<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, 2000
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 132,138,604 Shares
- ----------------------------------- -------------------------------
(Title of each class) (Outstanding at March 31, 2000)
<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
Consolidated Statement of Shareholders' Equity 5
Notes to Consolidated Financial Statements 6
Operating Statistics 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures about
Market Risk 13
Part II. Other Information 14
Signatures 15
i
<PAGE>
CONSOLIDATED STATEMENT OF RESULTS OF OPERATIONS
DPL INC.
Three Months Ended
March 31
------------------
2000 1999
---- ----
--millions--
Revenues
- --------
Utility Service Revenues --
Electric $258.9 $259.9
Gas 101.4 102.5
Other revenues 26.3 21.1
------ ------
Total Revenues 386.6 383.5
Expenses
- --------
Fuel and purchased power 57.8 61.2
Gas purchased for resale 90.8 84.2
Operation and maintenance 47.8 38.0
Depreciation and amortization 34.3 33.0
Amortization of regulatory assets, net 6.9 6.5
General taxes 34.5 34.3
------ ------
Total Expenses 272.1 257.2
------ ------
Operating Income 114.5 126.3
Other Income (Deductions)
- -------------------------
Investment income 17.4 17.1
Other income (deductions) (9.3) 0.4
Interest expense (33.7) (26.4)
Trust preferred distributions by subsidiary (6.1) -
------ ------
Income before income taxes 82.8 117.4
Income taxes 32.7 44.9
------ ------
Net income $ 50.1 $ 72.5
====== ======
Average Number of Common Shares
Outstanding (millions) 145.4 152.9
Earnings Per Share of Common Stock - Basic
and Diluted $ 0.34 $ 0.47
Dividends Paid Per Share of Common Stock $0.235 $0.235
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
------------------
2000 1999
---- ----
--millions--
Operating Activities
- --------------------
Cash received from utility customers $361.6 $341.1
Other operating cash receipts 38.7 26.0
Cash paid for:
Fuel and purchased power (51.2) (53.8)
Purchased gas (65.0) (73.0)
Operation and maintenance labor (21.0) (24.2)
Nonlabor operating expenditures (52.1) (16.6)
Interest (30.8) (29.8)
Income taxes (24.1) (12.4)
Property, excise and payroll taxes (56.7) (55.7)
------ ------
Net cash provided by operating activities 99.4 101.6
Investing Activities
- --------------------
Capital expenditures (67.0) (20.5)
Purchases of available-for-sale financial assets (91.8) (130.4)
Sales of available-for-sale financial assets 28.0 72.0
------ ------
Net cash used for investing activities (130.8) (78.9)
Financing Activities
- --------------------
Issuance of preferred securities 479.3 -
Issuance of long-term debt 421.4 -
Issuance of warrants 47.9 -
Retirement of long-term debt (2.5) (2.0)
Dividends paid on common stock (35.3) (36.1)
Issuance (retirement) of short-term debt (227.0) 45.5
Purchase of treasury stock (585.2) (30.5)
------ ------
Net cash provided by (used for) financing activities 98.6 (23.1)
Cash and temporary cash investments--
- -----------------------------------
Net change 67.2 (0.4)
Balance at beginning of period 111.9 13.7
------ ------
Balance at end of period $179.1 $ 13.3
====== ======
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-2-
<PAGE>
CONSOLIDATED BALANCE SHEET
DPL INC.
At At
March 31, December 31,
2000 1999
--------- ------------
--millions--
ASSETS
Property
- --------
Electric property $3,402.5 $3,385.0
Gas property 332.7 330.6
Other property 226.5 184.7
-------- --------
Total property 3,961.7 3,900.3
Less--
Accumulated depreciation and amortization (1,667.6) (1,633.5)
-------- --------
Net property 2,294.1 2,266.8
-------- --------
Current Assets
- --------------
Cash and temporary cash investments 179.1 111.9
Accounts receivable, less provision for
uncollectible accounts of $2.3 and
$4.3, respectively 207.0 218.1
Inventories, at average cost 70.1 93.1
Deferred property and excise taxes 61.8 94.6
Other 72.9 71.7
-------- --------
Total current assets 590.9 589.4
-------- --------
Other Assets
- ------------
Financial assets 1,179.8 1,094.4
Income taxes recoverable through future revenues 165.5 168.5
Other regulatory assets 45.4 53.3
Other 168.8 168.0
-------- --------
Total other assets 1,559.5 1,484.2
-------- --------
Total Assets $4,444.5 $4,340.4
======== ========
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,
2000 1999
--------- ------------
--millions--
CAPITALIZATION AND LIABILITIES
Capitalization
- --------------
Common shareholders' equity--
Common stock $ 1.3 $ 1.6
Other paid-in capital 125.9 739.0
Warrants 50.0 -
Common stock held by employee plans (90.5) (90.7)
Accumulated other comprehensive income 118.9 109.8
Earnings reinvested in the business 706.8 691.9
------- -------
Total common shareholders' equity 912.4 1,451.6
Preferred stock equity 22.9 22.9
Preferred stock subject to mandatory redemption 0.1 -
Company obligated mandatorily redeemable
trust preferred securities of subsidiary
holding solely parent debentures 504.2 -
Long-term debt 1,756.0 1,336.6
-------- --------
Total capitalization 3,195.6 2,811.1
-------- --------
Current Liabilities
- -------------------
Accounts payable 109.2 130.4
Accrued taxes 135.6 170.6
Accrued interest 33.0 33.1
Short-term debt 67.1 294.1
Current deferred income tax 25.5 10.0
Other 41.8 56.6
-------- --------
Total current liabilities 412.2 694.8
-------- --------
Deferred Credits and Other
- --------------------------
Deferred taxes 466.3 471.9
Unamortized investment tax credit 65.6 66.4
Insurance and claims costs 141.1 140.0
Other 163.7 156.2
-------- --------
Total deferred credits and other 836.7 834.5
-------- --------
Total Capitalization and Liabilities $4,444.5 $4,340.4
======== ========
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-4-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
DPL INC.
Three Months Ended March 31, 2000 and 1999
Common
Common Stock Stock Accum. Earnings
------------------- Other Held by- Other Reinvested
Outstanding Paid-In Employee Comp. in the
$ in millions Shares Amount Capital Warrants Plans Income Business Total
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2000:
Beginning balance 157,801,404 $1.6 $739.0 - $(90.7) $109.8 $691.9 $1,451.6
Net income 50.1
Unrealized gains, net
of reclasification 9.2
adjustments, after tax
Total comprehensive income 59.3
Common stock dividends (35.3) (35.3)
Issuance of securities (23.1) 50.0 26.9
Treasury stock (25,662,800) (0.3) (590.9) (591.2)
Employee stock plans 0.9 0.2 1.1
Other (0.1) 0.1 -
------------------------------------------------------------------------------
Ending balance 132,138,604 $1.3 $125.9 $50.0 $(90.5) $118.9 $706.8 $912.4
==============================================================================
1999:
Beginning balance 161,264,604 $1.6 $799.0 - $(94.4) $ 47.2 $630.3 $1,383.7
Net income 72.5
Unrealized gains, net
of reclassification
adjustments, after tax 2.2
Total comprehensive income 74.7
Common stock dividends (36.1) (36.1)
Treasury stock (1,983,600) - (35.3) (35.3)
Employee stock plans 0.5 1.7 2.2
------------------------------------------------------------------------------
Ending balance 159,281,004 $1.6 $764.2 - $(92.7) $ 49.4 $666.7 $1,389.2
==============================================================================
</TABLE>
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
-5-
<PAGE>
Notes to Consolidated Financial Statements
1. DPL Inc. has prepared the consolidated financial statements in
this report 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 1999 Annual Report on Form 10-K.
2. Reclassifications have been made in certain prior years' amounts
to conform to the current reporting presentation of DPL Inc.
In the opinion of management, the information included in this
Form 10-Q reflects all adjustments which are necessary for a fair
statement of the results of operations for the periods presented. Any
adjustments are of a normal recurring nature.
3. Business Segment Reporting
DPL Inc.'s principal subsidiary, DP&L, provides energy services
to its customers within a 6,000 square mile service territory. DP&L
sells and distributes electricity and natural gas to residential,
commercial, industrial and governmental customers. As a result of
legislation that will give electric utility customers a choice of
energy providers starting January 1, 2001, DP&L has begun aligning
its business units. For purposes of the segment disclosure required
by the FASB Statement No. 131, "Disclosure about Segments of an
Enterprise and Related Information," DPL Inc.'s results are classified
in two reportable segments, electric and natural gas. Amounts attributed
to segments below the quantitative thresholds for separate disclosure
are primarily for a natural gas supply management company, insurance,
electric peaking generation and street lighting services.
SEGMENT INFORMATION
For the three months
ended March 31,
$ in millions 2000 1999
- ------------------------------------------------------------------
$ $
ELECTRIC
- --------
Revenues from external customers 258.9 259.9
Intersegment revenues 0.6 1.2
Earnings before interest and taxes 95.9 101.8
NATURAL GAS
- -----------
Revenues from external customers 101.4 102.5
Intersegment revenues 0.5 0.8
Earnings before interest and taxes 20.3 23.8
-6-
<PAGE>
OTHER
- -----
Revenues from external customers 26.3 21.1
Intersegment revenues 1.8 1.8
Earnings before interest and taxes (1.7) 0.7
TOTAL
- -----
Revenues from external customers 386.6 383.5
Intersegment revenues 2.9 3.8
Earnings before interest and taxes 114.5 126.3
Profit or Loss Reconciliation (a)
- ---------------------------------
Total earnings before interest and taxes 114.5 126.3
Investment income 17.4 17.1
Other income and deductions (9.3) 0.4
Interest expense (33.7) (26.4)
Trust preferred distributions by subsidiary (6.1) -
Income before income taxes 82.8 117.4
(a) For categories not reconciled above, segment totals
equal consolidated totals.
-7-
<PAGE>
OPERATING STATISTICS
The Dayton Power and Light Company
Three Months Ended
March 31
------------------
2000 1999
---- ----
Electric
- --------
Sales (millions of kWh)--
Residential 1,340 1,414
Commercial 825 798
Industrial 1,158 1,123
Other 872 908
------- -------
Total 4,195 4,243
Revenues (thousands of $)--
Residential 110,868 114,101
Commercial 57,027 55,249
Industrial 55,487 54,783
Other 36,121 36,293
------- -------
Total 259,503 260,426
Other Electric Statistics--
Average price per kWh-retail and
wholesale customers (cents) 6.11 6.04
Fuel cost per net kWh generated (cents) 1.18 1.26
Electric customers at end of period 496,142 491,840
Average kWh use per residential customer 3,030 3,223
Peak demand-maximum one hour
use (MW), (net) 2,666 2,561
-8-
<PAGE>
OPERATING STATISTICS
(continued)
The Dayton Power and Light Company
Three Months Ended
March 31
------------------
2000 1999
---- ----
Gas
- ---
Sales (millions of MCF)--
Residential 11,634 13,188
Commercial 3,554 3,947
Industrial 1,066 1,237
Other 470 673
Transportation gas delivered 6,893 6,513
------- -------
Total 23,617 25,558
Revenues (thousands of $)--
Residential 67,228 68,615
Commercial 19,657 19,622
Industrial 5,655 5,827
Other 8,940 8,449
------- -------
Total 101,480 102,513
Other Gas Statistics--
Average price per MCF-retail customers ($) 5.68 5.11
Gas customers at end of period 309,743 307,018
Degree Days (based on calendar month)--
Heating 2,606 2,843
Cooling - -
-9-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
-----------------------------------------------------------
This report contains certain forward-looking statements regarding
plans and expectations for the future. Investors are cautioned that
actual outcomes and results may vary materially from those projected
due to various factors beyond DPL Inc.'s control, including abnormal
weather, unusual maintenance or repair requirements, changes in fuel
costs, increased competition, regulatory changes and decisions,
changes in accounting rules and adverse economic conditions.
DPL Inc.'s earnings for the first quarter of 2000 were $0.34 per
share, down 28% from $0.47 per share earned in the first quarter a
year ago. The earnings reduction is primarily attributable to an
increase in operation and maintenance expenses, an increase in
interest expense caused by an increase in long-term debt and costs
associated with the issuance by a subsidiary company of preferred
stock subject to mandatory redemption.
Financial Condition
- -------------------
On February 2, 2000, DPL Inc. entered into a series of
recapitalization transactions including the issuance to Kohlberg
Kravis Roberts & Co. ("KKR"), an investment company, of $550 million
of a combination of voting preferred and trust preferred securities
and warrants. The securities were issued through a private offering
pursuant to Section 4(2) of the Securities Act of 1933. The trust
preferred securities sold to KKR have an aggregate face amount of $550
million, were issued at an initial discounted aggregate price of $500
million, have a maturity of 30 years (subject to acceleration to six
months after the exercise of the warrants) and pay distributions at a
rate of 8.5% of the aggregate face amount per year. The 6.8 million
shares of mandatorily redeemable voting preferred securities, par
value of $0.01 per share, were issued at an aggregate purchase price
of $68,000 and carry voting rights for up to 4.9% of DPL Inc.'s total
voting rights and the nomination of one Board seat. The 31.6 million
warrants, representing approximately 19.9% of DPL Inc.'s shares
currently outstanding, have a term of 12 years, an exercise price of
$21 per share and were sold for an aggregate purchase price of $50
million. The $550 million KKR investment closed on March 13, 2000.
DPL Inc. will recognize the trust preferred securities original issue
discount in 2000.
DPL Inc. used the proceeds from this recapitalization, combined
with $425 million of new debt capital to retire $227 million of short-
term debt and repurchase 25.7 million common shares at a weighted
average purchase price of $23 per share. The $425 million issuance of
8.25% Senior Notes due 2007 closed on February 24, 2000. The
remaining proceeds will be used to continue the company's stock
buy back plan, its planned generation strategy and other capital
needs.
On February 4, 2000, DPL Inc. initiated an Offer to Purchase for
Cash up to 25 million common shares, or approximately 16% of
outstanding shares, at a price of $20-$23, via a modified Dutch
Auction process. This tender expired on March 3, 2000. DPL accepted
for purchase 25 million shares, or 16% of its common stock, at a price
of $23 per share. DPL Inc. currently intends to purchase up to an
additional 6.6 million shares. At the end of the first quarter
662,800 additional shares were repurchased.
-10-
<PAGE>
On April 19, 2000, DPL Inc. announced Phase Four of its electric
peaking generation expansion plan with the purchase of two additional
General Electric ("GE") combustion turbine peaking units. Each
natural gas-fired unit is rated at 80 megawatts ("MW") for a total of
160 MW, representing an investment of more than $60 million. The
units are expected to be online by the end of 2001.
The first four phases of the peaking generation additions
represent an investment of $270 million and will increase peaking
capacity by almost 800 MW by the end of 2001. Phases One and Two,
representing 475 MW, will be operating by June of this year.
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. DPL Inc.'s
ability to complete its capital projects and the reliability of future
service will be affected by its financial condition and the
availability of external funds at reasonable cost.
At March 31, 2000, DPL Inc.'s cash and temporary cash investment
balance was $179.1 million. DPL Inc. held financial assets valued as
of March 31, 2000 at $1,179.8 million. Financial assets include
direct and indirect managed debt and equity securities.
DPL Inc. and its subsidiaries have $300 million available through
Revolving Credit Agreements ("Credit Agreements"). At March 31, 2000,
DPL Inc. had no borrowings outstanding under these Credit Agreements.
DPL Inc. also has $15 million available in a short-term informal line
of credit. At March 31, 2000, DPL Inc. had no borrowings outstanding
from this line and $67.1 million in commercial paper outstanding.
DP&L has $75 million available in short-term informal lines of credit.
At March 31, 2000, DP&L had no borrowings outstanding under these
informal lines and no commercial paper outstanding.
DP&L currently 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
2000-2004.
Results of Operations
- ---------------------
Electric revenues decreased $1.0 million from the first quarter
last year primarily due to a 5% decrease in residential sales
partially offset by a 3% increase in business sales. Gas revenues
decreased $1.1 million from the first quarter last year as a result of
a 12% decrease in retail sales. The sales decreases were primarily
attributable to warmer weather.
Fuel and purchased power decreased $3.4 million from the first
quarter last year primarily due to lower sales as a result of milder
weather, which was partially offset by higher purchased power expense.
Gas purchased for resale in the first quarter increased $6.6
million compared to the same quarter last year because of increased
non-utility sales coupled with higher gas costs.
-11-
<PAGE>
Operation and maintenance expense increased from last year by
$9.8 million for the first quarter due primarily to increased
compensation plan expenses.
Depreciation and amortization increased $1.3 million from last
year because of increased property investment.
Interest expense increased $7.3 million from the first quarter of
1999 primarily because of an increase in long-term debt. The weighted
average interest rate on long-term debt outstanding was 7.3% and 7.6%
for the quarter ended March 31, 2000 and March 31, 1999, respectively.
The $6.1 million of trust preferred distributions is for one-half
month's amortization of the initial issuance discount and
distributions at 8.5% related to the new trust preferred securities
sold to KKR.
Income taxes decreased $12.2 million from last year because of
lower taxable income caused by the factors discussed previously.
Issues and Financial Risks
- --------------------------
Responding to Ohio legislation regarding energy companies that
became effective in October 1999, DP&L is separating into various
business units and evaluating each unit on a stand-alone basis.
Business units not complementing DP&L's going-forward strategy may be
divested. As a result of this evaluation process, DP&L reached an
agreement to sell its natural gas retail distribution business unit
for $425 million. This all-cash sale of assets (book value
approximating $250 million at December 31, 1999) is subject to
regulatory approvals and is expected to close by the end of the second
quarter, 2000. The after-tax proceeds from the sale will be used to
continue its planned generation strategy, to continue DPL Inc.'s stock
buy back program and to finance in part other business unit capital
needs.
The Compact Agreement between DP&L and Local 175, Utility Workers
of America, AFL-CIO expired on October 31, 1999. Management and Union
Negotiations Committees are discussing provisions of a new agreement
that will be responsive to the changes in business conditions.
-12-
<PAGE>
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
----------------------------------------------------------
The carrying value of DPL Inc.'s debt was $1,636 million at
December 31, 1999, consisting of DP&L's first mortgage bonds and
guaranteed air quality development obligations, notes, commercial
paper and lines of credit. The fair value of this debt was
$1,605 million, based on current market prices or discounted cash
flows using current rates for similar issues with similar terms and
remaining maturities. The following table presents the principal cash
repayments and related weighted average interest rates by maturity
date for long-term, fixed-rate debt at December 31, 1999.
Expected Maturity Date
-------------------------------------------------------
There- Fair
2000 2001 2002 2003 2004 after Total Value
-------------------------------------------------------
Long-term Debt
- --------------
Amount ($ in millions) $5 $6 $7 $8 $510 $806 $1,342 $1,311
Average rate 7.7% 7.7% 7.8% 7.8% 6.3% 7.3% 6.9%
DPL Inc. issued $425 million of Senior Notes Due 2007, with an
interest rate of 8.25% in February, 2000. The proceeds are being used
to continue its planned growth strategy, retire short-term debt and
repurchase common shares. The following table presents the principal
cash repayments and related weighted average interest rates by
maturity date for long-term fixed-rate debt including the issuance of
this new debt.
Expected Maturity Date (Including $425 Senior Notes Due 2007)
-------------------------------------------------------------
There- Fair
2000 2001 2002 2003 2004 after Total Value
-------------------------------------------------------------
Long-term Debt
- --------------
Amount ($ in millions) $5 $6 $7 $8 $510 $1,222 $1,767 $1,736
Average rate 7.7% 7.7% 7.8% 7.8% 6.3% 7.6% 7.3%
Because the long-term debt is at a fixed rate, the primary market
risk to DPL Inc. is short-term interest rate risk. The carrying value
and fair value of short-term debt was $294 million with a weighted
average interest rate of 5.9% at December 31, 1999. The carrying value
and fair value of short-term debt outstanding has been reduced to $67
million as of March 31, 2000. The interest expense risk related to
short-term debt at December 31, 1999 was estimated to be approximately
an increase/decrease of less than $1 million if the weighted average
cost for each quarter increased/decreased by 10%. With the reduction
in short-term debt in the first quarter 2000, the interest expense risk
has become negligible.
The fair value of available-for-sale securities was
$1,221.6 million and $1,113.1 million at March 31, 2000 and
December 31, 1999, respectively. The equity price risk related to
these securities was estimated as the potential increase/decrease in
fair value of $121.2 million and $111.3 million at March 31, 2000 and
December 31, 1999, respectively, that resulted from a hypothetical 10%
increase/decrease in the market prices.
As of March 31, 2000, there have been no other material changes
in the above information since the end of the preceding fiscal year.
-13-
<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 11,
2000, four directors were elected, each of whom will serve a three-
year term expiring in 2003. The nominees were elected as follows:
Ernie Green, 135,193,043 shares FOR, 2,381,090 shares WITHHELD; David
R. Holmes, 135,258,863 shares FOR, 2,315,270 shares WITHHELD; Burnell
R. Roberts, 135,015,539 shares FOR, 2,558,594 shares WITHHELD; and
George R. Roberts, 134,785,257 shares FOR, 2,788,876 shares WITHHELD.
DPL Inc.'s Stock Option Plan was also approved as follows:
89,895,075 shares FOR, 20,788,158 shares AGAINST, 4,159,344 shares
WITHHELD, and 22,731,556 shares NOT VOTED.
Item 5. Other Information.
-----------------
Rate Regulation and Government Legislation
- ------------------------------------------
On July 22, 1998, the Public Utilities Commission of Ohio
("PUCO") approved the implementation of Minimum Electric Service
Standards for all of Ohio's investor-owned electric utilities. This
Order details minimum standards of performance for a variety of
service related functions, effective July 1, 1999. On December 21,
1999, the PUCO issued additional rules proposed by the PUCO Staff
which are designed to guide the electric utility companies as they
prepare to enter into deregulation. These rules include certification
of providers of competitive retail electric services, minimum
competitive retail electric service standards, monitoring the electric
utility market, and establishing procedures for alternative dispute
resolution. There were also rules issued to amend existing rules for
noncompetitive electric service and safety standards and electric
companies long-term forecast reporting. DP&L submitted comments on
the proposed rules on January 31, 2000. The PUCO issued the final
rules on March 30, 2000 and April 6, 2000.
In October 1999, legislation ("the Legislation") became effective
in Ohio giving electric utility customers a choice of energy providers
starting January 1, 2001. Under the Legislation, electric generation,
aggregation, power marketing and power brokerage services supplied to
retail customers in Ohio will be deemed competitive and will not be
subject to supervision and regulation by the PUCO. As required by the
Legislation, DP&L filed its transition plan at the PUCO on
December 20, 1999. In order to finalize DP&L's specific requirements
under the new Legislation, a hearing has been scheduled for June 5,
2000. DP&L is unable to predict the outcome of the regulatory process
which could have an impact on DP&L's future financial position,
earnings or cash flows.
On March 10, 2000, Ohio Governor Robert Taft reappointed
Commissioner Ronda H. Fergus to a five-year term with the PUCO that
expires in April 2005.
-14-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) The following exhibit is filed herewith:
Exhibit No. Description
----------- -----------------------
27 Financial Data Schedule
(b) Reports on Form 8-K.
No reports on Form 8-K were filed by DPL Inc. during the quarter
ended March 31, 2000.
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 15, 2000 /s/Elizabeth M. McCarthy
------------ ------------------------
Elizabeth M. McCarthy
Vice President and Chief
Accounting Officer
Date: May 15, 2000 /s/Stephen F. Koziar, Jr.
------------ -------------------------
Stephen F. Koziar, Jr.
Group Vice President and
Secretary
-15-
<TABLE> <S> <C>
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504300
22900
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0
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