<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 June 30, 1996
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 June 30, 1996)
<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 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
Part II - Other Information 10
Signatures 11
i
<PAGE>
CONSOLIDATED STATEMENT OF RESULTS OF OPERATIONS
The Dayton Power and Light Company
Three Months Six Months
Ended Ended
June 30 June 30
------------ -------------
1996 1995 1996 1995
---- ---- ---- ----
--thousands-- --thousands--
Income
- ------
Utility service revenues--
Electric $245,563 $234,844 $510,187 $490,919
Gas and Other 36,468 31,704 140,848 131,797
-------- -------- -------- --------
Total utility service revenues 282,031 266,548 651,035 622,716
Interest and other income 4,205 3,323 6,033 4,868
-------- -------- -------- --------
Total Income 286,236 269,871 657,068 627,584
-------- -------- -------- --------
Expenses
- --------
Fuel and purchased power 54,615 59,554 116,239 123,701
Gas purchased for resale 19,461 17,614 84,020 80,633
Operation and maintenance 69,332 55,750 124,988 106,901
Depreciation and amortization 31,218 28,154 60,449 56,213
Amortization of regulatory assets, net 3,402 2,794 7,461 5,519
General taxes 31,903 30,915 64,059 62,096
Interest expense 22,125 23,297 44,168 46,517
-------- -------- -------- --------
Total Expenses 232,056 218,078 501,384 481,580
-------- -------- -------- --------
Income Before Income Taxes 54,180 51,793 155,684 146,004
Income Taxes 21,113 18,032 59,866 52,919
-------- -------- -------- --------
Net Income 33,067 33,761 95,818 93,085
Preferred Dividends 217 217 434 434
-------- -------- -------- --------
Earnings on Common Stock $ 32,850 $ 33,544 $ 95,384 $ 92,651
======== ======== ======== ========
Set Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-1-
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
The Dayton Power and Light Company
Six Months Ended
June 30
----------------
1996 1995
---- ----
--thousands--
Operating Activities
- --------------------
Cash received from utility customers $654,398 $642,794
Other operating cash receipts 5,029 5,655
Cash paid for:
Fuel and purchased power (108,065) (120,023)
Purchased gas (95,027) (74,315)
Operation and maintenance labor (43,067) (44,678)
Nonlabor operating expenditures (90,022) (76,287)
Interest (43,514) (43,125)
Income taxes (35,754) (38,304)
Property, excise and payroll taxes (72,065) (71,362)
-------- --------
Net cash provided by operating activities 171,913 180,355
-------- --------
Investing Activities
- --------------------
Property expenditures (41,503) (42,708)
Other activities (86,007) -
-------- --------
Net cash used for investing activities (127,510) (42,708)
-------- --------
Financing Activities
- --------------------
Dividends paid on common stock (69,400) (66,733)
Dividends paid on preferred stock (433) -
Retirement of long-term debt (50) (3,145)
Retirement of short-term debt (3,500) -
-------- --------
Net cash used for financing activities (73,383) (69,878)
-------- --------
Cash and temporary cash investments--
- -----------------------------------
Net change (28,980) 67,769
Balance at beginning of period 39,110 8,297
-------- --------
Balance at end of period $ 10,130 $ 76,066
======== ========
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-2-
<PAGE>
CONSOLIDATED BALANCE SHEET
The Dayton Power and Light Company
At At
June 30, December 31,
1996 1995
-------- -----------
--thousands--
ASSETS
- ------
Property
- --------
Electric property $3,066,009 $3,064,579
Gas and other utility property 288,681 289,286
Construction work in progress 65,159 22,926
---------- ----------
3,419,849 3,376,791
Less--
Accumulated depreciation and amortization (1,188,820) (1,134,632)
---------- ----------
Net property 2,231,029 2,242,159
---------- ----------
Current Assets
- --------------
Cash and temporary cash investments 10,130 39,110
Accounts receivable, less provision for
uncollectible accounts 137,071 144,510
Inventories, at average cost 63,207 81,628
Taxes applicable to subsequent years 77,086 82,371
Other current assets 33,875 45,752
---------- ----------
Total current assets 321,369 393,371
---------- ----------
Other Assets
- ------------
Income taxes recoverable through
future revenues 232,675 238,632
Regulatory assets 147,195 155,715
Financial assets 64,332 3,765
Other assets 173,182 170,658
---------- ----------
Total other assets 617,384 568,770
---------- ----------
Total Assets $3,169,782 $3,204,300
========== ==========
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-3-
<PAGE>
CONSOLIDATED BALANCE SHEET
(continued)
The Dayton Power and Light Company
At At
June 30, December 31,
1996 1995
-------- ------------
--thousands--
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization
- --------------
Common shareholder's equity--
Common stock $ 412 $ 412
Other paid-in capital 738,786 738,693
Earnings reinvested in the business 442,455 451,350
---------- ----------
Total common shareholder's equity 1,181,653 1,190,455
Preferred stock 22,851 22,851
Long-term debt 951,632 991,591
---------- ----------
Total capitalization 2,156,136 2,204,897
---------- ----------
Current Liabilities
- -------------------
Accounts payable 77,597 96,958
Accrued taxes 109,186 115,886
Accrued interest 21,620 21,680
Current portion of long-term debt 40,400 450
Other 52,879 47,267
---------- ----------
Total current liabilities 301,682 282,241
---------- ----------
Deferred Credits and Other
- --------------------------
Deferred taxes 524,432 532,144
Unamortized investment tax credit 76,695 79,424
Other 110,837 105,594
---------- ----------
Total deferred credits and other 711,964 717,162
---------- ----------
Total Capitalization and Liabilities $3,169,782 $3,204,300
========== ==========
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-4-
<PAGE>
Notes to Consolidated Financial Statements
1. Reconciliation of Net Income to Net Cash Provided by Operating
Activities:
Six Months Ended
June 30
1996 1995
---- ----
--millions--
Net Income $ 95.8 $ 93.1
Adjustments for non-cash items:
Depreciation and amortization 60.4 56.2
Changes in working capital:
Accounts receivable 7.4 26.1
Accounts payable (27.6) (22.7)
Other 25.1 34.7
Other operating activities 10.8 (7.0)
------ ------
Net cash provided by operating activities $171.9 $180.4
====== ======
2. Reclassifications have been made in certain prior years' amounts
to conform to the current reporting presentation of the Company.
3. 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 1995 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-
<PAGE>
OPERATING STATISTICS
The Dayton Power and Light Company
Three Months Six Months
Ended Ended
June 30 June 30
------------- -------------
1996 1995 1996 1995
---- ---- ---- ----
Electric
- --------
Sales (millions of kWh)--
Residential 1,032 924 2,530 2,271
Commercial* 881 769 1,713 1,541
Industrial* 1,122 1,168 2,185 2,264
Other 750 1,028 1,696 2,048
------- ------- ------- -------
Total 3,785 3,889 8,124 8,124
Revenues (thousands of dollars)--
Residential 94,967 84,672 214,317 194,981
Commercial* 3,052 54,930 119,865 108,767
Industrial* 5,501 59,530 108,929 115,575
Other 32,043 35,712 67,076 71,596
------- ------- ------- -------
Total 245,563 234,844 510,187 490,919
Other Electric Statistics--
Average price per kWh--retail and
wholesale customers (cents) 6.41 5.97 6.21 5.98
Fuel cost per net kWh generated
(cents) 1.24 1.31 1.26 1.33
Electric customers at end of period 476,822 472,394 476,822 472,394
Average kWh use per residential
customer 2,420 2,188 5,938 5,381
Peak demand-maximum one hour
use (mw), (net) 2,641 2,704 2,668 2,704
* Includes the effect of reclassifying certain industrial customers as
commercial customers in the fourth quarter of 1995.
-6-
<PAGE>
OPERATING STATISTICS
(continued)
The Dayton Power and Light Company
Three Months Six Months
Ended Ended
June 30 June 30
------------- -------------
1996 1995 1996 1995
Gas ---- ---- ---- ----
- ---
Sales (millions of mcf)--
Residential 4,284 3,617 18,997 16,388
Commercial 1,242 999 5,689 4,544
Industrial 739 423 2,585 1,648
Other 410 546 1,718 1,742
Transportation gas delivered 3,623 3,521 9,274 8,974
------- ------- ------- -------
Total 10,298 9,106 38,263 33,296
Revenues (thousands of dollars)--
Residential 22,793 19,833 89,703 85,305
Commercial 5,964 4,930 25,092 22,274
Industrial 2,951 1,692 10,210 7,531
Other 4,108 4,186 13,326 12,718
------- ------- ------- -------
Total 35,816 30,641 138,331 127,828
Other Gas Statistics--
Average price mcf-retail customers
(dollars) 5.00 5.10 4.55 5.05
Gas customers at end of period 295,351 291,326 295,351 291,326
Degree Days (based on calendar month)--
Heating 723 607 3,920 3,438
Cooling 282 249 282 249
-7-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The Company's earnings on common stock for the second quarter of
1996 were slightly less than a year ago. Year-to-date earnings on
common stock increased by $2.7 million from the same period in 1995.
The West Central Ohio economy remained very strong in the second
quarter with unemployment levels in the service area dropping below
4%, outpacing both the state and national economies. This
performance, combined with more seasonal weather than last year, led
to an increase in retail electric and total natural gas sales of 5%
and 15%, respectively, over year-to-date 1995 levels.
An analysis of the financial condition and results of operations
for the second quarter and six months ended June 30, 1996 and 1995 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 June 30, 1996, the Company's cash and temporary cash
investment balance was $10.1 million. In addition, $90.0 million was
invested in debt and equity financial assets.
The Company has available to it $97 million in short-term
informal lines of credit. As of June 30, 1996, the Company had no
short-term debt outstanding. DPL Inc. and its subsidiaries have
$200 million available through a Revolving Credit Agreement ("Credit
Agreement"). As of June 30, 1996, 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 1996-2000.
-8-
<PAGE>
Results of Operations
- ---------------------
Electric revenues increased by $10.7 million and $19.3 million,
respectively, for the second quarter and six months ended June 30,
1996, over the corresponding periods in 1995. Residential customer
revenues were up 12% for the second quarter and 10% year-to-date as a
result of weather-related sales.
Gas revenues increased $5.2 million and $10.5 million,
respectively, from the second quarter and year-to-date last year. The
variance reflects increased gas sales of 13% in the second quarter and
15% year-to-date over last year due to colder weather and increased
business activity.
Fuel and purchased power expense decreased $4.9 million and $7.5
million, respectively, for the second quarter and year-to-date. The
variance is a result of lower sales to other utilities as well as a
lower fuel cost recovery rate.
Gas purchased for resale increased $1.8 million from the
corresponding quarter in 1995 and $3.4 million from year-to-date last
year primarily as a result of the increased sales.
Operation and maintenance expense increased over last year by
$13.6 million for the quarter and $18.1 million year-to-date due to
higher insurance and claims expenses and planned maintenance measures
undertaken in the second quarter in preparation for the upcoming
summer cooling season.
Depreciation and amortization expense increased $3.1 million from
the previous year's second quarter and $4.2 million year-to-date.
This variance reflects increased depreciable assets and a second
quarter adjustment to the depreciation reserve.
General taxes increased $2.0 million over the first six months of
last year due to increased property taxes.
Income taxes increased $3.1 million and $6.9 million,
respectively, over the second quarter and year-to-date 1995 primarily
due to higher pre-tax income.
-9-
<PAGE>
Part II. Other Information
---------------------------
Item 5. Other Information.
Rate Regulation and Government Legislation
- ------------------------------------------
On July 9, 1996, the Company refiled its open-access transmission
tariff with the Federal Energy Regulatory Commission ("FERC") in
compliance with Order Nos. 888 and 889 issued by FERC on April 24,
1996.
On February 15, 1996, the PUCO issued guidelines for
interruptible service, including services that accommodate the
attainment and delivery of replacement electricity during periods when
the utility faces constraints on its own resources. 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.
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 June 30, 1996.
-10-
<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: August 14, 1996 /s/ Paul R. Anderson
--------------- --------------------
Paul R. Anderson
Controller
(Principal Accounting Officer)
Date: August 14, 1996 /s/ Thomas M. Jenkins
--------------- ---------------------
Thomas M. Jenkins
Group Vice President and Treasurer
(Principal Financial Officer)
-11-
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