-----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, qnbjxrs0ccZ1x5dJeaytnbydTwH0Y1JCZ17x57Qya6dWl2Bs2GCDcsDPYhmtaJAM G1FvmTesYyqtdQ6u1IVl9A== 0000950168-95-000400.txt : 19950512 0000950168-95-000400.hdr.sgml : 19950512 ACCESSION NUMBER: 0000950168-95-000400 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950511 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DUKE POWER CO /NC/ CENTRAL INDEX KEY: 0000030371 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 560205520 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04928 FILM NUMBER: 95536915 BUSINESS ADDRESS: STREET 1: 422 S CHURCH ST CITY: CHARLOTTE STATE: NC ZIP: 28242-0001 BUSINESS PHONE: 7045940887 MAIL ADDRESS: STREET 1: 422 S CHURCH ST CITY: CHARLOTTE STATE: NC ZIP: 28242 10-Q 1 DUKE POWER 10Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------------------- FORM 10-Q QUARTERLY REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended March 31, 1995 -------------------------------- DUKE POWER COMPANY 422 South Church Street Charlotte, North Carolina 28242-0001 704-594-0887 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 ----------------------- FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended March 31, 1995 Commission File Number 1-4928 DUKE POWER COMPANY (Exact name of registrant as specified in its charter) North Carolina 56-0205520 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 422 South Church Street, Charlotte, N.C. 28242-0001 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code 704-594-0887 No Change (Former name, former address and former fiscal year, if changed since last report) ----------------------------- 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 ___ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Number of shares of Common Stock, without par value, outstanding at March 31, 1995 204,859,339 shares DUKE POWER COMPANY INDEX
PAGE PART I. FINANCIAL INFORMATION Consolidated Statements of Income for the Three Months Ended March 31, 1995 and 1994 2 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1995 and 1994 3 Consolidated Balance Sheets - March 31, 1995 and December 31, 1994 4-5 Consolidated Statements of Capitalization - March 31, 1995 and December 31, 1994 6 Notes to Consolidated Financial Statements 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 8-9 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders 9 Item 6. Exhibits and Reports on Form 8-K 9 SIGNATURES 10 Part I. FINANCIAL INFORMATION Item 1. CONSOLIDATED FINANCIAL STATEMENTS DUKE POWER COMPANY CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in Thousands)
Three Months Ended March 31 1995 1994 Operating revenues $1,111,065 $1,099,002 Operating expenses Fuel used in electric generation 169,368 169,046 Net interchange and purchased power 114,259 136,514 Other operation and maintenance 282,130 287,512 Depreciation and amortization 112,735 116,073 General taxes 63,159 63,273 Total operating expenses 741,651 772,418 Operating Income 369,414 326,584 Interest expense and other income Interest expense (72,523) (64,470) Allowance for funds used during construction and other deferred returns 31,597 25,152 Other, net 2,048 (527) Total interest expense and other income (38,878) (39,845) Income before income taxes 330,536 286,739 Income taxes 129,260 113,122 Net Income 201,276 173,617 Preferred and preference stock requirements 12,735 12,322 Earnings for common stock $188,541 $161,295 Common stock data Average common shares outstanding (thousands) 204,859 204,859 Earnings per share $ 0.92 $ 0.79 Dividends per share $ 0.49 $ 0.47
See Notes to Consolidated Financial Statements 2 DUKE POWER COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in Thousands)
Three Months Ended March 31 1995 1994 Cash flows from operating activities Net Income $ 201,276 $ 173,617 Adjustments to reconcile net income to net cash provided by operating activities: Non-cash items Depreciation and amortization 168,727 $ 159,592 Deferred income taxes and investment tax credit amortization 6,733 4,268 Allowance for equity funds used during construction (5,928) (6,254) Purchased capacity levelization (25,894) (11,671) Other, net 2,728 (12,519) (Increase) Decrease in Accounts receivable (16,518) 50,293 Inventory (23,167) (1,715) Prepayments (4,969) (2,040) Increase (Decrease) in Accounts payable (56,484) (107,938) Taxes accrued 96,673 54,354 Interest accrued and other liabilities (29,579) (29,287) Total adjustments 112,322 97,083 Net cash provided by operating activities 313,598 270,700 Cash flows from investing activities Construction expenditures and other property additions (215,142) (174,451) External funding for decommissioning (14,118) (13,131) Investment in nuclear fuel (3,719) (17,757) Investment in joint ventures (2,326) 966 Net change in investment securities (1,128) 23,363 Net cash used in investing activities (236,433) (181,010) Cash flows from financing activities Proceeds from the issuance of Short-term notes payable, net 67,100 24,100 Construction loans and other 8,429 494 Payments for the redemption of First and refunding mortgage bonds (40,000) - Preferred stock (2,926) (1,500) Construction loans and other (512) (164) Dividends paid (113,305) (109,038) Other (371) (336) Net cash used in financing activities (81,585) (86,444) Net increase (decrease) in cash (4,420) 3,246 Cash at beginning of period 37,430 33,812 Cash at end of period $ 33,010 $ 37,058
See Notes to Consolidated Financial Statements 3 DUKE POWER COMPANY CONSOLIDATED BALANCE SHEETS (Dollars in Thousands)
March 31 December 31 1995 1994 (Unaudited) ASSETS Current assets Cash $ 33,010 $ 37,430 Short-term investments 123,754 132,692 Receivables (less allowance for losses: 1995 - $6,729; 1994 - $6,637) 569,383 552,865 Inventory - at average cost 344,529 319,385 Prepayments and other 20,691 15,722 Total current assets 1,091,367 1,058,094 Investments and other Investments in joint ventures 110,656 108,330 Other investments, at cost or less 93,292 83,226 Nuclear decommissioning trust funds 197,565 172,390 Pre-funded pension cost 80,000 80,000 Total investments and other assets 481,513 443,946 Property, plant and equipment Electric plant in service (at original cost) Production 6,800,370 6,747,397 Transmission 1,451,596 1,439,435 Distribution 4,003,021 3,965,393 Other 1,029,280 1,020,192 Electric plant in service 13,284,267 13,172,417 Less accumulated depreciation and amortization 4,899,299 4,810,004 Electric plant in service, net 8,384,968 8,362,413 Nuclear fuel 725,242 757,983 Less accumulated amortization 418,934 415,560 Nuclear fuel, net 306,308 342,423 Construction work in progress (including nuclear fuel in process: 1995 - $40,883; 1994 - $52,273) 580,145 558,730 Total electric plant, net 9,271,421 9,263,566 Other property - at cost (less accumulated depreciation: 1995 - $25,044; 1994 - $24,137) 310,840 302,383 Total property, plant and equipment, net 9,582,261 9,565,949 Deferred debits Purchased capacity costs 958,218 932,324 Debt expense, primarily refinancing costs, being amortized over the terms of related debt 183,425 186,306 Regulatory asset related to income taxes 489,232 489,292 Regulatory asset related to DOE assessment fee 107,670 102,467 Other 88,018 83,850 Total deferred debits 1,826,563 1,794,239 Total assets $12,981,704 $12,862,228
See Notes to Consolidated Financial Statements 4 DUKE POWER COMPANY CONSOLIDATED BALANCE SHEETS (Dollars in Thousands)
March 31 December 31 1995 1994 (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 229,980 $ 343,688 Notes payable 174,200 107,100 Taxes accrued 126,672 29,999 Interest accrued 68,944 72,157 Current maturities of long-term debt and preferred stock 55,265 93,759 Other 95,026 121,539 Total current liabilities 750,087 768,242 Long-term debt (Note 4) 3,572,806 3,567,122 Accumulated deferred income taxes 2,361,672 2,348,631 Deferred credits and other liabilities Investment tax credit 269,785 272,594 DOE assessment fee 107,670 102,467 Nuclear decommissioning costs externally funded 197,565 172,390 Other 323,158 318,453 Total deferred credits and other liabilities 898,178 865,904 Preferred and preference stock with sinking fund requirements (Note 4) 278,029 279,500 Preferred and preference stock without sinking fund requirements (Note 4) 500,000 500,000 Common stockholders' equity Common stock, no par 1,926,909 1,926,909 Retained earnings 2,694,023 2,605,920 Total common stockholders' equity 4,620,932 4,532,829 Total liabilities and stockholders' equity $12,981,704 $12,862,228
See Notes to Consolidated Financial Statements 5 DUKE POWER COMPANY CONSOLIDATED STATEMENTS OF CAPITALIZATION (Dollars in Thousands)
March 31 December 31 1995 1994 (Unaudited) Common Stock Equity Common stock, no par, 300,000,000 shares authorized; 204,859,339 shares outstanding for 1995 and 1994 $1,926,909 $1,926,909 Retained earnings 2,694,023 2,605,920 Total common stock equity 4,620,932 4,532,829 Preferred and preference stock (At March 31, 1995 and December 31, 1994 12,500,000 shares of preferred stock, 10,000,000 shares of preferred stock A, and 1,500,000 shares of preference stock were authorized with or without sinking fund requirements) Without sinking fund requirements 500,000 500,000 With sinking fund requirements 279,500 281,000 Less preferred shares reacquired for current sinking fund requirements (15,000 shares at cost) (1,471) - Less current sinking fund requirements - (1,500) Subtotal preferred and preference stock with sinking fund requirements 278,029 279,500 Total preferred and preference stock 778,029 779,500 Long-term debt First and refunding mortgage bonds 3,400,505 3,440,505 Capitalized leases 25,668 26,039 Other long-term debt 130,000 130,000 Unamortized debt discount and premium, net (61,774) (62,918) Current maturities of long-term debt (44,965) (81,926) Subtotal long-term debt 3,449,434 3,451,700 Subsidiary long-term debt Crescent Resources 100,075 92,102 Nantahala Power and Light Company 33,597 33,653 Current maturities of long-term debt (10,300) (10,333) Subtotal subsidiary long-term debt 123,372 115,422 Total consolidated long-term debt 3,572,806 3,567,122 Total capitalization $8,971,767 $8,879,451
See Notes to Consolidated Financial Statements 6 DUKE POWER COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Total income taxes paid for the quarter ended March 31 were $12,587,000 and $52,805,000 for 1995 and 1994, respectively. Interest paid, net of amounts capitalized, for the quarter ended March 31 was $67,591,000 and $65,626,000 for 1995 and 1994, respectively. 2. The North Carolina statute allowing rate adjustments for past over- or under- recovery of fuel costs was set to expire in 1997. The North Carolina legislature repealed this expiration provision in March 1995. 3. The Company is involved in legal, tax and regulatory proceedings before various courts, regulatory commissions and governmental agencies regarding matters arising in the ordinary course of business, some of which involve substantial amounts. Where appropriate, the Company has made accruals in accordance with Statement of Financial Accounting Standards No. 5 "Accounting for Contingencies," in order to provide for such matters. Management is of the opinion that the final disposition of these proceedings will not have a material adverse effect on the results of operations or the financial position of the Company. 4. The carrying amounts and estimated fair values of long-term debt and preferred stock are listed below in thousands of dollars. The majority of estimated fair value amounts were obtained from independent parties. Judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates determined as of March 31, 1995 and December 31, 1994, are not necessarily indicative of the amounts the Company could have realized in current market exchanges.
March 31, 1995 December 31, 1994 Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt $3,664,177 $3,485,000 $3,696,260 $3,392,000 Preferred stock $ 778,029 $ 732,000 $ 781,000 $ 697,000
5. In the Consolidated Statements of Income and Consolidated Statements of Cash Flows, certain prior period information has been reclassified to conform with current classifications. 6. These are quarterly financial statements and the amounts reported in the Consolidated Statements of Income are not necessarily indicative of amounts expected for the respective years. These amounts may be affected by seasonal temperature variations, timing of scheduled and unscheduled maintenance of certain electric generating units, and the Company's policy of accruing estimates for certain other expenses ratably over twelve months until final amounts are determined. 7. In the opinion of the Company, the accompanying financial statements contain all adjustments necessary to present fairly the financial position of Duke Power Company as of the respective dates shown and the results of its operations for the respective periods then ended. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES During the period January 1, 1995 through March 31, 1995, additions to property (including nuclear fuel) of $174.5 million and retirements of $64.6 million resulted in a net increase in gross plant of $109.9 million. The Company is building a combustion turbine facility in Lincoln County, North Carolina to provide capacity at periods of peak demand. Units 1 and 2 of the Lincoln Combustion Turbine Station began commercial operation on May 5, 1995. Current plans call for another 10 units to begin commercial operation during 1995, with the remaining 4 units to come on line in 1996. The estimated total cost of the project is approximately $500 million. All appeals relating to the issuance of the final air permit for the facility have been dismissed. The Company normally experiences seasonal peak loads in the summer and winter which are relatively in balance. On June 22, 1994, the Company experienced its summer peak load of 14,936 MW during hot weather. A new all-time peak load of 16,070 MW occurred on January 19, 1994 during extremely cold weather. The Company's peak load includes the load of the other joint owners of the Catawba Nuclear Station (the Other Catawba Joint Owners). Fixed charges coverage for the twelve months ended March 31, 1995, using the SEC method, was 4.78 times. Internal cash generation for the twelve months ended March 31, 1995 was 67 percent. The Company is involved in legal, tax and regulatory proceedings before various courts, regulatory commissions and governmental agencies regarding matters arising in the ordinary course of business, some of which involve substantial amounts. Where appropriate, the Company has made accruals in accordance with Statement of Financial Accounting Standards No. 5 "Accounting for Contingencies," in order to provide for such matters. Management is of the opinion that the final disposition of these proceedings will not have a material adverse effect on the results of operations or the financial position of the Company. As a result of favorable market conditions, in April 1995 the Company issued $78 million in medium-term notes, the proceeds of which will be used to refinance higher cost long-term debt. In addition, the Company reacquired 30,000 shares of its 7.12% Series Q Preferred Stock to satisfy sinking fund requirements, including 15,000 shares for current sinking fund requirements. RESULTS OF OPERATIONS Earnings per share for the first quarter 1995 were 92 cents per share compared to 79 cents per share for the same period in 1994. This increase was primarily due to decreased operating and maintenance expenses, lower purchased power costs, and better performance by the Associated Enterprises Group business units. Revenues for the first quarter of 1995 were slightly higher than first quarter 1994 due to contributions from the Associated Enterprises Group business units as well as higher kilowatt-hour sales. Total retail kilowatt-hour sales for the quarter increased 2.7 percent. Residential sales fell 3.9 percent. General service sales rose 2.5 percent. Textile sales rose 3.3 percent, with total industrial sales increasing 3.8 percent. However, total kilowatt-hour sales did not materially impact earnings due to offsetting reductions in sales to non-retail customers. Net interchange and purchased power expense decreased $22.3 million for the first quarter 1995 compared to the same period 1994. This decrease was primarily due to decreases in purchased capacity and energy from the Other Catawba Joint Owners. 8 Operating and maintenance expenses decreased $5.4 million, or 1.9%, for the first quarter 1995 from the same period in 1994. This decrease was primarily due to reduced fossil maintenance expenses, which were partially offset by increased expenses for the increased activity of the Associated Enterprises Group business units. Interest expense increased $8.1 million during the first quarter of 1995 compared to the same period in 1994. This increase is primarily due to the issuance of additional long-term debt in 1994. Allowance for funds used during construction (AFUDC) and other deferred returns increased $6.4 million. The increase was largely due to the return on the deferred purchased capacity balance. PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote of the security holders of the Company during the first quarter of 1995. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) Exhibits (27) Financial Data Schedule (included in electronic filing only) (B) Reports on Form 8-K The Company filed no Form 8-K reports during the first quarter of 1995. 9 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. DUKE POWER COMPANY Date: May 10, 1995 _________________________________________________ Richard J. Osborne Senior Vice President and Chief Financial Officer Date: May 10, 1995 _________________________________________________ Jeffrey L. Boyer Controller EX-27 2 EXHIBIT 27
OPUR1 This schedule contains summary financial information extracted from the Consolidated Statements of Income, Consolidated Statements of Cash Flows, Consolidated Balance Sheets and Consolidated Statements of Capitalization for the 3 months ended 03/31/95 and is qualified in its entirety by reference to such financial statements. 1000 3-mos DEC-31-1994 JAN-01-1995 MAR-31-1995 PER-BOOK 9271421 792353 1091367 1826563 0 12981704 1926909 0 2694023 4620932 278029 500000 3572806 174200 0 0 55265 0 24003 1665 1418800 12981704 1111065 129260 741651 870911 369414 33645 273799 72523 201276 12735 188541 100380 57581 313598 .92 0
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