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, 1998
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, 1998)
<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 9
Signatures 10
i
<PAGE>
CONSOLIDATED STATEMENT OF RESULTS OF OPERATIONS
The Dayton Power and Light Company
Three Months Six Months
Ended Ended
June 30 June 30
------------ ------------
1998 1997 1998 1997
---- ---- ---- ----
--millions-- --millions--
Income
- ------
Utility service revenues--
Electric $264.2 $234.7 $525.6 $487.8
Gas and Other 29.0 35.1 120.5 139.3
------ ------ ------ ------
Total Utility Service Revenues 293.2 269.8 646.1 627.1
Interest and other income
1.6 2.3 6.2 4.4
------ ------ ------ ------
Total Income 294.8 272.1 652.3 631.5
------ ------ ------ ------
Expenses
- --------
Fuel and purchased power 66.7 51.0 127.9 106.2
Gas purchased for resale 15.5 19.9 74.3 86.8
Operation and maintenance 59.4 59.4 93.8 111.2
Depreciation and amortization 32.2 31.2 64.5 62.5
Amortization of regulatory assets, net 4.3 3.8 8.9 8.0
General taxes 33.8 33.3 68.1 66.9
Interest expense 22.5 21.9 43.7 43.7
------ ------ ------ ------
Total Expenses 234.4 220.5 481.2 485.3
------ ------ ------ ------
Income Before Income Taxes 60.4 51.6 171.1 146.2
Income taxes 24.2 18.4 65.4 50.8
------ ------ ------ ------
Net Income 36.2 33.2 105.7 95.4
Preferred dividends 0.2 0.2 0.4 0.4
------ ------ ------ ------
Earnings on Common Stock $ 36.0 $ 33.0 $105.3 $ 95.0
====== ====== ====== ======
Comprehensive Income $ 43.0 $ 35.4 $117.2 $ 97.2
See 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
----------------
1998 1997
---- ----
--millions--
Operating Activities
- --------------------
Cash received from utility customers $652.3 $651.8
Other operating cash receipts 4.4 5.3
Cash paid for:
Fuel and purchased power (128.9) (115.4)
Purchased gas (82.2) (92.7)
Operation and maintenance labor (41.8) (43.5)
Nonlabor operating expenditures (68.3) (79.5)
Interest (42.4) (43.1)
Income taxes (67.1) (40.7)
Property, excise and payroll taxes (76.9) (74.8)
------ ------
Net cash provided by operating activities 149.1 167.4
Investing Activities
- --------------------
Property expenditures (47.7) (48.4)
Other activities (28.7) (21.7)
------ ------
Net cash used for investing activities (76.4) (70.1)
Financing Activities
- --------------------
Dividends paid on common stock (172.0) (57.9)
Parent company capital contribution 49.0 -
Issuance of short-term debt 43.7 16.8
Retirement of long-term debt (0.4) (40.4)
Dividends paid on preferred stock (0.4) (0.4)
------ ------
Net cash used for financing activities (80.1) (81.9)
Cash and temporary cash investments--
- -----------------------------------
Net change (7.4) 15.4
Balance at beginning of period 11.8 2.1
------ ------
Balance at end of period $ 4.4 $ 17.5
====== ======
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,
1998 1997
-------- ------------
--millions--
ASSETS
Property $3,632.2 $3,587.8
Less--
Accumulated depreciation and amortization (1,415.3) (1,355.8)
-------- --------
Net property 2,216.9 2,232.0
-------- --------
Current Assets
- --------------
Cash and temporary cash investments 4.4 11.8
Accounts receivable, less provision for
uncollectible accounts 187.8 205.8
Inventories, at average cost 77.3 87.1
Deferred property and excise taxes 81.6 91.9
Other 24.4 61.4
-------- --------
Total current assets 375.5 458.0
-------- --------
Other Assets
- ------------
Financial assets 160.2 111.1
Income taxes recoverable through future revenues 200.8 208.2
Regulatory assets 107.8 116.7
Other assets 201.5 200.8
-------- --------
Total other assets 670.3 636.8
-------- --------
Total Assets $3,262.7 $3,326.8
======== ========
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,
1998 1997
-------- ------------
--millions--
CAPITALIZATION AND LIABILITIES
Capitalization
- --------------
Common shareholder's equity--
Common stock $ 0.4 $ 0.4
Other paid-in capital 788.2 739.1
Accumulated other comprehensive income 31.7 20.3
Earnings reinvested in the business 420.9 521.0
-------- --------
Total common shareholder's equity 1,241.2 1,280.8
Preferred stock 22.9 22.9
Long-term debt 885.6 886.0
-------- --------
Total capitalization 2,149.7 2,189.7
-------- --------
Current Liabilities
- -------------------
Short-term debt 124.8 81.0
Accounts payable 74.9 124.2
Dividends payable 33.3 -
Accrued taxes 98.8 157.8
Accrued interest 20.8 20.7
Current deferred income tax 24.5 2.7
Other 28.0 39.6
-------- --------
Total current liabilities 405.1 426.0
-------- --------
Deferred Credits and Other
- --------------------------
Deferred taxes 499.7 500.5
Unamortized investment tax credit 70.8 72.2
Other 137.4 138.4
-------- --------
Total deferred credits and other 707.9 711.1
-------- --------
Total Capitalization and Liabilities $3,262.7 $3,326.8
======== ========
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 1997 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 result 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
------------- -------------
1998 1997 1998 1997
---- ---- ---- ----
Electric
- --------
Sales (millions of kWh)--
Residential 1,005 1,002 2,328 2,410
Commercial 886 829 1,706 1,652
Industrial 1,200 1,192 2,298 2,282
Other 1,151 804 2,336 1,642
------- ------- ------- -------
Total 4,242 3,827 8,668 7,986
Revenues (thousands of dollars)--
Residential 92,536 89,448 202,044 202,299
Commercial 61,502 57,933 118,180 114,387
Industrial 59,395 55,698 111,918 107,830
Other 50,757 31,630 93,433 63,295
------- ------- ------- -------
Total 264,190 234,709 525,575 487,811
Other Electric Statistics--
Average price per kWh-retail and
wholesale customers (cents) 6.14 6.05 5.95 6.03
Fuel cost per net kWh generated (cents) 1.30 1.26 1.27 1.26
Electric customers at end of period 487,172 481,982 487,172 481,982
Average kWh use per residential customer 2,309 2,331 5,354 5,608
Peak demand-maximum one hour
use (mw), (net) 2,931 2,812 2,931 2,812
-6-
<PAGE>
OPERATING STATISTICS
(continued)
The Dayton Power and Light Company
Three Months Six Months
Ended Ended
June 30 June 30
------------- ------------
1998 1997 1998 1997
---- ---- ---- ----
Gas
- ---
Sales (millions of MCF)--
Residential 2,706 3,883 14,063 17,029
Commercial 1,064 1,187 4,096 5,204
Industrial 249 368 1,170 1,566
Other 234 265 1,139 1,282
Transportation gas delivered 4,352 4,660 10,265 10,830
------- ------- ------- -------
Total 8,605 10,363 30,733 35,911
Revenues (thousands of dollars)--
Residential 17,525 22,514 77,478 91,467
Commercial 5,644 6,194 21,018 26,223
Industrial 1,237 1,786 5,728 7,366
Other 4,606 4,464 16,265 13,443
------- ------- ------- -------
Total 29,012 34,958 120,489 138,499
Other Gas Statistics--
Average price MCF-retail customers
(dollars) 6.01 5.57 5.36 5.23
Gas customers at end of period 302,434 298,723 302,434 298,723
Degree Days (based on calendar month)--
Heating 507 830 2,876 3,618
Cooling 323 183 346 183
-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
1998 were $36.0 million, up $3.0 million from quarterly earnings a
year ago. Year-to-date earnings were $105.3 million, up $10.3 million
from the same period in 1997.
The financial condition and results of operations for the second
quarter and six months ended June 30, 1998 and 1997 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, 1998, the Company's cash and temporary cash
investment balance was $4.4 million. In addition, $160.2 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,
1998, 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
has $97 million available in short-term informal lines of credit. As
of June 30, 1998, the Company had $33.0 million of these informal
lines outstanding and $91.0 million in commercial paper outstanding.
During the quarter, the Company received a parent company capital
contribution of $49.0 million.
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 1998-2002.
-8-
<PAGE>
Results of Operations
--------------------
Utility service revenues increased by $23.4 million and
$19.0 million, respectively, for the second quarter and six months
ended June 30, 1998. Electric revenues increased $29.5 million in the
second quarter and $37.8 million year-to-date due to more sales to
other utilities and to business customers. Lower gas revenues in both
periods, due to warmer temperatures, partially offset the increase.
Fuel and purchased power increased $15.7 million and
$21.7 million, respectively, from the second quarter and year-to-date
last year, primarily as a result of higher purchased power expenses
resulting from increased sales to other utilities.
Gas purchased for resale in the second quarter 1998 decreased
$4.4 million compared to second quarter 1997 and $12.5 million year-to-
date versus last year. Lower sales due to milder weather caused the
variation.
Operation and maintenance expense for the second quarter 1998 was
even with the second quarter 1997, but decreased $17.4 million year-to-
date. During the second quarter 1998, lower insurance and claims
costs were offset by higher benefit and administrative costs. Lower
insurance and claims costs, production maintenance and Company-wide
cost containment efforts contributed to the year-to-date decrease.
Income taxes increased $5.8 million and $14.6 million,
respectively, from the second quarter and year-to-date 1997 primarily
due to higher taxable income.
Part II. Other Information
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, 1998.
-9-
<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, 1998 /s/ James P. Torgerson
--------------- ---------------------------------
James P. Torgerson
Vice President, CFO and Treasurer
Date: August 14, 1998 /s/ Paul R. Anderson
--------------- ---------------------------------
Paul R. Anderson
Controller
(Principal Accounting Officer)
-10-
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