<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 March 31, 1996
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 106,659,023 Shares
----------------------------------- ------------------
(Title of each class) (Outstanding at March 31, 1996)
<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 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
Part II - Other Information 10
Signatures 11
i
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CONSOLIDATED STATEMENT OF RESULTS OF OPERATIONS
DPL Inc.
Three Months Ended
March 31
------------------
1996 1995
---- ----
--thousands--
Income
- ------
Utility service revenues $368,421 $355,567
Interest and other income 6,377 6,297
-------- --------
Total Income 374,798 361,864
-------- --------
Expenses
- --------
Fuel and purchased power 61,624 64,147
Gas purchased for resale 64,559 63,019
Operation and maintenance 56,111 51,505
Depreciation and amortization 30,388 28,896
Amortization of regulatory assets, net 4,059 2,725
General taxes 32,312 31,261
Interest expense 22,030 23,134
Preferred dividend requirements of The Dayton
Power and Light Company 217 217
------- -------
Total Expenses 271,300 264,904
------- -------
Income Before Income Taxes 103,498 96,960
Income Taxes 39,672 36,147
-------- --------
Net Income $ 63,826 $ 60,813
======== ========
Average Number of Common Shares
Outstanding (thousands) 100,961 101,056
Earnings Per Share of Common Stock $0.63 $0.60
Dividends Paid Per Share of Common Stock $0.325 $0.31
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-1-
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
DPL Inc.
Three Months Ended
March 31
------------------
1996 1995
---- ----
--thousands--
Operating Activities
- --------------------
Cash received from utility customers $348,710 $343,636
Other operating cash receipts 6,982 8,559
Cash received (paid) for:
Fuel and purchased power (56,219) (61,472)
Purchased gas (49,260) (33,621)
Operation and maintenance labor (26,210) (25,592)
Nonlabor operating expenditures (33,684) (38,785)
Interest (27,869) (24,856)
Income taxes 11,107 11,375
Property, excise and payroll taxes (50,319) (49,582)
-------- --------
Net cash provided by operating activities 123,238 129,662
-------- --------
Investing Activities
- --------------------
Net cash used for property expenditures
and other (59,671) (28,515)
-------- --------
Financing Activities
- --------------------
Dividends paid on common stock (33,294) (31,330)
Purchase of treasury stock (898) -
Retirement of long-term debt - (42)
-------- --------
Net cash used for financing activities (34,192) (31,372)
-------- --------
Cash and temporary cash investments--
Net change 29,375 69,775
Balance at beginning of period 150,371 95,566
-------- --------
Balance at end of period $179,746 $165,341
======== ========
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-2-
<PAGE>
CONSOLIDATED BALANCE SHEET
DPL Inc.
At At
March 31, December 31,
1996 1995
-------- -----------
--thousands--
ASSETS
- ------
Property
- --------
Utility property $3,369,261 $3,370,697
Other property 56,102 55,427
Construction work in progress 39,078 23,496
---------- ----------
3,464,441 3,449,620
Less--
Accumulated depreciation and amortization (1,194,445) (1,167,779)
---------- ----------
Net property 2,269,996 2,281,841
---------- ----------
Current Assets
- --------------
Cash and temporary cash investments 179,746 150,371
Accounts receivable, less provision for
uncollectible accounts 165,926 147,998
Inventories, at average cost 58,536 82,700
Taxes applicable to subsequent years 52,890 82,371
Prepaid utility excise tax 36,079 18,069
Prepayments and other 13,153 21,715
---------- ----------
Total current assets 506,330 503,224
---------- ----------
Other Assets
- ------------
Income taxes recoverable through future
revenues 235,934 238,632
Regulatory assets 151,580 155,715
Other assets 180,157 143,343
---------- ----------
Total other assets 567,671 537,690
---------- ----------
Total Assets $3,343,997 $3,322,755
========== ==========
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-3-
<PAGE>
CONSOLIDATED BALANCE SHEET
(continued)
DPL Inc.
At At
March 31, December 31,
1996 1995
-------- -----------
--thousands--
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization
- --------------
Common shareholders' equity--
Common stock $ 1,067 $ 1,067
Other paid-in capital 771,042 771,414
Common stock held by employee plans (105,208) (107,228)
Earnings reinvested in the business 530,313 499,533
---------- ----------
Total common shareholders' equity 1,197,214 1,164,786
Preferred stock 22,851 22,851
Long-term debt 1,081,612 1,081,591
---------- ----------
Total capitalization 2,301,677 2,269,228
---------- ----------
Current Liabilities
- -------------------
Accounts payable 80,702 96,982
Accrued taxes 140,134 119,398
Accrued interest 18,746 24,929
Other 28,771 43,521
---------- ----------
Total current liabilities 268,353 284,830
---------- ----------
Deferred Credits and Other
- --------------------------
Deferred taxes 512,881 516,292
Unamortized investment tax credit 78,895 79,646
Other 182,191 172,759
---------- ----------
Total deferred credits and other 773,967 768,697
---------- ----------
Total Capitalization and Liabilities $3,343,997 $3,322,755
========== ==========
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-4-
<PAGE>
Notes to Consolidated Financial Statements
1. Reconciliation of Net Income to Net Cash Provided by Operating
Activities:
Three Months Ended
March 31
1996 1995
---- ----
--millions--
Net Income $ 63.8 $ 60.8
Adjustments for non-cash items:
Depreciation and amortization 30.4 28.9
Taxes applicable to subsequent years 29.8 28.7
Changes in Working Capital:
Accounts receivable (16.4) (10.4)
Accounts payable (10.8) 6.8
Other 11.1 12.1
Other operating activities 15.3 2.8
------ ------
Net cash provided by operating activities $123.2 $129.7
====== ======
2. Reclassifications have been made in certain prior years' amounts
to conform to the current reporting presentation of DPL Inc.
3. 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 1995 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.
-5-
<PAGE>
OPERATING STATISTICS
The Dayton Power and Light Company
Three Months Ended
March 31
------------------
1996 1995
---- ----
Electric
- --------
Sales (millions of kWh) --
Residential 1,498 1,346
Commercial* 832 772
Industrial* 1,063 1,096
Other 946 1,020
------- -------
Total 4,339 4,234
Revenues (thousands of dollars) --
Residential 119,350 110,309
Commercial* 56,813 53,837
Industrial* 53,428 56,045
Other 35,034 35,885
------- -------
Total 264,625 256,076
Other Electric Statistics --
Average price per kWh--retail and wholesale
customers (cents) 6.03 5.99
Fuel cost per net kWh generated (cents) 1.30 1.34
Electric customers at end of period 476,557 471,596
Average kWh use per residential customer 3,518 3,194
Peak demand--maximum one hour use (mw), (net) 2,668 2,508
*Includes the effect of reclassifying certain industrial customers as
commercial customers in the fourth quarter of 1995.
-6-
<PAGE>
OPERATING STATISTICS
(continued)
The Dayton Power and Light Company
Three Months Ended
March 31
------------------
1996 1995
---- ----
Gas
- ---
Sales (millions of mcf) --
Residential 14,712 12,771
Commercial 4,447 3,545
Industrial 1,846 1,225
Other 1,308 1,196
Transported gas 5,651 5,453
------- -------
Total 27,964 24,190
Revenues (thousands of dollars) --
Residential 66,910 65,472
Commercial 19,128 17,344
Industrial 7,259 5,839
Other 9,218 8,532
------- -------
Total 102,515 97,187
Other Gas Statistics --
Average price per mcf--retail customers
(dollars) 4.42 5.03
Gas customers at end of period 295,778 291,315
Degree Days (based on calendar month) --
Heating 3,197 2,831
Cooling 0 0
-7-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
DPL Inc.'s earnings for the first quarter of 1996 were $0.63 per
share, an increase from the $0.60 per share earned in the same period
a year ago. Continued strong business activity and colder than normal
winter weather were the main reasons behind the improved financial
performance. DPL Inc. was also able to continue to control costs
throughout the Company, which helped to achieve the earnings growth.
An analysis of the financial condition and results of operations
for the first quarter ended March 31, 1996 and 1995 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 March 31, 1996, DPL Inc.'s cash and temporary cash
investment balance was $179.7 million.
DP&L has available to it $97 million in short-term informal lines
of credit. As of March 31, 1996, DP&L had no short-term debt
outstanding. DPL Inc. and its subsidiaries have $200 million
available through a Revolving Credit Agreement. As of March 31, 1996,
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 1996-2000.
-8-
<PAGE>
Results of Operations
- ---------------------
Electric revenues increased by $8.6 million for the first quarter
of 1996. Residential customer revenues were up $9.0 million as a
result of higher sales from colder weather.
Gas revenues increased $5.3 million from the corresponding
quarter last year. The variance reflects a 16% increase in gas sales
due to colder weather and to increased business activity.
Fuel and purchased power declined $2.5 million in the first
quarter primarily due to lower electric fuel costs. Operation and
maintenance expense was $4.6 million higher in the first quarter of
1996 compared to 1995. The variance was due to increased insurance
costs.
Income taxes increased $3.5 million from the first quarter of
1995 primarily due to higher book income.
-9-
<PAGE>
Part II. Other Information
---------------------------
Item 4. Submission of Matters to a Vote of Security Holders.
At DPL Inc.'s Annual Meeting of Shareholders held on April 16,
1996, three directors of DPL Inc. were elected, each of whom will
serve a three year term expiring in 1999. The nominees were elected
as follows: James F. Dicke, II, 94,048,977 shares FOR, 1,398,265
shares WITHHELD; Peter H. Forster, 94,000,967 shares FOR, 1,446,275
shares WITHHELD; and Jane G. Haley, 94,003,920 shares FOR, 1,443,322
shares WITHHELD.
Item 5. Other Information.
Rate Regulation and Government Legislation
- ------------------------------------------
On April 24, 1996, the Federal Energy Regulatory Commission
("FERC") issued final rules requiring all electric utilities that own
or control transmission facilities to file open-access transmission
service tariffs, which tariffs would provide third parties with non-
discriminatory wholesale transmission service comparable to what the
utility provides itself. The rules require all such filings within
60 days of the publication of the orders in the Federal Register.
DP&L filed its open-access tariff on April 12, 1996. FERC further
stated that all stranded costs reasonably incurred and costs of
complying with the rules will be recoverable by electric utilities.
On March 21, 1996, legislation was introduced in the Ohio House
of Representatives which would restructure the electric industry in
Ohio. It is not expected that this legislation will be passed during
this legislative session.
On January 25, 1996, Governor Voinovich reappointed Chairman
Craig A. Glazer to the PUCO for a five year term which commenced on
April 11, 1996 and will extend until April 10, 2001.
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 March 31, 1996.
-10-
<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 May 13, 1996 /s/ Stephen F. Koziar
--------------------------- ---------------------------
Stephen F. Koziar
Group Vice President and
Secretary
Date May 13, 1996 /s/ Thomas M. Jenkins
--------------------------- ---------------------------
Thomas M. Jenkins
Group Vice President
(Principal Financial
Officer)
-11-
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