<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 September 30, 1995
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 at September 30, 1995)
<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 12
i
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF RESULTS OF OPERATIONS
The Dayton Power and Light Company
Three Months Nine Months
Ended Ended
September 30 September 30
------------- -------------
1995 1994 1995 1994
---- ---- ---- ----
--thousands-- --thousands--
<S> <C> <C> <C> <C>
Income
- ------
Utility service revenues--
Electric $279,674 $242,734 $770,594 $719,342
Gas 20,593 20,442 148,420 169,740
Steam 406 765 4,375 5,479
------- ------- ------- -------
Total utility service revenues 300,673 263,941 923,389 894,561
Interest and other income 2,939 1,408 7,807 8,527
------- ------- ------- -------
Total Income 303,612 265,349 931,196 903,088
------- ------- ------- -------
Expenses
- --------
Fuel used in electric and steam
production 68,543 54,819 192,244 168,249
Gas purchased for resale 9,670 10,597 90,303 107,383
Operation and maintenance 67,924 58,833 174,826 171,038
Depreciation and amortization 30,518 27,848 86,731 83,552
General taxes 31,288 29,934 93,384 87,798
Interest expense 24,083 23,357 70,600 70,149
Amortization of regulatory
assets, net 6,632 2,749 12,151 8,061
------- ------- ------- -------
Total Expenses 238,658 208,137 720,239 696,230
------- ------- ------- -------
Income Before Income Taxes 64,954 57,212 210,957 206,858
Income Taxes 26,039 22,541 78,957 80,130
------- ------- ------- -------
Net Income 38,915 34,671 132,000 126,728
Preferred Dividends 216 253 650 4,484
------- ------- ------- -------
Earnings on Common Stock $ 38,699 $ 34,418 $131,350 $122,244
======= ======= ======= =======
</TABLE>
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-1-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOWS
The Dayton Power and Light Company
Nine Months
Ended
September 30
-------------
1995 1994
---- ----
--thousands--
<S> <C> <C>
Operating Activities
- --------------------
Cash received from utility customers $926,906 $935,878
Other operating cash receipts 8,485 8,743
Cash paid for:
Fuel and purchased power (183,970) (181,920)
Purchased gas (103,174) (119,750)
Operation and maintenance labor (64,952) (65,844)
Nonlabor operating expenditures (102,661) (120,540)
Interest (net of amounts
capitalized) (69,357) (69,255)
Income taxes (76,275) (72,104)
Property, excise and payroll taxes (101,201) (93,354)
-------- --------
Net cash provided by operating
activities 233,801 221,854
-------- --------
Investing Activities
- --------------------
Net cash used for property
expenditures and other (61,173) (58,004)
-------- --------
Financing Activities
- --------------------
Dividends paid on common and
preferred stock (100,100) (79,168)
Retirement of long-term debt (9,177) (9,177)
Capital contribution - 63,131
Issuance of long-term debt 108,910 -
Funding of trust for debt retirement (110,000) -
Retirement of short-term debt - (25,000)
Retirement of preferred stock - (94,249)
-------- --------
Net cash used for financing activities (110,367) (144,463)
-------- --------
Net increase in cash and temporary
cash investments 62,261 19,387
Cash and temporary cash investments
at beginning of period 8,297 5,980
-------- --------
Cash and temporary cash investments
at end of period $ 70,558 $ 25,367
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-2-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
The Dayton Power and Light Company
At At
September 30, December 31,
1995 1994
------------- ------------
--thousands--
<S> <C> <C>
ASSETS
- ------
Property
- --------
Electric property $3,018,647 $2,961,563
Gas property 256,515 251,751
Steam and other property 38,430 38,571
Construction work in progress 52,550 68,549
--------- ---------
3,366,142 3,320,434
Less--
Accumulated depreciation and
amortization (1,118,073) (1,043,779)
--------- ---------
Net property 2,248,069 2,276,655
--------- ---------
Current Assets
- --------------
Cash and temporary cash investments 70,558 8,297
Accounts receivable, less provision
for uncollectible accounts 90,313 99,785
Inventories, at average cost 82,182 83,345
Taxes applicable to subsequent years 46,447 78,289
Prepayments and other 12,218 29,555
--------- ---------
Total current assets 301,718 299,271
--------- ---------
Other Assets
- ------------
Income taxes recoverable through
future revenues 237,178 249,330
Regulatory assets (Note 1) 156,480 168,844
Other assets 168,753 152,950
--------- ---------
Total other assets 562,411 571,124
--------- ---------
Total Assets $3,112,198 $3,147,050
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-3-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
(continued)
The Dayton Power and Light Company
At At
September 30, December 31,
1995 1994
------------- ------------
--thousands--
<S> <C> <C>
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization
- --------------
Common shareholder's equity--
Common stock $ 412 $ 412
Other paid-in capital 738,646 738,494
Earnings reinvested in the business 421,949 421,410
--------- ---------
Total common shareholder's equity 1,161,007 1,160,316
Preferred stock 22,851 22,851
Long-term debt 998,875 1,003,736
--------- ---------
Total capitalization 2,182,733 2,186,903
--------- ---------
Current Liabilities
- -------------------
Accounts payable 56,917 75,650
Current portion of first mortgage bonds 450 4,730
Accrued taxes 69,638 123,491
Accrued interest 20,619 20,713
Gas costs refundable 23,856 5,635
Dividends payable 33,150 -
Other 11,413 26,055
--------- ---------
Total current liabilities 216,043 256,274
--------- ---------
Deferred Credits and Other
- --------------------------
Deferred taxes 524,383 530,630
Unamortized investment tax credit 80,201 81,212
Other 108,838 92,031
--------- ---------
Total deferred credits and other 713,422 703,873
--------- ---------
Total Capitalization and Liabilities $3,112,198 $3,147,050
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-4-
<PAGE>
Notes to Consolidated Financial Statements
1. Regulatory assets on the balance sheet consist of:
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
--millions--
<S> <C> <C>
Phase-in $ 64.5 $ 75.9
Demand-side management 33.2 31.9
Deferred interest 58.8 61.0
------- -------
Total $ 156.5 $ 168.8
======= =======
</TABLE>
2. Statement of Cash Flow Reconciliation of Net Income to Net Cash
Provided by Operating Activities:
<TABLE>
<CAPTION>
Nine Months Ended
September 30
1995 1994
---- ---- --millions--
--millions--
<S> <C> <C>
Net Income $ 132.0 $ 126.7
Adjustments for non-cash items:
Depreciation and amortization 86.7 83.5
Deferred income taxes (0.8) (1.5)
Taxes applicable to subsequent years 86.3 81.2
Amortization of regulatory assets, net 12.2 8.1
Changes in Working Capital:
Accounts receivable 9.5 56.5
Accounts payable (14.5) (64.4)
Other (78.4) (50.3)
Other operating activities 0.8 (17.9)
------ ------
Net cash provided by operating
activities $ 233.8 $ 221.9
====== ======
</TABLE>
3. In September 1995, $110 million of Ohio Air Quality Development
Revenue Refunding Bonds, with an interest rate of 6.10%, due 2030,
were issued. Proceeds of the financing were placed in an irrevocable
trust to be used on December 1, 1995 to redeem a similar principal
amount of First Mortgage Bonds that secure a series of Pollution
Control Bonds with an interest rate of 9.5%.
-5-
<PAGE>
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 consolidated financial statements and notes
thereto in the Company's 1994 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>
<TABLE>
<CAPTION>
OPERATING STATISTICS
The Dayton Power and Light Company
Three Months Nine Months
Ended Ended
September 30 September 30
------------- -------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Electric
- --------
Sales (millions of kWh)--
Residential 1,365 1,093 3,636 3,489
Commercial 927 835 2,468 2,311
Industrial 1,196 1,134 3,459 3,275
Other 1,021 620 3,070 1,781
------- ------- ------- -------
Total 4,509 3,682 12,633 10,856
Revenues (thousands of dollars)--
Residential 121,821 99,754 316,802 302,531
Commercial 61,607 56,779 170,374 163,016
Industrial 59,457 58,058 175,031 170,689
Other 34,327 25,665 101,159 76,190
------- ------- ------- -------
Operating Revenues 277,212 240,256 763,366 712,426
Non-Operating Revenues 2,463 2,478 7,228 6,916
------- ------- ------- -------
Total 279,675 242,734 770,594 719,342
Other Electric Statistics--
Average price per kWh--retail
and wholesale customers
(cents) 6.15 6.52 6.04 6.56
Fuel cost per net kWh
generated (cents) 1.36 1.36 1.34 1.41
Electric customers at end
of period 473,468 467,872 473,468 467,872
Average kWh use per
residential customer 3,229 2,613 8,611 8,351
Peak demand-maximum one hour
use (mw), (net) 2,961 2,758 2,961 2,824
</TABLE>
-7-
<PAGE>
<TABLE>
<CAPTION>
OPERATING STATISTICS
(continued)
The Dayton Power and Light Company
Three Months Nine Months
Ended Ended
September 30 September 30
------------ ------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Gas
- ---
Sales (millions of mcf)--
Residential 1,981 1,756 18,369 20,006
Commercial 715 674 5,260 5,910
Industrial 140 196 1,788 2,431
Other 323 307 2,065 2,093
Transportation gas delivered 2,763 2,754 11,737 11,216
------- ------- ------- -------
Total 5,922 5,687 39,219 41,656
Revenues (thousands of dollars)--
Residential 12,930 12,369 98,235 111,511
Commercial 3,658 3,783 25,932 30,646
Industrial 708 929 8,239 11,527
Other 3,295 3,361 16,014 16,056
------- ------- ------- -------
Total 20,591 20,442 148,420 169,740
Other Gas Statistics--
Average price mcf-retail
customers (dollars) 5.88 6.32 5.14 5.38
Gas customers at end of period 291,812 287,524 291,812 287,524
Degree Days
(based on calendar month)--
Heating 108 92 3,546 3,886
Cooling 776 592 1,025 942
</TABLE>
-8-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The Company's earnings increased $4.3 million and $9.1 million,
respectively, for the quarter and nine months ended September 30,
1995, as compared to the same periods last year. Continued strong
business activity, hot summer weather and efficient operations all
combined to produce solid financial results in the third quarter.
Electric sales to business customers were up 8% over the same period a
year ago, and total retail sales were up 12%. DP&L customers also
established a new all-time record for peak electricity usage of
2,961,000 kilowatts on August 14, 1995. These strong sales gains were
partially offset by financing fees associated with a debt refinancing.
An analysis of the financial condition and results of operation
for the third quarter and nine months ended September 30, 1995 and
1994 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 September 30, 1995, the Company's cash and temporary cash
investment balance was $70.6 million.
The Company has available to it $97 million in short-term
informal lines of credit. As of September 30, 1995, the Company had
no short-term debt outstanding. DPL Inc. and its subsidiaries have
$200 million available through a Revolving Credit Agreement. As of
September 30, 1995, 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 1995-1999.
-9-
<PAGE>
Results of Operations
- ---------------------
Electric revenues increased by $36.9 million and $51.3 million,
respectively, for the third quarter and nine months ended September
30, 1995, over the corresponding periods in 1994. Residential sales
increased 25% in the third quarter and 4% year-to-date over last year
due to the hot summer weather. Sales to business customers increased
8% in the third quarter and 6% year-to-date over last year reflecting
the continued strength of the West Central Ohio economy. For the nine
month period, sales to other public utilities increased 164% over
1994.
Fuel used in electric and steam production increased
$13.7 million and $24.0 million, respectively, over the third quarter
and year-to-date 1994, primarily related to increased electric sales.
Gas revenues and gas purchased for resale decreased $21.3 million
and $17.1 million, respectively, from year-to-date last year. The
decreases reflect a lower gas cost recovery rate and a decline of 10%
in retail gas sales due primarily to mild winter temperatures.
Operation and maintenance expense increased $9.1 million and
$3.8 million, respectively, over the third quarter and year-to-date
last year. The increases are due primarily to financing fees of $4.7
million associated with a debt refinancing.
General taxes increased $1.4 million and $5.6 million,
respectively, for the third quarter and nine months ended
September 30, 1995. Higher property tax rates applied to increased
property investment and greater utility excise tax due to higher gross
receipts caused the increase.
Preferred stock dividends during the year-to-date period
decreased $3.8 million from last year due to redemptions of several
series of preferred stock in 1994.
-10-
<PAGE>
Part II. Other Information
---------------------------
Item 5. Other Information.
Rate Regulation and Government Legislation
- ------------------------------------------
On May 31, 1995 and June 1, 1995, respectively, the Company filed
its electric and natural gas Long-Term Forecast Reports ("LTFR") with
the PUCO. An Integrated Resource Plan filed as part of the electric
LTFR included plans for the construction of a series of 75 MW
combustion turbine generating units. The first unit became
operational on June 1, 1995. The electric LTFR was approved by the
PUCO on October 5, 1995.
Environmental Considerations
- ----------------------------
Air Quality
- -----------
As required by State of Ohio regulation, in April 1995, the PUCO
initiated proceedings to conduct a review of the Company's
Environmental Compliance Plan ("ECP"). The Company submitted the ECP
update report and data to the PUCO on July 14, 1995. A Stipulation
and Recommendation recommending re-approval of the Company's ECP was
entered into between the Company, the Office of Consumers' Counsel and
PUCO staff. A hearing on the review of the Company's ECP was held and
the ECP was approved by the PUCO on November 9, 1995.
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 DPL Inc. during the
quarter ended September 30, 1995.
-11-
<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 November 14, 1995 /s/ Stephen F. Koziar
----------------- ---------------------
Stephen F. Koziar
Group Vice President and
Secretary
Date November 14, 1995 /s/ Thomas M. Jenkins
----------------- ---------------------
Thomas M. Jenkins
Group Vice President
(Principal Financial Officer)
-12-
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</TABLE>
