-----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, OckudLfs+COpQE6sgn6j1f/wBQKjVPY6lLpllt3HU7gv1sXJ9FMdfaO1/TocZAPZ OovAx3bXrKtmAXpODhCEBg== 0000027430-99-000003.txt : 19990518 0000027430-99-000003.hdr.sgml : 19990518 ACCESSION NUMBER: 0000027430-99-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990517 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: 99626079 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, 1999 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------ ------ Commission File Number 1-2385 ------ THE DAYTON POWER AND LIGHT COMPANY (Exact name of registrant as specified in its charter) OHIO 31-0258470 - ------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) Courthouse Plaza Southwest Dayton, Ohio 45402 ---------------------------------------- (Address of principal executive offices) (937) 224-6000 ---------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- --- The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format. Indicate the number of shares of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $.01 par value 41,172,173 Shares - ------------------------------- ------------------------------- (Title of each class) (Outstanding at March 31, 1999) 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 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Part II - Other Information 11 Signatures 12 i CONSOLIDATED STATEMENT OF RESULTS OF OPERATIONS The Dayton Power and Light Company Three Months Ended March 31 ------------------ 1999 1998 ---- ---- --millions-- Revenues - -------- Utility service revenues-- Electric $260.4 $261.4 Gas 102.5 91.5 ------ ------ Total Utility Service Revenues 362.9 352.9 Expenses - -------- Fuel and purchased power 61.2 61.2 Gas purchased for resale 65.9 58.8 Operation and maintenance 38.2 34.3 Depreciation and amortization 32.6 31.3 Amortization of regulatory assets, net 6.5 5.6 General taxes 34.2 34.4 Interest expense 24.4 21.2 ------ ------ Total Expenses 263.0 246.8 Other income 16.4 4.6 ------ ------ Income Before Income Taxes 116.3 110.7 Income taxes 44.5 41.2 ------ ------ Net Income 71.8 69.5 Preferred dividends 0.2 0.2 ------ ------ Earnings on Common Stock $ 71.6 $ 69.3 ====== ====== 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 ------------------ 1999 1998 ---- ---- --millions-- Operating Activities - -------------------- Cash received from utility customers $341.7 $348.8 Other operating cash receipts 4.4 1.6 Cash paid for: Fuel and purchased power (53.8) (68.6) Purchased gas (54.7) (48.6) Operation and maintenance labor (23.7) (23.4) Nonlabor operating expenditures (20.9) (42.9) Interest (27.9) (26.7) Income taxes (8.1) (12.9) Property, excise and payroll taxes (55.5) (54.2) ------ ------ Net cash provided by operating activities 101.5 73.1 Investing Activities - -------------------- Property expenditures (20.9) (26.7) Increases in financial assets (78.8) (19.5) Decreases in financial assets 45.5 10.4 ------ ------ Net cash used for investing activities (54.2) (35.8) Financing Activities - -------------------- Dividends paid on common stock (55.8) (116.8) Dividends paid on preferred stock (0.2) (0.2) Issuance of short-term debt 15.5 75.5 ------ ------ Net cash used for financing activities (40.5) (41.5) Cash and temporary cash investments-- - ----------------------------------- Net change 6.8 (4.2) Balance at beginning of period 1.9 11.8 ------ ------ Balance at end of period $ 8.7 $ 7.6 ====== ====== 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, 1999 1998 -------- ----------- --millions-- ASSETS Property - -------- Electric property $3,378.2 $3,372.8 Gas property 298.2 296.9 Other property 19.1 18.9 -------- -------- Total property 3,695.5 3,688.6 Less-- Accumulated depreciation and amortization (1,500.3) (1,472.2) -------- -------- Net property 2,195.2 2,216.4 -------- -------- Current Assets - -------------- Cash and temporary cash investments 8.7 1.9 Accounts receivable, less provision for uncollectible accounts 234.5 219.2 Inventories, at average cost 96.9 112.2 Deferred property and excise taxes 61.1 93.4 Prepaid utility excise tax 35.4 17.7 Other 27.5 32.0 -------- -------- Total current assets 464.1 476.4 -------- -------- Other Assets - ------------ Financial assets 275.4 232.2 Income taxes recoverable through future revenues 188.8 195.5 Other regulatory assets 76.7 82.2 Other assets 193.7 209.7 -------- -------- Total other assets 734.6 719.6 -------- -------- Total Assets $3,393.9 $3,412.4 ======== ======== 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, 1999 1998 -------- ----------- --millions-- CAPITALIZATION AND LIABILITIES Capitalization - -------------- Common shareholder's equity-- Common stock $ 0.4 $ 0.4 Other paid-in capital 788.2 788.2 Accumulated other comprehensive income 24.9 33.6 Earnings reinvested in the business 440.5 450.8 -------- -------- Total common shareholder's equity 1,254.0 1,273.0 Preferred stock 22.9 22.9 Long-term debt 660.7 885.6 -------- -------- Total capitalization 1,937.6 2,181.5 -------- -------- Current Liabilities - ------------------- Current portion of long-term debt 225.4 0.4 Short-term debt 196.7 181.2 Accounts payable 93.2 106.6 Accrued taxes 149.0 160.9 Accrued interest 15.8 20.7 Other 91.0 49.8 -------- -------- Total current liabilities 771.1 519.6 -------- -------- Deferred Credits and Other - -------------------------- Deferred taxes 473.9 488.2 Unamortized investment tax credit 68.5 69.3 Other 142.8 153.8 -------- -------- Total deferred credits and other 685.2 711.3 -------- -------- Total Capitalization and Liabilities $3,393.9 $3,412.4 ======== ======== 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, 1999 and 1998 Common Stock Accumulated Earnings -------------------- Other Other Reinvested Outstanding Paid-In Comprehensive in the $ in millions Shares Amount Capital Income Business Total - ----------------------------------------------------------------------------------------------- 1999: Beginning Balance 41,172,173 $0.4 $788.2 $33.6 $450.8 $1,273.0 Net Income 71.8 Unrealized loss, net of reclassification adjustments, after tax (8.7) 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 =================================================================== 1998: Beginning Balance 41,172,173 $0.4 $739.1 $20.3 $521.0 $1,280.8 Net Income 69.5 Net unrealized gain on securites, after tax 4.6 Total comprehensive income 74.1 Common stock dividends (140.0) (140.0) Preferred stock dividends (0.2) (0.2) ------------------------------------------------------------------- Ending balance 41,172,173 $0.4 $739.1 $24.9 $450.3 $1,214.7 ===================================================================
See Notes to Consolidated Financial Statements. These interim statements are unaudited. -5- Notes to Consolidated Financial Statements 1. Reclassifications have been made in certain prior years' amounts to conform to the current reporting presentation of the Company. 2. The consolidated financial statements in this report have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto in the Company's 1998 Annual Report on Form 10-K. The information included in this Form 10-Q reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the result of operations for the periods presented. Any adjustments are of a normal recurring nature. -6- OPERATING STATISTICS The Dayton Power and Light Company Three Months Ended March 31 ------------------ 1999 1998 ---- ---- Electric - -------- Sales (millions of kWh) -- Residential 1,414 1,323 Commercial 798 820 Industrial 1,123 1,098 Other 908 1,185 ------- -------- Total 4,243 4,426 Revenues (thousands of dollars) -- Residential 114,101 109,508 Commercial 55,249 56,678 Industrial 54,783 52,522 Other 36,293 42,677 ------- ------- Total 260,426 261,385 Other Electric Statistics -- Average price per kWh-retail and wholesale customers (cents) 6.04 5.77 Fuel cost per net kWh generated (cents) 1.26 1.25 Electric customers at end of period 491,840 486,795 Average kWh use per residential customer 3,223 3,045 Peak demand-maximum one hour use (mw), (net) 2,561 2,373 -7- OPERATING STATISTICS (continued) The Dayton Power and Light Company Three Months Ended March 31 ------------------ 1999 1998 ---- ---- Gas - --- Sales (millions of MCF) -- Residential 13,188 11,356 Commercial 3,947 3,032 Industrial 1,237 920 Other 673 906 Transported gas 6,513 5,913 ------- ------- Total 25,558 22,127 Revenues (thousands of dollars) -- Residential 68,615 59,953 Commercial 19,622 15,373 Industrial 5,827 4,492 Other 8,449 11,658 ------- ------- Total 102,513 91,476 Other Gas Statistics -- Average price per MCF-retail customers (dollars) 5.11 5.19 Gas customers at end of period 307,018 303,023 Degree Days (based on calendar month) -- Heating 2,843 2,369 Cooling - 23 -8- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. The Company's net income for the first quarter of 1999 was $71.8 million up from $69.5 million earned in the first quarter a year ago. In the quarter, winter temperatures were colder than last year, but still warmer than normal. The service territory remains strong with a 2% increase in retail electric sales from the first quarter of 1998. Increased revenues from these higher sales coupled with income from investments contributed to the improved financial performance. The Company advanced some maintenance expenditures into the first quarter to prepare for the peak summer months. The financial condition and results of operations for the first quarter ended March 31, 1999 are discussed below. Financial Condition - ------------------- Construction plans are subject to continuing review and are expected to be revised in light of changes in financial and economic conditions, load forecasts, legislative and regulatory developments and changing environmental standards, among other factors. The Company's ability to complete its capital projects and the reliability of future service will be affected by its financial condition, the availability of external funds at reasonable cost and adequate and timely rate increases. On April 6, 1999, DPL Inc. completed a private placement issuance of $500 million of Senior Notes due 2004, with an interest rate of 6.32%. The proceeds were used for the redemption of the Company's $225 million 8.40% Series of First Mortgage Bonds, the reduction of short-term debt and for general corporate purposes. At March 31, 1999, the Company's cash and temporary cash investment balance was $8.7 million. In addition, $275.4 million was invested in financial assets. DPL Inc. and its subsidiaries have $300 million available through Revolving Credit Agreements ("Credit Agreements"). At March 31, 1999, DPL Inc. had $30 million outstanding under these Credit Agreements. The Company has $97 million available in short-term informal lines of credit. At March 31, 1999, the Company had $71.9 million of these informal lines outstanding and $123.5 million in commercial paper outstanding. The Company currently 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 1999-2003. -9- Results of Operations - --------------------- Utility service revenues increased by $10.0 million from the first quarter last year. Higher retail gas sales due to colder weather were the primary cause of this increase. Gas purchased for resale increased $7.1 million over first quarter 1998 as a result of the higher utility gas sales. Operation and maintenance expense increased $3.9 million from the first quarter last year. Higher production maintenance, line clearance and insurance and claims costs were partially offset by reduced compensation and benefit expense. Interest expense increased from last year by $3.2 million, because of higher short-term debt balances. Other income increased by $11.8 million over the same period in 1998 as a result of higher investment income. Income taxes increased $3.3 million from the corresponding quarter last year with the higher pre-tax income. Issues and Financial Risks - -------------------------- 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. Some computer applications may not properly recognize dates beginning with the year 2000. This "Y2K" issue, if not corrected, could cause disruptions in information technology systems and operating control systems. The Company has implemented a plan to identify and correct Y2K issues in its computer applications and operations. This plan includes (1) evaluation of applications and systems, (2) assessment of Y2K errors, (3) correction of errors and (4) testing of applications and systems. The evaluation and assessment phases are substantially complete. The correction and testing phases, approximately 70% complete, continue on schedule and are expected to be completed in the third quarter of 1999. The estimated cost of this corrective action is $20 million, and includes modification and replacement of hardware and software. The electric industry relies on computer applications to monitor and control interdependent power systems. These systems are also susceptible to Y2K problems. The utility industry has organized work groups to identify and solve potential problems. The Company is evaluating the possibility of Y2K disruptions in the industry and is adopting proper contingency plans. -10- Part II. Other Information Item 5. Other Information. - ------------------------- Rate Regulation and Government Legislation - ------------------------------------------ On March 4, 1999, the PUCO initiated an inquiry into the adequacy of electricity generation and transmission facilities of Ohio's investor-owned electric utility companies to avoid a recurrence of the power supply shortages that occurred in the summer of 1998. The Company has responded to various data requests from the PUCO concerning their inquiry. On March 26, 1998, a twelve member Joint Committee of the Ohio Senate and House of Representatives, created to explore and possibly draft retail wheeling legislation, introduced an electric deregulation Bill which expired at year end. On September 16, 1998, the Company and the three other major investor-owned utilities in Ohio presented a comprehensive electric utility restructuring Bill to a working group of the Committee. In March 1999, a group of legislators released to the public a draft outline for restructuring. On March 25, 1999, those legislators introduced companion electric restructuring Bills in the Ohio House and Senate. The Company is participating in hearings that are being held on the companion Bills at the Legislature. 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 March 31, 1999. -11- 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 17, 1999 /s/James P. Torgerson ------------ ---------------------------------- James P. Torgerson Vice President, CFO and Treasurer Date: May 17, 1999 /s/Paul R. Anderson ------------ ---------------------------------- Paul R. Anderson Controller (Principal Accounting Officer) -12- EX-27 2 DP&L COMPANY FINANCIAL DATA SCHEDULE
UT 1,000 3-MOS DEC-31-1999 MAR-31-1999 PER-BOOK 2176100 19100 464100 265500 469100 3393900 400 788200 465400 1254000 0 22900 660700 73200 0 123500 225400 0 0 0 1034200 3393900 362900 44500 238600 283100 79800 16400 96200 24400 71800 200 71600 55800 27900 101700 1.74 1.74
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