<PAGE>
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 1-9052
------
DPL INC.
(Exact name of registrant as specified in its charter)
OHIO 31-1163136
(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
----- -----
Indicate the number of shares of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.01 par value
and Preferred Share Purchase
Rights 107,193,791
- --------------------------- ----------------------------------
(Title of each class) (Outstanding at June 30, 1994)
<PAGE>
<PAGE>
DPL INC.
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
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF RESULTS OF OPERATIONS
DPL Inc.
Three Months Ended Six Months Ended
June 30 June 30
1994 1993 1994 1993
---- ---- ---- ----
--thousands-- --thousands--
<S> <C> <C> <C> <C>
INCOME
Utility service revenues . . . . . . . . . . . . $257,239 $238,006 $629,354 $583,848
Interest and other income . . . . . . . . . . . 10,358 11,084 14,894 17,302
-------- -------- -------- --------
Total Income . . . . . . . . . . . . . . . 267,597 249,090 644,248 601,150
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 . . . . . . . . . . 34,505 43,154 78,934 92,667
Maintenance of equipment and facilities . . . . 18,358 16,514 34,524 29,538
Depreciation and amortization . . . . . . . . . 28,586 27,577 57,142 55,085
General taxes . . . . . . . . . . . . . . . . . 28,950 27,726 58,005 55,257
Interest expense . . . . . . . . . . . . . . . . 23,247 23,148 46,675 49,078
Allowance for funds used during construction . . (49) (301) (254) (187)
Regulatory deferrals . . . . . . . . . . . . . . 2,682 (6,316) 5,312 (12,467)
Preferred dividend requirements of
The Dayton Power and Light Company . . . . . 2,111 2,158 4,231 4,469
-------- -------- -------- --------
Total Expenses . . . . . . . . . . . . . . 210,711 202,068 494,786 474,116
-------- -------- -------- -------
Income Before Income Taxes . . . . . . . . . . . 56,886 47,022 149,462 127,034
Income Taxes . . . . . . . . . . . . . . . . . . 21,984 15,682 59,208 42,465
-------- -------- -------- --------
Net Income . . . . . . . . . . . . . . . . . . . $ 34,902 $ 31,340 $ 90,254 $ 84,569
======== ======== ======== ========
Average Number of Common Shares
Outstanding (000)(a) . . . . . . . . . . . . 101,234 97,708 99,591 97,757
Earnings Per Share of Common Stock (a) . . . . . $ 0.34 $ 0.33 $ 0.91 $ 0.87
Dividends Paid Per Share of Common Stock . . . . $ 0.295 $ 0.28 $ 0.59 $ 0.56
</TABLE>
(a) Average shares and earnings per share for 1993 were restated to reflect
adoption of a new Financial Accounting Standards Board approved Statement
of Position on accounting for Employee Stock Own Plans.
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
1
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOWS
DPL Inc.
Six Months Ended
June 30
------------------
1994 1993
---- ----
--thousands--
<S> <C> <C>
Operating Activities
- --------------------
Cash received from utility customers . . . . . . . . . . . . . . . . . . $ 650,197 $ 597,410
Other operating cash receipts . . . . . . . . . . . . . . . . . . . . . 13,095 11,997
Cash paid for:
Fuel and purchased power . . . . . . . . . . . . . . . . . . . . . . . (120,333) (105,301)
Purchased gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . (87,772) (83,309)
Operation and maintenance labor . . . . . . . . . . . . . . . . . . . (46,260) (41,224)
Non-labor operating expenditures . . . . . . . . . . . . . . . . . . . (80,413) (132,334)
Interest (net of amounts capitalized) . . . . . . . . . . . . . . . . (46,051) (36,332)
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (46,059) (28,293)
Property, excise and payroll taxes . . . . . . . . . . . . . . . . . . (65,735) (63,733)
--------- ---------
Net cash provided by operating activities . . . . . . . . . . . . . . . 170,669 118,881
--------- ---------
Investing Activities
- --------------------
Net cash used for property expenditures and other . . . . . . . . . . . (44,606) (57,625)
--------- ---------
Financing Activities
- --------------------
Dividends paid on common stock . . . . . . . . . . . . . . . . . . . . . (58,646) (57,353)
Retirement of preferred stock . . . . . . . . . . . . . . . . . . . . . (94,249) (8,500)
Retirement of short-term debt . . . . . . . . . . . . . . . . . . . . . (25,000) (127,300)
Retirement of long-term debt . . . . . . . . . . . . . . . . . . . . . . (3,137) (433,131)
Issuance of long-term debt . . . . . . . . . . . . . . . . . . . . . . . - 536,000
Issuance of common stock (Note 1) . . . . . . . . . . . . . . . . . . . 72,857 -
--------- ---------
Net cash used for financing activities . . . . . . . . . . . . . . . . . (108,175) (90,284)
--------- ---------
Net increase (decrease) in cash and temporary cash investments . . . . . 17,888 (29,028)
Cash and temporary cash investments at beginning of period . . . . . . . . 81,640 108,102
--------- ---------
Cash and temporary cash investments at end of period . . . . . . . . . . . $ 99,528 $ 79,074
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
2
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
DPL Inc.
At At
June 30, December 31,
1994 1993
------------- ------------
--thousands--
<S> <C> <C>
ASSETS
Utility property and plant. . . . . . . . . . . . . . . . . . . . . . . . $3,225,019 $3,204,690
Other property and plant . . . . . . . . . . . . . . . . . . . . . . . . 60,544 55,474
Construction work in progress . . . . . . . . . . . . . . . . . . . . . . 40,670 35,824
---------- ----------
3,326,233 3,295,988
Less--
Accumulated depreciation and amortization . . . . . . . . . . . . . . . (1,026,501) (977,201)
---------- ----------
Net property and plant . . . . . . . . . . . . . . . . . . . . . . . 2,299,732 2,318,787
---------- ----------
Current Assets
Cash and temporary cash investments, at cost. . . . . . . . . . . . . . . 99,528 81,640
Accounts receivable, less provision for uncollectible accounts . . . . . 98,916 135,025
Inventories, at average cost . . . . . . . . . . . . . . . . . . . . . . 79,123 86,386
Taxes applicable to subsequent years . . . . . . . . . . . . . . . . . . 72,853 72,751
Gas costs recoverable . . . . . . . . . . . . . . . . . . . . . . . . . . 2,877 23,052
Prepayments and other . . . . . . . . . . . . . . . . . . . . . . . . . . 10,334 41,736
---------- ----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . 363,631 440,590
---------- ----------
Other Assets
Regulatory deferrals (Note 3) . . . . . . . . . . . . . . . . . . . . . . 177,441 172,832
Income taxes recoverable through future revenues . . . . . . . . . . . . 259,341 269,144
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125,660 103,677
---------- ----------
Total other assets. . . . . . . . . . . . . . . . . . . . . . . . . 562,442 545,653
---------- ----------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,225,805 $3,305,030
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
3
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
(continued)
DPL Inc.
At At
June 30, December 31,
1994 1993
------------- ------------
--thousands--
<S> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization
Common shareholders' equity--
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,072 $ 1,035
Other paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . 781,158 708,151
Common stock held by employee plans . . . . . . . . . . . . . . . . . . (106,712) (105,217)
Earnings reinvested in the business . . . . . . . . . . . . . . . . . . 424,334 423,363
---------- ----------
Total common shareholders' equity . . . . . . . . . . . . . . . . . . 1,099,852 1,027,332
Preferred stock of The Dayton Power and Light Company--
Without mandatory redemption provisions (Note 2). . . . . . . . . . . . 22,851 82,850
With mandatory redemption provisions (Note 2) . . . . . . . . . . . . . - 30,000
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,099,785 1,102,889
---------- ----------
Total capitalization . . . . . . . . . . . . . . . . . . . . . . . 2,222,488 2,243,071
---------- ----------
Current Liabilities
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,216 113,075
Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 25,000
Current portion of first mortgage bonds and preferred stock . . . . . . . 4,730 8,980
Accrued taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,978 114,389
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,107 24,338
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,461 51,434
---------- ----------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . 266,492 337,216
---------- ----------
Deferred Credits and Other
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 515,731 519,319
Unamortized investment tax credit . . . . . . . . . . . . . . . . . . . . 82,994 85,139
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,100 120,285
---------- ----------
Total deferred credits and other . . . . . . . . . . . . . . . . . 736,825 724,743
---------- ----------
Total Capitalization and Liabilities . . . . . . . . . . . . . . . . . . $3,225,805 $3,305,030
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
4
<PAGE>
<PAGE>
Notes to Consolidated Financial Statements
1. On June 1, 1994, 238,190 shares of common stock valued at
$4.8 million were issued to participants in the dividend
reinvestment plan.
2. 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 contributed to DPL Inc.'s principal subsidiary,
The Dayton Power and Light Company ("DP&L"). DP&L used the funds,
along with internal cash, to redeem all of the outstanding shares
of its Preferred Stock Series D, E, F, H and I On May 6, 1994.
3. Regulatory deferrals on the balance sheet consist of:
<TABLE>
<CAPTION>
June 30, Dec. 31,
1994 1993
-------- -------
--millions--
<S> <C> <C>
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
====== ======
</TABLE>
4. Statement of Cash Flow Reconciliation
Reconciliation of Net Income to Net Cash Provided by
Operating Activities:
<TABLE>
<CAPTION>
Six Months Ended
June 30
1994 1993
---- ----
--millions--
<S> <C> <C>
Net Income . . . . . . . . . . . . . . . . . $ 90.3 $ 84.6
Adjustments for non-cash items:
Depreciation and amortization . . . . . . 57.1 55.1
Deferred income taxes . . . . . . . . . . (2.2) 5.2
Taxes applicable to subsequent years . . . 53.5 51.1
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 . 35.2 5.5
Accounts payable . . . . . . . . . . . . . (34.6) (30.9)
Other . . . . . . . . . . . . . . . . . . (24.9) (14.0)
Other operating activities . . . . . . . . . (8.9) (25.1)
------ ------
Net cash provided by operating activities . $170.7 $118.9
====== ======
</TABLE>
5
<PAGE>
<PAGE>
5. Reclassifications have been made in certain prior years'
amounts to conform to the current reporting presentation of
DPL Inc.
6. The consolidated financial statements in this report
have been prepared by DPL Inc., 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 DPL Inc.'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
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
OPERATING STATISTICS
The Dayton Power and Light Company
Three Months Ended Six Month Ended
June 30 June 30
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
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
</TABLE>
7
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
OPERATING STATISTICS
(continued)
The Dayton Power and Light Company
Three Months Ended Six Months Ended
June 30 June 30
------------------ ----------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
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
</TABLE>
8
<PAGE>
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
DPL Inc.'s earnings for the second quarter of 1994 were
$0.34 per share, compared to $0.33 per share a year ago.
Earnings for the first six months of 1994 increased to $0.91 per
share, from $0.87 per share for the same period in 1993.
Electric sales were strong, reflecting significantly warmer
weather and the continued strength of the West Central Ohio
economy. DP&L's 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.
Earnings per share for 1993 were restated from $0.31
and $0.83, respectively, for the three and six months ended
June 30 to reflect adoption of a new Financial Accounting
Standards Board approved Statement of Position on accounting for
Employee Stock Ownership Plans.
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. DP&L'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, DPL Inc.'s cash and temporary cash
investment balance was $99.5 million.
DP&L has available to it $97 million in short-term
informal lines of credit. As of June 30, 1994, DP&L 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. DP&L 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.
9
<PAGE>
<PAGE>
DPL Inc. anticipates that it has sufficient capacity to
issue First Mortgage Bonds of DP&L to satisfy its requirements
in connection with the financing of its construction and
refunding programs during the five year period 1994-1998.
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 step 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 $8.6
million during the second quarter and $13.7 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 $1.8 million and $5.0
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.
10
<PAGE>
<PAGE>
General taxes expense increased $1.2 million during the
second quarter and $2.7 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.
Interest expense decreased $2.5 million year-to-date in
1994 due to the issuances 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 $6.3 million and $16.7 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
<PAGE>
<PAGE>
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.
DP&L 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. DP&L provides partial requirements service to twelve
municipal customers which distribute electricity within their
corporate limits. DP&L 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. DP&L 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 DP&L'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.
12
<PAGE>
<PAGE>
On July 8, 1993, the Third Circuit Court of Appeals reversed the
District Court for Delaware and reinstated 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. DP&L 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 DP&L
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, DP&L does not expect
the bankruptcy proceedings to have a material adverse effect on
its earnings or competitive position.
2. In January 1994, DP&L, 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 DP&L 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 DP&L 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.
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2. On June 1, 1994, DP&L filed its natural gas Long-Term
Forecast Report ("LTFR") with the PUCO. DP&L 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
- --------
DP&L 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. DP&L does not believe it
will be required to participate in the remediation of this site
since available information does not demonstrate that DP&L
contributed wastes to the site. The final resolution will not
have a material effect on DP&L'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 DPL Inc. during
the quarter ended June 30, 1994.
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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.
DPL INC.
----------------------------------
(Registrant)
Date: August 15, 1994 Stephen F. Koziar
- ------------------------ ----------------------------------
Stephen F. Koziar
Group Vice President
Date: August 15, 1994 Thomas M. Jenkins
- ------------------------ ----------------------------------
Thomas M. Jenkins
Group Vice President and Treasurer
(Principal Financial Officer)
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