<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, 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)
(937) 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, 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 Nine Months
Ended Ended
September 30 September 30
------------- -------------
1996 1995 1996 1995
---- ---- ---- ----
--thousands-- --thousands--
Income
- ------
Utility service revenues--
Electric $257,255 $279,674 $767,443 $770,594
Gas and Other 20,961 20,999 161,808 152,795
-------- -------- -------- --------
Total utility service revenues 278,216 300,673 929,251 923,389
Interest and other income 1,240 2,939 7,273 7,807
-------- -------- -------- --------
Total Income 279,456 303,612 936,524 931,196
-------- -------- -------- --------
Expenses
- --------
Fuel and purchased power 57,823 68,543 174,061 192,244
Gas purchased for resale 9,700 9,670 93,721 90,303
Operation and maintenance 56,220 67,924 181,208 174,826
Depreciation and amortization 29,595 30,518 90,044 86,731
Amortization of regulatory assets, net 4,142 6,632 11,603 12,151
General taxes 32,287 31,288 96,346 93,384
Interest expense 22,402 24,083 66,570 70,600
-------- -------- -------- --------
Total Expenses 212,169 238,658 713,553 720,239
-------- -------- -------- --------
Income Before Income Taxes 67,287 64,954 222,971 210,957
Income Taxes 25,545 26,039 85,411 78,957
-------- -------- -------- --------
Net Income 41,742 38,915 137,560 132,000
Preferred Dividends 216 216 650 650
-------- -------- -------- --------
Earnings on Common Stock $ 41,526 $ 38,699 $136,910 $131,350
======== ======== ======== ========
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-1-
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
The Dayton Power and Light Company
Nine Months Ended
September 30
-----------------
1996 1995
---- ----
--thousands--
Operating Activities
- --------------------
Cash received from utility customers $954,075 $926,906
Other operating cash receipts 7,752 8,485
Cash paid for:
Fuel and purchased power (166,711) (183,970)
Purchased gas (133,501) (103,174)
Operation and maintenance labor (60,370) (64,952)
Nonlabor operating expenditures (142,827) (102,661)
Interest (69,993) (69,357)
Income taxes (62,923) (76,275)
Property, excise and payroll taxes (103,848) (101,201)
-------- --------
Net cash provided by operating activities 221,654 233,801
-------- --------
Investing Activities
- --------------------
Property expenditures (80,227) (61,173)
Other activities (103,826) -
-------- --------
Net cash used for investing activities (184,053) (61,173)
-------- --------
Financing Activities
- --------------------
Dividends paid on common stock (103,900) (99,450)
Dividends paid on preferred stock (650) (650)
Retirement of long-term debt (450) (119,177)
Issuance of short-term debt 31,500 -
Issuance of long-term debt - 108,910
-------- --------
Net cash used for financing activities (73,500) (110,367)
-------- --------
Cash and temporary cash investments--
- -----------------------------------
Net change (35,899) 62,261
Balance at beginning of period 39,110 8,297
-------- --------
Balance at end of period $ 3,211 $ 70,558
======== ========
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-2-
<PAGE>
CONSOLIDATED BALANCE SHEET
The Dayton Power and Light Company
At At
September 30, December 31,
1996 1995
------------- ------------
--thousands--
ASSETS
- ------
Property
- --------
Electric property $3,086,380 $3,064,579
Gas and other utility property 289,111 289,286
Construction work in progress 76,461 22,926
---------- ----------
3,451,952 3,376,791
Less--
Accumulated depreciation and amortization (1,221,646) (1,134,632)
---------- ----------
Net property 2,230,306 2,242,159
---------- ----------
Current Assets
- --------------
Cash and temporary cash investments 3,211 39,110
Accounts receivable, less provision for
uncollectible accounts 111,941 144,510
Inventories, at average cost 71,995 81,628
Deferred property and excise tax 47,746 82,371
Other 55,101 45,752
---------- ----------
Total current assets 289,994 393,371
---------- ----------
Other Assets
- ------------
Income taxes recoverable through
future revenues 228,972 238,632
Regulatory assets 141,944 155,715
Financial assets 70,569 3,765
Other 172,080 170,658
---------- ----------
Total other assets 613,565 568,770
---------- ----------
Total Assets $3,133,865 $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
September 30, December 31,
1996 1995
------------- ------------
--thousands--
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization
- --------------
Common shareholder's equity--
Common stock $ 412 $ 412
Other paid-in capital 738,833 738,693
Earnings reinvested in the business 449,338 451,350
---------- ----------
Total common shareholder's equity 1,188,583 1,190,455
Preferred stock 22,851 22,851
Long-term debt 951,252 991,591
---------- ----------
Total capitalization 2,162,686 2,204,897
---------- ----------
Current Liabilities
- -------------------
Accounts payable 51,059 96,958
Notes payable 36,306 4,805
Current portion of long-term debt 40,400 450
Accrued taxes 76,536 115,886
Accrued interest 17,313 21,680
Other 37,385 42,462
---------- ----------
Total current liabilities 258,999 282,241
---------- ----------
Deferred Credits and Other
- --------------------------
Deferred taxes 521,576 532,144
Unamortized investment tax credit 75,951 79,424
Other 114,653 105,594
---------- ----------
Total deferred credits and other 712,180 717,162
---------- ----------
Total Capitalization and Liabilities $3,133,865 $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:
Nine Months Ended
September 30
1996 1995
---- ----
--millions--
Net Income $137.6 $132.0
Adjustments for non-cash items:
Depreciation and amortization 90.0 86.7
Changes in working capital:
Accounts receivable 32.6 9.5
Accounts payable (41.1) (14.5)
Other (16.9) 7.9
Other operating activities 19.5 12.2
------ ------
Net cash provided by operating activities $221.7 $233.8
====== ======
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 Nine Months
Ended Ended
September 30 September 30
------------- -------------
1996 1995 1996 1995
---- ---- ---- ----
Electric
- --------
Sales (millions of kWh)--
Residential 1,197 1,365 3,727 3,636
Commercial* 895 927 2,608 2,468
Industrial* 1,198 1,196 3,383 3,459
Other 814 1,021 2,510 3,070
------- ------- ------- -------
Total 4,104 4,509 12,228 12,633
Revenues (thousands of dollars)--
Residential 107,348 121,821 321,665 316,802
Commercial* 59,224 61,607 179,089 170,374
Industrial* 57,800 59,457 166,729 175,031
Other 32,884 36,790 99,960 108,387
------- ------- ------- -------
Total 257,256 279,675 767,443 770,594
Other Electric Statistics--
Average price per kWh--retail and
wholesale customers (cents) 6.19 6.15 6.20 6.04
Fuel cost per net kWh generated
(cents) 1.23 1.36 1.26 1.34
Electric customers at end of period 477,675 473,468 477,675 473,468
Average kWh use per residential
customer 2,805 3,229 8,742 8,611
Peak demand-maximum one hour
use (mw), (net) 2,887 2,961 2,887 2,961
* 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 Nine Months
Ended Ended
September 30 September 30
------------- -------------
1996 1995 1996 1995
---- ---- ---- ----
Gas
- ---
Sales (millions of mcf)--
Residential 1,841 1,981 20,838 18,369
Commercial 631 715 6,320 5,260
Industrial 158 140 2,743 1,788
Other 244 323 1,962 2,065
Transportation gas delivered 3,092 2,763 12,366 11,737
------- ------- ------- -------
Total 5,966 5,922 44,229 39,219
Revenues (thousands of dollars)--
Residential 12,922 12,930 102,625 98,235
Commercial 3,544 3,658 28,636 25,932
Industrial 868 708 11,078 8,239
Other 3,317 3,295 16,643 16,014
------- ------- ------- -------
Total 20,651 20,591 158,982 148,420
Other Gas Statistics--
Average price mcf-retail customers
(dollars) 6.39 5.88 4.72 5.14
Gas customers at end of period 295,110 291,812 295,110 291,812
Degree Days (based on calendar month)--
Heating 107 108 4,027 3,546
Cooling 552 776 834 1,025
-7-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The Company's earnings on common stock increased $2.8 million and
$5.6 million, respectively, for the third quarter and nine months
ended September 30, 1996, as compared to the same periods last year.
Summer temperatures were 13% cooler than normal and 29% cooler than
last year's hot summer. As a result, total retail electric sales were
down nearly 5% from the third quarter of 1995, influenced primarily by
a 12% drop in residential electric sales.
Offsetting the effects of milder temperatures, operating and
maintenance expenses in the third quarter were 17% less than a year
ago as a result of Company-wide productivity improvements and lower
financing fees.
An analysis of the financial condition and results of operations
for the third quarter and nine months ended September 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 September 30, 1996, the Company's cash and temporary cash
investment balance was $3.2 million. In addition, $107.7 million was
invested in debt and equity financial assets.
The Company has available to it $97 million in short-term
informal lines of credit. DPL Inc. and its subsidiaries have
$200 million available through a Revolving Credit Agreement ("Credit
Agreement"). As of September 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.
As of September 30, 1996, the Company had $22 million in commercial
paper outstanding and $13 million through the informal credit lines.
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 decreased by $22.4 million and $3.2 million,
respectively, for the third quarter and nine months ended
September 30, 1996, from the corresponding periods in 1995.
Residential sales decreased 12% in the third quarter while showing a
year-to-date increase of 3% from 1995. Sales to other public
utilities were down 37% for the quarter and 32% year-to-date compared
to last year.
Gas revenues increased $10.6 million year-to-date compared to
last year due to a higher gas cost recovery rate and more weather-
related residential sales.
Fuel and purchased power expense decreased $10.7 million and
$18.2 million, respectively, from the third quarter and year-to-date
1995, primarily related to decreased sales to other utilities and
lower fuel cost recovery rates.
Gas purchased for resale increased $3.4 million for the year
compared to 1995 as a result of the increased sales.
Operation and maintenance expense for the third quarter decreased
from last year by $11.7 million and increased $6.4 million year-to-
date. The decrease in the third quarter was due to financing fees of
$4.7 million associated with the 1995 debt refinancing and lower
administration expenses. Offsetting the decrease for the quarter and
causing the increase on a year-to-date basis are higher insurance and
claim costs.
Depreciation and amortization expense increased $3.3 million over
year-to-date 1995. This variance primarily reflects increased
depreciable assets and a second quarter adjustment to the depreciation
reserve.
General taxes increased $3.0 million over the 1995 year-to-date
amounts due to increased property taxes.
Interest expense decreased $1.7 million from the third quarter
last year and $4.0 million year-to-date. This was primarily due to
interest savings from the 1995 bond refinancing.
Income taxes increased $6.5 million over 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 September 30, 1996, the Federal Energy Regulatory Commission
("FERC") conditionally accepted the Company's market-based sales
tariff which will allow the Company to sell wholesale generation
supply at prices that reflect current market prices.
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 September 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: November 14, 1996 /s/ Paul R. Anderson
----------------- ---------------------
Paul R. Anderson
Controller
(Principal Accounting Officer)
Date: November 14, 1996 /s/ Thomas M. Jenkins
----------------- ---------------------
Thomas M. Jenkins
Group Vice President and Treasurer
(Principal Financial Officer)
-11-
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