<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, 1997
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 Identification No.)
incorporation or organization)
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 June 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 Six Months Ended
June 30 June 30
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
--millions-- --millions--
Income
- ------
Utility service revenues--
Electric $234.7 $245.6 $487.8 $510.2
Gas and other 35.1 36.4 139.3 140.8
------ ------ ------ ------
Total Utility Service Revenues 269.8 282.0 627.1 651.0
Interest and other income 2.3 4.2 4.4 6.1
------ ------ ------ ------
Total Income 272.1 286.2 631.5 657.1
------ ------ ------ ------
Expenses
- --------
Fuel and purchased power 51.0 54.6 106.2 116.2
Gas purchased for resale 19.9 19.5 86.8 84.0
Operation and maintenance 59.4 69.3 111.2 125.0
Depreciation and amortization 31.2 31.2 62.5 60.4
Amortization of regulatory assets, net 3.8 3.4 8.0 7.5
General taxes 33.3 31.9 66.9 64.1
Interest expense 21.9 22.1 43.7 44.2
------ ------ ------ ------
Total Expenses 220.5 232.0 485.3 501.4
------ ------ ------ ------
Income Before Income Taxes 51.6 54.2 146.2 155.7
Income taxes 18.4 21.1 50.8 59.9
------ ------ ------ ------
Net Income 33.2 33.1 95.4 95.8
Preferred dividends 0.2 0.2 0.4 0.4
------ ------ ------ ------
Earnings on Common Stock $ 33.0 $ 32.9 $ 95.0 $ 95.4
====== ====== ====== ======
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
----------------
1997 1996
---- ----
--millions--
Operating Activities
- --------------------
Cash received from utility customers $651.8 $654.4
Other operating cash receipts 5.3 5.0
Cash paid for:
Fuel and purchased power (115.4) (108.1)
Purchased gas (92.7) (95.0)
Operation and maintenance labor (43.5) (43.1)
Nonlabor operating expenditures (79.5) (90.0)
Interest (43.1) (43.5)
Income taxes (40.7) (35.7)
Property, excise and payroll taxes (74.8) (72.1)
------ ------
Net cash provided by operating activities 167.4 171.9
------ ------
Investing Activities
- --------------------
Property expenditures (48.4) (41.5)
Other activities (21.7) (86.0)
------ ------
Net cash used for investing activities (70.1) (127.5)
------ ------
Financing Activities
- --------------------
Dividends paid on common stock (57.9) (69.4)
Dividends paid on preferred stock (0.4) (0.4)
Retirement of long-term debt (40.4) (0.1)
Issuance/retirement of short-term debt 16.8 (3.5)
------ ------
Net cash used for financing activities (81.9) (73.4)
------ ------
Cash and temporary cash investments--
- -----------------------------------
Net change 15.4 (29.0)
Balance at beginning of period 2.1 39.1
------ ------
Balance at end of period $ 17.5 $ 10.1
====== ======
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,
1997 1996
-------- ------------
--millions--
ASSETS
- ------
Property $3,528.8 $3,493.2
Less--
Accumulated depreciation and amortization (1,302.6) (1,249.4)
-------- --------
Net property 2,226.2 2,243.8
-------- --------
Current Assets
- --------------
Cash and temporary cash investments 17.5 2.1
Accounts receivable, less provision for
uncollectible accounts 156.3 193.4
Inventories, at average cost 65.1 75.2
Deferred property and excise taxes 81.0 87.3
Other 15.9 54.3
-------- --------
Total current assets 335.8 412.3
-------- --------
Other Assets
- ------------
Financial assets 75.8 56.0
Income taxes recoverable through future
revenues 220.3 222.4
Regulatory assets 127.7 137.3
Other 183.3 171.4
-------- --------
Total other assets 607.1 587.1
-------- --------
Total Assets $3,169.1 $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
June 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 488.0 478.2
-------- --------
Total common shareholder's equity 1,227.4 1,217.5
Preferred stock 22.9 22.9
Long-term debt 925.9 926.3
-------- --------
Total capitalization 2,176.2 2,166.7
-------- --------
Current Liabilities
- -------------------
Accounts payable 72.1 109.6
Dividends payable 29.0 -
Short-term debt 28.2 11.3
Accrued taxes 93.6 136.6
Accrued interest 21.5 21.6
Current deferred income tax 23.3 -
Current portion of long-term debt 0.4 40.4
Other 26.3 49.1
-------- --------
Total current liabilities 294.4 368.6
-------- --------
Deferred Credits and Other
- --------------------------
Deferred taxes 509.7 513.2
Unamortized investment tax credit 73.7 75.2
Other 115.1 119.5
-------- --------
Total deferred credits and other 698.5 707.9
-------- --------
Total Capitalization and Liabilities $3,169.1 $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.
-5-
<PAGE>
OPERATING STATISTICS
The Dayton Power and Light Company
Three Months Ended Six Months Ended
June 30 June 30
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
Electric
- --------
Sales (millions of kWh)--
Residential 1,002 1,032 2,410 2,530
Commercial 829 881 1,652 1,713
Industrial 1,192 1,122 2,282 2,185
Other 804 750 1,642 1,696
------- ------- ------- -------
Total 3,827 3,785 7,986 8,124
Revenues (thousands of dollars)--
Residential 89,448 94,967 202,299 214,317
Commercial 57,933 63,052 114,387 119,865
Industrial 55,698 55,501 107,830 108,929
Other 31,630 32,043 63,295 67,076
------- ------- ------- -------
Total 234,709 245,563 487,811 510,187
Other Electric Statistics--
Average price per kWh--retail and
wholesale customers (cents) 6.05 6.41 6.03 6.21
Fuel cost per net kWh generated (cents) 1.26 1.24 1.26 1.26
Electric customers at end of period 81,982 476,822 481,982 476,822
Average kWh use per residential customer 2,331 2,420 5,608 5,938
Peak demand-maximum one hour
use (mw), (net) 2,812 2,641 2,812 2,668
-6-
<PAGE>
OPERATING STATISTICS
(continued)
The Dayton Power and Light Company
Three Months Ended Six Months Ended
June 30 June 30
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
Gas
- ---
Sales (millions of MCF)--
Residential 3,883 4,284 17,029 18,997
Commercial 1,187 1,242 5,204 5,689
Industrial 368 739 1,566 2,585
Other 265 410 1,282 1,718
Transportation gas delivered 4,660 3,623 10,830 9,274
------- ------- ------- -------
Total 10,363 10,298 35,911 38,263
Revenues (thousands of dollars)--
Residential 22,514 22,793 91,467 89,703
Commercial 6,194 5,964 26,223 25,092
Industrial 1,786 2,951 7,366 10,210
Other 4,464 4,108 13,443 13,326
------- ------- ------- -------
Total 34,958 35,816 138,499 138,331
Other Gas Statistics--
Average price MCF-retail customers
(dollars) 5.57 5.00 5.23 4.55
Gas customers at end of period 299,047 295,351 299,047 295,351
Degree Days (based on calendar month)--
Heating 830 723 3,618 3,920
Cooling 183 282 183 282
-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 and
year-to-date 1997 were $33.0 and $95.0, respectively, approximately
equal to earnings in the same periods last year. Electric sales to
industrial customers continue to grow, up 4% year-to-date versus the
same period a year ago. The economy, combined with successful cost
control efforts throughout the Company, helped to mitigate the impact
of mild first and second quarter weather, and maintain our improved
financial performance.
The financial condition and results of operations for the second
quarter and six months ended June 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 June 30, 1997, the Company's cash and temporary cash
investment balance was $17.5 million. In addition, $75.8 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 June 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 June 30, 1997, the Company had $26.9 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 decreased by $12.2 million and $23.9
million, respectively, for the second quarter and six months ended
June 30, 1997. An increase in electric industrial sales was offset by
reductions in other sales classes, primarily due to the effects of
mild winter and early summer weather and lower fuel cost recovery
rates.
Interest and other income was $1.9 million lower than the second
quarter 1996 and $1.7 million lower than year-to-date as a result of
lower interest income on short-term investments.
Fuel and purchased power decreased $3.6 million and $10.0
million, respectively, from the second quarter and year-to-date last
year primarily as a result of lower retail electric sales and lower
fuel costs in both periods. Decreased purchased power expenses also
contributed to the year-to-date variation.
Gas purchased for resale increased $0.4 million compared to
second quarter 1996 and $2.8 million year-to-date versus last year.
Higher natural gas costs were partially offset by lower sales due to
milder weather.
Operation and maintenance expense decreased from last year by
$9.9 million for the quarter and $13.8 million year-to-date. Lower
insurance and claims costs, and overall cost containment efforts
contributed to the second quarter decrease. In addition, a downward
adjustment to the actuarially determined pension and retiree health
care expenses resulted in the year-to-date variation.
General taxes increased $1.4 million and $2.8 million compared to
the second quarter and year-to-date 1996, respectively, due to higher
property taxes from additional property.
Income taxes decreased $2.7 million and $9.1 million,
respectively, from the second quarter and year-to-date 1996 primarily
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 by August 15, 1997.
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. The Company's
interruptible electric service tariffs were approved on May 1, 1997,
and tariffs conforming to this Order were subsequently filed with the
PUCO on May 15, 1997.
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, 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: August 14, 1997 /s/ Paul R. Anderson
---------------------- ----------------------------------
Paul R. Anderson
Controller
(Principal Accounting Officer)
Date: August 14, 1997 /s/ Thomas M. Jenkins
---------------------- ----------------------------------
Thomas M. Jenkins
Group Vice President and Treasurer
(Principal Financial Officer)
-11-
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