.0
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Total Expenses 264.8 269.3
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Income Before Income Taxes 94.6 101.5
Income taxes 32.4 38.8
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Net Income 62.2 62.7
Preferred dividends 0.2 0.2
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Earnings on Common Stock $ 62.0 $ 62.5
====== ======
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-1-
CONSOLIDATED STATEMENT OF CASH FLOWS
The Dayton Power and Light Company
Three Months Ended
March 31
------------------
1997 1996
---- ----
--millions--
Operating Activities
- --------------------
Cash received from utility customers $358.8 $349.3
Other operating cash receipts 2.0 1.7
Cash received (paid) for:
Fuel and purchased power (57.8) (56.2)
Purchased gas (56.7) (49.3)
Operation and maintenance labor (24.8) (25.8)
Nonlabor operating expenditures (50.1) (41.0)
Interest (26.4) (26.1)
Income taxes (0.2) 11.8
Property, excise and payroll taxes (52.5) (50.2)
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Net cash provided by operating activities 92.3 114.2
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Investing Activities
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Property expenditures (18.1) (22.9)
Other activities (12.5) (23.4)
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Net cash used for investing activities (30.6) (46.3)
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Financing Activities
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Dividends paid on common stock (28.9) (34.7)
Dividends paid on preferred stock (0.2) (0.2)
Retirement of short-term debt (10.0) (3.5)
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Net cash used for financing activities (39.1) (38.4)
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Cash and temporary cash investments--
- -------------------------------------
Net change 22.6 29.5
Balance at beginning of period 2.1 39.1
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Balance at end of period $ 24.7 $ 68.6
====== ======
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
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CONSOLIDATED BALANCE SHEET
The Dayton Power and Light Company
At At
March 31, December 31,
1997 1996
--------- ------------
--millions--
ASSETS
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Property $3,501.2 $3,493.2
Less--
Accumulated depreciation and amortization (1,275.1) (1,249.4)
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Net property 2,226.1 2,243.8
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Current Assets
- --------------
Cash and temporary cash investments 24.7 2.1
Accounts receivable, less provision for
uncollectible accounts 187.9 193.4
Inventories, at average cost 63.0 75.2
Deferred property and excise taxes 57.0 87.3
Prepaid utility excise tax 36.1 18.2
Other 24.7 36.1
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Total current assets 393.4 412.3
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Other Assets
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Income taxes recoverable through future
revenues 223.8 222.4
Regulatory assets 132.3 137.3
Financial assets 64.8 56.0
Other 173.5 171.4
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Total other assets 594.4 587.1
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Total Assets $3,213.9 $3,243.2
======== ========
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-3-
CONSOLIDATED BALANCE SHEET
(continued)
The Dayton Power and Light Company
At At
March 31, December 31,
1997 1996
--------- ------------
--millions--
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization
- --------------
Common shareholder's equity--
Common stock $ 0.4 $ 0.4
Other paid-in capital 738.9 738.9
Earnings reinvested in the business 510.8 478.2
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Total common shareholder's equity 1,250.1 1,217.5
Preferred stock 22.9 22.9
Long-term debt 926.3 926.3
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Total capitalization 2,199.3 2,166.7
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Current Liabilities
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Accounts payable 84.5 109.6
Accrued taxes 138.1 136.6
Accrued interest 16.7 21.6
Current portion of long-term debt 40.4 40.4
Other 34.3 60.4
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Total current liabilities 314.0 368.6
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Deferred Credits and Other
- --------------------------
Deferred taxes 512.5 513.2
Unamortized investment tax credit 74.5 75.2
Other 113.6 119.5
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Total deferred credits and other 700.6 707.9
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Total Capitalization and Liabilities $3,213.9 $3,243.2
======== ========
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
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Notes to Consolidated Financial Statements
1. Reclassifications have been made in certain prior years' amounts
to conform to the current reporting presentation of the Company.
2. The consolidated financial statements in this report have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. These consolidated financial statements should be read
in conjunction with the consolidated financial statements and notes
thereto in the Company's 1996 Annual Report on Form 10-K.
The information included in this Form 10-Q reflects all
adjustments which are, in the opinion of management, necessary for a
fair statement of the results of operations for the periods presented.
Any adjustments are of a normal recurring nature.
-5-
OPERATING STATISTICS
The Dayton Power and Light Company
Three Months Ended
March 31
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1997 1996
---- ----
Electric
- --------
Sales (millions of kWh) --
Residential 1,408 1,498
Commercial 823 832
Industrial 1,090 1,063
Other 838 945
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Total 4,159 4,338
Revenues (thousands of dollars) --
Residential 112,851 119,350
Commercial 56,454 56,813
Industrial 52,132 53,428
Other 31,665 35,034
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Total 253,102 264,625
Other Electric Statistics --
Average price per kWh--retail and wholesale
customers (cents) 6.01 6.03
Fuel cost per net kWh generated (cents) 1.27 1.30
Electric customers at end of period 480,835 476,557
Average kWh use per residential customer 3,277 3,518
Peak demand--maximum one hour use (mw), (net) 2,690 2,668
-6-
OPERATING STATISTICS
(continued)
The Dayton Power and Light Company
Three Months Ended
March 31
------------------
1997 1996
---- ----
Gas
- ---
Sales (millions of MCF) --
Residential 13,145 14,713
Commercial 4,017 4,447
Industrial 1,198 1,846
Other 1,017 1,308
Transported gas 6,170 5,651
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Total 25,547 27,965
Revenues (thousands of dollars) --
Residential 68,952 66,910
Commercial 20,028 19,128
Industrial 5,581 7,259
Other 8,980 9,218
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Total 103,541 102,515
Other Gas Statistics --
Average price per MCF--retail customers
(dollars) 5.13 4.42
Gas customers at end of period 298,729 295,778
Degree Days (based on calendar month) --
Heating 2,788 3,197
Cooling 0 0
-7-
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The Company's earnings for the first quarter of 1997 were
$62.0 million, almost equal to the same period a year ago. The
sustained health of the West Central Ohio economy along with continued
company-wide cost control efforts combined to offset mild first
quarter weather. While weather during the quarter was 13% milder than
last year's first quarter, total retail electric sales were down only
3%, with sales of electricity to business customers up 1%.
An analysis of the financial condition and results of operations
for the first quarter ended March 31, 1997 and 1996 is discussed
below.
Financial Condition
- -------------------
Construction plans are subject to continuing review and are
expected to be revised in light of changes in financial and economic
conditions, load forecasts, legislative and regulatory developments
and changing environmental standards, among other factors. The
Company's ability to complete its capital projects and the reliability
of future service will be affected by its financial condition, the
availability of external funds at reasonable cost and adequate and
timely rate increases.
As of March 31, 1997, The Company's cash and temporary cash
investment balance was $24.7 million. In addition, $64.8 million was
invested in debt and equity financial assets.
The Company has available to it $97 million in short-term
informal lines of credit. DPL Inc. and its subsidiaries have
$200 million available through a Revolving Credit Agreement ("Credit
Agreement"). As of March 31, 1997, DPL Inc. had no outstanding
borrowings under this Credit Agreement. The Company has authority
from the Public Utilities Commission of Ohio ("PUCO") to issue short
term debt up to $200 million with a maximum debt limit of $300 million
including loans from DPL Inc. under the terms of the Credit Agreement.
The Company anticipates that it has sufficient capacity to issue
First Mortgage Bonds to satisfy its requirements in connection with
the financing of its construction and refinancing programs during the
five year period 1997-2001.
On May 1, 1997 the Company redeemed the 5-5/8% First Mortgage
Bonds Series in the amount of $40 million which matured on that date.
-8-
Results of Operations
- ---------------------
Electric revenues decreased by $11.5 million for the first
quarter 1997. A slight increase in sales to business customers was
more than offset by the effects of warmer weather.
Fuel and purchased power decreased $6.5 million from first
quarter 1996 as a result of decreased electric sales and purchased
power expenses.
Gas purchased for resale increased $2.3 million from the same
period a year ago. Higher gas costs were partially offset by lower
sales due to the milder weather.
Operation and maintenance expenses were $3.8 million lower in the
first quarter of 1997. Decreased customer program expenditures and a
downward adjustment to the actuarially determined pension and retiree
health care expenses were partially offset by higher insurance and
claims costs.
Income taxes decreased $6.4 million compared to the first three
months last year due to lower taxable income.
-9-
Part II. Other Information
---------------------------
Item 5. Other Information.
Rate Regulation and Government Legislation
- ------------------------------------------
On April 24, 1996, the Federal Energy Regulatory Commission
("FERC") issued final rules requiring all electric utilities that own
or control transmission facilities to file open-access transmission
service tariffs. In compliance with these rules, on January 2, 1997,
the Company re-filed its open-access tariff with FERC. On March 4,
1997, FERC issued its Order No. 888-A, an order on rehearing of Order
No. 888. In this new order, FERC reaffirmed many of its positions
addressed in the original order relating to stranded cost and open
access transmission service, and required transmission owning
utilities to refile their open access tariffs to incorporate some
minor language changes by July 15, 1997.
On February 27, 1997, after rehearing its earlier order on the
subject, the PUCO issued guidelines for the implementation of
conjunctive electric service. These guidelines govern the terms and
conditions under which different service locations may be aggregated
for cost-of-service, rate design, rate negotiation and billing
purposes. The Company's conjunctive electric service tariff was filed
with the PUCO on March 31, 1997. The Company filed an appeal of these
guidelines on April 25, 1997.
On April 11, 1996, the PUCO issued an Entry on Rehearing ordering
utilities to file interruptible electric service tariffs. On June 14,
1996, the Company filed for approval of a non-firm electric service
rate schedule and replacement power rate riders. The Company filed a
revised interruptible electric service tariff on April 4, 1997.
Item 6. Exhibits and Reports on Form 8-K.
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed by the Company during the
quarter ended March 31, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
THE DAYTON POWER AND LIGHT COMPANY
----------------------------------
(Registrant)
Date: May 14, 1997 /s/ Paul R. Anderson
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Controller
(Principal Accounting Officer)
Date: May 14, 1997 /s/ Thomas M. Jenkins
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Group Vice President and Treasurer
(Principal Financial Officer)
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