Page 1 of 8
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended June 30, 1995
Commission file number 0-14688
ALLEGHENY GENERATING COMPANY
(Exact name of registrant as specified in its charter)
Virginia 13-3079675
(State of Incorporation) (I.R.S. Employer Identification No.)
12 East 49th Street, New York, New York 10017
Telephone number 212-752-2121
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 and (2) has been subject to such filing requirements
for the past 90 days.
At August 11, 1995, 1,000 shares of the Common Stock ($l.00 par
value) of the registrant were outstanding.
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ALLEGHENY GENERATING COMPANY
Form 10-Q for Quarter Ended June 30, 1995
Index
Page
No.
PART I - FINANCIAL INFORMATION:
Statement of income -
Three and six months ended June 30, 1995 and 1994 3
Balance sheet -
June 30, 1995 and December 31, 1994 4
Statement of cash flows -
Six months ended June 30, 1995 and 1994 5
Notes to financial statements 6
Management's discussion and analysis of financial
condition and results of operations 7
PART II - OTHER INFORMATION 8
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ALLEGHENY GENERATING COMPANY
Statement of Income
Three Months Ended Six Months Ended
June 30 June 30
1995 1994 1995 1994
(Thousands of Dollars)
ELECTRIC OPERATING REVENUES $22 061 $21 869 $44 157 $44 300
OPERATING EXPENSES:
Operation and maintenance expense 1 571 1 444 3 367 3 277
Depreciation 4 224 4 236 8 448 8 472
Taxes other than income taxes 1 248 1 528 2 547 2 868
Federal income taxes 3 502 3 408 6 725 6 921
Total Operating Expenses 10 545 10 616 21 087 21 538
Operating Income 11 516 11 253 23 070 22 762
OTHER INCOME AND DEDUCTIONS 9 5 9 7
Income Before Interest Charges 11 525 11 258 23 079 22 769
INTEREST CHARGES:
Interest on long-term debt 4 198 4 244 8 397 8 438
Other interest 234 243 1 020 475
Total Interest Charges 4 432 4 487 9 417 8 913
NET INCOME $ 7 093 $ 6 771 $13 662 $13 856
See accompanying notes to financial statements.
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ALLEGHENY GENERATING COMPANY
Balance Sheet
June 30, December 31,
1995 1994
(Thousands of Dollars)
ASSETS
Property, Plant, and Equipment
At original cost, including $1,575,000
and $21,000 under construction $ 838 891 $ 824 714
Accumulated depreciation (152 397) (143 965)
686 494 680 749
Current Assets:
Cash 100 45
Accounts receivable 5 986 1 516
Materials and supplies - at average cost 1 897 2 193
Other 200 2 237
8 183 5 991
Deferred Charges:
Regulatory assets 4 450 4 449
Unamortized loss on reacquired debt 10 276 10 653
Other 363 12 394
15 089 27 496
Total Assets $ 709 766 $ 714 236
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock - $1.00 par value per share,
authorized 5,000 shares, outstanding
1,000 shares $ 1 $ 1
Other paid-in capital 209 999 209 999
Retained earnings 8 491 12 729
218 491 222 729
Long-term debt:
Debentures, net 148 501 148 454
Commercial paper 9 895 41 736
Medium-term notes 74 600 76 975
Notes payable to affiliates 27 900 -
479 387 489 894
Current liabilities:
Long-term debt due within one year 3 375 1 000
Accounts payable 14 48
Interest accrued 4 890 4 900
Other 761 536
9 040 6 484
Deferred Credits and Other Liabilities:
Unamortized investment credit 51 636 52 297
Deferred income taxes 141 439 137 297
Regulatory liabilities 28 264 28 264
221 339 217 858
Total Capitalization and Liabilities $ 709 766 $ 714 236
See accompanying notes to financial statements.
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ALLEGHENY GENERATING COMPANY
Statement of Cash Flows
Six Months Ended
June 30
1995 1994
(Thousands of Dollars)
CASH FLOWS FROM OPERATIONS:
Net income $ 13 662 $ 13 856
Depreciation 8 448 8 472
Deferred investment credit and income taxes, net 3 481 3 389
Changes in certain current assets and liabilities:
Accounts receivable, net (4 470) 1 714
Materials and supplies 296 (2)
Accounts payable (34) (9)
Taxes accrued (227) 327
Interest accrued (10) 5
Other, net 2 958 (256)
24 104 27 496
CASH FLOWS FROM INVESTING:
Construction expenditures (2 208) (1 220)
CASH FLOWS FROM FINANCING:
Retirement of long-term debt (3 941) (8 430)
Cash dividends on common stock (17 900) (17 750)
(21 841) (26 180)
NET CHANGE IN CASH 55 96
Cash at January 1 45 15
Cash at June 30 $ 100 $ 111
Supplemental cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) $ 8 958 $ 8 448
Income taxes 1 658 3 245
See accompanying notes to financial statements.
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ALLEGHENY GENERATING COMPANY
Notes to Financial Statements
1. The Company's Notes to Financial Statements in the Allegheny Power
System companies' combined Annual Report on Form 10-K for the year
ended December 31, 1994, should be read with the accompanying
financial statements and the following notes. With the exception of
the December 31, 1994 balance sheet in the aforementioned annual
report on Form 10-K, the accompanying financial statements appearing
on pages 3 through 5 and these notes to financial statements are
unaudited. In the opinion of the Company, such financial statements
together with these notes thereto contain all adjustments (which
consist only of normal recurring adjustments) necessary to present
fairly the Company's financial position as of June 30, 1995, the
results of operations for the three and six months ended June 30, 1995
and 1994, and cash flows for the six months ended June 30, 1995 and
1994.
2. The Statement of Income reflects the results of past operations and is
not intended as any representation as to future results. For purposes
of the Balance Sheet and Statement of Cash Flows, temporary cash
investments with original maturities of three months or less,
generally in the form of repurchase agreements, are considered to be
the equivalent of cash.
3. Common stock dividends per share declared and paid during the periods
for which income statements are included are as follows:
1995 1994
1st 2nd 1st 2nd
Quarter Quarter Quarter Quarter
Number of Shares 1 000 1 000 1 000 1 000
Amount per Share $8 950 $8 950 $8 875 $8 875
Earnings per share are not reported inasmuch as the common stock of
the Company is 100% owned by its parents, Monongahela Power Company
(27%), The Potomac Edison Company (28%), and West Penn Power Company
(45%).
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ALLEGHENY GENERATING COMPANY
Management's Discussion and Analysis of Financial Condition
and Results of Operations
COMPARISON OF SECOND QUARTER AND FIRST SIX MONTHS OF 1995
WITH SECOND QUARTER AND FIRST SIX MONTHS OF 1994
The changes in revenues and net income are primarily due to changes in
the Company's net plant (the major component of rate base). As a result
of the May 22 settlement agreement which is described below, net plant
increased during the second quarter with resultant increases in revenues
and net income.
The decrease in taxes other than income for the second quarter and
first six months of 1995 was primarily due to a decrease in property
taxes.
The increase in other interest for the six months ended June 1995 was
due to interest paid on the revenue refund pursuant to the settlement
agreement described below.
LIQUIDITY AND CAPITAL RESOURCES
The Company's discussion on Liquidity and Capital Resources and
Results of Operations in the Allegheny Power System companies' combined
Annual Report on Form 10-K for the year ended December 31, 1994, should be
read with the following information.
On March 23, 1995, the Federal Energy Regulatory Commission (FERC)
approved the settlement agreement filed for the cases to determine the
return on equity (ROE) earned by the Company. The Company's ROE was
reduced to 11.13% for the period from March 1, 1992 through December 31,
1994, and increased to 11.20% beginning in 1995. In April 1995, revenue
refunds for the period March 1992 through December 1994, including
interest, were made to customers, for which adequate reserves had
previously been provided.
On May 22, 1995, the FERC approved a settlement agreement resulting in
the transfer on the balance sheet of a prior tax payment of approximately
$12 million from Deferred Charges to Property, Plant, and Equipment, and
the inclusion of that amount in rate base effective June 1, 1995. The
additional rate base will produce about $1.4 million in additional annual
revenues.
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ALLEGHENY GENERATING COMPANY
Part II--Other Information to Form 10-Q
for Quarter Ended June 30, 1995
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule.
(b) No reports on Form 8-K were filed on behalf of the Company
for the quarter ended June 30, l995.
Signature
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.
ALLEGHENY GENERATING COMPANY
THOMAS J. KLOC
____________________________
Thomas J. Kloc
Controller
(Chief Accounting Officer)
August 11, 1995
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<F1>All common stock is owned by Parent. No EPS required.
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