-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, iZ/R9fyMu+Shd9A+TdZR9Rd85/7Ey3jVh6xRdefB+VTHGpRcxRqdvwuO5a4l0udW VagufnB6kkCzAG41CCefJQ== 0000020290-95-000015.txt : 19950516 0000020290-95-000015.hdr.sgml : 19950516 ACCESSION NUMBER: 0000020290-95-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CINCINNATI GAS & ELECTRIC CO CENTRAL INDEX KEY: 0000020290 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 310240030 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01232 FILM NUMBER: 95538414 BUSINESS ADDRESS: STREET 1: 139 E FOURTH ST ROOM 362-ANNEX CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5133812000 10-Q 1 CG&E 10-Q FOR 03/31/95 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 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 1-1232 THE CINCINNATI GAS & ELECTRIC COMPANY (Exact name of registrant as specified in its charter) OHIO 31-0240030 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 139 East Fourth Street Cincinnati, Ohio 45202 (Address of principal executive offices) Registrant`s telephone number: (513) 381-2000 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 ----- ---- As of April 30, 1995, 89,663,086 shares of Common Stock, par value $8.50 per share, were outstanding, all of which were held by CINergy Corp. THE CINCINNATI GAS & ELECTRIC COMPANY TABLE OF CONTENTS Item Number PART I. FINANCIAL INFORMATION 1 Consolidated Financial Statements Consolidated Balance Sheets Consolidated Statements of Income (Loss) Consolidated Statements of Changes in Common Stock Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements 2 Management's Discussion and Analysis of Financial Condition and Results of Operations PART II. OTHER INFORMATION 4 Submission of Matters to a Vote of Security Holders 6 Exhibits and Reports on Form 8-K Signatures
THE CINCINNATI GAS & ELECTRIC COMPANY CONSOLIDATED BALANCE SHEETS ASSETS March 31 December 31 1995 1994 (unaudited) (dollars in thousands) Utility Plant - original cost In service Electric. . . . . . . . . . . . . . . . . $4 518 906 $4 502 840 Gas . . . . . . . . . . . . . . . . . . . 654 905 645 602 Common. . . . . . . . . . . . . . . . . . 185 812 185 718 5 359 623 5 334 160 Accumulated depreciation. . . . . . . . . . 1 641 508 1 613 505 3 718 115 3 720 655 Construction work in progress . . . . . . . 74 993 74 989 Total utility plant . . . . . . . . . . 3 793 108 3 795 644 Current Assets Cash and temporary cash investments . . . . 16 063 52 516 Restricted deposits . . . . . . . . . . . . 99 98 Accounts receivable less accumulated provision of $10,348,000 at March 31, 1995 and $8,999,000 at December 31, 1994 for doubtful accounts . . . . . . . . . . 252 592 269 020 Materials, supplies, and fuel - at average cost Fuel for use in electric production . . 43 183 42 167 Gas stored for current use. . . . . . . 12 166 31 284 Other materials and supplies. . . . . . 57 099 57 864 Property taxes applicable to subsequent year. . . . . . . . . . . . . . . . . . . 114 465 112 420 Prepayments and other . . . . . . . . . . . 36 151 31 327 531 818 596 696 Other Assets Regulatory assets Post-in-service carrying costs and deferred operating expenses . . . . . . 153 433 155 138 Phase-in deferred return and depreciation. . . . . . . . . . . . . . 103 076 100 943 Deferred demand-side management costs . . 12 141 10 002 Amounts due from customers - income taxes . . . . . . . . . . . . . . . . . 370 293 381 380 Deferred merger costs . . . . . . . . . . 16 721 12 013 Unamortized costs of reacquiring debt . . 34 841 33 426 Other . . . . . . . . . . . . . . . . . . 43 243 55 987 Other . . . . . . . . . . . . . . . . . . . 46 724 40 436 780 472 789 325 $5 105 398 $5 181 665 The accompanying notes are an integral part of these consolidated financial statements.
THE CINCINNATI GAS & ELECTRIC COMPANY CAPITALIZATION AND LIABILITIES March 31 December 31 1995 1994 (unaudited) (dollars in thousands) Common Stock Equity Common stock - $8.50 par value; authorized shares - 120,000,000; outstanding shares - 89,663,086 at March 31, 1995 and December 31, 1994. . . . . $ 762 136 $ 762 136 Paid-in capital . . . . . . . . . . . . . . . . 337 874 337 874 Retained earnings . . . . . . . . . . . . . . . 453 174 432 962 Total common stock equity . . . . . . . . . 1 553 184 1 532 972 Cumulative Preferred Stock Not subject to mandatory redemption . . . . . . 80 000 80 000 Subject to mandatory redemption . . . . . . . . 210 000 210 000 Long-term Debt. . . . . . . . . . . . . . . . . . 1 638 860 1 837 757 Total capitalization. . . . . . . . . . . . 3 482 044 3 660 729 Current Liabilities Long-term debt due within one year. . . . . . . 114 000 - Notes payable . . . . . . . . . . . . . . . . . 1 000 14 500 Accounts payable. . . . . . . . . . . . . . . . 90 273 120 817 Accrued taxes . . . . . . . . . . . . . . . . . 248 672 227 651 Accrued interest. . . . . . . . . . . . . . . . 38 243 31 902 Other . . . . . . . . . . . . . . . . . . . . . 38 035 32 658 530 223 427 528 Other Liabilities Deferred income taxes . . . . . . . . . . . . . 734 844 747 060 Unamortized investment tax credits . . . . . . 133 894 135 417 Accrued pension and other postretirement benefit costs . . . . . . . . . . . . . . . . 106 591 102 254 Other . . . . . . . . . . . . . . . . . . . . . 117 802 108 677 1 093 131 1 093 408 $5 105 398 $5 181 665
THE CINCINNATI GAS & ELECTRIC COMPANY CONSOLIDATED STATEMENTS OF INCOME (LOSS) (unaudited) Quarter Ended Twelve Months Ended March 31 March 31 1995 1994 1995 1994 (in thousands) Operating Revenues Electric . . . . . . . . . . . . . . . . . . . . . . . . $349 956 $333 390 $1 362 353 $1 315 002 Gas. . . . . . . . . . . . . . . . . . . . . . . . . . . 175 211 229 151 388 458 505 804 525 167 562 541 1 750 811 1 820 806 Operating Expenses Fuel used in electric production . . . . . . . . . . . . 84 073 81 881 327 662 335 552 Gas purchased. . . . . . . . . . . . . . . . . . . . . . 94 493 142 025 200 761 300 399 Purchased and exchanged power. . . . . . . . . . . . . . 10 505 7 314 24 123 21 369 Other operation. . . . . . . . . . . . . . . . . . . . . 68 922 68 635 336 317 266 486 Maintenance. . . . . . . . . . . . . . . . . . . . . . . 23 533 25 942 104 401 113 731 Depreciation . . . . . . . . . . . . . . . . . . . . . . 39 537 38 769 157 444 153 664 Post-in-service deferred operating expenses - net. . . . 823 823 3 290 (2 894) Phase-in deferred depreciation . . . . . . . . . . . . . - (1 313) (848) (6 662) Income taxes . . . . . . . . . . . . . . . . . . . . . . 43 346 42 444 105 030 117 197 Taxes other than income taxes. . . . . . . . . . . . . . 50 656 49 933 198 104 186 059 415 888 456 453 1 456 284 1 484 901 Operating Income . . . . . . . . . . . . . . . . . . . . . 109 279 106 088 294 527 335 905 Other Income and Expenses - Net Allowance for equity funds used during construction. . . 596 458 2 109 2 638 Post-in-service carrying costs . . . . . . . . . . . . . - - - 8 100 Phase-in deferred return . . . . . . . . . . . . . . . . 2 134 7 621 9 864 31 290 Write-off of a portion of Zimmer Station . . . . . . . . - - - (234 844) Income taxes Related to the write-off of a portion of Zimmer Station . . . . . . . . . . . . . . . . . . . - - - 12 085 Other. . . . . . . . . . . . . . . . . . . . . . . . . 1 207 1 856 5 970 9 914 Other - net. . . . . . . . . . . . . . . . . . . . . . . 965 15 (5 776) (9 013) 4 902 9 950 12 167 (179 830) Income Before Interest . . . . . . . . . . . . . . . . . . 114 181 116 038 306 694 156 075 Interest Interest on long-term debt . . . . . . . . . . . . . . . 37 111 39 623 147 874 157 594 Other interest . . . . . . . . . . . . . . . . . . . . . 826 881 2 776 2 576 Allowance for borrowed funds used during construction. . (980) (657) (3 300) (3 161) 36 957 39 847 147 350 157 009 Net Income (Loss). . . . . . . . . . . . . . . . . . . . . 77 224 76 191 159 344 (934) Preferred Dividend Requirement . . . . . . . . . . . . . . 5 362 6 290 21 449 25 160 Net Income (Loss) Applicable To Common Stock . . . . . . . $ 71 862 $ 69 901 $ 137 895 $ (26 094) The accompanying notes are an integral part of these consolidated financial statements.
THE CINCINNATI GAS & ELECTRIC COMPANY CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCK EQUITY (unaudited) Common Paid-in Retained Total Common Stock Capital Earnings Stock Equity (dollars in thousands) Quarter Ended March 31, 1995 Balance January 1, 1995. . . . . . . . . . $762 136 $337 874 $ 432 962 $1 532 972 Net income . . . . . . . . . . . . . . . . 77 224 77 224 Dividends on preferred stock . . . . . . . (5 362) (5 362) Dividends on common stock. . . . . . . . . (51 650) (51 650) Balance March 31, 1995 . . . . . . . . . . $762 136 $337 874 $ 453 174 $1 553 184 Quarter Ended March 31, 1994 Balance January 1, 1994. . . . . . . . . . $748 528 $314 218 $ 456 511 $1 519 257 Net income . . . . . . . . . . . . . . . . 76 191 76 191 Issuance of 436,286 shares of common stock . . . . . . . . . . . . . . 3 708 7 384 11 092 Common stock issuance expense. . . . . . . (9) (9) Dividends on preferred stock . . . . . . . (6 290) (6 290) Dividends on common stock. . . . . . . . . (37 899) (37 899) Balance March 31, 1994 . . . . . . . . . . $752 236 $321 593 $ 488 513 $1 562 342 Twelve Months Ended March 31, 1995 Balance April 1, 1994. . . . . . . . . . . $752 236 $321 593 $ 488 513 $1 562 342 Net income . . . . . . . . . . . . . . . . 159 344 159 344 Issuance of 1,164,717 shares of common stock . . . . . . . . . . . . . . 9 900 15 758 25 658 Common stock issuance expense. . . . . . . (30) (30) Dividends on preferred stock . . . . . . . (21 449) (21 449) Dividends on common stock. . . . . . . . . (172 721) (172 721) Other. . . . . . . . . . . . . . . . . . . 553 (513) 40 Balance March 31, 1995 . . . . . . . . . . $762 136 $337 874 $ 453 174 $1 553 184 Twelve Months Ended March 31, 1994 Balance April 1, 1993. . . . . . . . . . . $738 147 $292 043 $ 662 545 $1 692 735 Net income . . . . . . . . . . . . . . . . (934) (934) Issuance of 1,657,590 shares of common stock . . . . . . . . . . . . . . 14 089 29 566 43 655 Common stock issuance expense. . . . . . . (16) (16) Dividends on preferred stock . . . . . . . (25 160) (25 160) Dividends on common stock. . . . . . . . . (147 938) (147 938) Balance March 31, 1994 . . . . . . . . . . $752 236 $321 593 $ 488 513 $1 562 342 The accompanying notes are an integral part of these consolidated financial statements.
THE CINCINNATI GAS & ELECTRIC COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Quarter Ended Twelve Months Ended March 31 March 31 1995 1994 1995 1994 (in thousands) OPERATING ACTIVITIES Net income (loss) . . . . . . . . . . . . . . . . . $ 77 224 $ 76 191 $ 159 344 $ (934) Items providing (using) cash currently: Depreciation. . . . . . . . . . . . . . . . . . . 39 537 38 769 157 444 153 664 Deferred income taxes and investment tax credits - net . . . . . . . . . . . . . . . . . (2 056) 652 10 972 33 772 Allowance for equity funds used during construction. . . . . . . . . . . . . . . . . . (596) (458) (2 109) (2 638) Deferred gas and electric fuel costs - net. . . . 6 984 7 604 (10 891) (7 469) Regulatory assets Post-in-service and phase-in cost deferrals . . (1 311) (8 111) (7 422) (48 946) Deferred merger costs . . . . . . . . . . . . . (4 709) (4 370) 620 (11 722) Other . . . . . . . . . . . . . . . . . . . . . 9 205 2 686 (1 372) 5 779 Write-off of a portion of Zimmer Station. . . . . - - - 234 844 Changes in current assets and current liabilities Restricted deposits . . . . . . . . . . . . . (1) 25 (4) 136 Accounts receivable . . . . . . . . . . . . . 16 428 (8 613) 68 186 (28 654) Materials, supplies, and fuel . . . . . . . . 18 867 43 148 (3 079) 20 012 Accounts payable. . . . . . . . . . . . . . . (30 544) (31 242) (7 395) (6 242) Accrued taxes and interest. . . . . . . . . . 27 362 24 088 11 485 8 983 Other items - net . . . . . . . . . . . . . . . . 2 997 1 793 88 843 20 462 Net cash provided by (used in) operating activities. . . . . . . . . . . . 159 387 142 162 464 622 371 047 FINANCING ACTIVITIES Issuance of common stock. . . . . . . . . . . . . . - 11 083 25 628 43 639 Issuance of long-term debt. . . . . . . . . . . . . - 311 957 - 608 957 Retirement of preferred stock . . . . . . . . . . . - - (40 400) - Redemption of long-term debt. . . . . . . . . . . . (87 462) (313 247) (87 737) (607 689) Change in short-term debt . . . . . . . . . . . . . (13 500) (17 500) (12 500) 9 425 Dividends on preferred stock. . . . . . . . . . . . (5 362) (6 290) (21 449) (25 160) Dividends on common stock . . . . . . . . . . . . . (51 650) (37 899) (172 721) (147 938) Net cash provided by (used in) financing activities. . . . . . . . . . . . (157 974) (51 896) (309 179) (118 766) INVESTING ACTIVITIES Construction expenditures (less allowance for equity funds used during construction). . . . . . (35 727) (34 956) (190 725) (197 513) Deferred demand-side management costs . . . . . . . (2 139) (1 423) (7 112) (4 380) Net cash provided by (used in) investing activities. . . . . . . . . . . . (37 866) (36 379) (197 837) (201 893) Net increase (decrease) in cash and temporary cash investments. . . . . . . . . . . . . (36 453) 53 887 (42 394) 50 388 Cash and temporary cash investments at beginning of period . . . . . . . . . . . . . . . . 52 516 4 570 58 457 8 069 Cash and temporary cash investments at end of period . . . . . . . . . . . . . . . . . . . $ 16 063 $ 58 457 $ 16 063 $ 58 457 The accompanying notes are an integral part of these consolidated financial statements.
THE CINCINNATI GAS & ELECTRIC COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. These Consolidated Financial Statements reflect all adjustments (which include only normal, recurring adjustments) necessary in the opinion of The Cincinnati Gas & Electric Company (CG&E), a subsidiary of CINergy Corp., for a fair presentation of the interim results. These statements should be read in conjunction with CG&E`s 1994 Annual Report on Form 10-K (1994 Form 10-K) (Commission File Number 1-1232). Certain amounts in the 1994 Consolidated Financial Statements have been reclassified to conform to the 1995 presentation. 2. As previously discussed in the 1994 Form 10-K, CG&E redeemed $59 million principal amount of its 9.70% first mortgage bonds (due June 15, 2019) on April 30, 1995, and $55 million principal amount of its 10 1/8% first mortgage bonds (due May 1, 2020) on May 1, 1995. Additionally, $41 million principal amount of the 9.70% first mortgage bonds and $45 million principal amount of the 10 1/8% first mortgage bonds were retired on March 31, 1995. The Union Light, Heat and Power Company (ULH&P), a subsidiary of CG&E, announced its intention to redeem $5 million principal amount of its 10.25% first mortgage bonds (due June 1, 2020) at par with cash deposited in the Maintenance and Replacement Fund, and to redeem the remaining amount of such bonds at the redemption price of 107.34% on June 1, 1995. 3. CG&E and ULH&P filed registration statements with the Securities and Exchange Commission (SEC) under the Securities Act of 1933, which became effective on May 3, 1995, with respect to the issuance of up to $500 million and $55 million, respectively, of unsecured debt. Approval has been received from the Public Utilities Commission of Ohio and the SEC under the Public Utility Holding Company Act of 1935 (PUHCA), with respect to the unsecured debt to be issued by CG&E. Applications are pending before the Kentucky Public Service Commission and the SEC under PUHCA with respect to the unsecured debt to be issued by ULH&P. THE CINCINNATI GAS & ELECTRIC COMPANY MANAGEMENT`S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION Regulatory Matters On March 29, 1995, the Federal Energy Regulatory Commission (FERC) issued a Notice of Proposed Rulemaking (MEGA-NOPR) on Open Access, which is another step in the transition towards potentially full-scale competition in the electric utility industry. The MEGA-NOPR is essentially the electric industry`s equivalent of the FERC`s Order 636 applicable to the natural gas industry. The MEGA-NOPR as proposed would, among other things, provide for mandatory filing of open access/comparability transmission tariffs, provide for functional unbundling of all services, require utilities to use the tariffs for their own bulk power transactions, establish an electronic bulletin board, and establish a contract-based approach to stranded costs. A final order could be issued by the end of 1995. CINergy Corp., the parent company of The Cincinnati Gas & Electric Company (CG&E or Company), is currently evaluating its position with respect to the provisions of the MEGA-NOPR and the potential effects upon the Company if ultimately adopted. CAPITAL REQUIREMENTS As previously discussed in the 1994 Annual Report on Form 10-K, CG&E redeemed $59 million principal amount of its 9.70% first mortgage bonds (due June 15, 2019) on April 30, 1995, and $55 million principal amount of its 10 1/8% first mortgage bonds (due May 1, 2020) on May 1, 1995. Additionally, $41 million principal amount of the 9.70% first mortgage bonds and $45 million principal amount of the 10 1/8% first mortgage bonds were retired on March 31, 1995. The Union Light, Heat and Power Company (ULH&P), a subsidiary of CG&E, announced its intention to redeem $5 million principal amount of its 10.25% first mortgage bonds (due June 1, 2020) at par with cash deposited in the Maintenance and Replacement Fund, and to redeem the remaining amount of such bonds at the redemption price of 107.34% on June 1, 1995. CAPITAL RESOURCES CG&E and ULH&P filed registration statements with the Securities and Exchange Commission (SEC) under the Securities Act of 1933, which became effective on May 3, 1995, with respect to the issuance of up to $500 million and $55 million, respectively, of unsecured debt. Approval has been received from the Public Utilities Commission of Ohio (PUCO) and the SEC under the Public Utility Holding Company Act of 1935 (PUHCA), with respect to the unsecured debt to be issued by CG&E. Applications are pending before the Kentucky Public Service Commission and the SEC under PUHCA with respect to the unsecured debt to be issued by ULH&P. RESULTS OF OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1995 Kilowatt-hour Sales Kilowatt-hour (kwh) sales for the quarter ended March 31, 1995, increased 6.6% over the same period of 1994, due in large part to non-firm power sales for resale reflecting third party short-term power sales to other utilities. Also contributing to the total kwh sales levels were increased retail sales to commercial and industrial customers. Higher commercial sales resulted from an increase in the average number of commercial customers. Increased industrial sales reflect growth in the primary metals and chemicals sectors. A decrease in domestic sales volumes resulted from the milder weather experienced during the first quarter of 1995 and led to a decrease in total retail sales. Mcf Sales and Transportation Mcf gas sales and transportation volumes for the first quarter of 1995 decreased 4.3% as compared to the first quarter of 1994. Warmer weather during the winter heating season led to decreases in gas sales to domestic and commercial customers. These decreases were partially offset by increases in the average number of both domestic and commercial customers. Industrial sales decreased as customers continued to purchase gas directly from suppliers, using transportation services provided by the Company. The increase in these transportation volumes, which was over twice the decrease in industrial sales, was primarily as a result of growth in the primary metals, paper products, and chemicals sectors. Revenues Electric Operating Revenues Electric operating revenues increased $17 million (5.0%) for the quarter ended March 31, 1995, over the comparable period of 1994. This increase primarily reflects the higher kwh sales associated with non-firm power sales for resale to other utilities. Also contributing to the increase was the implementation in May 1994 of the final increase of a three-year retail rate phase-in plan that was ordered by the PUCO in May 1992 (May 1992 Order). An analysis of electric operating revenues is shown below: Quarter Ended March 31 (in millions) Operating revenues - March 31, 1994 $333 Increase (Decrease) due to change in: Price per kwh Retail 7 Sales for Resale Non-firm power transactions 3 Total change in price per kwh 10 Kwh sales Retail (3) Sales for Resale Non-firm power transactions 10 Total change in kwh sales 7 Operating revenues - March 31, 1995 $350 Gas Operating Revenues Gas operating revenues declined $54 million (23.5%) in the first quarter of 1995 when compared to the same period last year. This decrease was primarily a result of the previously mentioned changes in gas sales volumes and the operation of fuel adjustment clauses reflecting a decline in the average cost of gas purchased for the period. In addition, an increase in the relative volume of gas transported to gas sold, as previously discussed, contributed to the decrease. Providing transportation services does not necessitate the recovery of gas purchased costs by the Company. Consequently, the revenue per Mcf transported is below the revenue per Mcf sold. Operating Expenses Fuel Used in Electric Production Electric fuel costs increased $2 million (2.7%) for the quarter as compared to last year. An analysis of these fuel costs is shown below: Quarter Ended March 31 (in millions) Fuel expense - March 31, 1994 $82 Increase (Decrease) due to change in: Price of fuel (3) Kwh generation 5 Fuel expense - March 31, 1995 $84 Gas Purchased Gas purchased for the quarter decreased $48 million (33.5%) when compared to the same period last year mainly reflecting decreases in the average cost per Mcf of gas purchased of 22.9% and in volumes purchased of 13.7%. Purchased and Exchanged Power Purchased and exchanged power for the quarter ended March 31, 1995, increased $3 million (43.6%) over the comparable period of 1994. This increase primarily reflects power received from other utilities in connection with increased non- firm power sales for resale. Maintenance The $2 million (9.3%) decrease in maintenance expense for the first quarter of 1995 as compared to the same period of 1994 is due to reduced maintenance on electric generating units, electric distribution facilities, and gas production facilities. Other Income and Expenses - Net Phase-in Deferred Return Phase-in deferred return decreased $5 million (72.0%) for the quarter ended 1995 from the comparable period of 1994 as a result of implementing the final increase of a three-year rate phase-in plan, as previously mentioned. Interest Interest charges decreased $3 million (7.3%) for the three months ended March 31, 1995, from the same period of 1994 primarily due to the refinancing of $305 million of long-term debt during the first quarter of 1994. Preferred Dividend Requirement The decrease in CG&E`s preferred dividend requirement of $.9 million (14.8%) for the quarter ended March 31, 1995, from the same period of 1994 was due to the early redemption on April 1, 1994, of 400,000 shares of $100 par value cumulative preferred stock (9.28% Series). RESULTS OF OPERATIONS FOR THE TWELVE MONTHS ENDED MARCH 31, 1995 Kilowatt-hour Sales Kwh sales for the twelve months ended March 31, 1995, remained virtually unchanged, increasing .1% over the same period of 1994. An increase in non- firm power sales for resale associated with power sales to other utilities more than offset a small decline in retail sales attributable to milder weather during the first quarter of 1995 and the second half of 1994. An increase in the average number of domestic customers partially offset a decline in domestic sales, whereas commercial sales increased due to an increase in the average number of customers. Increased industrial sales resulted from growth in the primary metals, chemicals, and non-electrical machinery sectors. Mcf Sales and Transportation Mcf gas sales and transportation volumes for the twelve months ended March 31, 1995, decreased 6.2% when compared to the twelve months ended March 31, 1994. Warmer weather during the winter heating season led to decreases in gas sales to domestic and commercial customers. The decreased sales to domestic and commercial customers were partially offset by an increase in the average number of both domestic and commercial customers. Industrial sales decreased as industrial customers continued the previously mentioned shift in demand toward transportation services. This increase in Mcf transported was nearly three times the decrease in industrial sales, primarily as a result of growth in the primary metals, food products, and chemicals sectors. Revenues Electric Operating Revenues Electric operating revenues increased $47 million (3.6%) for the twelve months ended March 31, 1995, over the same period last year. This increase primarily reflects three electric retail rate increases granted by the PUCO. Increases in May 1993 and May 1994 were related to the phase-in plan included in the May 1992 Order and the third increase was effective in August 1993 pursuant to a PUCO order (August 1993 Order). The previously discussed increase in non-firm power sales for resale also contributed to the increase. An analysis of electric operating revenues is shown below: Twelve Months Ended March 31 (in millions) Operating revenues - March 31, 1994 $1 315 Increase (Decrease) due to change in: Price per kwh Retail 44 Sales for resale Non-firm power transactions 5 Total change in price per kwh 49 Kwh sales Retail (4) Sales for resale Non-firm power transactions 2 Total change in kwh sales (2) Operating revenues - March 31, 1995 $1 362 Gas Operating Revenues Gas operating revenues declined $117 million (23.2%) for the twelve months ended March 31, 1995, when compared to the same period last year. This decrease was primarily a result of the previously mentioned changes in gas sales volumes and the operation of fuel adjustment clauses reflecting a decline in the average cost of gas purchased for the period. In addition, an increase in relative volume of gas transported to gas sold, as previously discussed, contributed to the decrease. Providing transportation services does not necessitate the recovery of gas purchased costs by the Company. Consequently, the revenue per Mcf transported is below the revenue per Mcf sold. Operating Expenses Fuel Used in Electric Production Electric fuel costs, the Company's largest annual operating expense, decreased $8 million (2.4%) for the twelve month period as compared to last year. An analysis of these fuel costs is shown below: Twelve Months Ended March 31 (in millions) Fuel expense - March 31, 1994 $336 Increase (Decrease) due to change in: Price of fuel (9) Kwh generation 1 Fuel expense - March 31, 1995 $328 Gas Purchased Gas purchased for the twelve month period ended March 31, 1995, decreased $100 million (33.2%) from the same period last year mainly reflecting decreases in the average cost per Mcf of gas purchased of 20.5% and in volumes purchased of 15.9%. Purchased and Exchanged Power Purchased and exchanged power for the twelve month period ended March 31, 1995, increased $3 million (12.9%) over the comparable period of 1994. This increase primarily reflects power received from other utilities in connection with increased non-firm power sales for resale. Other Operation Increased other operation expenses of $70 million (26.2%) for the twelve months ended March 31, 1995, over the same period of 1994 were due to a number of factors. The primary factor contributing to the increase was the recognition of $52 million of nonrecurring charges for merger-related costs and other expenditures which the Company does not expect to recover from customers due to various rate settlements. Additionally, increased electric production, transmission, and distribution expenses contributed to the increase. Maintenance The $9 million (8.2%) decrease in maintenance expenses for the twelve months ended March 31, 1995, as compared to the same period of 1994 was due to decreased maintenance on electric generating units, electric distribution facilities, and gas production facilities. Depreciation Depreciation expense increased $4 million (2.5%) for the twelve month period ended March 31, 1995, over the comparable period ended March 31, 1994. This increase primarily reflects additions to wholly-owned electric utility plant and gas utility plant. Also, a full year's amortization of deferred post-in- service carrying costs on the Wm. H. Zimmer (Zimmer) and Woodsdale (Woodsdale) Generating Stations added to the increase. CG&E began amortizing these costs over the estimated useful life of the applicable generating station in accordance with the August 1993 Order. Post-in-service Deferred Operating Expenses - Net The $6 million increase in post-in-service deferred operating expenses for the twelve months ended March 31, 1995, from the comparable period of 1994, resulted from ceasing the deferral and commencing the amortization of deferred operating expenses associated with the first five units of Woodsdale in August 1993. CG&E had deferred depreciation, operation and maintenance expenses (exclusive of fuel costs), and property taxes related to these five units from the time the units began commercial operation until the effective date of new rates authorized by the August 1993 Order. The deferred expenses are being amortized over a period of 10 years. Phase-in Deferred Depreciation Phase-in deferred depreciation resulted from the three-year rate phase-in plan for Zimmer included in the May 1992 Order. The change of $6 million for phase- in deferred depreciation for the twelve months ended March 31, 1995, as compared to the same period of 1994 reflects discontinuance of the deferral of depreciation when the final increase of the phase-in plan became effective in May 1994. Taxes Other than Income Taxes Taxes other than income taxes for the twelve month period ended March 31, 1995, increased $12 million (6.5%) over the same period of 1994 primarily due to increased excise taxes. Also contributing to this increase were increased property taxes resulting from a greater investment in taxable property and higher property tax rates. Other Income and Expenses - Net Post-in-service Carrying Costs Post-in-service carrying costs decreased $8 million for the twelve month period ended March 31, 1995. Accrual of carrying costs on the first five units of Woodsdale ceased after the August 1993 Order which reflected Woodsdale in retail electric rates. Phase-in Deferred Return Phase-in deferred return decreased $21 million (68.5%) for the twelve months ended March 31, 1995, from the comparable period of 1994 as a result of implementing the final increase of the three-year rate phase-in plan in May 1994. Write-off of a Portion of Zimmer Station In November 1993, CG&E wrote off Zimmer costs disallowed from rates in the May 1992 Order. Interest Interest charges decreased $10 million (6.2%) for the twelve months ended March 31, 1995, from the same period of 1994 primarily due to the refinancing of $305 million of long-term debt during the first quarter of 1994. Preferred Dividend Requirement The decrease in CG&E's preferred dividend requirement of $4 million (14.7%) for the twelve months ended March 31, 1995, from the same period of 1994 was due to the early redemption on April 1, 1994, of 400,000 shares of $100 par value cumulative preferred stock (9.28% Series). PART II - OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) The annual meeting of shareholders of The Cincinnati Gas & Electric Company was held effective April 20, 1995. (b) Proxies were not solicited for the annual meeting, at which the Board of Directors was re-elected in its entirety. (c) The following were unanimously re-elected at the annual meeting: Jackson H. Randolph James E. Rogers George H. Stinson ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) The following exhibit is filed herewith: Exhibit Designation Nature of Exhibit 27 Financial Data Schedule (included in electronic submission only). (b) No reports on Form 8-K were filed during the quarter ended March 31, 1995. SIGNATURES 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, although The Cincinnati Gas & Electric Company (CG&E) believes that the disclosures are adequate to make the information presented not misleading. In the opinion of CG&E, these statements reflect all adjustments (which include only normal, recurring adjustments) necessary to reflect the results of operations for the respective periods. The unaudited statements are subject to such adjustments as the annual audit by independent public accountants may disclose to be necessary. Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed by an officer and the principal accounting officer on its behalf by the undersigned thereunto duly authorized. THE CINCINNATI GAS & ELECTRIC COMPANY ------------------------------------- Registrant J. WAYNE LEONARD ----------------------------------------- Date: May 11, 1995 J. Wayne Leonard Group Vice President and Chief Financial Officer CHARLES J. WINGER ----------------------------------------- Date: May 11, 1995 Charles J. Winger Comptroller, and Principal Accounting Officer EX-27 2 FDS FOR CG&E 03/31/95 10-Q
UT THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS, CONSOLIDATED STATEMENTS OF INCOME AND CONSOLIDATED STATEMENTS OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 DEC-31-1995 JAN-01-1995 MAR-31-1995 3-MOS PER-BOOK 3,793,108 0 531,818 733,748 46,724 5,105,398 762,136 337,874 453,174 1,553,184 210,000 80,000 1,638,860 1,000 0 0 114,000 0 0 0 1,508,354 5,105,398 525,167 43,346 372,542 415,888 109,279 4,902 114,181 36,957 77,224 5,362 71,862 51,650 37,111 159,387 0.00 0.00 -----END PRIVACY-ENHANCED MESSAGE-----