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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended September 30, 1995
Commission File Number 0-14688
ALLEGHENY GENERATING COMPANY
(Exact name of registrant as specified in its charter)
Virginia 13-3079675
(State of Incorporation) (I.R.S. Employer Identification No.)
12 East 49th Street, New York, New York 10017
Telephone Number - 212-752-2121
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 and (2) has been subject to such filing requirements for the past
90 days.
At November 9, 1995, 1,000 shares of the Common Stock ($1.00 par
value) of the registrant were outstanding.
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ALLEGHENY GENERATING COMPANY
Form 10-Q for Quarter Ended September 30, 1995
Index
Page
No.
PART I--FINANCIAL INFORMATION:
Statement of income - Three and nine months ended
September 30, 1995 and 1994 3
Balance sheet - September 30, 1995
and December 31, 1994 4
Statement of cash flows - Nine months ended
September 30, 1995 and 1994 5
Notes to financial statements 6
Management's discussion and analysis of financial
condition and results of operations 7
PART II--OTHER INFORMATION 8
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ALLEGHENY GENERATING COMPANY
Statement of Income
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
(Thousands of Dollars)
ELECTRIC OPERATING REVENUES $ 21,573 $22,337 $ 65,730 $ 66,637
OPERATING EXPENSES:
Operation and maintenance expense 1,324 1,653 4,691 4,930
Depreciation 4,274 4,236 12,722 12,708
Taxes other than income taxes 1,221 1,399 3,768 4,267
Federal income taxes 3,410 3,498 10,135 10,419
Total Operating Expenses 10,229 10,786 31,316 32,324
Operating Income 11,344 11,551 34,414 34,313
OTHER INCOME AND DEDUCTIONS 5 3 14 10
Income Before Interest Charges 11,349 11,554 34,428 34,323
INTEREST CHARGES:
Interest on long-term debt 4,149 4,230 12,546 12,668
Other interest 236 237 1,256 712
Total Interest Charges 4,385 4,467 13,802 13,380
NET INCOME $ 6,964 $ 7,087 $ 20,626 $ 20,943
See accompanying notes to financial statements.
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ALLEGHENY GENERATING COMPANY
Balance Sheet
September 30 December 31
1995 1994
ASSETS: (THOUSANDS OF DOLLARS)
Property, Plant, and Equipment:
At original cost, including $1,320,000
and $21,000 under construction $ 838,764 $ 824,714
Accumulated depreciation (156,558) (143,965)
682,206 680,749
Current assets:
Cash 4 45
Accounts receivable 2,963 1,516
Materials and supplies - at average cost 1,985 2,193
Other 524 2,237
5,476 5,991
Deferred Charges:
Regulatory assets 4,372 4,449
Unamortized loss on reacquired debt 10,088 10,653
Other 341 12,394
14,801 27,496
Total Assets $ 702,483 $ 714,236
CAPITALIZATION AND LIABILITIES:
Capitalization:
Common stock - $1.00 par value per share,
authorized 5,000 shares, outstanding
1,000 shares $ 1 $ 1
Other paid-in capital 209,999 209,999
Retained earnings 6,505 12,729
216,505 222,729
Long-term debt:
Debentures, net 148,523 148,454
Commercial paper 33,803 41,736
Medium-term notes 74,600 76,975
473,431 489,894
Current Liabilities:
Long-term debt due within one year 3,375 1,000
Accounts payable 55 48
Interest accrued 1,249 4,900
Other 1,387 536
6,066 6,484
Deferred Credits and Other Liabilities:
Unamortized investment credit 51,305 52,297
Deferred income taxes 143,773 137,297
Regulatory liabilities 27,908 28,264
222,986 217,858
Total Capitalization and Liabilities $ 702,483 $ 714,236
See accompanying notes to financial statements.
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ALLEGHENY GENERATING COMPANY
Statement of Cash Flows
Nine Months Ended
September 30
1995 1994
(Thousands of Dollars)
CASH FLOWS FROM OPERATIONS:
Net income $20,626 $20,943
Depreciation 12,722 12,708
Deferred investment credit and income taxes, net 5,206 5,022
Changes in certain current assets and
liabilities:
Accounts receivable (1,447) 5,122
Materials and supplies 208 (1)
Accounts payable 7 8
Taxes accrued 849 1,203
Interest accrued (3,651) (3,824)
Other, net 2,416 867
36,936 42,048
CASH FLOWS FROM INVESTING:
Construction expenditures (2,194) (1,086)
CASH FLOWS FROM FINANCING:
Retirement of long-term debt (7,933) (14,323)
Cash dividends on common stock (26,850) (26,625)
(34,783) (40,948)
NET CHANGE IN CASH (41) 14
Cash at January 1 45 15
Cash at September 30 4 29
Supplemental cash flow information:
Cash paid during the period for:
Interest $16,754 $16,507
Income taxes 3,473 5,125
See accompanying notes to financial statements.
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ALLEGHENY GENERATING COMPANY
Notes to Financial Statements
1. The Company's Notes to Financial Statements in the Allegheny
Power System companies' combined Annual Report on Form 10-K for
the year ended December 31, 1994, should be read with the
accompanying financial statements and the following notes.
With the exception of the December 31, 1994 balance sheet in
the aforementioned annual report on Form 10-K, the accompanying
financial statements appearing on pages 3 through 5 and these
notes to financial statements are unaudited. In the opinion of
the Company, such financial statements together with these
notes thereto contain all adjustments (which consist only of
normal recurring adjustments) necessary to present fairly the
Company's financial position as of September 30, 1995, the
results of operations for the three and nine months ended
September 30, 1995 and 1994, and cash flows for the nine months
ended September 30, 1995 and 1994.
2. The Statement of Income reflects the results of past operations
and is not intended as any representation as to future results.
For purposes of the Balance Sheet and Statement of Cash Flows,
temporary cash investments with original maturities of three
months or less, generally in the form of repurchase agreements,
are considered to be the equivalent of cash.
3. Common stock dividends per share declared and paid during the
periods for which income statements are included are as
follows:
1995 1994
Number Amount Number Amount
of Shares Per Share of Shares Per Share
First Quarter 1,000 $8,950 1,000 $8,875
Second Quarter 1,000 $8,950 1,000 $8,875
Third Quarter 1,000 $8,950 1,000 $8,875
Earnings per share are not reported inasmuch as the common
stock of the Company is 100% owned by its parents, Monongahela
Power Company (27%), The Potomac Edison Company (28%), and West
Penn Power Company (45%).
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ALLEGHENY GENERATING COMPANY
Management's Discussion and Analysis of Financial Condition
and Results of Operations
COMPARISON OF THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1995
WITH THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1994
The changes in revenues and net income are primarily
due to changes in the Company's net plant (the major component of rate
base).
The decrease in taxes other than income taxes for the
third quarter and first nine months of 1995 was primarily due to a
decrease in property taxes.
The increase in other interest for the nine months
ended September 1995 was due to interest paid on the revenue refund
pursuant to the settlement agreement described below.
LIQUIDITY AND CAPITAL RESOURCES
The Company's discussion on Liquidity and Capital
Resources and Results of Operations in the Allegheny Power System
companies' combined Annual Report on Form 10-K for the year ended December
31, 1994, should be read with the following information.
On March 23, 1995, the Federal Energy Regulatory
Commission (FERC) approved a settlement agreement filed for cases to
determine the return on equity (ROE) earned by the Company. The Company's
ROE was reduced to 11.13% for the period from March 1, 1992 through
December 31, 1994, and increased to 11.20% beginning in 1995. In April
1995, revenue refunds for the period March 1992 through December 1994,
including interest, were made to customers, for which adequate reserves
had previously been provided.
On May 22, 1995, the FERC approved a settlement
agreement resulting in the inclusion in Property, Plant, and Equipment,
and rate base, effective June 1, 1995, of a prior tax payment of
approximately $12 million, previously recorded on the balance sheet as
Deferred Charges. This regulatory decision will produce about $1.4
million in additional annual revenues.
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ALLEGHENY GENERATING COMPANY
Part II - Other Information to Form 10-Q
for Quarter Ended September 30, 1995
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
(3)(ii) By-laws of the Company, as amended, dated
November 2, 1995
(27) Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed on behalf of the
Company for the quarter ended September 30, 1995.
Signature
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.
ALLEGHENY GENERATING COMPANY
THOMAS J. KLOC
Thomas J. Kloc
Controller
(Chief Accounting Officer)
November 9, 1995