<PAGE>
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, 1994
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
------
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
incorporation or organization) Identification No.)
Courthouse Plaza Southwest
Dayton, Ohio 45402
(Address of principal executive offices)
513-224-6000
(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
----- -----
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
- - ---------------------------- ----------------------------------
(Title of each class) (Outstanding on March 31, 1994)
<PAGE>
<PAGE>
THE DAYTON POWER AND LIGHT COMPANY
INDEX
Page No.
--------
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 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9
Part II - Other Information 11
Signatures 13
i
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF RESULTS OF OPERATIONS
The Dayton Power and Light Company
Three Months Ended
March 31
------------------
1994 1993
---- ----
--thousands--
INCOME
<S> <C> <C>
Utility service revenues--
Electric . . . . . . . . . . . . . . . . . . . . . $250,298 $232,948
Gas . . . . . . . . . . . . . . . . . . . . . . . 118,876 110,130
Steam . . . . . . . . . . . . . . . . . . . . . . 3,547 3,361
-------- --------
Total utility service revenues . . . . . . . . . 372,721 346,439
Interest and other income . . . . . . . . . . . . . 1,152 2,262
-------- --------
Total Income . . . . . . . . . . . . . . . . . 373,873 348,701
-------- --------
EXPENSES
Fuel used in electric and steam production . . . . . 58,681 59,471
Gas purchased for resale . . . . . . . . . . . . . . 79,215 72,797
Operating and administrative . . . . . . . . . . . . 43,931 47,874
Maintenance of equipment and facilities . . . . . . 16,177 12,794
Depreciation and amortization . . . . . . . . . . . 27,900 27,156
General taxes . . . . . . . . . . . . . . . . . . . 28,995 27,464
Interest expense . . . . . . . . . . . . . . . . . . 23,484 25,308
Allowance for funds used during construction . . . . (205) 114
Regulatory deferrals (Note 2) . . . . . . . . . . . 2,630 (6,151)
-------- --------
Total Operating Expenses . . . . . . . . . . . 280,808 266,827
-------- --------
Operating Income . . . . . . . . . . . . . . . . . . 93,065 81,874
Income Taxes . . . . . . . . . . . . . . . . . . . . 36,847 27,088
-------- --------
Net Income . . . . . . . . . . . . . . . . . . . . . 56,218 54,786
Preferred dividends . . . . . . . . . . . . . . . . 2,120 2,311
-------- --------
Earnings on Common Stock . . . . . . . . . . . . . . $ 54,098 $ 52,475
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
1
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOWS
The Dayton Power and Light Company
Three Months Ended
March 31
--------------------
1994 1993
---- ----
--thousands--
<S> <C> <C>
Operating Activities
- - --------------------
Cash received from utility customers . . . . . . . . . . . . . . . . . . $355,790 $315,232
Other operating cash receipts . . . . . . . . . . . . . . . . . . . . . 1,330 2,442
Cash paid for:
Fuel and purchased power . . . . . . . . . . . . . . . . . . . . . . . (57,443) (54,225)
Purchased gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . (53,057) (42,425)
Operation and maintenance labor . . . . . . . . . . . . . . . . . . . (25,111) (20,677)
Non-labor operating expenditures . . . . . . . . . . . . . . . . . . . (46,399) (67,340)
Interest (net of amounts capitalized) . . . . . . . . . . . . . . . . (23,365) (11,326)
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) 4,595
Property, excise and payroll taxes . . . . . . . . . . . . . . . . . . (45,710) (41,145)
-------- --------
Net cash provided by operating activities . . . . . . . . . . . . . . . 106,031 85,131
-------- --------
Investing Activities
- - --------------------
Net cash used for property expenditures and other . . . . . . . . . . . (17,195) (16,975)
-------- --------
Financing Activities
- - --------------------
Dividends paid on common and preferred stock . . . . . . . . . . . . . . . (31,120) (29,181)
Retirement of short-term debt . . . . . . . . . . . . . . . . . . . . . . (25,000) (62,000)
Retirement of long-term debt . . . . . . . . . . . . . . . . . . . . . . . (38) (330,035)
Issuance of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . - 446,000
-------- --------
Net cash provided by (used for) financing activities . . . . . . . . . . (56,158) 24,784
-------- --------
Net increase in cash and temporary cash investments . . . . . . . . . . 32,678 92,940
Cash and temporary cash investments at beginning of period . . . . . . . . 5,980 3,679
-------- --------
Cash and temporary cash investments at end of period . . . . . . . . . . . $ 38,658 $ 96,619
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
2
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
The Dayton Power and Light Company
At At
March 31, December 31,
1994 1993
------------- ------------
--thousands--
<S> <C> <C>
ASSETS
Electric property and plant . . . . . . . . . . . . . . . . . . . . . . . $2,935,533 $2,923,842
Gas property and plant . . . . . . . . . . . . . . . . . . . . . . . . . . 241,347 240,126
Steam property and plant . . . . . . . . . . . . . . . . . . . . . . . . . 31,978 31,978
Construction work in progress . . . . . . . . . . . . . . . . . . . . . . 35,828 35,825
---------- ----------
3,244,686 3,231,771
Less--
Accumulated depreciation and amortization . . . . . . . . . . . . . . . (974,687) (950,546)
---------- ----------
Net property and plant . . . . . . . . . . . . . . . . . . . . . . . . 2,269,999 2,281,225
---------- ----------
Current Assets
Cash and temporary cash investments, at cost . . . . . . . . . . . . . . . 38,658 5,980
Accounts receivable, less provision for uncollectible accounts (Note 1) . 207,242 130,113
Inventories, at average cost . . . . . . . . . . . . . . . . . . . . . . . 68,443 85,356
Taxes applicable to subsequent years . . . . . . . . . . . . . . . . . . . 46,682 72,751
Gas costs recoverable . . . . . . . . . . . . . . . . . . . . . . . . . . 11,158 23,052
Prepayments and other . . . . . . . . . . . . . . . . . . . . . . . . . . 43,874 44,874
---------- ----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . 416,057 362,126
---------- ----------
Other Assets
Regulatory deferrals (Note 2) . . . . . . . . . . . . . . . . . . . . . . 175,471 172,832
Income taxes recoverable through future revenues . . . . . . . . . . . . . 263,944 269,144
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131,565 129,003
---------- ----------
Total other assets . . . . . . . . . . . . . . . . . . . . . . . . 570,980 570,979
---------- ----------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,257,036 $3,214,330
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
3
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
(continued)
The Dayton Power and Light Company
At At
March 31, December 31,
1994 1993
------------- ------------
--thousands--
<S> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization
Common shareholder's equity--
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 412 $ 412
Other paid-in capital (Note 1) . . . . . . . . . . . . . . . . . . . 738,466 675,176
Earnings reinvested in the business . . . . . . . . . . . . . . . . 398,656 373,605
---------- ----------
Total common shareholder's equity . . . . . . . . . . . . . . . 1,137,534 1,049,193
Preferred stock--
Without mandatory redemption provisions . . . . . . . . . . . . . . 82,850 82,850
With mandatory redemption provisions . . . . . . . . . . . . . . . . 30,000 30,000
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,012,867 1,012,889
---------- ----------
Total capitalization . . . . . . . . . . . . . . . . . . . . . . 2,263,251 2,174,932
---------- ----------
Current Liabilities
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . 89,142 113,742
Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,805 29,805
Current portion of first mortgage bonds and preferred stock . . . . . 8,980 8,980
Accrued taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127,522 113,618
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,674 21,089
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,326 51,353
---------- ----------
Total current liabilities . . . . . . . . . . . . . . . . . . . 284,449 338,587
---------- ----------
Deferred Credits and Other
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 534,122 536,202
Unamortized investment tax credit . . . . . . . . . . . . . . . . . . 84,110 84,858
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91,104 79,751
---------- ----------
Total deferred credits and other . . . . . . . . . . . . . . . . 709,336 700,811
---------- ----------
Total Capitalization and Liabilities . . . . . . . . . . . . . . . . . $3,257,036 $3,214,330
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
4
<PAGE>
<PAGE>
Notes to Consolidated Financial Statements
1. On March 28, 1994, DPL Inc. issued 3,200,000 shares of
common stock through an Underwriting Agreement. The net proceeds
of $63.2 million, included in Accounts Receivable and Other
Paid-In Capital at March 31, 1994, were used to provide a capital
contribution to the Company. This capital contribution was used,
along with internal cash, to redeem all of the outstanding shares
of the Company's Preferred Stock Series D, E, F, H and I on May 6,
1994.
2. Pursuant to the Public Utilities Commission of Ohio
("PUCO")-approved phased in electric rate increase, the third and
final increase of 6.4% took effect January 1, 1994. Deferrals
(including carrying charges) which were capitalized through 1993,
are being recovered over seven years commencing in 1994.
Regulatory deferrals on the balance sheet were:
<TABLE>
<CAPTION>
March 31, Dec. 31,
1994 1993
--------- --------
--millions--
<S> <C> <C>
Phase-in $ 83.5 $ 85.8
Demand Side Management 28.9 23.3
Deferred interest - Zimmer 63.1 63.7
------ ------
Total $175.5 $172.8
====== ======
</TABLE>
5
<PAGE>
<PAGE>
3. Statement of Cash Flow Reconciliation.
Reconciliation of Net Income to Net Cash Provided by
Operating Activities:
<TABLE>
<CAPTION>
Three Months Ended
March 31
1994 1993
---- ----
--millions--
<S> <C> <C>
Net Income . . . . . . . . . . . . . . . . . $ 56.2 $ 54.8
Adjustments for non-cash items:
Depreciation and amortization . . . . . . 27.9 27.1
Deferred income taxes . . . . . . . . . . (4.0) 4.1
Taxes applicable to subsequent years . . . 26.1 25.4
Allowance for equity funds used
during construction . . . . . . . . . . (0.1) 0.1
Regulatory deferrals (Note 2) . . . . . . 2.6 (6.2)
Changes in Working Capital:
Accounts receivable and unbilled revenue . (13.9) (26.8)
Accounts payable . . . . . . . . . .. . . (23.0) (3.2)
Other . . . . . . . . . . . . . . . . . . 31.5 31.9
Other operating activities . . . . . . . . . 2.7 (22.1)
------ ------
Net cash provided by operating activities . $106.0 $ 85.1
====== ======
</TABLE>
4. Reclassifications have been made in certain prior years'
amounts to conform to the current reporting presentation of the
Company.
5. 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 financial statements and notes thereto in
the Company's 1993 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.
6
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
OPERATING STATISTICS
The Dayton Power and Light Company
Three Months Ended
March 31
------------------
1994 1993
---- ----
<S> <C> <C>
ELECTRIC
Sales (millions of kWh)--
Residential . . . . . . . . . . . . . . . . . 1,426 1,372
Commercial . . . . . . . . . . . . . . . . . 749 733
Industrial . . . . . . . . . . . . . . . . . 1,039 941
Other . . . . . . . . . . . . . . . . . . . . 544 843
------- -------
Total . . . . . . . . . . . . . . . . . . . 3,758 3,889
Revenues (thousands of dollars)--
Residential . . . . . . . . . . . . . . . . . 115,575 105,215
Commercial . . . . . . . . . . . . . . . . . 53,005 48,548
Industrial . . . . . . . . . . . . . . . . . 55,170 47,794
Other . . . . . . . . . . . . . . . . . . . . 26,548 31,391
------- -------
Total . . . . . . . . . . . . . . . . . . . 250,298 232,948
Other Electric Statistics--
Average price per kWh--
retail and wholesale customers (cents) . . 6.60 5.92
Fuel cost per net kWh
generated (cents) . . . . . . . . . . . . . 1.47 1.42
Electric customers at end of period . . . . . 465,934 461,464
Average kWh use per residential customer . . 3,417 3,317
Peak demand--maximum
one hour use (mw), (net) . . . . . . . . . 2,747 2,434
</TABLE>
7
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
OPERATING STATISTICS
(continued)
The Dayton Power and Light Company
Three Months Ended
March 31
------------------
1994 1993
---- ----
<S> <C> <C>
GAS
Sales (thousands of mcf)--
Residential . . . . . . . . . . . . . . . . . 14,753 13,952
Commercial . . . . . . . . . . . . . . . . . 4,284 3,911
Industrial . . . . . . . . . . . . . . . . . 1,894 1,503
Other . . . . . . . . . . . . . . . . . . . . 1,415 1,389
Transportation gas delivered . . . . . . . . 5,177 4,342
------- -------
Total . . . . . . . . . . . . . . . . . . . 27,523 25,097
Revenues (thousands of dollars)--
Residential . . . . . . . . . . . . . . . . . 79,004 73,744
Commercial . . . . . . . . . . . . . . . . . 21,905 19,905
Industrial . . . . . . . . . . . . . . . . . 8,797 7,128
Other . . . . . . . . . . . . . . . . . . . . 9,170 9,353
------- -------
Total . . . . . . . . . . . . . . . . . . . 118,876 110,130
Other Gas Statistics--
Average price per mcf--
retail customers (dollars) . . . . . . . . 5.21 5.17
Gas customers at end of period . . . . . . . 287,640 284,820
DEGREE DAYS (based on calendar month)--
Heating . . . . . . . . . . . . . . . . . . . 3,194 2,953
Cooling . . . . . . . . . . . . . . . . . . . 0 0
</TABLE>
8
<PAGE>
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
The Company's earnings for the first quarter of 1994
increased $1.6 million compared to the first quarter of 1993.
The improved first quarter earnings are due to continued cost
containment and increased energy sales, resulting from the
strong West Central Ohio economy and cold winter weather.
Electric retail sales grew 5% in the first quarter with business
sales increasing 7%. On January 18, 1994, the Company's
customers established a new winter peak electricity usage of
2,747 MW, exceeding the previous winter peak by 9%. Natural gas
sales increased by 10% over the first quarter of 1993.
An analysis of the financial condition and results of
operation for the first quarter ended March 31, 1994 and 1993 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.
In late March and early April 1994, DPL Inc. completed a
public offering of 3.2 million common shares. The net proceeds
were used on May 6, 1994, along with internal cash, to redeem
all of the outstanding shares of the Company's Preferred Stock
Series D, E, F, H and I. The preferred dividend savings will
have a positive impact on earnings.
As of March 31, 1994, the Company's cash and temporary cash
investment balance was $39 million.
The Company has available to it $97 million in short-term
informal lines of credit. As of March 31, 1994, the Company had
no short-term debt outstanding. DPL Inc. and its subsidiaries
have $200 million available through a Revolving Credit
Agreement. As of March 31, 1994, DPL Inc. had no outstanding
borrowings under this Credit Agreement. The Company has
authority from the PUCO to issue long and short-term debt up to
a maximum limit of $300 million which could include loans from
DPL Inc. under the terms of the Credit Agreement. The Company's
short-term debt is limited to up to $200 million pursuant to
that PUCO authorization.
9
<PAGE>
<PAGE>
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 1994-1998.
Results of Operations
- - ---------------------
Electric revenues increased $17.4 million for the first
quarter of 1994. Total retail electric sales increased 5% due
to cold weather and the strong local economy. Implementation of
the third and final phase of the electric rate increase of 6.4%
effective in January 1994 also contributed to the increase in
revenues.
Fuel used in electric and steam production decreased
$0.8 million from last year. A decrease in purchased power
costs resulted from lower sales to other utilities.
Gas revenues and gas purchased for resale increased
$8.7 million and $6.4 million respectively, over the first
quarter of 1993. The higher amounts resulted from a
weather-related gas retail sales increase of 8% and a higher gas
cost recovery factor.
Operating and administrative expenses decreased
$3.9 million in 1994 as compared to 1993. Bond redemption costs
of $15 million are included in the 1993 expenses, partially
offset in 1994 by increased benefits and claims costs.
Maintenance expenses increased $3.4 million over the first
quarter of 1993 due to generating station and distribution
maintenance activities.
Interest expense decreased $1.8 million in 1994 due to the
issuance of new First Mortgage Bonds in 1993 overlapping the
related debt series to be redeemed and lower interest rates on
long term debt obtained through refinancings.
Phase-in deferrals capitalized in years prior to 1994 are
being recovered over a seven year period commencing in 1994.
Income taxes increased $9.8 million over the first quarter
of 1993 resulting from a corresponding increase in taxable
income over the same period a year ago.
10
<PAGE>
<PAGE>
Part II. Other Information
---------------------------
Item 5. Other Information.
Gas Operations and Gas Supply
- - -----------------------------
The PUCO supports open access, nondiscriminatory
transportation of natural gas by the state's local distribution
companies for end-use customers. The PUCO has guidelines to
provide a standardized structure for end-use transportation
programs which require a tariff providing the prices, terms and
conditions for such service. The Company filed a transportation
tariff to comply with these guidelines in December 1993. That
tariff was approved by the PUCO on March 30, 1994 and became
effective on April 6, 1994. The tariff governs the Company's
sales to end-use transportation customers. For the twelve
months ended March 31, 1994, the Company had 208 end-use customers
transporting 14.2 million cubic feet of natural gas under pre-
existing natural gas transportation agreements or this tariff.
Rate Regulations and Government Legislation
- - -------------------------------------------
The Company has in place a percentage of income payment
plan ("PIPP") for eligible low-income households as required by
the PUCO. This plan prohibits disconnections for nonpayment of
customer bills if eligible low-income households pay a specified
percentage of their household income toward their utility bill.
The PUCO has approved a surcharge by way of a temporary base
rate tariff rider which allows companies to recover arrearages
accumulated under PIPP. In 1993 the Company reached a
settlement with the PUCO staff, the Office of the Ohio
Consumers' Counsel and the Legal Aid Society to provide new and
expanded programs for PIPP eligible customers. The expanded
programs include greater arrears crediting, lower monthly
payments, educational programs and information reports. In
exchange, the Company may accelerate recovery of PIPP and
pre-PIPP arrearages and recover program costs. The settlement
also established a four year moratorium on changes to the
program. The PUCO approved the settlement on December 2, 1993.
Pursuant to the terms of the settlement, the Company filed an
application on January 21, 1994 to lower its PIPP rate. The
application was approved by the PUCO on March 24, 1994.
11
<PAGE>
<PAGE>
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, 1994.
12
<PAGE>
<PAGE>
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 16, 1994 Paul R. Anderson
- - ------------------------ ----------------------------------
Paul R. Anderson
Controller
(Principal Accounting Officer)
Date: May 16, 1994 Thomas M. Jenkins
- - ------------------------ ----------------------------------
Thomas M. Jenkins
Group Vice President and Treasurer
(Principal Financial Officer)
13
<PAGE>
