-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PYnMVS3yqBaguyUZbFXCjQQewTaY7ZfosJBG1mOXGwu/4vn9OgqLdm0O6fCNHFYD 561ZsCepRIB/2ehwvwHHyg== 0000027430-00-000001.txt : 20000516 0000027430-00-000001.hdr.sgml : 20000516 ACCESSION NUMBER: 0000027430-00-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAYTON POWER & LIGHT CO CENTRAL INDEX KEY: 0000027430 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 310258470 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-02385 FILM NUMBER: 633290 BUSINESS ADDRESS: STREET 1: PO BOX 8825 STREET 2: PO BOX 1247 CITY: DAYTON STATE: OH ZIP: 45401 BUSINESS PHONE: 5132246000 MAIL ADDRESS: STREET 1: P O BOX 8825 CITY: DAYTON STATE: OH ZIP: 45401 10-Q 1 DP&L COMPANY 10-Q 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 March 31, 2000 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 oganization) 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 March 31, 2000) 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 Consolidated Statement of Shareholder's Equity 5 Notes to Consolidated Financial Statements 6 Operating Statistics 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 Item 3. Quantitative and Qualitative Disclosures about Market Risk 12 Part II. Other Information 13 Signatures 14 i CONSOLIDATED STATEMENT OF RESULTS OF OPERATIONS The Dayton Power and Light Company Three Months Ended March 31 ------------------ 2000 1999 ---- ---- --millions-- Revenues - -------- Utility service revenues-- Electric $259.5 $260.4 Gas 101.5 102.5 ------ ------ Total Utility Service Revenues 361.0 362.9 Expenses - -------- Fuel and purchased power 57.8 61.2 Gas purchased for resale 67.6 65.9 Operation and maintenance 46.5 38.2 Depreciation and amortization 33.5 32.6 Amortization of regulatory assets, net 6.9 6.5 General taxes 34.5 34.2 ------ ------ Total Expenses 246.8 238.6 ------ ------ Operating Income 114.2 124.3 Other Income (Deductions) - ------------------------- Investment income 1.6 14.3 Other income (deductions) (9.2) 2.1 Interest expense (18.5) (24.4) ------ ------ Income before income taxes 88.1 116.3 Income taxes 32.0 44.5 ------ ------ Net Income 56.1 71.8 Preferred dividends 0.2 0.2 ------ ------ Earnings on Common Stock $ 55.9 $ 71.6 ====== ====== See Notes to Consolidated Financial Statements. These interim statements are unaudited. -1- CONSOLIDATED STATEMENT OF CASH FLOWS The Dayton Power and Light Company Three Months Ended March 31 ------------------ 2000 1999 ---- ---- --millions-- Operating Activities - -------------------- Cash received from utility customers $362.1 $341.7 Other operating cash receipts 5.2 4.4 Cash paid for: Fuel and purchased power (51.2) (53.8) Purchased gas (41.8) (54.7) Operation and maintenance labor (20.5) (23.7) Nonlabor operating expenditures (47.3) (20.9) Interest (28.2) (27.9) Income taxes (15.9) (8.1) Property, excise and payroll taxes (56.6) (55.5) ------ ------ Net cash provided by operating activities 105.8 101.5 Investing Activities - -------------------- Capital expenditures (26.0) (20.9) Purchases of available-for-sale financial assets - (78.8) Sales of available-for-sale financial assets - 45.5 ------ ------ Net cash used for investing activities (26.0) (54.2) Financing Activities - -------------------- Dividends paid on common stock - (55.8) Dividends paid on preferred stock (0.2) (0.2) Issuance (Retirement) of short-term debt (123.0) 15.5 ------ ------ Net cash used for financing activities (123.2) (40.5) Cash and temporary cash investments-- - ----------------------------------- Net change (43.4) 6.8 Balance at beginning of period 95.5 1.9 ------ ------ Balance at end of period $ 52.1 $ 8.7 ====== ====== See Notes to Consolidated Financial Statements. These interim statements are unaudited. -2- CONSOLIDATED BALANCE SHEET The Dayton Power and Light Company At At March 31, December 31, 2000 1999 --------- ------------ --millions-- ASSETS Property - -------- Electric property $3,401.3 $3,384.1 Gas property 332.7 330.6 Other property 61.0 58.9 -------- -------- Total property 3,795.0 3,773.6 Less-- Accumulated depreciation and amortization (1,635.8) (1,602.6) -------- -------- Net property 2,159.2 2,171.0 -------- -------- Current Assets - -------------- Cash and temporary cash investments 52.1 95.5 Accounts receivable, less provision for uncollectible accounts of $2.3 and $4.3, respectively 195.9 206.6 Inventories, at average cost 70.0 92.9 Taxes applicable to subsequent years 61.8 94.6 Prepaid public utility excise tax - electric 29.4 14.7 Other 33.3 52.2 -------- -------- Total current assets 442.5 556.5 -------- -------- Other Assets - ------------ Income taxes recoverable through future revenues 165.5 168.5 Other regulatory assets 45.4 53.3 Other 215.2 204.2 -------- -------- Total other assets 426.1 426.0 -------- -------- Total Assets $3,027.8 $3,153.5 ======== ======== See Notes to Consolidated Financial Statements. These interim statements are unaudited. -3- CONSOLIDATED BALANCE SHEET (continued) The Dayton Power and Light Company At At March 31, December 31, 2000 1999 --------- ------------ --millions-- CAPITALIZATION AND LIABILITIES Capitalization - -------------- Common shareholder's equity-- Common stock $ 0.4 $ 0.4 Other paid-in capital 769.8 769.7 Accumulated other comprehensive income 21.7 13.6 Earnings reinvested in the business 569.8 513.9 -------- -------- Total common shareholder's equity 1,361.7 1,297.6 Preferred stock 22.9 22.9 Long-term debt 661.2 661.2 -------- -------- Total capitalization 2,045.8 1,981.7 -------- -------- Current Liabilities - -------------------- Accounts payable 97.3 126.2 Accrued taxes 135.2 164.2 Accrued interest 9.0 19.7 Short-term debt - 123.1 Current deferred income tax 25.4 9.9 Other 35.8 51.0 -------- -------- Total current liabilities 302.7 494.1 -------- -------- Deferred Credits and Other - -------------------------- Deferred taxes 449.1 453.9 Unamortized investment tax credit 65.5 66.3 Deferred compensation 103.2 97.2 Other 61.5 60.3 -------- -------- Total deferred credits and other 679.3 677.7 -------- -------- Total Capitalization and Liabilities $3,027.8 $3,153.5 ======== ======== See Notes to Consolidated Financial Statements. These interim statements are unaudited. -4-
CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY The Dayton Power and Light Company Three Months Ended March 31, 2000 and 1999 Common Stock Accum. Earnings ------------------- Other Other Reivested Outstanding Paid-In Comp. in the $ in millions Shares Amount Capital Income Business Total - --------------------------------------------------------------------------------- 2000: Beginning balance 41,172,173 $0.4 $769.7 $13.6 $513.9 $1,297.6 Net income 56.1 Unrealized gains, net of reclassification 8.2 adjustments, after tax Total comprehensive income 64.3 Preferred stock dividends (0.2) (0.2) Other 0.1 (0.1) - ------------------------------------------------------ Ending balance 41,172,173 $0.4 769.8 $21.7 $569.8 $1,361.7 ====================================================== 1999: Beginning balance 41,172,173 $0.4 $788.2 $33.6 $450.8 $1,273.0 Net income 71.8 Unrealized gains, net of reclassification (8.7) adjustments, after tax Total comprehensive income 63.1 Common stock dividends (81.9) (81.9) Preferred stock dividends (0.2) (0.2) ------------------------------------------------------ Ending balance 41,172,173 $0.4 $788.2 $24.9 $440.5 $1,254.0 ======================================================
See Notes to Consolidated Financial Statements. These interim statements are unaudited. -5- Notes to Consolidated Financial Statements 1. The Dayton Power and Light Company ("the Company") has prepared the consolidated financial statements in this report 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 1999 Annual Report on Form 10-K. 2. Reclassifications have been made in certain prior years' amounts to conform to the current reporting presentation of the Company. In the opinion of management, the information included in this Form 10-Q reflects all adjustments which are necessary for a fair statement of the results of operations for the periods presented. Any adjustments are of a normal recurring nature. 3. Business Segment Reporting The Company provides energy services to its customers within a 6,000 square mile territory. The Company sells and distributes electricity and natural gas to residential, commercial, industrial and governmental customers. As a result of legislation that will give electric utility customers a choice of energy providers starting January 1, 2001, the Company has begun aligning its business units. For purposes of the segment disclosure required by the FASB Statement No. 131, "Disclosure About Segments of an Enterprise and Related Information," the Company's results are classified in two reportable segments, electric and natural gas. SEGMENT INFORMATION For the three months ended March 31, $ in millions 2000 1999 - ------------------------------------------------------------------- $ $ ELECTRIC - -------- Revenues from external customers 259.5 260.4 Intersegment revenues - 0.6 Earnings before interest and taxes 95.9 101.8 NATURAL GAS - ----------- Revenues from external customers 101.5 102.5 Intersegment revenues 0.5 0.8 Earnings before interest and taxes 20.3 23.8 -6- TOTAL - ----- Revenues from external customers 361.0 362.9 Intersegment revenues 0.5 1.4 Earnings before interest and taxes 116.2 125.6 Profit or Loss Reconciliation (a) - --------------------------------- Total earnings before interest and taxes 116.2 125.6 Unallocated corporate expenses (2.0) (1.3) Investment income 1.6 14.3 Other income and deductions (9.2) 2.1 Interest expense (18.5) (24.4) ----- ----- Income before income taxes 88.1 116.3 (a) For categories not reconciled above, segment totals equal consolidated totals. -7- OPERATING STATISTICS The Dayton Power and Light Company Three Months Ended March 31 ------------------ 2000 1999 ---- ---- Electric - -------- Sales (millions of kWh)-- Residential 1,340 1,414 Commercial 825 798 Industrial 1,158 1,123 Other 872 908 ------- ------- Total 4,195 4,243 Revenues (thousands of $)-- Residential 110,868 114,101 Commercial 57,027 55,249 Industrial 55,487 54,783 Other 36,121 36,293 ------- ------- Total 259,503 260,426 Other Electric Statistics-- Average price per kWh-retail and wholesale customers (cents) 6.11 6.04 Fuel cost per net kWh generated (cents) 1.18 1.26 Electric customers at end of period 496,142 491,840 Average kWh use per residential customer 3,030 3,223 Peak demand-maximum one hour use (MW), (net) 2,666 2,561 -8- OPERATING STATISTICS (continued) The Dayton Power and Light Company Three Months Ended March 31 ------------------ 2000 1999 ---- ---- Gas - --- Sales (millions of MCF)-- Residential 11,634 13,188 Commercial 3,554 3,947 Industrial 1,066 1,237 Other 470 673 Transportation gas delivered 6,893 6,513 ------- ------- Total 23,617 25,558 Revenues (thousands of $)-- Residential 67,228 68,615 Commercial 19,657 19,622 Industrial 5,655 5,827 Other 8,940 8,449 ------- ------- Total 101,480 102,513 Other Gas Statistics-- Average price per MCF-retail customers ($) 5.68 5.11 Gas customers at end of period 309,743 307,018 Degree Days (based on calendar month)-- Heating 2,606 2,843 Cooling - - -9- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. ----------------------------------------------------------- This report contains certain forward-looking statements regarding plans and expectations for the future. Investors are cautioned that actual outcomes and results may vary materially from those projected due to various factors beyond the Company's control, including abnormal weather, unusual maintenance or repair requirements, changes in fuel costs, increased competition, regulatory changes and decisions, changes in accounting rules and adverse economic conditions. The Company's earnings on common stock for the first quarter of 2000 were $55.9 million, down 22% from $71.6 million earned in the first quarter a year ago. The earnings reduction is primarily attributable to an increase in operation and maintenance expenses and a decrease in investment income. These were partially offset by decreased interest expense because of less debt and by lower income taxes. Financial Condition - ------------------- At March 31, 2000, the Company's cash and temporary cash investment balance was $52.1 million. DPL Inc. and its subsidiaries have $300 million available through Revolving Credit Agreements ("Credit Agreements"). At March 31, 2000, DPL Inc. had no borrowings outstanding under these Credit Agreements. The Company has $75 million available in short-term informal lines of credit. At March 31, 2000, the Company had no borrowings outstanding under these informal lines and no commercial paper outstanding. 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 and the availability of external funds at reasonable cost. Results of Operations - --------------------- Electric revenues decreased $0.9 million from the first quarter last year primarily due to a 5% decrease in residential sales partially offset by a 3% increase in business sales. Gas revenues decreased $1.0 million from the first quarter last year as a result of a 12% decrease in retail sales. The sales decreases were primarily attributable to warmer weather. Fuel and purchased power decreased $3.4 million from the first quarter last year primarily due to lower sales as a result of milder weather, which was partially offset by higher purchased power expense. -10- Gas purchased for resale in the first quarter increased $1.7 million compared to the same quarter last year primarily because of higher gas costs. Operation and maintenance expense increased from last year by $8.3 million for the first quarter due primarily to increased compensation plan expenses. Depreciation and amortization increased $0.9 million from last year because of increased property investment. Investment income decreased $12.7 million from the first quarter of 1999 because of the transfer of the Company's ownership interests in the assets and liabilities of MVE, Inc. to Plaza Building Inc. which is another wholly-owned subsidiary of DPL Inc. Interest expense decreased $5.9 million from last year primarily because of a reduction in First Mortgage Bonds. Income taxes decreased $12.5 million from last year because of lower taxable income caused by the factors discussed previously. Issues and Financial Risks - -------------------------- Responding to Ohio legislation regarding energy companies that became effective in October 1999, the Company is separating into various business units and evaluating each unit on a stand-alone basis. Business units not complementing the Company's going-forward strategy may be divested. As a result of this evaluation process, the Company reached an agreement to sell its natural gas retail distribution business unit for $425 million. This all-cash sale of assets (book value approximating $250 million at December 31, 1999) is subject to regulatory approvals and is expected to close by the end of the second quarter, 2000. The after-tax proceeds from the sale will be used to continue the Company's planned generation strategy, to continue DPL Inc.'s stock buy back program and to finance in part other business unit capital needs. The Compact Agreement between the Company and Local 175, Utility Workers of America, AFL-CIO expired on October 31, 1999. Management and Union Negotiations Committees are discussing provisions of a new agreement that will be responsive to the changes in business conditions. -12- Item 3. Quantitative and Qualitative Disclosures about Market Risk. ---------------------------------------------------------- The carrying value of the Company's debt was $785 million at December 31, 1999, consisting of the Company's first mortgage bonds and guaranteed air quality development obligations, notes, commercial paper and lines of credit. The fair value of this debt was $776 million, based on current market prices or discounted cash flows using current rates for similar issues with similar terms and remaining maturities. The following table presents the principal cash repayments and related weighted average interest rates by maturity date for long-term, fixed-rate debt at December 31, 1999. Expected Maturity Date ------------------------------------------------------- There- Fair 2000 2001 2002 2003 2004 after Total Value ------------------------------------------------------- Long-term Debt - -------------- Amount ($ in millions) $0.4 $0.4 $0.4 $0.4 $0.8 $660.8 $662.8 $651.4 Average rate 6.4% 6.4% 6.4% 6.4% 6.4% 7.4% 7.4% Because the long-term debt is at a fixed rate, the primary market risk to the Company is short-term interest rate risk. The carrying value and fair value of short-term debt was $125 million with a weighted cost for each quarter increased/decreased by 10%. As of March 31, 2000, the Comapny had no short-term outstanding. Therefore, the Company does not have any exposure to interest expense risk related to short-term debt. The fair value of available-for-sale securities was $98 million and $62 million at March 31, 2000 and December 31, 1999, respectively. The equity price risk related to these securities was estimated as the potential increase/decrease in fair value of $10 million and $6 million at March 31, 2000 and December 31, 1999, respectively, that resulted from a hypothetical 10% increase/decrease in the market prices. As of March 31, 2000, there have been no other material changes in the above information since the end of the preceding fiscal year. -13- Part II. Other Information Item 5. Other Information. ----------------- Rate Regulation and Government Legislation - ------------------------------------------ On July 22, 1998, the Public Utilities Commission of Ohio ("PUCO") approved the implementation of Minimum Electric Service Standards for all of Ohio's investor-owned electric utilities. This Order details minimum standards of performance for a variety of service related functions, effective July 1, 1999. On December 21, 1999, the PUCO issued additional rules proposed by the PUCO Staff which are designed to guide the electric utility companies as they prepare to enter into deregulation. These rules include certification of providers of competitive retail electric services, minimum competitive retail electric service standards, monitoring the electric utility market, and establishing procedures for alternative dispute resolution. There were also rules issued to amend existing rules for noncompetitive electric service and safety standards and electric companies long-term forecast reporting. The Company submitted comments on the proposed rules on January 31, 2000. The PUCO issued the final rules on March 30, 2000 and April 6, 2000. In October 1999, legislation ("the Legislation") became effective in Ohio giving electric utility customers a choice of energy providers starting January 1, 2001. Under the Legislation, electric generation, aggregation, power marketing and power brokerage services supplied to retail customers in Ohio will be deemed competitive and will not be subject to supervision and regulation by the PUCO. As required by the Legislation, the Company filed its transition plan at the PUCO on December 20, 1999. In order to finalize the Company's specific requirements under the new Legislation, a hearing has been scheduled for June 5, 2000. The Company is unable to predict the outcome of the regulatory process which could have an impact on the Company's future financial position, earnings or cash flows. On March 10, 2000, Ohio Governor Robert Taft reappointed Commissioner Ronda H. Fergus to a five-year term with the PUCO that expires in April 2005. -14- Item 6. Exhibits and Reports on Form 8-K. -------------------------------- (a) The following exhibit is filed herewith: Exhibit No. Description ----------- ----------------------- 27 Financial Data Schedule (b) Reports on Form 8-K. No reports on Form 8-K were filed by the Company during the quarter ended March 31, 2000. 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: May 15, 2000 /s/Elizabeth M. McCarthy ------------ ------------------------ Elizabeth M. McCarthy Vice President and Chief Accounting Officer Date: May 15, 2000 /s/Stephen F. Koziar, Jr. ------------ ------------------------- Stephen F. Koziar, Jr. Group Vice President and Secretary -15- EX-27 2 DP&L COMPANY FINANCIAL DATA SCHEDULE
UT 1,000 3-MOS DEC-31-2000 MAR-31-2000 PER-BOOK 2098200 61000 442500 210900 215200 3027800 400 769800 591500 1361700 0 22900 661200 0 0 0 400 0 0 0 981600 3027800 361000 32000 246800 278800 82200 (7600) 74600 (18500) 56100 200 55900 0 28200 105800 1.36 1.36
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