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, 2004
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 |
Registrant; State of Incorporation; Address; Telephone Number |
IRS Employer Identification No. | ||
| 1-10290 |
Duquesne Light Holdings, Inc. | 25-1598483 | ||
| (A Pennsylvania Corporation) | ||||
| 411 Seventh Avenue | ||||
| Pittsburgh, Pennsylvania 15219 | ||||
| 412-393-6000 | ||||
| 1-956 |
Duquesne Light Company | 25-0451600 | ||
| (A Pennsylvania Corporation) | ||||
| 411 Seventh Avenue | ||||
| Pittsburgh, Pennsylvania 15219 | ||||
| 412-393-6000 | ||||
Indicate by check mark whether each 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 and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether each registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes x No ¨
As of April 30, 2004, there were 76,182,342 shares of Duquesne Light Holdings, Inc.’s single class of common stock outstanding.
As of April 30, 2004, there were 10 shares of Duquesne Light Company’s single class of common stock outstanding, all held by Duquesne Light Holdings, Inc.
PART I. FINANCIAL INFORMATION
| Item 1. | Financial Statements |
Duquesne Light Holdings
Condensed Consolidated Statements of Income (Unaudited)
| (All Amounts in Three Months | ||||||
| 2004 |
2003 | |||||
| Operating Revenues: |
||||||
| Retail sales of electricity |
$ | 188.4 | $ | 193.4 | ||
| Other |
28.7 | 26.9 | ||||
| Total Operating Revenues |
217.1 | 220.3 | ||||
| Operating Expenses: |
||||||
| Purchased power |
94.2 | 96.4 | ||||
| Other operating and maintenance |
54.1 | 50.1 | ||||
| Depreciation and amortization |
20.4 | 24.1 | ||||
| Taxes other than income taxes |
13.2 | 13.7 | ||||
| Total Operating Expenses |
181.9 | 184.3 | ||||
| Operating Income |
35.2 | 36.0 | ||||
| Other Income |
4.1 | 19.6 | ||||
| Interest and Other Charges |
14.4 | 19.2 | ||||
| Income from Continuing Operations Before Income Taxes |
24.9 | 36.4 | ||||
| Income Tax Expense |
3.2 | 8.5 | ||||
| Income from Continuing Operations |
21.7 | 27.9 | ||||
| Income from Discontinued Operations – Net (Note 8) |
0.1 | 1.7 | ||||
| Net Income |
21.8 | 29.6 | ||||
| Dividends on Preferred Stock (Note 1) |
— | 0.2 | ||||
| Earnings Available for Common Stock |
$ | 21.8 | $ | 29.4 | ||
| Average Number of Common Shares Outstanding |
75.9 | 74.5 | ||||
| Basic Earnings Per Share of Common Stock: |
||||||
| Earnings from Continuing Operations |
$ | 0.29 | $ | 0.37 | ||
| Earnings from Discontinued Operations |
— | 0.02 | ||||
| Basic Earnings Per Share of Common Stock |
$ | 0.29 | $ | 0.39 | ||
| Diluted Earnings Per Share of Common Stock: |
||||||
| Earnings from Continuing Operations |
$ | 0.28 | $ | 0.37 | ||
| Earnings from Discontinued Operations |
— | 0.02 | ||||
| Diluted Earnings Per Share of Common Stock |
$ | 0.28 | $ | 0.39 | ||
| Dividends Declared Per Share of Common Stock |
$ | 0.25 | $ | 0.25 | ||
See notes to condensed consolidated financial statements.
2
Duquesne Light Holdings
Condensed Consolidated Balance Sheets (Unaudited)
| (Millions of Dollars) |
||||||||
| March 31, 2004 |
December 31, 2003 |
|||||||
| Assets |
||||||||
| Current Assets: |
||||||||
| Cash and temporary cash investments |
$ | 12.2 | $ | 33.8 | ||||
| Receivables |
108.8 | 115.0 | ||||||
| Other |
56.8 | 35.3 | ||||||
| Total Current Assets |
177.8 | 184.1 | ||||||
| Long-Term Investments |
616.2 | 567.9 | ||||||
| Property, Plant and Equipment: |
||||||||
| Property plant and equipment |
2,156.3 | 2,143.9 | ||||||
| Less: Accumulated depreciation and amortization |
(716.8 | ) | (706.6 | ) | ||||
| Total Property, Plant and Equipment – Net |
1,439.5 | 1,437.3 | ||||||
| Other Non-Current Assets: |
||||||||
| Regulatory assets |
287.1 | 281.6 | ||||||
| Transition costs |
5.9 | 8.4 | ||||||
| Other |
60.9 | 61.5 | ||||||
| Total Other Non-Current Assets |
353.9 | 351.5 | ||||||
| Total Assets |
$ | 2,587.4 | $ | 2,540.8 | ||||
| Liabilities and Capitalization |
||||||||
| Current Liabilities: |
||||||||
| Current debt maturities and notes payable |
$ | 90.2 | $ | 51.5 | ||||
| Accounts payable |
108.6 | 112.0 | ||||||
| Other |
80.7 | 85.9 | ||||||
| Discontinued operations |
25.3 | 29.9 | ||||||
| Total Current Liabilities |
304.8 | 279.3 | ||||||
| Non-Current Liabilities: |
||||||||
| Deferred income taxes – net |
474.3 | 474.1 | ||||||
| Other |
218.9 | 163.8 | ||||||
| Total Non-Current Liabilities |
693.2 | 637.9 | ||||||
| Commitments and Contingencies (Note 7) |
||||||||
| Capitalization: |
||||||||
| Long-term debt |
932.3 | 977.5 | ||||||
| Preferred and Preference Stock |
71.4 | 70.7 | ||||||
| Common Shareholders’ Equity: |
||||||||
| Common stock – no par value (authorized – 187,500,000 shares; issued – 126,929,154 shares) |
1,213.8 | 1,215.4 | ||||||
| Retained earnings |
555.9 | 553.1 | ||||||
| Treasury stock (at cost) (50,935,003 and 51,505,469 shares) |
(1,181.0 | ) | (1,189.7 | ) | ||||
| Unearned compensation |
(3.0 | ) | (3.4 | ) | ||||
| Total Common Shareholders’ Equity |
585.7 | 575.4 | ||||||
| Total Capitalization |
1,589.4 | 1,623.6 | ||||||
| Total Liabilities and Capitalization |
$ | 2,587.4 | $ | 2,540.8 | ||||
See notes to condensed consolidated financial statements.
3
Duquesne Light Holdings
Condensed Consolidated Statements of Cash Flows (Unaudited)
| (Millions of Dollars) | ||||||||
| Three Months Ended March 31, |
||||||||
| 2004 |
2003 |
|||||||
| Cash Flows from Operating Activities: |
||||||||
| Operations |
$ | 45.0 | $ | 39.8 | ||||
| Changes in working capital other than cash |
(39.1 | ) | (17.9 | ) | ||||
| Other |
(1.1 | ) | (21.3 | ) | ||||
| Cash flows from discontinued operations |
(4.6 | ) | (7.5 | ) | ||||
| Net Cash Provided from (Used in) Operating Activities |
0.2 | (6.9 | ) | |||||
| Cash Flows from Investing Activities: |
||||||||
| Capital expenditures |
(19.1 | ) | (14.0 | ) | ||||
| Proceeds from disposition of investments |
— | 18.5 | ||||||
| Other |
(0.7 | ) | (2.1 | ) | ||||
| Net Cash (Used in) Provided from Investing Activities |
(19.8 | ) | 2.4 | |||||
| Cash Flows from Financing Activities: |
||||||||
| Revolving credit facility borrowings |
90.0 | — | ||||||
| Reductions of long-term debt obligations |
(80.3 | ) | (2.0 | ) | ||||
| Dividends on common and preferred stock |
(16.4 | ) | (16.1 | ) | ||||
| Other |
4.7 | 0.4 | ||||||
| Net Cash Used in Financing Activities |
(2.0 | ) | (17.7 | ) | ||||
| Net decrease in cash |
(21.6 | ) | (22.2 | ) | ||||
| Cash and temporary cash investments at beginning of period |
33.8 | 93.9 | ||||||
| Cash and temporary cash investments at end of period |
$ | 12.2 | $ | 71.7 | ||||
See notes to condensed consolidated financial statements.
Duquesne Light Holdings
Consolidated Statements of Comprehensive Income (Unaudited)
| (Millions of Dollars) | |||||||
| Three Months Ended March 31, |
|||||||
| 2004 |
2003 |
||||||
| Net income |
$ | 21.8 | $ | 29.6 | |||
| Other comprehensive loss: |
|||||||
| Unrealized holding losses arising during the year, net of tax of $— and $(0.1) |
— | (0.2 | ) | ||||
| Comprehensive income |
$ | 21.8 | $ | 29.4 | |||
See notes to condensed consolidated financial statements.
4
Duquesne Light Company
Condensed Consolidated Statements of Income (Unaudited)
| (Millions of Dollars) | ||||||
| Three Months Ended March 31, | ||||||
| 2004 |
2003 | |||||
| Operating Revenues: |
||||||
| Retail sales of electricity |
$ | 188.4 | $ | 193.4 | ||
| Other |
6.2 | 5.9 | ||||
| Total Operating Revenues |
194.6 | 199.3 | ||||
| Operating Expenses: |
||||||
| Purchased power |
94.2 | 96.4 | ||||
| Other operating and maintenance |
32.6 | 29.7 | ||||
| Depreciation and amortization |
18.0 | 21.5 | ||||
| Taxes other than income taxes |
13.2 | 13.5 | ||||
| Total Operating Expenses |
158.0 | 161.1 | ||||
| Operating Income |
36.6 | 38.2 | ||||
| Other Income |
3.9 | 5.4 | ||||
| Interest and Other Charges |
11.2 | 12.7 | ||||
| Company Obligated Mandatorily Redeemable Preferred Securities Dividend Requirements (Note 1) |
— | 3.1 | ||||
| Net Income Before Income Taxes |
29.3 | 27.8 | ||||
| Income Taxes |
11.5 | 11.1 | ||||
| Net Income |
17.8 | 16.7 | ||||
| Dividends on Preferred and Preference Stock |
0.8 | 0.8 | ||||
| Earnings Available for Common Stock |
$ | 17.0 | $ | 15.9 | ||
See notes to condensed consolidated financial statements.