<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 September 30, 1995
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 106,951,623 Shares
----------------------------------- ------------------
(Title of each class) (Outstanding at September 30, 1995)
<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 11
Signatures 12
i
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF RESULTS OF OPERATIONS
DPL Inc.
Three Months Nine Months
Ended Ended
September 30 September 30
------------ ------------
1995 1994 1995 1994
---- ---- ---- ----
--thousands-- --thousands--
<S> <C> <C> <C> <C>
Income
- ------
Utility service revenues $300,051 $263,321 $921,513 $892,675
Interest and other income 6,651 8,930 20,161 24,078
------- ------- ------- -------
Total income 306,702 272,251 941,674 916,753
------- ------- ------- -------
Expenses
- --------
Fuel used in electric and
steam production 68,543 54,819 192,244 168,249
Gas purchased for resale 9,670 10,597 90,303 107,383
Operation and maintenance 68,372 59,997 175,834 173,456
Depreciation and amortization 31,410 28,683 89,356 85,824
General taxes 31,740 30,123 94,007 88,128
Interest expense 23,989 23,285 70,327 69,960
Amortization of regulatory
assets, net 6,632 2,749 12,151 8,061
Preferred dividend requirements 216 253 650 4,484
------- ------- ------- -------
Total Expenses 240,572 210,506 724,872 705,545
------- ------- ------- -------
Income Before Income Taxes 66,130 61,745 216,802 211,208
Income Taxes 26,687 24,846 81,945 84,055
------- ------- ------- -------
Net Income $ 39,443 $ 36,899 $134,857 $127,153
======= ======= ======= =======
Average Number of Common
Shares Outstanding (000) 101,135 101,418 101,107 100,207
Earnings Per Share of Common
Stock $ 0.39 $ 0.36 $ 1.33 $ 1.27
Dividends Paid Per Share of
Common Stock $ 0.31 $ 0.295 $ 0.93 $ 0.885
</TABLE>
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-1-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOWS
DPL Inc.
Nine Months
Ended
September 30
--------------
1995 1994
---- ----
--thousands--
<S> <C> <C>
Operating Activities
- --------------------
Cash received from utility customers $925,030 $933,992
Other operating cash receipts 22,684 18,947
Cash paid for:
Fuel and purchased power (183,970) (181,920)
Purchased gas (103,174) (119,750)
Operation and maintenance labor (66,320) (67,146)
Nonlabor operating expenditures (98,458) (119,945)
Interest (net of amounts capitalized) (71,119) (71,017)
Income taxes (70,416) (76,853)
Property, excise and payroll taxes (101,900) (93,670)
------- -------
Net cash provided by operating
activities 252,357 222,638
------- -------
Investing Activities
- --------------------
Net cash used for property
expenditures and other (74,018) (52,417)
------- -------
Financing Activities
- --------------------
Dividends paid on common stock (94,014) (88,435)
Retirement of short-term debt - (25,000)
Retirement of long-term debt (9,177) (9,177)
Issuance of common stock - 76,826
Retirement of preferred stock - (94,249)
Issuance of long-term debt 108,910 -
Funding of trust for debt retirement (110,000) -
------- -------
Net cash used for financing activities (104,281) (140,035)
------- -------
Net increase in cash and temporary
cash investments 74,058 30,186
Cash and temporary cash investments
at beginning of period 95,566 81,640
------- -------
Cash and temporary cash investments
at end of period $169,624 $111,826
======= =======
</TABLE>
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-2-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
DPL Inc.
At At
September 30, December 31,
1995 1994
------------- ------------
--thousands--
<S> <C> <C>
ASSETS
- ------
Property
- --------
Utility property $3,315,860 $3,254,095
Other property 64,567 62,333
Construction work in progress 52,550 68,549
--------- ---------
3,432,977 3,384,977
Less--
Accumulated depreciation and
amortization (1,150,202) (1,072,789)
--------- ---------
Net property 2,282,775 2,312,188
--------- ---------
Current Assets
- --------------
Cash and temporary cash investments 169,624 95,566
Accounts receivable, less provision
for uncollectible accounts 94,279 103,411
Inventories, at average cost 83,324 84,638
Taxes applicable to subsequent years 46,447 78,289
Prepayments and other 11,330 24,886
--------- ---------
Total current assets 405,004 386,790
--------- ---------
Other Assets
- ------------
Income taxes recoverable through
future revenues 237,178 249,330
Regulatory assets (Note 1) 156,480 168,844
Other assets 137,397 115,545
--------- ---------
Total other assets 531,055 533,719
--------- ---------
Total Assets $3,218,834 $3,232,697
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-3-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
(continued)
DPL Inc.
At At
September 30, December 31,
1995 1994
------------- ------------
--thousands--
<S> <C> <C>
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization
- --------------
Common shareholders' equity--
Common stock $ 1,070 $ 1,070
Other paid-in capital 777,086 776,622
Common stock held by employee plans (107,985) (108,649)
Earnings reinvested in the business 469,417 459,292
--------- ---------
Total common shareholders' equity 1,139,588 1,128,335
--------- ---------
Preferred stock 22,851 22,851
Long-term debt 1,088,875 1,093,736
--------- ---------
Total capitalization 2,251,314 2,244,922
--------- ---------
Current Liabilities
- -------------------
Accounts payable 55,715 75,334
Current portion of first mortgage bonds 450 4,730
Accrued taxes 69,324 123,936
Accrued interest 22,107 23,963
Gas costs refundable 23,856 5,635
Dividends payable 31,835 -
Other 6,780 21,340
--------- ---------
Total current liabilities 210,067 254,938
--------- ---------
Deferred Credits and Other
- --------------------------
Deferred taxes 514,694 511,847
Unamortized investment tax credit 80,430 81,463
Other 162,329 139,527
--------- ---------
Total deferred credits and other 757,453 732,837
--------- ---------
Total Capitalization and Liabilities $3,218,834 $3,232,697
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-4-
<PAGE>
Notes to Consolidated Financial Statements
1. Regulatory assets on the balance sheet consist of:
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
--millions--
<S> <C> <C>
Phase-in $ 64.5 $ 75.9
Demand-side management 33.2 31.9
Deferred interest 58.8 61.0
------ ------
Total $ 156.5 $ 168.8
====== ======
</TABLE>
2. Statement of Cash Flow Reconciliation of Net Income to Net Cash
Provided by Operating Activities:
<TABLE>
<CAPTION>
Nine Months Ended
September 30
1995 1994
---- ----
--millions--
<S> <C> <C>
Net Income $ 134.9 $ 127.2
Adjustments for non-cash items:
Depreciation and amortization 89.4 85.8
Deferred income taxes 9.0 (0.3)
Taxes applicable to subsequent years 86.8 81.3
Amortization of regulatory assets, net 12.2 8.1
Changes in Working Capital:
Accounts receivable 12.5 55.8
Accounts payable (15.4) (62.6)
Other (84.7) (62.0)
Other operating activities 7.7 (10.7)
------ ------
Net cash provided by operating
activities $ 252.4 $ 222.6
====== ======
</TABLE>
3. In September 1995, $110 million of Ohio Air Quality Development
Revenue Refunding Bonds, with an interest rate of 6.10%, due 2030,
were issued. Proceeds of the financing were placed in an irrevocable
trust to be used on December 1, 1995 to redeem a similar principal
amount of First Mortgage Bonds that secure a series of Pollution
Control Bonds with an interest rate of 9.5%.
-5-
<PAGE>
4. Reclassifications have been made in certain prior years' amounts
to conform to the current reporting presentation of DPL Inc.
5. 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 1994 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>
<TABLE>
<CAPTION>
OPERATING STATISTICS
The Dayton Power and Light Company
Three Months Nine Months
Ended Ended
September 30 September 30
------------- -------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Electric
- --------
Sales (millions of kWh)--
Residential 1,365 1,093 3,636 3,489
Commercial 927 835 2,468 2,311
Industrial 1,196 1,134 3,459 3,275
Other 1,021 620 3,070 1,781
------- ------- ------- -------
Total 4,509 3,682 12,633 10,856
Revenues (thousands of dollars)--
Residential 121,821 99,754 316,802 302,531
Commercial 61,607 56,779 170,374 163,016
Industrial 59,457 58,058 175,031 170,689
Other 34,327 25,665 101,159 76,190
------- ------- ------- -------
Operating Revenues 277,212 240,256 763,366 712,426
Non-Operating Revenues 2,463 2,478 7,228 6,916
------- ------- ------- -------
Total 279,675 242,734 770,594 719,342
Other Electric Statistics--
Average price per kWh--
retail and wholesale
customers (cents) 6.15 6.52 6.04 6.56
Fuel cost per net kWh
generated (cents) 1.36 1.36 1.34 1.41
Electric customers at
end of period 473,468 467,872 473,468 467,872
Average kWh use per
residential customer 3,229 2,613 8,611 8,351
Peak demand-maximum one hour
use (mw), (net) 2,961 2,758 2,961 2,824
-7-
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
OPERATING STATISTICS
(continued)
The Dayton Power and Light Company
Three Months Nine Months
Ended Ended
September 30 September 30
------------ ------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Gas
- ---
Sales (millions of mcf)--
Residential 1,981 1,756 18,369 20,006
Commercial 715 674 5,260 5,910
Industrial 140 196 1,788 2,431
Other 323 307 2,065 2,093
Transportation gas delivered 2,763 2,754 11,737 11,216
------- ------- ------- -------
Total 5,922 5,687 39,219 41,656
Revenues (thousands of dollars)--
Residential 12,930 12,369 98,235 111,511
Commercial 3,658 3,783 25,932 30,646
Industrial 708 929 8,239 11,527
Other 3,295 3,361 16,014 16,056
------- ------- ------- -------
Total 20,591 20,442 148,420 169,740
Other Gas Statistics--
Average price mcf-retail
customers (dollars) 5.88 6.32 5.14 5.38
Gas customers at end of period 291,812 287,524 291,812 287,524
Degree Days
(based on calendar month)--
Heating 108 92 3,546 3,886
Cooling 776 592 1,025 942
-8-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
DPL Inc.'s earnings for the third quarter of 1995 were $0.39 per
share, an increase from the $0.36 per share earned in the same period
a year ago. For the nine months ended September 30, 1995, earnings
were $1.33 per share, up six cents from $1.27 per share in 1994.
Continued strong business activity, hot summer weather and efficient
operations all combined to produce solid financial results in the
third quarter. Electric sales to business customers were up 8% over
the same period a year ago, and total retail sales were up 12%. DP&L
customers also established a new all-time record for peak electricity
usage of 2,961,000 kilowatts on August 14, 1995. These strong sales
gains were partially offset by financing fees associated with a debt
refinancing.
An analysis of the financial condition and results of operations
for the third quarter and nine months ended September 30, 1995 and
1994 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 September 30, 1995, DPL Inc.'s cash and temporary cash
investment balance was $169.6 million.
DP&L has available to it $97 million in short-term informal lines
of credit. As of September 30, 1995, DP&L had no short-term debt
outstanding. DPL Inc. and its subsidiaries have $200 million
available through a Revolving Credit Agreement. As of September 30,
1995, DPL Inc. had no outstanding borrowings under this Credit
Agreement. DP&L has authority from the Public Utilities Commission of
Ohio ("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.
DP&L 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 1995-1999.
-9-
<PAGE>
Results of Operations
- ---------------------
Electric revenues increased $36.9 million and $51.3 million,
respectively, for the third quarter and nine months ended
September 30, 1995, over the corresponding periods in 1994.
Residential sales increased 25% in the third quarter and 4% year-to-
date over last year due to the hot summer weather. Sales to business
customers increased 8% in the third quarter and 6% year-to-date over
last year reflecting the continued strength of the West Central Ohio
economy. For the nine month period, sales to other public utilities
increased 164% over 1994.
Fuel used in electric and steam production increased
$13.7 million and $24.0 million, respectively, over the third quarter
and year-to-date 1994, primarily related to increased electric sales.
Gas revenues and gas purchased for resale decreased $21.3 million
and $17.1 million, respectively, from year-to-date last year. The
decreases reflect a lower gas cost recovery rate and a decline of 10%
in retail gas sales due primarily to mild winter temperatures.
Interest and other income decreased $3.9 million year-to-date
from last year due primarily to interest on a tax refund in 1994.
Operation and maintenance expense increased $8.4 million and
$2.4 million, respectively, over the third quarter and year-to-date
last year. The increases are due primarily to financing fees of $4.7
million associated with a debt refinancing.
General taxes increased $1.6 million and $5.9 million,
respectively, for the third quarter and nine months ended
September 30, 1995. Higher property tax rates applied to increased
property investment and greater utility excise tax due to higher gross
receipts caused the increase.
Preferred stock dividends during the year-to-date period
decreased $3.8 million from last year due to redemptions of several
series of preferred stock in 1994.
-10-
<PAGE>
Part II. Other Information
---------------------------
Item 5. Other Information.
Rate Regulation and Government Legislation
- ------------------------------------------
On May 31, 1995 and June 1, 1995, respectively, DP&L filed its
electric and natural gas Long-Term Forecast Reports ("LTFR") with the
PUCO. An Integrated Resource Plan filed as part of the electric LTFR
included plans for the construction of a series of 75 MW combustion
turbine generating units. The first unit became operational on
June 1, 1995. The electric LTFR was approved by the PUCO on
October 5, 1995.
Environmental Considerations
- ----------------------------
Air Quality
- -----------
As required by State of Ohio regulation, in April 1995, the PUCO
initiated proceedings to conduct a review of DP&L's Environmental
Compliance Plan ("ECP"). DP&L submitted the ECP update report and
data to the PUCO on July 14, 1995. A Stipulation and Recommendation
recommending re-approval of DP&L's ECP was entered into between DP&L,
the Office of Consumers' Counsel and PUCO staff. A hearing on the
review of DP&L's ECP was held and the ECP was approved by the PUCO on
November 9, 1995.
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 DPL Inc. during the
quarter ended September 30, 1995.
-11-
<PAGE>
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 November 14, 1995 /s/ Stephen F. Koziar
------------------ ------------------------
Stephen F. Koziar
Group Vice President and
Secretary
Date November 14, 1995 /s/ Thomas M. Jenkins
------------------ ------------------------
Thomas M. Jenkins
Group Vice President
(Principal Financial Officer)
-12-
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
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<S> <C>
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
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</TABLE>
