-----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, c+Byk62FgklozS2PxjWjNL3gWL+1Ca1Rv2T2yXc7JIdM15/H/t7vPeqpse1u5uNh u4XEnNtYHUzt7fSt6HRJiw== 0000027430-94-000003.txt : 19940816 0000027430-94-000003.hdr.sgml : 19940816 ACCESSION NUMBER: 0000027430-94-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940815 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAYTON POWER & LIGHT CO CENTRAL INDEX KEY: 0000027430 STANDARD INDUSTRIAL CLASSIFICATION: 4931 IRS NUMBER: 310258470 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-02385 FILM NUMBER: 94543978 BUSINESS ADDRESS: STREET 1: PO BOX 8825 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 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, 1994 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 incorporation or organization) Identification No.) Courthouse Plaza Southwest Dayton, Ohio 45402 (Address of principal executive offices) 513-224-6000 (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 on June 30, 1994) 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 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Part II - Other Information 12 Signatures 15 i
CONSOLIDATED STATEMENT OF RESULTS OF OPERATIONS The Dayton Power and Light Company Three Months Ended Six Months Ended June 30 June 30 ------------------ ------------------ 1994 1993 1994 1993 ---- ---- ---- ---- --thousands-- --thousands-- INCOME Utility service revenues-- Electric . . . . . . . . . . . . . . . . . . . . . $226,310 $206,883 $476,608 $439,831 Gas . . . . . . . . . . . . . . . . . . . . . . . 30,422 30,696 149,298 140,826 Steam . . . . . . . . . . . . . . . . . . . . . . 1,167 1,082 4,714 4,443 -------- -------- -------- -------- Total utility service revenues . . . . . . . . . 257,899 238,661 630,620 585,100 Interest and other income . . . . . . . . . . . . . 5,713 7,229 6,865 9,491 -------- -------- -------- -------- Total Income . . . . . . . . . . . . . . . . . 263,612 245,890 637,485 594,591 -------- -------- -------- -------- EXPENSES Fuel used in electric and steam production . . . . . 54,749 50,750 113,430 110,221 Gas purchased for resale . . . . . . . . . . . . . . 17,572 17,658 96,787 90,455 Operating and administrative . . . . . . . . . . . . 33,653 41,910 77,583 89,785 Maintenance of equipment and facilities . . . . . . 18,443 16,275 34,620 29,069 Depreciation and amortization . . . . . . . . . . . 27,805 27,106 55,704 54,262 General taxes . . . . . . . . . . . . . . . . . . . 28,870 27,605 57,865 55,069 Interest expense . . . . . . . . . . . . . . . . . . 23,307 23,981 46,792 49,288 Allowance for funds used during construction . . . . (49) (301) (254) (187) Regulatory deferrals . . . . . . . . . . . . . . . . 2,682 (6,316) 5,312 (12,467) -------- -------- -------- -------- Total Operating Expenses . . . . . . . . . . . 207,032 198,668 487,839 465,495 -------- -------- -------- -------- Operating Income . . . . . . . . . . . . . . . . . . 56,580 47,222 149,646 129,096 Income Taxes . . . . . . . . . . . . . . . . . . . . 20,741 14,684 57,589 41,772 -------- -------- -------- -------- Net Income . . . . . . . . . . . . . . . . . . . . . 35,839 32,538 92,057 87,324 Preferred dividends . . . . . . . . . . . . . . . . 2,111 2,158 4,231 4,469 -------- -------- -------- -------- Earnings on Common Stock . . . . . . . . . . . . . . $ 33,728 $ 30,380 $ 87,826 $ 82,855 ======== ======== ======== ========
See Notes to Consolidated Financial Statements. These interim statements are unaudited. 1
CONSOLIDATED STATEMENT OF CASH FLOWS The Dayton Power and Light Company Six Months Ended June 30 -------------------- 1994 1993 ---- ---- --thousands-- Operating Activities - -------------------- Cash received from utility customers . . . . . . . . . . . . . . . . . . $651,463 $598,662 Other operating cash receipts . . . . . . . . . . . . . . . . . . . . . 7,153 4,694 Cash paid for: Fuel and purchased power . . . . . . . . . . . . . . . . . . . . . . . (120,333) (105,301) Purchased gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . (87,772) (83,309) Operation and maintenance labor . . . . . . . . . . . . . . . . . . . (45,437) (38,939) Non-labor operating expenditures . . . . . . . . . . . . . . . . . . . (80,838) (123,546) Interest (net of amounts capitalized) . . . . . . . . . . . . . . . . (46,051) (37,125) Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (42,910) (25,419) Property, excise and payroll taxes . . . . . . . . . . . . . . . . . . (65,559) (63,557) -------- -------- Net cash provided by operating activities . . . . . . . . . . . . . . . 169,716 126,160 -------- -------- Investing Activities - -------------------- Net cash used for property expenditures and other . . . . . . . . . . . (32,232) (37,543) -------- -------- Financing Activities - -------------------- Dividends paid on common and preferred stock . . . . . . . . . . . . . . . (54,365) (58,328) Retirement of preferred stock . . . . . . . . . . . . . . . . . . . . . . (94,249) (8,500) Retirement of short-term debt . . . . . . . . . . . . . . . . . . . . . . (25,000) (37,300) Retirement of long-term debt . . . . . . . . . . . . . . . . . . . . . . . (3,137) (433,131) Issuance of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . - 446,000 Capital contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,184 - -------- -------- Net cash used for financing activities . . . . . . . . . . . . . . . . . (113,567) (91,259) -------- -------- Net increase (decrease) in cash and temporary cash investments . . . . . 23,917 (2,642) Cash and temporary cash investments at beginning of period . . . . . . . . 5,980 3,679 -------- -------- Cash and temporary cash investments at end of period . . . . . . . . . . . $ 29,897 $ 1,037 ======== ========
See Notes to Consolidated Financial Statements. These interim statements are unaudited. 2
CONSOLIDATED BALANCE SHEET The Dayton Power and Light Company At At June 30, December 31, 1994 1993 ------------- ------------ --thousands-- ASSETS Electric property and plant . . . . . . . . . . . . . . . . . . . . . . . $2,940,637 $2,923,842 Gas property and plant . . . . . . . . . . . . . . . . . . . . . . . . . . 243,685 240,126 Steam and other property and plant . . . . . . . . . . . . . . . . . . . . 38,186 38,199 Construction work in progress . . . . . . . . . . . . . . . . . . . . . . 40,670 35,825 ---------- ---------- 3,263,178 3,237,992 Less-- Accumulated depreciation and amortization . . . . . . . . . . . . . . . (998,152) (950,546) ---------- ---------- Net property and plant . . . . . . . . . . . . . . . . . . . . . . . . 2,265,026 2,287,446 ---------- ---------- Current Assets Cash and temporary cash investments, at cost . . . . . . . . . . . . . . . 29,897 5,980 Accounts receivable, less provision for uncollectible accounts . . . . . . 93,907 130,113 Inventories, at average cost . . . . . . . . . . . . . . . . . . . . . . . 77,377 85,356 Taxes applicable to subsequent years . . . . . . . . . . . . . . . . . . . 72,853 72,751 Gas costs recoverable . . . . . . . . . . . . . . . . . . . . . . . . . . 2,877 23,052 Prepayments and other . . . . . . . . . . . . . . . . . . . . . . . . . . 11,169 44,874 ---------- ---------- Total current assets . . . . . . . . . . . . . . . . . . . . . . . . 288,080 362,126 ---------- ---------- Other Assets Regulatory deferrals (Note 2) . . . . . . . . . . . . . . . . . . . . . . 177,441 172,832 Income taxes recoverable through future revenues . . . . . . . . . . . . . 259,341 269,144 Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147,147 122,782 ---------- ---------- Total other assets . . . . . . . . . . . . . . . . . . . . . . . . 583,929 564,758 ---------- ---------- Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,137,035 $3,214,330 ========== ==========
See Notes to Consolidated Financial Statements. These interim statements are unaudited. 3
CONSOLIDATED BALANCE SHEET (continued) The Dayton Power and Light Company At At June 30, December 31, 1994 1993 ------------- ------------ --thousands-- CAPITALIZATION AND LIABILITIES Capitalization Common shareholder's equity-- Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 412 $ 412 Other paid-in capital . . . . . . . . . . . . . . . . . . . . . . . 738,453 675,176 Earnings reinvested in the business . . . . . . . . . . . . . . . . 390,661 373,605 ---------- ---------- Total common shareholder's equity . . . . . . . . . . . . . . . 1,129,526 1,049,193 Preferred stock-- Without mandatory redemption provisions (Note 1) . . . . . . . . . . 22,851 82,850 With mandatory redemption provisions (Note 1). . . . . . . . . . . . - 30,000 Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,009,785 1,012,889 ---------- ---------- Total capitalization . . . . . . . . . . . . . . . . . . . . . . 2,162,162 2,174,932 ---------- ---------- Current Liabilities Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,126 113,742 Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,806 29,805 Current portion of first mortgage bonds and preferred stock . . . . . 4,730 8,980 Accrued taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,534 113,618 Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,858 21,089 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,022 51,353 ---------- ---------- Total current liabilities . . . . . . . . . . . . . . . . . . . 264,076 338,587 ---------- ---------- Deferred Credits and Other Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 532,981 536,202 Unamortized investment tax credit . . . . . . . . . . . . . . . . . . 82,728 84,858 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,088 79,751 ---------- ---------- Total deferred credits and other . . . . . . . . . . . . . . . . 710,797 700,811 ---------- ---------- Total Capitalization and Liabilities . . . . . . . . . . . . . . . . . $3,137,035 $3,214,330 ========== ==========
See Notes to Consolidated Financial Statements. These interim statements are unaudited. 4 Notes to Consolidated Financial Statements 1. On March 28, 1994, DPL Inc. issued 3,200,000 shares of common stock through an Underwriting Agreement. The net proceeds of $63.2 million were used to provide a capital contribution to The Dayton Power and Light Company ("the Company"). This capital contribution was used, along with internal cash, to redeem all of the outstanding shares of the Company's Preferred Stock Series D, E, F, H and I On May 6, 1994. 2. Regulatory deferrals on the balance sheet were:
June 30, Dec. 31, 1994 1993 --------- -------- --millions-- Phase-in $ 81.1 $ 85.8 Demand-side management 34.0 23.3 Deferred interest - Zimmer 62.3 63.7 ------ ------ Total $177.4 $172.8 ====== ======
3. Statement of Cash Flow Reconciliation. Reconciliation of Net Income to Net Cash Provided by Operating Activities:
Six Months Ended June 30 1994 1993 ---- ---- --millions-- Net Income . . . . . . . . . . . . . . . . . $ 92.1 $ 87.3 Adjustments for non-cash items: Depreciation and amortization . . . . . . 55.7 54.3 Deferred income taxes . . . . . . . . . . (4.0) 7.5 Taxes applicable to subsequent years . . . 53.4 51.0 Allowance for equity funds used during construction . . . . . . . . . . (0.1) (0.1) Regulatory deferrals . . . . . . . . . . . 5.3 (12.5) Changes in Working Capital: Accounts receivable and unbilled revenue . 36.2 4.3 Accounts payable . . . . . . . . . . . . . (35.5) (22.3) Other . . . . . . . . . . . . . . . . . . (17.9) (15.2) Other operating activities . . . . . . . . . (15.5) (28.1) ------ ------ Net cash provided by operating activities . $169.7 $126.2 ====== ======
5 4. Reclassifications have been made in certain prior years' amounts to conform to the current reporting presentation. 5. 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 1993 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. 6
OPERATING STATISTICS The Dayton Power and Light Company Three Months Ended Six Month Ended June 30 June 30 1994 1993 1994 1993 ---- ---- ---- ---- ELECTRIC Sales (millions of kWh)-- Residential . . . . . . . . . . . . . . . . . 970 925 2,396 2,297 Commercial . . . . . . . . . . . . . . . . . 727 691 1,476 1,424 Industrial . . . . . . . . . . . . . . . . . 1,102 1,038 2,141 1,979 Other . . . . . . . . . . . . . . . . . . . . 617 681 1,161 1,524 ------- ------- ------- ------- Total . . . . . . . . . . . . . . . . . . . 3,416 3,335 7,174 7,224 Revenues (thousands of dollars)-- Residential . . . . . . . . . . . . . . . . . 87,202 78,512 202,777 183,727 Commercial . . . . . . . . . . . . . . . . . 53,232 47,098 106,237 95,646 Industrial . . . . . . . . . . . . . . . . . 57,461 52,175 112,631 99,969 Other . . . . . . . . . . . . . . . . . . . . 28,415 29,098 54,963 60,489 ------- ------- ------- ------- Total . . . . . . . . . . . . . . . . . . . 226,310 206,883 476,608 439,831 Other Electric Statistics-- Average price per kWh-- retail and wholesale customers (cents) . . 6.56 6.11 6.58 6.01 Fuel cost per net kWh generated (cents) . . . . . . . . . . . . . 1.39 1.36 1.43 1.40 Electric customers at end of period . . . . . 466,716 461,276 466,716 461,276 Average kWh use per residential customer . . 2,322 2,233 5,739 5,550 Peak demand--maximum one hour use (mw), (net) . . . . . . . . . 2,824 2,449 2,824 2,449
7
OPERATING STATISTICS (continued) The Dayton Power and Light Company Three Months Ended Six Months Ended June 30 June 30 ------------------ ---------------- 1994 1993 1994 1993 ---- ---- ---- ---- GAS Sales (thousands of mcf)-- Residential . . . . . . . . . . . . . . . . . 3,497 3,459 18,250 17,411 Commercial . . . . . . . . . . . . . . . . . 952 1,076 5,236 4,987 Industrial . . . . . . . . . . . . . . . . . 341 452 2,235 1,955 Other . . . . . . . . . . . . . . . . . . . . 371 415 1,786 1,804 Transportation gas delivered . . . . . . . . 3,285 2,951 8,462 7,293 ------ ------ ------ ------ Total . . . . . . . . . . . . . . . . . . . 8,446 8,353 35,969 33,450 Revenues (thousands of dollars)-- Residential . . . . . . . . . . . . . . . . . 20,138 19,337 99,142 93,081 Commercial . . . . . . . . . . . . . . . . . 4,958 5,275 26,863 25,180 Industrial . . . . . . . . . . . . . . . . . 1,801 2,097 10,598 9,225 Other . . . . . . . . . . . . . . . . . . . . 3,525 3,987 12,695 13,340 ------- ------- ------- ------- Total . . . . . . . . . . . . . . . . . . . 30,422 30,696 149,298 140,826 Other Gas Statistics-- Average price per mcf-- retail customers (dollars) . . . . . . . . 5.55 5.30 5.28 5.20 Gas customers at end of period . . . . . . . 287,271 284,193 287,271 284,193 DEGREE DAYS (based on calendar month)-- Heating . . . . . . . . . . . . . . . . . . . 600 625 3,794 3,578 Cooling . . . . . . . . . . . . . . . . . . . 350 226 350 226
8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The Company's earnings increased $3.3 million and $5.0 million, respectively, for the quarter and six months ending June 30, 1994, as compared to the same periods last year. Electric sales were strong, reflecting significantly warmer weather and the continued strength of West Central Ohio's economy. DP&L customers recently set an all time peak demand for electricity usage of 2,824 MW on June 20. Year-to-date electric and natural gas retail sales have both increased 5% over the prior year. An analysis of the financial condition and results of operations for the second quarter and six months ended June 30, 1994 and 1993 is 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, 1994, the Company's cash and temporary cash investment balance was $30 million. The Company has available to it $97 million in short-term informal lines of credit. As of June 30, 1994, the Company had no short-term debt outstanding. DPL Inc. and its subsidiaries have $200 million available through a Revolving Credit Agreement. As of June 30, 1994, DPL Inc. had no outstanding borrowings under this Credit Agreement. The Company has authority from the 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 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 1994-1998. 9 Results of Operations - --------------------- Electric revenues increased $19.4 million and $36.8 million, respectively, for the second quarter and six months ended June 30, 1994, over the corresponding periods in 1993. Energy sales remained strong in the second quarter and first half of 1994 reflecting the continued strength of the West Central Ohio economy and unusually warm weather. Total retail electric sales increased 5% for the first six months of the year, contributing to the increases in revenues. The electric revenue increase also includes the effects of the last phase of the electric rate increase. Fuel used in electric and steam production increased $4.0 million and $3.2 million, respectively, over the second quarter and year-to-date 1993, primarily related to increased electric sales. Gas revenues and gas purchased for resale remained constant for the quarter compared to the corresponding quarter last year. Year-to-date gas revenues and gas purchased for resale increased $8.5 million and $6.3 million, respectively, over the same period in 1993. The higher amounts resulted from a total gas sales increase of 8% and a higher gas cost recovery factor. Interest and other income decreased in the second quarter and first six months of 1994 from 1993 amounts. The 1994 periods included $3.4 million of interest on federal income tax refunds, compared to $5.8 million in 1993. Operating and administrative expenses decreased $8.3 million during the second quarter and $12.2 million year-to-date from the same periods a year ago. Bond redemption costs of $15 million and $7.5 million were incurred in the first and second quarters of 1993. Benefits and claims costs increased in 1994 versus 1993. Maintenance expenses increased $2.2 million and $5.6 million, respectively, for the second quarter and six months ended June 30, 1994, over the corresponding periods in 1993 due to electric generating station maintenance activities. General taxes expense increased $1.3 million during the second quarter and $2.8 million year-to-date over the same periods a year ago. The increase is primarily related to higher gross receipts taxes due to higher revenues. 10 Interest expense decreased $2.5 million year-to-date in 1994 due to the issuance of First Mortgage Bonds in 1993 overlapping the related debt series which were subsequently redeemed in 1993 and lower interest rates on long term debt obtained through the refinancings. Phase-in deferrals capitalized in years prior to 1994 are being recovered over a seven year period commencing in 1994. Income taxes increased $6.1 million and $15.8 million, respectively, for the second quarter and year-to-date 1994, over the corresponding periods in 1993. The higher amounts result from a corresponding increase in taxable income over the same periods in the prior year. 11 Part II. Other Information --------------------------- Item 5. Other Information. Electric Operations and Fuel Supply - ----------------------------------- 1. A merger agreement between The Cincinnati Gas & Electric Company and PSI Resources, Inc. is currently pending. The Company intervened in the merger proceedings at the Federal Energy Regulatory Commission ("FERC") in January 1993 and at the Securities and Exchange Commission in June 1994 to ensure that the operations of its commonly owned generating units will not be adversely impacted by the merger. 2. The Company provides partial requirements service to twelve municipal customers which distribute electricity within their corporate limits. The Company has negotiated a new service agreement with these municipalities that is subject to review and approval by each municipality's government body and the FERC. 3. The Company has also negotiated a new interconnection agreement with its only municipal customer that can generate all or a portion of its energy requirements. This agreement is currently pending approval by FERC. Sales to municipal customers represented 1.3% of total electric sales for the twelve month period ended June 30, 1994. Gas Operations and Gas Supply - ----------------------------- 1. On July 31, 1991, Columbia Gas System Inc. and Columbia Gas Transportation Corporation ("Columbia"), one of the Company's major pipeline suppliers, filed separate Chapter 11 petitions in U.S. Bankruptcy Court. The bankruptcy court permitted Columbia to break approximately 4,500 long term natural gas contracts with upstream suppliers on August 22, 1991, January 6, 1992, and January 8, 1992. On February 13, 1992, the bankruptcy court ruled on a motion by Columbia to flow through to its customers all appropriate refunds, including take-or-pay refunds which were received from its upstream suppliers and excessive rate refunds except for approximately $18 million of pre-petition take-or-pay refunds. However, on July 6, 1992, the U.S. District Court for Delaware reversed the bankruptcy court. On July 8, 1993, the Third Circuit Court of Appeals reversed the District Court for Delaware and reinstated 12 the U.S. Bankruptcy Court's ruling that Columbia may flow through to its customers all post petition take-or-pay refunds which were received from its upstream suppliers. The U.S. Supreme Court denied an appeal on February 18, 1994 of the Third Circuit Court of Appeals' decision. The Company has recovered all appropriate post petition take-or-pay refunds from Columbia as ordered by the Third Circuit Court of Appeals. Pre-petition refunds will remain in the bankruptcy estate until a plan of reorganization is approved. On June 24, 1994, in Baltimore Gas & Electric Company v. FERC, the U.S. Court of Appeals for the District of Columbia Circuit decided in favor of Columbia's customers by holding that a 1985 settlement between the parties should have prohibited Columbia from collecting pre-1987 upstream take-or-pay costs from its customers. FERC has been ordered by the Court of Appeals to determine the actual amount of the refund due to the Company and other customers. Such refunds will remain in the bankruptcy estate until a plan of reorganization is approved. The parties to the bankruptcy are currently evaluating Columbia's proposed plan of reorganization. Based upon a July 1993 FERC order disallowing the recovery of natural gas producer contracts rejected in the bankruptcy case, the Company does not expect the bankruptcy proceedings to have a material adverse effect on its earnings or competitive position. 2. In January 1994, the Company, the Staff of the Public Utilities Commission of Ohio ("PUCO") and the Office of the Ohio Consumers' Counsel submitted to the PUCO an agreement which resolves issues relating to the recovery of Order 636 "transition costs" to be billed to the Company by FERC natural gas interstate pipeline companies. The agreement, which was approved by the PUCO on July 14, 1994, provides for the full recovery of these transition costs from the Company's customers. The interstate pipelines will file with the FERC for authority to recover these transition costs, the exact magnitude of which has not been established. Rate Regulation and Government Legislation - ------------------------------------------- 1. On April 13, 1994, Ms. Jolynn Barry-Butler was reappointed as a PUCO commissioner. 13 2. On June 1, 1994, the Company filed its natural gas Long-Term Forecast Report ("LTFR") with the PUCO. The Company filed its electric LTFR with the PUCO on June 15, 1994. An Integrated Resource Plan filed as part of the electric LTFR included plans for the construction of a series of 70 MW combustion turbine generating units, the first of which is scheduled for completion in June 1995, and also the implementation of demand-side management programs. Environmental Considerations - ---------------------------- Land Use - -------- The Company and numerous other parties received notification from the Ohio Environmental Protection Agency on July 27, 1994 that it considers them Potentially Responsible Parties for clean-up of hazardous substances at the North Sanitary (a.k.a. Valleycrest) Landfill in Dayton, Ohio. The Company does not believe it will be required to participate in the remediation of this site since available information does not demonstrate that the Company contributed wastes to the site. The final resolution will not have a material effect on the Company's financial position or earnings. 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, 1994. 14 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 15, 1994 Paul R. Anderson - ------------------------ ---------------------------------- Paul R. Anderson Controller (Principal Accounting Officer) Date: August 15, 1994 Thomas M. Jenkins - ------------------------ ---------------------------------- Thomas M. Jenkins Group Vice President and Treasurer (Principal Financial Officer) 15 -----END PRIVACY-ENHANCED MESSAGE-----