UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 1 TO THE QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1995
Commission File Number 2-7793
THE UNION LIGHT, HEAT AND POWER COMPANY
(Exact name of registrant as specified in its charter)
KENTUCKY 31-0473080
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
139 East Fourth Street
Cincinnati, Ohio 45202
(Address of principal executive offices)
Registrant's telephone number: (513) 381-2000
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
The Union Light, Heat and Power Company 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.
As of October 31, 1995, 585,333 shares of Common Stock, par value $15.00 per
share, were outstanding, all of which were held by The Cincinnati Gas &
Electric Company.
<PAGE>
THE UNION LIGHT, HEAT AND POWER COMPANY
TABLE OF CONTENTS
Item
Number
Glossary of Terms
PART I. FINANCIAL INFORMATION
1 Financial Statements
Balance Sheets
Statements of Income
Statements of Changes in Common Stock Equity
Statements of Cash Flows
Notes to Financial Statements
2 Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II. OTHER INFORMATION
1 Exhibits and Reports on Form 8-K.
Signatures
<PAGE>
GLOSSARY OF TERMS
The following abbreviations or acronyms used in the text of this Form 10-Q
have the meanings set forth below:
TERM DEFINITION
CG&E The Cincinnati Gas & Electric Company (a subsidiary of
Cinergy Corp.)
Cinergy Cinergy Corp.
D&P Duff & Phelps Credit Rating Co.
FERC Federal Energy Regulatory Commission
KPSC Kentucky Public Service Commission
kwh Kilowatt-hour
Mcf Thousand cubic feet
MEGA-NOPR This FERC Notice of Proposed Rulemaking on Open Access,
issued on March 29, 1995, is another step in the
transition towards potentially full-scale competition in
the electric utility industry. Essentially, the proposed
rule is the electric industry's equivalent of the FERC's
Order 636 which is applicable to the natural gas industry.
Moody's Moody's Investors Service
Order 636 Issued in April 1992, this FERC order mandated changes to
the way local gas distribution companies purchase gas
supplies and contract for transportation and storage
services.
PSI PSI Energy, Inc. (a subsidiary of Cinergy)
PUHCA Public Utility Holding Company Act of 1935
S&P Standard & Poor's
SEC Securities and Exchange Commission
SFAS 121 Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of", issued in March
1995 by the Financial Accounting Standards Board, is a new
accounting standard requiring impairment losses on long-
lived assets be recognized when an asset's book value
exceeds its expected future cash flows.
ULH&P The Union Light, Heat and Power Company (a wholly-owned
subsidiary of CG&E)
ULH&P's Form ULH&P's 1994 Annual Report on Form 10-K (Commission File
10-K Number 2-7793)
<PAGE>
<TABLE>
<CAPTION>
THE UNION LIGHT, HEAT AND POWER COMPANY
BALANCE SHEETS
(unaudited)
ASSETS
September 30 December 31
1995 1994
(dollars in thousands)
<S> <C> <C>
Utility Plant - original cost
In service
Electric $185 701 $179 098
Gas 139 083 134 103
Common 19 121 19 122
343 905 332 323
Accumulated depreciation 110 256 104 113
233 649 228 210
Construction work in progress 8 257 8 638
Total utility plant 241 906 236 848
Current Assets
Cash 1 502 1 071
Accounts receivable less accumulated provision
of $1,140,000 at September 30, 1995, and
$457,000 at December 31, 1994, for doubtful
accounts 28 826 33 892
Materials, supplies, and fuel - at average cost
Gas stored for current use 5 774 6 216
Other materials and supplies 1 240 1 406
Property taxes applicable to subsequent year 2 287 2 200
Prepayments and other 637 593
40 266 45 378
Other Assets
Regulatory assets
Deferred merger costs 1 785 1 785
Unamortized costs of reacquiring debt 2 544 -
Other 2 590 2 718
Other 1 689 399
8 608 4 902
$290 780 $287 128
<FN>
The accompanying notes as they relate to ULH&P are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE UNION LIGHT, HEAT AND POWER COMPANY
CAPITALIZATION AND LIABILITIES
September 30 December 31
1995 1994
(dollars in thousands)
<S> <C> <C>
Common Stock Equity
Common stock - $15.00 par value; authorized
shares - 1,000,000; outstanding shares -
585,333 at September 30, 1995 and
December 31, 1994 $ 8 780 $ 8 780
Paid-in capital 18 839 18 839
Retained earnings 83 190 74 203
Total common stock equity 110 809 101 822
Long-term Debt 69 362 89 238
Total capitalization 180 171 191 060
Current Liabilities
Notes payable 26 500 14 500
Accounts payable 21 903 21 655
Accrued taxes 1 327 2 876
Accrued interest 2 157 2 123
Other 4 461 4 123
56 348 45 277
Other Liabilities
Deferred income taxes 23 981 23 226
Unamortized investment tax credits 5 151 5 364
Accrued pension and other postretirement
benefit costs 11 838 10 356
Income taxes refundable through rates 4 887 4 282
Other 8 404 7 563
54 261 50 791
$290 780 $287 128
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE UNION LIGHT, HEAT AND POWER COMPANY
STATEMENTS OF INCOME
(unaudited)
Quarter Ended Nine Months Ended Twelve Months Ended
September 30 September 30 September 30
1995 1994 1995 1994 1995 1994
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues
Electric $57 171 $49 354 $144 553 $138 280 $183 837 $180 019
Gas 5 995 6 678 45 870 53 065 64 776 79 185
Total operating revenues 63 166 56 032 190 423 191 345 248 613 259 204
Operating Expenses
Electricity purchased from parent
company for resale 42 124 37 289 109 099 105 396 138 590 137 031
Gas purchased 2 168 2 727 23 884 29 936 34 456 44 837
Other operation 7 428 7 764 22 481 23 105 31 665 31 435
Maintenance 903 1 424 3 040 4 166 4 347 6 216
Depreciation 2 907 2 643 8 553 7 892 11 305 10 509
Income taxes 1 612 461 5 573 4 688 6 227 6 748
Taxes other than income taxes 986 930 2 965 2 945 4 022 3 660
58 128 53 238 175 595 178 128 230 612 240 436
Operating Income 5 038 2 794 14 828 13 217 18 001 18 768
Other Income And Expenses - Net
Allowance for equity funds used
during construction 22 50 78 61 95 53
Income taxes (10) (101) (48) (57) 65 (56)
Other - net (8) 82 59 417 (122) 361
4 31 89 421 38 358
Income Before Interest 5 042 2 825 14 917 13 638 18 039 19 126
Interest
Interest on long-term debt 1 721 2 039 5 674 6 121 7 714 8 160
Other interest 157 79 376 296 475 460
Allowance for borrowed funds used
during construction (24) (59) (120) (134) (169) (162)
1 854 2 059 5 930 6 283 8 020 8 458
Net Income $ 3 188 $ 766 $ 8 987 $ 7 355 $ 10 019 $ 10 668
<FN>
The accompanying notes as they relate to ULH&P are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE UNION LIGHT, HEAT AND POWER COMPANY
STATEMENTS OF CHANGES IN COMMON STOCK EQUITY
(unaudited)
Common Paid-in Retained Total Common
Stock Capital Earnings Stock Equity
(dollars in thousands)
<S> <C> <C> <C> <C>
Quarter Ended September 30, 1995
Balance July 1, 1995 $8 780 $18 839 $80 002 $107 621
Net income 3 188 3 188
Balance September 30, 1995 $8 780 $18 839 $83 190 $110 809
Quarter Ended September 30, 1994
Balance July 1, 1994 $8 780 $18 839 $75 916 $103 535
Net income 766 766
Balance September 30, 1994 $8 780 $18 839 $76 682 $104 301
Nine Months Ended September 30, 1995
Balance January 1, 1995 $8 780 $18 839 $74 203 $101 822
Net income 8 987 8 987
Balance September 30, 1995 $8 780 $18 839 $83 190 $110 809
Nine Months Ended September 30, 1994
Balance January 1, 1994 $8 780 $18 839 $69 327 $ 96 946
Net income 7 355 7 355
Balance September 30, 1994 $8 780 $18 839 $76 682 $104 301
Twelve Months Ended September 30, 1995
Balance October 1, 1994 $8 780 $18 839 $76 682 $104 301
Net income 10 019 10 019
Dividends on common stock (3 511) (3 511)
Balance September 30, 1995 $8 780 $18 839 $83 190 $110 809
Twelve Months Ended September 30, 1994
Balance October 1, 1993 $8 780 $18 839 $68 941 $ 96 560
Net income 10 668 10 668
Dividends on common stock (2 927) (2 927)
Balance September 30, 1994 $8 780 $18 839 $76 682 $104 301
<FN>
The accompanying notes as they relate to ULH&P are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE UNION LIGHT, HEAT AND POWER COMPANY
STATEMENTS OF CASH FLOWS
(unaudited)
Quarter Ended Nine Months Ended Twelve Months Ended
September 30 September 30 September 30
1995 1994 1995 1994 1995 1994
(in thousands)
<S> <C> <C> <C> <C>
Operating Activities
Net income $ 3 188 $ 766 $ 8 987 $ 7 355 $ 10 019 $ 10 668
Items providing (using) cash currently:
Depreciation 2 907 2 643 8 553 7 892 11 305 10 509
Deferred income taxes and investment tax
credits - net 1 489 1 588 1 147 1 798 1 391 669
Allowance for equity funds used during
construction (22) (50) (78) (61) (95) (53)
Regulatory assets
Deferred merger costs - (1 785) - (1 785) - (1 785)
Other 43 43 128 128 170 170
Changes in current assets and current
liabilities
Accounts receivable (3 025) 3 982 5 066 12 367 1 500 2 099
Materials, supplies, and fuel (1 476) (1 974) 608 436 1 215 358
Accounts payable (992) (3 512) 248 (7 434) 5 305 (1 085)
Accrued taxes and interest (3 674) (1 868) (1 515) 1 736 56 1 313
Other items - net (2 004) (1 097) 1 969 2 491 2 258 4 305
Net cash provided by (used in)
operating activities (3 566) (1 264) 25 113 24 923 33 124 27 168
Financing Activities
Issuance of long-term debt 14 704 - 14 704 - 14 704 -
Redemption of long-term debt (21 302) - (37 036) - (37 036) -
Change in short-term debt 13 000 7 000 12 000 (12 500) 14 000 (6 000)
Dividends on common stock - - - - (3 511) (2 927)
Net cash provided by (used in)
financing activities 6 402 7 000 (10 332) (12 500) (11 843) (8 927)
Investing Activities
Construction expenditures (less allowance
for equity funds used during construction) (4 582) (5 070) (14 350) (13 564) (21 115) (18 655)
Net cash provided by (used in)
investing activities (4 582) (5 070) (14 350) (13 564) (21 115) (18 655)
Net increase (decrease) in cash and
temporary cash investment (1 746) 666 431 (1 141) 166 (414)
Cash and temporary cash investments at
beginning of period 3 248 670 1 071 2 477 1 336 1 750
Cash and temporary cash investments at
end of period $ 1 502 $ 1 336 $ 1 502 $ 1 336 $ 1 502 $ 1 336
<FN>
The accompanying notes as they relate to ULH&P are an integral part of these financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. These Financial Statements reflect all adjustments (which include only
normal, recurring adjustments) necessary in the opinion of ULH&P for a
fair presentation of the interim results. These statements should be
read in conjunction with the Financial Statements and the notes thereto
included in ULH&P's 1994 Form 10-K. Certain amounts in the 1994
Financial Statements have been reclassified to conform to the 1995
presentation.
2. SFAS 121, which is effective for ULH&P in January 1996, is not expected
to have an adverse impact on financial condition or results of operations
upon adoption, based on the regulatory environment in which ULH&P
currently operates. However, this may change in the future as
deregulation, competitive factors, and potential restructuring influence
the electric utility industry.
3. In June 1995, ULH&P redeemed $5 million principal amount of its 10 1/4%
first mortgage bonds (due June 1, 2020) at par with cash deposited in the
Maintenance and Replacement Fund, and the remaining $10 million principal
amount of such bonds at the redemption price of 107.34%.
Additionally, on September 1, 1995, ULH&P redeemed all of its 9.70% first
mortgage bonds (due July 1, 2019) at a redemption price of 106.51%.
4. On July 25, 1995, ULH&P issued $15 million of 7.65% debentures (due July
15, 2025). The proceeds from the issuance were used in conjunction with
the early redemption of long-term debt.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
Senior Security Ratings
In July 1995, S&P Ratings Group raised its ratings of ULH&P's senior secured
debt to A- from BBB+, removing the company from its credit watch list. The
company had been on credit watch since October 31, 1994. S&P also raised the
ratings of ULH&P's senior unsecured debt and preferred stock from BBB to BBB+.
The ratings group indicated these actions are a result of lower combined power
production costs, reduced operation and maintenance expenses, and deferral of
capital expenditures brought about as a result of the merger of CG&E and PSI
to form Cinergy.
In addition, in August 1995, D&P assigned a new rating of A- to ULH&P's first
mortgage bonds. In assigning this rating, D&P stated the merger will result
in lower new capacity needs and electric production costs and enhanced
transmission capabilities.
Finally, Moody's upgraded the credit ratings of ULH&P's first mortgage bonds
and senior unsecured debt in November 1995, to A3 from Baa1 and Baa1 from
Baa2, respectively, reflecting a strengthening financial position coupled with
low business risks.
Regulatory Matters
PUHCA Reform
In June 1995, after a year-long review of its continuing regulation of public
utility holding companies under the PUHCA, the SEC endorsed recommendations
for reform of the PUHCA. The recommendations call for repeal and, pending
repeal, significant administrative reform of the 60 year old statute. While
the report offers three alternative approaches to repeal and legislative
reform, the report's preferred option is repeal coupled with a transition
period of one year or longer and a transfer of certain consumer-protection
provisions of PUHCA to the FERC. The report further recommends that, pending
consideration of legislative options, the SEC take prompt administrative
action, by rulemaking and on a case-by-case basis, to modernize and simplify
regulation under PUHCA, with particular reference to financing transactions,
diversification into nonutility businesses, utility mergers and acquisitions
and PUHCA's "integration" standards. In the latter regard, the report
recommends a changed interpretation of PUHCA to permit registered holding
companies to own combination electric and gas utility companies provided the
affected states agree. Subsequent to the report's issuance, the SEC adopted
rule changes exempting various types of financing transactions by utility and
nonutility subsidiaries of registered holding companies. The SEC also
proposed a rule that would exempt investments by registered systems in
specified "energy-related companies" subject to certain conditions.
In October 1995, a bill was introduced in the U.S. Senate providing for the
repeal of PUHCA. The bill is pending before Congress.
MEGA-NOPR
The FERC's MEGA-NOPR on open access as proposed would, among other things,
provide for mandatory filing of open access/comparability transmission
tariffs, provide for functional unbundling of all services, require utilities
to use the filed tariffs for their own bulk power transactions, establish an
electronic bulletin board, and establish a contract-based approach to stranded
costs.
Cinergy filed comments in June 1995 in response to the MEGA-NOPR on behalf of
itself and its operating companies, including ULH&P. In the filing, Cinergy
reaffirmed support for FERC's authority to order utilities owning transmission
systems to provide access to other entities at rates and terms comparable to
those they provide affiliated companies. In August 1995, Cinergy filed
additional comments concerning the transmission pricing aspects of the MEGA-
NOPR. A final order is expected to be issued during the first half of 1996.
Accounting Issues
New Accounting Standard
SFAS 121, which is effective for ULH&P in January 1996, is not expected to
have an adverse impact on financial condition or results of operations upon
adoption, based on the regulatory environment in which ULH&P currently
operates. However, this may change in the future as deregulation, competitive
factors, and potential restructuring influence the electric utility industry.
CAPITAL RESOURCES
Long-term Debt
Currently, ULH&P has KPSC authority for $40 million in long-term debt
issuances.
For information regarding recent securities redemptions and issuances, see
Notes 3 and 4 of the "Notes to Financial Statements".
Short-term Debt
ULH&P has authority to borrow up to $35 million of short-term debt as of
September 30, 1995. In connection with this authority, ULH&P has established
unsecured lines of credit which currently permit borrowings of up to $30
million, of which $9 million remained unused at September 30, 1995.
THE UNION LIGHT, HEAT AND POWER COMPANY
RESULTS OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 1995
Kwh Sales
Kwh sales increased 17.6% for the quarter ended September 30, 1995, as
compared to the third quarter of 1994, due in large part to increased sales to
domestic and commercial customers. The increase in domestic and commercial
sales primarily resulted from warmer weather during the period.
Mcf Sales and Transportation
Mcf gas sales and transportation volumes for the third quarter of 1995
decreased .6% as compared to the third quarter of 1994. The decline was
attributable to decreased sales volumes to domestic, commercial, and
industrial customers. Warmer weather contributed to the decrease in domestic
and commercial sales. The decrease in industrial sales was attributable to
the trend of industrial customers electing to purchase directly from
suppliers, creating additional demand for transportation services provided by
ULH&P. The resulting significant increase in transportation volumes more than
offset the decline in industrial sales and was primarily attributable to
growth in the chemicals and paper products sectors.
Operating Revenues
Electric Operating Revenues
Electric operating revenues increased $7.8 million (15.8%) for the quarter
ended September 30, 1995, over the comparable period of 1994. This increase
reflects the previously discussed increases in kwh sales.
Gas Operating Revenues
Gas operating revenues decreased $.7 million (10.2%) for the quarter ended
September 30, 1995, over the comparable period of 1994. This decrease was the
result of the previously discussed decline in total volumes sold and the
operation of adjustment clauses reflecting a decline in the average cost of
gas purchased. An increase in the relative volume of gas transported to gas
sold also contributed to the decrease. Providing transportation services does
not necessitate the recovery of gas purchased costs. Consequently, the
revenue per Mcf transported is below the revenue per Mcf sold.
Operating Expenses
Electricity Purchased from Parent Company for Resale
Electricity purchased expense, ULH&P's largest operating expense, increased
$4.8 million (13.0%) for the quarter as compared to the same period last year.
An analysis of electricity purchased costs is shown below:
Quarter
Ended September 30
(in thousands)
Electricity purchased expense - September 30, 1994 $37 289
Increase due to change in:
Price of electricity 1 940
Kwh purchased 2 895
Electricity purchased expense - September 30, 1995 $42 124
Gas Purchased
Gas purchased for the quarter decreased $.6 million (20.5%) when compared to
the same period last year. This decrease was attributable to a 15.5% decline
in the average cost per Mcf purchased and a 5.9% decrease in volumes
purchased.
Other Operation
Other operation expense decreased $.3 million (4.3%) for the quarter ended
September 30, 1995, as compared to the same period last year. The decrease
was primarily attributable to decreased gas and electric distribution
expenses.
Maintenance
The decrease in maintenance expense of $.5 million (36.6%) for the third
quarter of 1995 as compared to the same period last year was primarily due to
lower maintenance costs on gas and electric distribution facilities.
Depreciation
The increase in depreciation expense of $.3 million (10.0%) for the third
quarter of 1995 as compared to the same period last year was primarily due to
additions to electric and gas plant in service.
Interest
Interest charges for the three month period ended September 30, 1995,
decreased $.2 million (10.0%) from the comparable period of 1994, primarily
due to the refinancing of $35 million of long-term debt during 1995.
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
Kwh Sales
Kwh sales for the nine months ended September 30, 1995, increased 7.2% over
the same period of 1994, primarily as a result of increased domestic,
commercial, and industrial sales volumes. The higher domestic and commercial
sales were mainly the result of warmer weather during the latter part of the
summer cooling season. The increased industrial sales reflect continued
growth in the paper products and primary metals sectors.
Mcf Sales and Transportation
Mcf gas sales and transportation volumes for the nine months ended September
30, 1995, decreased 2.3% as compared to the same period of 1994, as a result
of decreased sales volumes to domestic, commercial, and industrial customers.
Milder weather during the winter heating season contributed to the decrease in
domestic and commercial sales. The decrease in industrial sales was
attributable to the trend of industrial customers electing to purchase
directly from suppliers, creating additional demand for transportation
services provided by ULH&P. The resulting increase in transportation volumes
more than offset the decline in industrial sales.
Operating Revenues
Electric Operating Revenues
Electric operating revenues increased $6.3 million (4.5%) for the nine months
ended September 30, 1995, over the comparable period of 1994. This increase
reflects the previously discussed increases in kwh sales, the effects of which
were partially offset by decreases in fuel adjustment clauses reflecting a
decline in the average cost of electricity purchased.
An analysis of electric operating revenues is shown below:
Nine Months
Ended September 30
(in thousands)
Operating revenues - September 30, 1994 $138 280
Increase (Decrease) due to change in:
Price per kwh (3 608)
Kwh sales 9 908
Other (27)
Operating revenues - September 30, 1995 $144 553
Gas Operating Revenues
Gas operating revenues decreased $7.2 million (13.6%) in the first nine months
of 1995 when compared to the same period last year. This decrease was the
result of the previously discussed decline in total volumes sold and the
operation of adjustment clauses reflecting a decline in the average cost of
gas purchased. An increase in the relative volume of gas transported to gas
sold also contributed to the decrease. Providing transportation services does
not necessitate the recovery of gas purchased costs. Consequently, the
revenue per Mcf transported is below the revenue per Mcf sold.
Operating Expenses
Electricity Purchased from Parent Company for Resale
Electricity purchased expense increased $3.7 million (3.5%) for the first nine
months of 1995 as compared to last year.
An analysis of electricity purchased costs is shown below:
Nine Months
Ended September 30
(in thousands)
Electricity purchased expense - September 30, 1994 $105 396
Increase (Decrease) due to change in:
Price of electricity (3 620)
Kwh purchased 7 323
Electricity purchased expense - September 30, 1995 $109 099
Gas Purchased
Gas purchased expense for the first nine months decreased $6.1 million (20.2%)
when compared to the same period last year. The decrease was attributable to
a 7.7% decline in volumes purchased and a 13.5% decrease in the average cost
per Mcf of gas purchased.
Other Operation
Other operation expenses decreased $.6 million (2.7%) for the nine months
ended September 30, 1995, as compared to the same period last year. The
decrease was attributable to decreased gas and electric distribution expenses
and reduced gas production costs.
Maintenance
The decrease in maintenance expense of $1.1 million (27.0%) for the nine
months ended September 30, 1995, as compared the same period last year was due
primarily to lower maintenance costs on gas and electric distribution
facilities and reduced maintenance on facilities used for administrative and
general functions.
Depreciation
The increase in depreciation expense of $.7 million (8.4%) for the nine
months ended September 30, 1995, as compared the same period last year was
primarily due to additions to electric and gas plant in service.
Interest
Interest charges for the nine month period ended September 30, 1995, decreased
$.4 million (5.6%) from the comparable period of 1994, primarily due to the
refinancing of $35 million of long-term debt during 1995.
RESULTS OF OPERATIONS FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1995
Kwh Sales
Kwh sales for the twelve months ended September 30, 1995, increased 5.5% when
compared to the same period of 1994, primarily due to higher domestic,
commercial, and industrial sales. Increases in domestic and commercial sales
were due in large part to warmer weather during the summer cooling season.
The higher industrial sales primarily reflect growth in the primary metals
sector.
Mcf Sales and Transportation
Mcf gas sales and transportation volumes for the twelve months ended September
30, 1995, decreased 7.4% when compared to the same period of 1994, as a result
of lower domestic, commercial, and industrial sales. Milder weather during
the winter heating season contributed to the decrease in domestic and
commercial sales, while industrial sales decreased as customers elected to
purchase directly from suppliers, creating additional demand for
transportation services provided by ULH&P. The resulting increase in
transportation volumes more than offset the lower industrial sales and was
primarily due to growth in the paper products and primary metals sectors.
Operating Revenues
Electric Operating Revenues
Electric operating revenues increased $3.8 million (2.1%) for the twelve
months ended September 30, 1995, over the comparable period of 1994. The
increase was attributable to the previously discussed higher sales volumes and
was partially offset by the operation of adjustment clauses reflecting a
decline in the average cost of electricity purchased.
An analysis of electric operating revenues is shown below:
Twelve Months
Ended September 30
(in thousands)
Operating revenues - September 30, 1994 $180 019
Increase (Decrease) due to change in:
Price per kwh (5 958)
Kwh sales 9 863
Other (87)
Operating revenues - September 30, 1995 $183 837
Gas Operating Revenues
Gas operating revenues declined $14.4 million (18.2%) for the twelve months
ended September 30, 1995, when compared to the same period last year. This
decrease was the result of the aforementioned decline in volumes sold and the
operation of adjustment clauses reflecting a lower average cost of gas
purchased. An increase in the relative volume of gas transported to gas sold
also contributed to the decrease. Providing transportation services does not
necessitate the recovery of gas purchased costs. Consequently, the revenue
per Mcf transported is below the revenue per Mcf sold.
Operating Expenses
Electricity Purchased from Parent Company for Resale
Electricity purchased expense increased $1.6 million (1.1%) for the twelve
months ended September 30, 1995, as compared to last year.
An analysis of electricity purchased costs is shown below:
Twelve Months
Ended September 30
(in thousands)
Electricity purchased expense - September 30, 1994 $137 031
Increase (Decrease) due to change in:
Price of electricity (5 777)
Kwh purchased 7 336
Electricity purchased expense - September 30, 1995 $138 590
Gas Purchased
Gas purchased expense for the twelve months ended September 30, 1995,
decreased $10.4 million (23.2%) when compared to the same period last year.
This decrease was attributable to a 12.1% decline in volumes purchased and a
12.6% decrease in the average cost per Mcf of gas purchased.
Other Operation
Other operation expenses increased $.2 million (.7%) for the twelve months
ended September 30, 1995, as compared to the same period last year, primarily
due to recognition of nonrecurring charges in December 1994 for merger-related
costs and other costs ULH&P does not expect to recover from customers. These
nonrecurring charges were partially offset by a number of items, including
decreased gas production and distribution expenses and reductions in
administrative and general expenses.
Maintenance
The decrease in maintenance expense of $1.9 million (30.1%) for the twelve
months ended September 30, 1995, as compared the same period last year was due
primarily to lower maintenance costs on gas and electric distribution
facilities.
Depreciation
The increase in depreciation expense of $.8 million (7.6%) for the twelve
months ended September 30, 1995, as compared the same period last year was
primarily due to additions to electric and gas plant in service.
Taxes Other than Income Taxes
Taxes other than income taxes increased $.4 million (9.9%) for the twelve
months ended September 30, 1995, over the same period of 1994, primarily due
to increased property taxes as a result of higher property tax rates.
Interest
Interest charges for the twelve month period ended September 30, 1995,
decreased $.4 million (5.2%) from the comparable period of 1994, primarily due
to the refinancing of $35 million of long-term debt during 1995.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed herewith:
Exhibit
Designation Nature of Exhibit
27 Financial Data Schedules (included in electronic
submission only).
(b) No reports on Form 8-K were filed during the quarter ended September
30, 1995.
<PAGE>
SIGNATURES
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, although ULH&P believes that the disclosures are adequate to make
the information presented not misleading. In the opinion of ULH&P, these
statements reflect all adjustments (which include only normal, recurring
adjustments) necessary to reflect the results of operations for the respective
periods. The unaudited statements are subject to such adjustments as the
annual audit by independent public accountants may disclose to be necessary.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed by an
officer and the principal accounting officer on its behalf by the undersigned
thereunto duly authorized.
THE UNION LIGHT, HEAT AND POWER COMPANY
Registrant
Date: November 20, 1995 /S/J. Wayne Leonard
Duly Authorized Officer
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS, CONSOLIDATED STATEMENTS OF INCOME AND
CONSOLIDATED STATEMENTS OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<PERIOD-TYPE> 9-MOS
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 241,906
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 40,266
<TOTAL-DEFERRED-CHARGES> 6,919
<OTHER-ASSETS> 1,689
<TOTAL-ASSETS> 290,780
<COMMON> 8,780
<CAPITAL-SURPLUS-PAID-IN> 18,839
<RETAINED-EARNINGS> 83,190
<TOTAL-COMMON-STOCKHOLDERS-EQ> 110,809
0
0
<LONG-TERM-DEBT-NET> 69,362
<SHORT-TERM-NOTES> 26,500
<LONG-TERM-NOTES-PAYABLE> 0
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0
<CAPITAL-LEASE-OBLIGATIONS> 0
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<OTHER-ITEMS-CAPITAL-AND-LIAB> 84,109
<TOT-CAPITALIZATION-AND-LIAB> 290,780
<GROSS-OPERATING-REVENUE> 190,423
<INCOME-TAX-EXPENSE> 5,573
<OTHER-OPERATING-EXPENSES> 170,022
<TOTAL-OPERATING-EXPENSES> 175,595
<OPERATING-INCOME-LOSS> 14,828
<OTHER-INCOME-NET> 89
<INCOME-BEFORE-INTEREST-EXPEN> 14,917
<TOTAL-INTEREST-EXPENSE> 5,930
<NET-INCOME> 8,987
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<EARNINGS-AVAILABLE-FOR-COMM> 8,987
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