<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, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 1-2385
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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 Identification No.)
incorporation or organization)
Courthouse Plaza Southwest
Dayton, Ohio 45402
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(Address of principal executive offices)
(937) 224-6000
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(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, 1997)
<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 Ended Nine Months Ended
September 30 September 30
------------------ -----------------
1997 1996 1997 1996
---- ---- ---- ----
--millions-- --millions--
Income
- ------
Utility service revenues--
Electric $260.6 $257.2 $748.4 $767.5
Gas and Other 23.3 21.0 162.6 161.8
------ ------ ------ ------
Total Utility Service Revenues 283.9 278.2 911.0 929.3
Interest and other income 1.7 1.2 6.1 7.2
------ ------ ------ ------
Total Income 285.6 279.4 917.1 936.5
------ ------ ------ ------
Expenses
- --------
Fuel and purchased power 59.5 57.8 165.7 174.1
Gas purchased for resale 10.8 9.7 97.6 93.7
Operation and maintenance 52.3 56.2 163.4 181.2
Depreciation and amortization 31.5 29.6 94.0 90.0
Amortization of regulatory assets, net 4.6 4.2 12.6 11.6
General taxes 33.5 32.3 100.4 96.3
Interest expense 20.3 22.4 64.0 66.6
------ ------ ------ ------
Total Expenses 212.5 212.2 697.7 713.5
------ ------ ------ ------
Income Before Income Taxes 73.1 67.2 219.4 223.0
Income taxes 28.8 25.5 79.6 85.4
------ ------ ------ ------
Net Income 44.3 41.7 139.8 137.6
Preferred dividends
0.2 0.2 0.7 0.7
------ ------ ------ ------
Earnings on Common Stock $ 44.1 $ 41.5 $139.1 $136.9
====== ====== ====== ======
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
-----------------
1997 1996
---- ----
--millions--
Operating Activities
- --------------------
Cash received from utility customers $940.7 $954.1
Other operating cash receipts 7.2 7.7
Cash paid for:
Fuel and purchased power (173.2) (166.7)
Purchased gas (128.7) (133.5)
Operation and maintenance labor (60.2) (60.4)
Nonlabor operating expenditures (116.5) (142.8)
Interest (68.6) (70.0)
Income taxes (43.1) (62.9)
Property, excise and payroll taxes (108.8) (103.8)
------ ------
Net cash provided by operating activities 248.8 221.7
Investing Activities
- --------------------
Property expenditures (76.3) (80.2)
Other activities (33.1) (103.9)
------ ------
Net cash used for investing activities (109.4) (184.1)
Financing Activities
- --------------------
Dividends paid on common stock (86.9) (103.9)
Dividends paid on preferred stock (0.7) (0.7)
Retirement of long-term debt (40.4) (0.4)
Issuance (retirement) of short-term debt (4.0) 31.5
------ ------
Net cash used for financing activities (132.0) (73.5)
Cash and temporary cash investments--
- -----------------------------------
Net change 7.4 (35.9)
Balance at beginning of period 2.1 39.1
------ ------
Balance at end of period $ 9.5 $ 3.2
====== ======
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,
1997 1996
------------- ------------
--millions--
ASSETS
- ------
Property $3,553.4 $3,493.2
- --------
Less--
Accumulated depreciation and amortization (1,330.0) (1,249.4)
-------- --------
Net property 2,223.4 2,243.8
-------- --------
Current Assets
- --------------
Cash and temporary cash investments 9.5 2.1
Accounts receivable, less provision for
uncollectible accounts 152.5 193.4
Inventories, at average cost 80.3 75.2
Deferred property and excise taxes 49.7 87.3
Other 21.7 54.3
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Total current assets 313.7 412.3
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Other Assets
- ------------
Financial assets 94.1 56.0
Income taxes recoverable through future revenues 214.4 222.4
Regulatory assets 121.7 137.3
Other 184.0 171.4
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Total other assets 614.2 587.1
-------- --------
Total Assets $3,151.3 $3,243.2
======== ========
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,
1997 1996
------------- ------------
--millions--
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization
- --------------
Common shareholder's equity--
Common stock $ 0.4 $ 0.4
Other paid-in capital 739.0 738.9
Earnings reinvested in the business 505.2 478.2
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Total common shareholder's equity 1,244.6 1,217.5
Preferred stock 22.9 22.9
Long-term debt 925.9 926.3
-------- --------
Total capitalization 2,193.4 2,166.7
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Current Liabilities
- -------------------
Accounts payable 66.3 109.6
Dividends payable 31.6 -
Short-term debt 7.3 11.3
Accrued taxes 96.5 136.6
Accrued interest 15.9 21.6
Current deferred income tax 15.2 -
Current portion of long-term debt 0.4 40.4
Other 28.6 49.1
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Total current liabilities 261.8 368.6
-------- --------
Deferred Credits and Other
- --------------------------
Deferred taxes 506.8 513.2
Unamortized investment tax credit 73.0 75.2
Other 116.3 119.5
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Total deferred credits and other 696.1 707.9
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Total Capitalization and Liabilities $3,151.3 $3,243.2
======== ========
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-4-
<PAGE>
Notes to Consolidated Financial Statements
1. Reclassifications have been made in certain prior years' amounts
to conform to the current reporting presentation of the Company.
2. 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 1996 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.
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<PAGE>
OPERATING STATISTICS
The Dayton Power and Light Company
Three Months Ended Nine Months Ended
September 30 September 30
------------------ -----------------
1997 1996 1997 1996
---- ---- ---- ----
Electric
- --------
Sales (millions of kWh)--
Residential 1,141 1,197 3,551 3,727
Commercial 953 895 2,604 2,608
Industrial 1,244 1,198 3,526 3,383
Other 968 814 2,611 2,510
------- ------- ------- -------
Total 4,306 4,104 12,292 12,228
Revenues (thousands of dollars)--
Residential 102,024 107,348 304,323 321,665
Commercial 59,801 59,224 174,188 179,089
Industrial 59,633 57,800 167,462 166,729
Other 39,134 32,884 102,430 99,960
------- ------- ------- -------
Total 260,592 257,256 748,403 767,443
Other Electric Statistics--
Average price per kWh--retail and
wholesale customers (cents) 5.97 6.19 6.01 6.20
Fuel cost per net kWh generated (cents) 1.27 1.23 1.27 1.26
Electric customers at end of period 481,200 477,675 481,200 477,675
Average kWh use per residential
customer 2,654 2,805 8,260 8,742
Peak demand-maximum one hour
use (mw), (net) 2,848 2,887 2,848 2,887
-6-
<PAGE>
OPERATING STATISTICS
(continued)
The Dayton Power and Light Company
Three Months Ended Nine Months Ended
September 30 September 30
------------------ -----------------
1997 1996 1997 1996
---- ---- ---- ----
Gas
- ---
Sales (millions of MCF)--
Residential 2,006 1,841 19,035 20,838
Commercial 835 631 6,039 6,320
Industrial 164 158 1,729 2,743
Other 104 244 1,387 1,962
Transportation gas delivered 3,201 3,092 14,031 12,366
------- ------- ------- -------
Total 6,310 5,966 42,221 44,229
Revenues (thousands of dollars)--
Residential 15,074 12,922 106,540 102,625
Commercial 4,601 3,544 30,824 28,636
Industrial 725 868 8,092 11,078
Other 2,940 3,317 16,384 16,643
------- ------- ------- -------
Total 23,340 20,651 161,840 158,982
Other Gas Statistics--
Average price MCF-retail customers
(dollars) 6.74 6.39 5.39 4.72
Gas customers at end of period 297,458 295,110 297,458 295,110
Degree Days (based on calendar month)--
Heating 111 107 3,729 4,027
Cooling 486 552 669 834
-7-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
The Company's earnings on common stock were $44.1 million for the
third quarter, up $2.6 million from 1996. For the nine months ended
September 30, 1997, earnings on common stock were $139.1 million
compared to $136.9 million earned in the same period last year.
Ongoing cost control efforts throughout the Company resulted in a
reduction in operating and maintenance expenses, which offset retail
electric sales levels through September that were 1% below last year.
The financial condition and results of operations for the third
quarter and nine months ended September 30, 1997 and 1996 are 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, 1997, the Company's cash and temporary cash
investment balance was $9.5 million. In addition, $94.1 million was
invested in debt and equity financial assets.
DPL Inc. and its subsidiaries have $200 million available through
a Revolving Credit Agreement ("Credit Agreement"). As of September
30, 1997, 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 also has $97 million
available in short-term informal lines of credit. As of September 30,
1997, the Company had $6.0 million in commercial paper outstanding.
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 1997-2001.
-8-
<PAGE>
Results of Operations
- ---------------------
Utility service revenues increased by $5.7 million from the third
quarter last year and decreased $18.3 million for the nine months
ended September 30, 1997. An increase in electric sales to other
utilities was the primary cause of the increase for the quarter.
Increases in electric industrial sales and sales to other utilities
were offset by reductions in other sales classes, due to the effects
of mild weather as well as lower fuel cost recovery rates, resulting
in the year-to-date variation.
Fuel and purchased power increased $1.7 million compared to the
corresponding quarter a year ago, and decreased $8.4 million year-to-
date compared to 1996. Increased purchased power expenses from higher
sales to other utilities caused the increase for the quarter. Decreased
retail electric sales and lower fuel costs were the primary causes of
the year-to-date variation.
Gas purchased for resale increased $1.1 million and $3.9 million,
respectively, for the third quarter and nine months ended September 30,
1997. Higher natural gas costs were partially offset by lower sales due
to milder weather.
Operation and maintenance expense decreased from last year by
$3.9 million for the quarter and $17.8 million year-to-date. Lower
employee benefit costs from a downward adjustment to the actuarially
determined pension and retiree health care expenses, decreased
production maintenance, and overall cost containment efforts
contributed to the third quarter and year-to-date decreases.
Depreciation and amortization increased by $1.9 million for the
quarter and $4.0 million year-to-date compared to last year due to
increased depreciable plant base.
General taxes increased $1.2 million and $4.1 million compared to
the third quarter and year-to-date 1997, respectively, due to higher
property taxes from additional property.
Income taxes increased $3.3 million from the corresponding
quarter last year due to higher book income. Income taxes decreased
$5.8 million from the year-to-date last year due to lower taxable
income.
-9-
<PAGE>
Part II. Other Information
---------------------------
Item 5. Other Information.
Rate Regulation and Government Legislation
- ------------------------------------------
On April 24, 1996, the Federal Energy Regulatory Commission
("FERC") issued final rules requiring all electric utilities that own
or control transmission facilities to file open-access transmission
service tariffs. On July 31, 1997, FERC issued an order requiring the
Company and other utilities to refile their open-access transmission
tariffs with FERC. The Company filed their revised open-access
transmission tariffs on August 15, 1997.
On October 15, 1997, PUCO Commissioner David Johnson announced
that he will resign effective November 30, 1997. Commissioner Johnson
is serving a term that was scheduled to expire in April 1998.
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, 1997.
-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 12, 1997 /s/ Paul R. Anderson
----------------- ----------------------------------
Paul R. Anderson
Controller
(Principal Accounting Officer)
Date: November 12, 1997 /s/ Thomas M. Jenkins
----------------- ----------------------------------
Thomas M. Jenkins
Group Vice President and Treasurer
(Principal Financial Officer)
-11-
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