DPL INC
10-Q, 1997-11-12
ELECTRIC & OTHER SERVICES COMBINED
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<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, 1997
                                   
                                  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 Identification No.)
incorporation or organization)
                                   
                       Courthouse Plaza Southwest
                            Dayton, Ohio  45402
                 ----------------------------------------
                 (Address of principal executive offices)
                                   
                            (937) 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              106,623,694 Shares
- -----------------------------------      -----------------------------------  
     (Title of each class)               (Outstanding at September 30, 1997)
<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
<PAGE>
            CONSOLIDATED STATEMENT OF RESULTS OF OPERATIONS
                                   
                               DPL INC.


                                         Three Months Ended  Nine Months Ended
                                            September 30        September 30
                                         ------------------  -----------------
                                            1997     1996       1997     1996
                                            ----     ----       ----     ----
                                             --millions--        --millions--
                                                               
Income                                                         
- ------                                                               
Utility service revenues                  $283.4   $277.6     $909.3   $927.4
Interest and other income                    4.2      4.8       22.0     19.6
                                          ------   ------     ------   ------
     Total Income                          287.6    282.4      931.3    947.0
                                          ------   ------     ------   ------
Expenses                                                       
- --------                                                               
Fuel and purchased power                    59.5     57.8      165.7    174.1
Gas purchased for resale                    10.8      9.7       97.6     93.7
Operation and maintenance                   53.6     57.4      164.8    182.0
Depreciation and amortization               31.9     30.1       95.4     92.7
Amortization of regulatory assets, net       4.6      4.1       12.6     11.6
General taxes                               33.6     32.5      100.6     96.9
Interest expense                            20.3     22.4       64.0     66.5
Preferred dividend requirements of The   
   Dayton Power and Light Company            0.2      0.2        0.7      0.7
                                          ------   ------     ------   ------
     Total Expenses                        214.5    214.2      701.4    718.2
                                          ------   ------     ------   ------
Income Before Income Taxes                  73.1     68.2      229.9    228.8
                                                               
Income taxes                                28.2     26.5       83.7     88.4
                                          ------   ------     ------   ------
Net Income                                $ 44.9   $ 41.7     $146.2   $140.4
                                          ======   ======     ======   ======
Average Number of Common Shares                                
   Outstanding (millions)                  101.1    100.4      100.8    100.6
                                                               
Earnings Per Share of Common Stock        $ 0.44   $ 0.42     $ 1.45   $ 1.40
                                                               
Dividends Paid Per Share of Common Stock  $ 0.34   $0.325     $ 1.02   $0.975






See Notes to Consolidated Financial Statements.
These interim statements are unaudited.




                                  -1-
<PAGE>
                 CONSOLIDATED STATEMENT OF CASH FLOWS

                               DPL INC.
                                   
                                                  Nine Months Ended
                                                     September 30 
                                                  -----------------
                                                    1997      1996
                                                    ----      ----
                                                     --millions--
Operating Activities                                       
- --------------------                                                           
  Cash received from utility customers            $939.0    $952.3
  Other operating cash receipts                     14.2      20.1
  Cash paid for:                                            
     Fuel and purchased power                     (173.2)   (166.7)
     Purchased gas                                (128.7)   (133.5)
     Operation and maintenance labor               (61.7)    (61.4)
     Nonlabor operating expenditures               (82.6)   (110.0)
     Interest                                      (70.4)    (71.8)
     Income taxes                                  (60.9)    (77.8)
     Property, excise and payroll taxes           (109.2)   (104.7)
                                                  ------    ------      
  Net cash provided by operating activities        266.5     246.5
                                                        
Investing Activities                                        
- --------------------                                                            
  Property expenditures                            (77.5)    (71.8)
  Other activities                                 (95.9)   (213.2)
                                                  ------    ------      
  Net cash used for investing activities          (173.4)   (285.0)
                                                         
Financing Activities                                        
- --------------------                                                            
  Dividends paid on common stock                  (102.8)    (98.6)
  Retirement of long-term debt                     (42.4)     (0.5)
  Issuance of common stock                          14.8        -
  Issuance (retirement) of short-term debt          (4.0)     35.0
  Purchase of treasury stock                          -      (15.8)
                                                  ------    ------
Net cash used for financing activities            (134.4)    (79.9)
                                                        
                                                  
Cash and temporary cash investments--                       
- -----------------------------------                                
  Net change                                       (41.3)   (118.4)
  Balance at beginning of period                    72.8     150.4
                                                  ------    ------      
  Balance at end of period                        $ 31.5    $ 32.0
                                                  ======    ======
                                   
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.

                                  -2-
<PAGE>
                      CONSOLIDATED BALANCE SHEET

                               DPL INC.
                                   
                                                     At            At
                                                September 30,  December 31,
                                                   1997           1996
                                                -------------  ------------
                                                       --millions--
ASSETS                                                           
- ------                                                                 
Property                                          $3,607.6      $3,548.7
- --------                                                            
Less--                                                      
  Accumulated depreciation and amortization       (1,360.5)     (1,279.8)
                                                  --------      --------    
     Net property                                  2,247.1       2,268.9
                                                  --------      --------    
Current Assets                                              
- --------------                                                            
Cash and temporary cash investments                   31.5          72.8
Accounts receivable, less provision for              156.6         201.9
   uncollectible accounts
Inventories, at average cost                          81.0          75.9
Deferred property and excise taxes                    49.7          87.3
Other current assets                                  22.3          53.6
                                                  --------      --------    
  Total current assets                               341.1         491.5
                                                  --------      --------    
                                                  
Other Assets                                                
- ------------                                                            
Financial assets                                     301.4         170.3
Income taxes recoverable through future revenues     214.4         222.4
Regulatory assets                                    121.7         137.3
Other                                                136.8         128.3
                                                  --------      --------    
  Total other assets                                 774.3         658.3
                                                  --------      --------    
Total Assets                                      $3,362.5      $3,418.7
                                                  ========      ========
                                   
                                   
                                   
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
                                   
                                   
                                   
                                   
                                   
                                   
                                  -3-
<PAGE>
                      CONSOLIDATED BALANCE SHEET
                              (continued)
                               DPL INC.
                                                     At            At
                                                September 30,  December 31,
                                                   1997           1996
                                                -------------  ------------
                                                       --millions--
CAPITALIZATION AND LIABILITIES                              
- ------------------------------                                            
Capitalization                                              
- --------------                                                            
Common shareholders' equity--                               
  Common stock                                    $    1.1      $    1.1
  Other paid-in capital                              772.3         756.8
  Common stock held by employee plans                (99.3)       (102.1)
  Earnings reinvested in the business                571.1         544.7
                                                  --------      --------    
     Total common shareholders' equity             1,245.2       1,200.5
                                                            
Preferred stock                                       22.9          22.9
Long-term debt                                     1,010.9       1,014.3
                                                  --------      --------    
     Total capitalization                          2,279.0       2,237.7
                                                  --------      --------     
Current Liabilities                                         
- -------------------                                                            
Accounts payable                                      68.4         114.4
Dividends payable                                     34.9            -
Short-term debt                                        6.0          10.0
Accrued taxes                                         94.3         137.7
Accrued interest                                      17.3          24.8
Current deferred income tax                           15.2            -
Current portion of long-term debt                      3.4          42.4
Other                                                 34.4          57.0
                                                  --------      --------    
     Total current liabilities                       273.9         386.3
                                                  --------      --------    
Deferred Credits and Other                                  
- --------------------------                                               
Deferred taxes                                       477.2         488.1
Unamortized investment tax credit                     73.2          75.4
Insurance and claims costs                           142.8         107.9
Other                                                116.4         123.3
                                                  --------      --------    
     Total deferred credits and other                809.6         794.7
                                                  --------      --------    
Total Capitalization and Liabilities              $3,362.5      $3,418.7
                                                  ========      ========

See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
                                   
                                  -4-
<PAGE>
              Notes to Consolidated Financial Statements


1.   Reclassifications have been made in certain prior years' amounts
to conform to the current reporting presentation of DPL Inc.

2.   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 1996 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  Nine Months Ended
                                            September 30        September 30
                                         ------------------  -----------------
                                            1997     1996       1997     1996
                                            ----     ----       ----     ----
Electric                                                      
- --------                                                              
Sales (millions of kWh)--                                      
  Residential                              1,141    1,197      3,551    3,727
  Commercial                                 953      895      2,604    2,608
  Industrial                               1,244    1,198      3,526    3,383
  Other                                      968      814      2,611    2,510
                                         -------  -------    -------  -------
     Total                                 4,306    4,104     12,292   12,228
                                                                      
Revenues (thousands of dollars)--                              
  Residential                            102,024  107,348    304,323  321,665
  Commercial                              59,801   59,224    174,188  179,089
  Industrial                              59,633   57,800    167,462  166,729
  Other                                   39,134   32,884    102,430   99,960
                                         -------  -------    -------  -------
     Total                               260,592  257,256    748,403  767,443
                                                               
Other Electric Statistics--                                    
  Average price per kWh--retail and                             
     wholesale customers (cents)            5.97     6.19       6.01     6.20
  Fuel cost per net kWh generated (cents)   1.27     1.23       1.27     1.26
  Electric customers at end of period    481,200  477,675    481,200  477,675
  Average kWh use per residential          
     customer                              2,654    2,805      8,260    8,742
  Peak demand-maximum one hour                                 
     use (mw), (net)                       2,848    2,887      2,848    2,887
                                                               
                                                               
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                  -6-
<PAGE>
                         OPERATING STATISTICS
                              (continued)
                  The Dayton Power and Light Company
                                   
                                   

                                         Three Months Ended  Nine Months Ended
                                           September 30        September 30
                                         ------------------  -----------------
                                            1997     1996       1997     1996
                                            ----     ----       ----     ----
Gas                                                           
- ---                                                              
Sales (millions of MCF)--                                      
  Residential                              2,006    1,841     19,035   20,838
  Commercial                                 835      631      6,039    6,320
  Industrial                                 164      158      1,729    2,743
  Other                                      104      244      1,387    1,962
  Transportation gas delivered             3,201    3,092     14,031   12,366
                                         -------  -------    -------  -------
     Total                                 6,310    5,966     42,221   44,229
                                                               
Revenues (thousands of dollars)--                              
  Residential                             15,074   12,922    106,540  102,625
  Commercial                               4,601    3,544     30,824   28,636
  Industrial                                 725      868      8,092   11,078
  Other                                    2,940    3,317     16,384   16,643
                                         -------  -------    -------  -------
     Total                                23,340   20,651    161,840  158,982
                                                               
Other Gas Statistics--                                         
  Average price MCF-retail customers        
     (dollars)                              6.74     6.39       5.39     4.72
  Gas customers at end of period         297,458  295,110    297,458  295,110
                                                               
Degree Days (based on calendar month)--
  Heating                                    111      107      3,729    4,027
  Cooling                                    486      552        669      834


















                                  -7-
<PAGE>
Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations.

     DPL Inc.'s earnings for the third quarter of 1997 were $0.44 per
share, up $0.02 from the third quarter earnings of $0.42 per share a
year ago.  For the nine months ended September 30, 1997 earnings were
$1.45 per share, versus $1.40 per share earned in the same period last
year.  Ongoing cost control efforts throughout the Company resulted in
a reduction in operating and maintenance expenses which offset retail
electric sales levels through September that were 1% below last year.

     The financial condition and results of operations for the third
quarter and nine months ended September 30, 1997 and 1996 are 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, 1997, DPL Inc.'s cash and temporary cash
investment balance was $31.5 million.  In addition, $301.4 million was
invested in debt and equity financial assets.

     DPL Inc. and its subsidiaries have $200 million available through
a Revolving Credit Agreement ("Credit Agreement").  As of September
30, 1997, 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 also has $97 million
available in short-term informal lines of credit.  As of September 30,
1997, DP&L had $6.0 million in commercial paper outstanding.

     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 1997-2001.








                                  -8-
<PAGE>
Results of Operations
- ---------------------
     Utility service revenues increased by $5.8 million from the third
quarter last year and decreased $18.1 million for the nine months
ended September 30, 1997.  An increase in electric sales to other
utilities was the primary cause of the increase for the quarter.
Increases in electric industrial sales and sales to other utilities
were offset by reductions in other sales classes, due to the effects
of mild weather as well as lower fuel cost recovery rates, resulting
in the year-to-date variation.

     Fuel and purchased power increased $1.7 million compared to the
corresponding quarter a year ago, and decreased $8.4 million year-to-
date compared to 1996.  Increased purchased power expenses from higher
sales to other utilities caused the increase for the quarter.
Decreased retail electric sales and lower fuel costs were the primary
causes of the year-to-date variation.

     Gas purchased for resale increased $1.1 million and $3.9 million,
respectively, for the third quarter and nine months ended
September 30, 1997.  Higher natural gas costs were partially offset by
lower sales due to milder weather.

     Operation and maintenance expense decreased from last year by
$3.8 million for the quarter and $17.2 million year-to-date.  Lower
employee benefit costs from a downward adjustment to the actuarially
determined pension and retiree health care expenses, decreased
production maintenance, and overall cost containment efforts
contributed to the third quarter and year-to-date decreases.

     Depreciation and amortization increased by $1.8 million for the
quarter and $2.7 million year-to-date compared to last year due to
increased depreciable plant base.

     General taxes increased $1.1 million and $3.7 million compared to
the third quarter and year-to-date 1997, respectively, due to higher
property taxes from additional property.

     Income taxes increased $1.7 million from the corresponding
quarter last year due to higher book income.  Income taxes decreased
$4.7 million from the year-to-date last year due to lower taxable income.












                                  -9-
<PAGE>
                      Part II.  Other Information
                      ---------------------------

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.  On July 31, 1997, FERC issued an order requiring
DP&L and other utilities to refile their open-access transmission
tariffs with FERC.  DP&L filed their revised open-access transmission
tariffs on August 15, 1997.

     On October 15, 1997, PUCO Commissioner David Johnson announced
that he will resign effective November 30, 1997.  Commissioner Johnson
is serving a term that was scheduled to expire in April 1998.


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 September 30, 1997.






















                                 -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:     November 12, 1997        /s/ Stephen F. Koziar
          -----------------        ----------------------------------
                                   Stephen F. Koziar
                                   Group Vice President and Secretary




Date:     November 12, 1997        /s/ Thomas M. Jenkins
          -----------------        ----------------------------------
                                   Thomas M. Jenkins
                                   Group Vice President and Treasurer
                                   (Principal Financial Officer)















                                 -11-



<TABLE> <S> <C>

<ARTICLE> UT
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1997
<PERIOD-END>                               SEP-30-1997
<BOOK-VALUE>                                  PER-BOOK
<TOTAL-NET-UTILITY-PLANT>                      2247100
<OTHER-PROPERTY-AND-INVEST>                          0
<TOTAL-CURRENT-ASSETS>                          341100
<TOTAL-DEFERRED-CHARGES>                        336100
<OTHER-ASSETS>                                  438200
<TOTAL-ASSETS>                                 3362500
<COMMON>                                          1100
<CAPITAL-SURPLUS-PAID-IN>                       673000
<RETAINED-EARNINGS>                             571100
<TOTAL-COMMON-STOCKHOLDERS-EQ>                 1245200
                                0
                                      22900
<LONG-TERM-DEBT-NET>                           1010900
<SHORT-TERM-NOTES>                                   0
<LONG-TERM-NOTES-PAYABLE>                            0
<COMMERCIAL-PAPER-OBLIGATIONS>                    6000
<LONG-TERM-DEBT-CURRENT-PORT>                     3400
                            0
<CAPITAL-LEASE-OBLIGATIONS>                          0
<LEASES-CURRENT>                                     0
<OTHER-ITEMS-CAPITAL-AND-LIAB>                 1074100
<TOT-CAPITALIZATION-AND-LIAB>                  3362500
<GROSS-OPERATING-REVENUE>                       909300
<INCOME-TAX-EXPENSE>                             83700
<OTHER-OPERATING-EXPENSES>                      636700
<TOTAL-OPERATING-EXPENSES>                      720400
<OPERATING-INCOME-LOSS>                         188900
<OTHER-INCOME-NET>                               22000
<INCOME-BEFORE-INTEREST-EXPEN>                  210900
<TOTAL-INTEREST-EXPENSE>                         64000
<NET-INCOME>                                    146900
                        700
<EARNINGS-AVAILABLE-FOR-COMM>                   146200
<COMMON-STOCK-DIVIDENDS>                        102800
<TOTAL-INTEREST-ON-BONDS>                        70400
<CASH-FLOW-OPERATIONS>                          266500
<EPS-PRIMARY>                                     1.45
<EPS-DILUTED>                                     1.45
        

</TABLE>


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