Attached files
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8-K - CURRENT REPORT OF MATERIAL EVENTS OR CORPORATE CHANGES - DPL INC | a10-9077_28k.htm |
EX-99.2 - EX-99.2 - DPL INC | a10-9077_2ex99d2.htm |
EX-99.3 - EX-99.3 - DPL INC | a10-9077_2ex99d3.htm |
Exhibit 99.1
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Inquiries should be directed to:
Investor Relations Contact Craig Jackson, Assistant Treasurer phone (937) 259-7033 |
News Media Contact phone (937) 224-5940 communications@dplinc.com |
DPL Reports First Quarter 2010 Earnings;
Revises 2010 Earnings Guidance
DAYTON, Ohio April 29, 2010 DPL Inc. (NYSE: DPL) today reported first quarter 2010 earnings of $0.61 per share, compared to $0.61 per share for the same period in 2009. Earnings per share information reported in this press release is based on diluted shares outstanding unless otherwise noted. Total diluted shares outstanding were 116.2 million for the first quarter 2010 and 112.7 million for the same period in 2009.
The key drivers behind first quarter 2010 earnings per share compared to first quarter 2009 were:
· Implementation of the fuel, capacity and transmission riders and the continued recovery of environmental costs; and
· Increased wholesale revenues due to higher wholesale sales; offset by
· Lower gains realized on coal and emission allowance sales; and
· Deferral of RTO related costs in the first quarter 2009.
Through solid execution, we have reported strong earnings for the quarter, said Paul Barbas, DPL President and CEO. We are seeing the first positive signs in our service area that sales are stabilizing, especially in the industrial sector, and the company continues to generate strong cash flows. As we look forward to the balance of the year, we will continue to maintain our sharp focus on operational execution and cost control.
2010 Financial Results
Revenues increased $36.2 million, or 9%, to $451.2 million for the three months ended March 31, 2010 compared to $415.0 million for the same period in 2009. This increase was primarily the result of higher average retail rates and increased wholesale sales volumes, partially offset by a decrease in RTO capacity and other RTO revenues.
Retail revenues increased $34.3 million resulting primarily from the implementation of the fuel, transmission and capacity riders and the continued recovery of environmental costs. Retail sales volumes were relatively flat compared to the same period in 2009.
Wholesale revenues increased $9.3 million, primarily as a result of a 33% increase in wholesale volumes, partially offset by a 2% decrease in average wholesale sales prices.
RTO capacity and other revenues decreased $7.4 million primarily due to a decrease in PJM capacity revenue of $3.1 million and a decrease in PJM transmission and congestion revenues of $4.4 million.
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Three Months Ended March 31, |
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$ in millions |
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2010 |
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2009 |
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Variance |
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Retail |
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$ |
354.6 |
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$ |
320.3 |
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$ |
34.3 |
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Wholesale |
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40.2 |
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30.9 |
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9.3 |
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RTO Revenues |
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21.1 |
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25.5 |
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(4.4 |
) |
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RTO Capacity Revenues |
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32.3 |
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35.4 |
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(3.1 |
) |
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Other Revenues |
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3.0 |
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2.9 |
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0.1 |
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Total Revenues |
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$ |
451.2 |
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$ |
415.0 |
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$ |
36.2 |
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Fuel Costs, which include coal (net of gains on sales), gas, oil, and emission allowances (net of gains on sales), increased $20.5 million, or 25%, for the three months ended March 31, 2010 compared to the same period in 2009. The increase was primarily due to a $22.5 million decrease in gains realized from coal and emission allowance sales and a 4% increase in generation volume, partially offset by a 5% reduction in average fuel prices.
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Three Months Ended March 31, |
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$ in millions |
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2010 |
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2009 |
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Variance |
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Fuel Costs |
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$ |
102.3 |
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$ |
104.3 |
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$ |
(2.0 |
) |
Gains on Coal Sales |
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(0.2 |
) |
(20.7 |
) |
20.5 |
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Emission Allowances |
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(0.2 |
) |
(2.2 |
) |
2.0 |
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Total Fuel Costs |
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$ |
101.9 |
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$ |
81.4 |
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$ |
20.5 |
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Purchased Power costs increased $13.1 million for the three months ended March 31, 2010 compared to the same period in 2009. The increase in purchased power costs primarily reflected a $20.8 million reduction to RTO related cost deferrals. During the first quarter 2009, $23 million of RTO related costs were deferred, of which $13.5 million related to 2008. Also contributing to higher purchased power costs was an increase of $4.2 million relating to higher average market prices. These increases were partially offset by a $6.2 million, or 40%, reduction in purchased power volumes and a $5.7 million decrease in net RTO and capacity charges.
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Three Months Ended March 31, |
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$ in millions |
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2010 |
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2009 |
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Variance |
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Purchased Power |
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$ |
13.7 |
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$ |
15.7 |
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$ |
(2.0 |
) |
RTO Charges |
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30.6 |
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30.6 |
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0.0 |
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RTO Capacity Charges |
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30.7 |
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36.4 |
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(5.7 |
) |
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(Deferral) of RTO Related Charges, net |
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(2.2 |
) |
(23.0 |
) |
20.8 |
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Total Purchased Power |
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$ |
72.8 |
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$ |
59.7 |
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$ |
13.1 |
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Gross margin increased $2.6 million, or 1%, to $276.5 million for the three months ended March 31, 2010 compared to $273.9 million for the same period in 2009.
Operation and maintenance expense increased $1.7 million, or 2%, for the three months ended March 31, 2010 compared to the same period in 2009. The increase was primarily attributable to a $5.1 million increase in customer program costs and low-income assistance costs, both of which are funded through rate riders, a $1.2 million increase in pension costs, and a $1.0 million increase in employee benefit costs. These increases were partially offset by a $3.4 million insurance settlement and a $3.2 million decrease in maintenance costs at partner owned generating facilities.
Depreciation and amortization costs increased $1.5 million for the three months ended March 31, 2010 compared to the same period in 2009 primarily as a result of higher asset balances at the generating stations.
Interest expense decreased $3.8 million, or 17%, for the three months ended March 31, 2010 compared to the same period in 2009. This decrease was primarily the result of interest savings related to the redemption of DPLs $175 million 8% Senior Notes in March 2009 and the early redemption in December 2009 of $52.4 million of the $195 million 8.125% Note to DPL Capital Trust II.
Income Taxes for the three months ended March 31, 2010 decreased less than $0.1 million compared to the same period in 2009 primarily due to a decrease in the estimated annual effective tax rate.
Liquidity and Cash Flow
DPLs cash and cash equivalents totaled $88.9 million at March 31, 2010 compared to $74.9 million at December 31, 2009. In addition, DPL had $33.7 million in short-term investments at March 31, 2010. The increase in cash and cash equivalents was primarily attributed to $122.6 million of cash generated from operating activities partially offset by $39.8 million of capital expenditures, $35.0 million of dividends paid on common stock, and $33.7 million in purchases of short-term investments.
Construction additions were $30.2 million and $29.8 million during the three month periods ended March 31, 2010 and 2009 respectively and are expected to approximate $210 million in 2010.
Capital projects are subject to continuing review and are revised in light of changes in financial and economic conditions, load forecasts, legislative and regulatory developments and changing environmental standards, among other factors. For the period 2010 through 2012, DPL is projecting to spend an estimated $610 million on capital projects. This estimate does not include projected capital costs associated with the AMI/Smart Grid plan which was filed with the Public Utilities Commission of Ohio on August 4, 2009.
2010 Earnings Guidance
DPL has revised its 2010 earnings guidance of $2.35 to $2.60 per share to $2.35 to $2.55 per share. The company will discuss its 2010 earnings guidance and other 2010 projections during its first quarter 2010 conference call and webcast.
Conference Call and Webcast
At 9:00 a.m. Eastern Time on Friday, April 30, 2010, DPL will host a conference call and webcast to review first quarter 2010 financial results, discuss recent company events, and review its 2010 earnings guidance and other projections. The conference call will be available in listen-only mode for investors, media and the public by dialing 888-680-0892 for domestic participants or 617-213-4858 for international callers. The access code is 56441179. Please dial into the call at least 15 minutes prior to the start of the call to register.
The webcast can be accessed real-time at www.dplinc.com. Interested parties are encouraged to visit the web-site at least 15 minutes prior to the start of the webcast to register. The webcast will be available for replay on the DPL web-site in the investor relations section following the conference call.
About DPL
DPL Inc. (NYSE:DPL) is a regional energy company. DPLs principal subsidiaries include The Dayton Power and Light company (DP&L); DPL Energy, LLC (DPLE); and DPL Energy Resources, Inc. (DPLER). DP&L, a regulated electric utility, provides service to over 500,000 retail customers in West Central Ohio; DPLE engages in the operation of merchant peaking generation facilities; and DPLER is a competitive retail electric supplier in Ohio, selling to major industrial and commercial customers. DPL, through its subsidiaries, owns and operates approximately 3,700 megawatts of generation capacity, of which 2,800 megawatts are low cost coal-fired units and 900 megawatts are natural gas and diesel peaking units. Further information can be found at www.dplinc.com.
Certain statements contained in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Matters discussed in this press release that relate to events or developments that are expected to occur in the future, including managements expectations, strategic objectives, business prospects, anticipated economic performance and financial condition and other similar matters constitute forward-looking statements. Forward-looking statements are based on managements beliefs, assumptions and expectations of future economic performance, taking into account the information currently available to management. These statements are not statements of
historical fact and are typically identified by terms and phrases such as anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, and similar expressions. Such forward-looking statements are subject to risks and uncertainties, and investors are cautioned that outcomes and results may vary materially from those projected due to various factors beyond our control, including but not limited to: abnormal or severe weather and catastrophic weather-related damage; unusual maintenance or repair requirements; changes in fuel costs and purchased power, coal, environmental emissions, natural gas, oil, and other commodity prices; volatility and changes in markets for electricity and other energy-related commodities; performance of our suppliers and other counterparties; increased competition and deregulation in the electric utility industry; increased competition in the retail generation market; changes in interest rates; state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, emission levels and regulations, rate structures or tax laws; changes in federal and/or state environmental laws and regulations to which DPL and its subsidiaries are subject; the development and operation of Regional Transmission Organizations (RTOs), including PJM Interconnection, L.L.C. (PJM) to which DPLs operating subsidiary (DP&L) has given control of its transmission functions; changes in our purchasing processes, pricing, delays, employee, contractor, and supplier performance and availability; significant delays associated with large construction projects; growth in our service territory and changes in demand and demographic patterns; changes in accounting rules and the effect of accounting pronouncements issued periodically by accounting standard-setting bodies; financial market conditions, including impacts the current financial crisis may have on our business and financial condition; the outcomes of litigation and regulatory investigations, proceedings or inquiries; general economic conditions; and the risks and other factors discussed in DPLs and DP&Ls filings with the Securities and Exchange Commission.
Forward-looking statements speak only as of the date of the document in which they are made. We disclaim any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in our expectations or any change in events, conditions or circumstances on which the forward-looking statement is based.
The information contained herein is submitted for general information and not in connection with any sale or offer for sale of, or solicitation of any offer to buy, any securities.
DPL Inc.
CONSOLIDATED STATEMENTS OF RESULTS OF OPERATIONS
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Three Months Ended |
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March 31, |
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$ in millions except per share amounts |
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2010 |
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2009 |
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(unaudited) |
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Revenues |
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$ |
451.2 |
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$ |
415.0 |
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Cost of revenues: |
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Fuel |
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101.9 |
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81.4 |
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Purchased power |
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72.8 |
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59.7 |
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Total cost of revenues |
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174.7 |
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141.1 |
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Gross margin |
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276.5 |
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273.9 |
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Operating expenses: |
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Operation and maintenance |
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80.6 |
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78.9 |
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Depreciation and amortization |
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37.4 |
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35.9 |
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General taxes |
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32.5 |
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32.1 |
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Total operating expenses |
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150.5 |
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146.9 |
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Operating income |
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126.0 |
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127.0 |
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Other income / (expense), net: |
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Investment income |
|
0.1 |
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0.5 |
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Interest expense |
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(17.9 |
) |
(21.7 |
) |
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Other income (deductions) |
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(0.8 |
) |
(0.2 |
) |
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Total other income / (expense), net |
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(18.6 |
) |
(21.4 |
) |
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Earnings before income tax |
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107.4 |
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105.6 |
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Income tax expense |
|
36.4 |
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36.4 |
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Net Income |
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$ |
71.0 |
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$ |
69.2 |
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Average number of common shares outstanding (millions): |
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Basic |
|
115.6 |
|
112.1 |
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Diluted |
|
116.2 |
|
112.7 |
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Earnings per share of common stock: |
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Basic |
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$ |
0.61 |
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$ |
0.62 |
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Diluted |
|
$ |
0.61 |
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$ |
0.61 |
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Dividends paid per share of common stock |
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$ |
0.3025 |
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$ |
0.2850 |
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DPL Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
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Three Months Ended |
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March 31, |
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$ in millions |
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2010 |
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2009 |
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(unaudited) |
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Cash flows from operating activities: |
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Net income |
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$ |
71.0 |
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$ |
69.2 |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
|
37.4 |
|
35.9 |
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Deferred income taxes |
|
10.5 |
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3.6 |
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Changes in certain assets and liabilities |
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(9.5 |
) |
(36.4 |
) |
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Other |
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13.2 |
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1.0 |
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Net cash provided by operating activities |
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122.6 |
|
73.3 |
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Cash flows from investing activities: |
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Capital expenditures |
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(39.8 |
) |
(50.2 |
) |
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Purchase of short-term investments and securities |
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(33.7 |
) |
(5.1 |
) |
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Sale of short-term investments and securities |
|
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|
10.1 |
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Other |
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2.2 |
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2.3 |
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Net cash used for investing activities |
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(71.3 |
) |
(42.9 |
) |
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Cash flows from financing activities: |
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Dividends paid on common stock |
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(35.0 |
) |
(32.1 |
) |
||
Repurchase of warrants |
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(15.9 |
) |
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Retirement of long-term debt |
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(175.0 |
) |
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Withdrawal of restricted funds held in trust, net |
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6.7 |
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Withdrawals from revolving credit facilities |
|
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150.0 |
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Repurchase of DPL common stock |
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(3.9 |
) |
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Exercise of stock options |
|
1.4 |
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Tax impact related to exercise of stock options |
|
0.2 |
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Net cash used for financing activities |
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(37.3 |
) |
(66.3 |
) |
||
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Cash and cash equivalents: |
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|
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Net change |
|
14.0 |
|
(35.9 |
) |
||
Balance at beginning of period |
|
74.9 |
|
62.5 |
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||
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|
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Cash and cash equivalents at end of period |
|
$ |
88.9 |
|
$ |
26.6 |
|
|
|
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|
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Supplemental cash flow information: |
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|
|
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Interest paid, net of amounts capitalized |
|
$ |
23.7 |
|
$ |
28.4 |
|
Income taxes refunded net |
|
$ |
5.1 |
|
$ |
5.0 |
|
Non-cash financing and investing activities: |
|
|
|
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Accruals for capital expenditures |
|
$ |
13.3 |
|
$ |
15.9 |
|
DPL Inc.
CONSOLIDATED BALANCE SHEETS
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At |
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At |
|
||
|
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March 31, |
|
December 31, |
|
||
$ in millions |
|
2010 |
|
2009 |
|
||
|
|
(unaudited) |
|
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ASSETS |
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Current assets: |
|
|
|
|
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Cash and cash equivalents |
|
$ |
88.9 |
|
$ |
74.9 |
|
Short-term investments |
|
33.7 |
|
|
|
||
Accounts receivable, net |
|
221.3 |
|
212.8 |
|
||
Inventories, at average cost |
|
122.7 |
|
125.7 |
|
||
Taxes applicable to subsequent years |
|
44.6 |
|
59.5 |
|
||
Other prepayments and current assets |
|
30.8 |
|
24.1 |
|
||
Total current assets |
|
542.0 |
|
497.0 |
|
||
|
|
|
|
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Property, plant and equipment: |
|
|
|
|
|
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Property, plant and equipment |
|
5,289.8 |
|
5,269.2 |
|
||
Less: Accumulated depreciation and amortization |
|
(2,483.5 |
) |
(2,466.0 |
) |
||
|
|
2,806.3 |
|
2,803.2 |
|
||
Construction work in process |
|
85.7 |
|
89.0 |
|
||
Total net property |
|
2,892.0 |
|
2,892.2 |
|
||
|
|
|
|
|
|
||
Other noncurrent assets: |
|
|
|
|
|
||
Regulatory assets |
|
215.2 |
|
214.2 |
|
||
Other deferred assets |
|
33.8 |
|
38.3 |
|
||
Total other noncurrent assets |
|
249.0 |
|
252.5 |
|
||
|
|
|
|
|
|
||
Total Assets |
|
$ |
3,683.0 |
|
$ |
3,641.7 |
|
|
|
|
|
|
|
||
LIABILITIES AND SHAREHOLDERS EQUITY |
|
|
|
|
|
||
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
||
Current portion - long-term debt |
|
$ |
100.4 |
|
$ |
100.6 |
|
Accounts payable |
|
81.5 |
|
77.2 |
|
||
Accrued taxes |
|
69.6 |
|
70.2 |
|
||
Accrued interest |
|
18.0 |
|
23.5 |
|
||
Customer security deposits |
|
19.0 |
|
19.4 |
|
||
Other current liabilities |
|
26.2 |
|
24.0 |
|
||
Total current liabilities |
|
314.7 |
|
314.9 |
|
||
|
|
|
|
|
|
||
Noncurrent liabilities: |
|
|
|
|
|
||
Long-term debt |
|
1,223.6 |
|
1,223.5 |
|
||
Deferred taxes |
|
582.0 |
|
569.1 |
|
||
Regulatory liabilities |
|
127.9 |
|
125.4 |
|
||
Pension, retiree and other benefits |
|
89.0 |
|
111.7 |
|
||
Unamortized investment tax credit |
|
34.5 |
|
35.2 |
|
||
Insurance and claims costs |
|
16.2 |
|
16.2 |
|
||
Other deferred credits |
|
129.3 |
|
122.9 |
|
||
Total noncurrent liabilities |
|
2,202.5 |
|
2,204.0 |
|
||
|
|
|
|
|
|
||
Redeemable preferred stock of subsidiary |
|
22.9 |
|
22.9 |
|
||
|
|
|
|
|
|
||
Common shareholders equity: |
|
|
|
|
|
||
Common stock, at par value of $0.01 per share |
|
1.2 |
|
1.2 |
|
||
Warrants |
|
2.9 |
|
2.9 |
|
||
Common stock held by employee plans |
|
(18.4 |
) |
(19.3 |
) |
||
Accumulated other comprehensive loss |
|
(22.7 |
) |
(29.0 |
) |
||
Retained earnings |
|
1,179.9 |
|
1,144.1 |
|
||
Total common shareholders equity |
|
1,142.9 |
|
1,099.9 |
|
||
|
|
|
|
|
|
||
Total Liabilities and Shareholders Equity |
|
$ |
3,683.0 |
|
$ |
3,641.7 |
|
DPL Inc.
OPERATING STATISTICS
(unaudited)
|
|
Three Months Ended |
|
||||
|
|
March 31, |
|
||||
|
|
2010 |
|
2009 |
|
||
|
|
|
|
|
|
||
Electric Sales (millions of kWh): |
|
|
|
|
|
||
Residential |
|
1,595 |
|
1,601 |
|
||
Commercial |
|
886 |
|
916 |
|
||
Industrial |
|
801 |
|
760 |
|
||
Other retail |
|
337 |
|
338 |
|
||
Total retail |
|
3,619 |
|
3,615 |
|
||
|
|
|
|
|
|
||
Wholesale |
|
759 |
|
571 |
|
||
|
|
|
|
|
|
||
Total electric sales |
|
4,378 |
|
4,186 |
|
||
|
|
|
|
|
|
||
Operating Revenues ($ in thousands): |
|
|
|
|
|
||
Residential |
|
$ |
180,086 |
|
$ |
160,251 |
|
Commercial |
|
89,000 |
|
80,555 |
|
||
Industrial |
|
57,601 |
|
53,841 |
|
||
Other retail |
|
26,427 |
|
23,720 |
|
||
Other miscellaneous revenues |
|
1,486 |
|
1,975 |
|
||
Total retail |
|
354,600 |
|
320,342 |
|
||
|
|
|
|
|
|
||
Wholesale |
|
40,233 |
|
30,904 |
|
||
|
|
|
|
|
|
||
RTO revenues |
|
53,428 |
|
60,912 |
|
||
|
|
|
|
|
|
||
Other revenues |
|
2,937 |
|
2,862 |
|
||
|
|
|
|
|
|
||
Total operating revenues |
|
$ |
451,198 |
|
$ |
415,020 |
|
|
|
|
|
|
|
||
Other Statistics: |
|
|
|
|
|
||
Average price per kWh - retail (cents) |
|
9.76 |
|
8.81 |
|
||
Fuel cost per net kWh generated (cents) |
|
2.31 |
|
2.53 |
|
||
Fuel cost per net kWh generated (cents)-includes allowance / coal sales and derivative gains / losses |
|
2.38 |
|
1.97 |
|
||
Electric customers at end of period |
|
515,619 |
|
515,827 |
|
||
Average kWh use per residential customer |
|
3,493 |
|
3,502 |
|
||
Peak demand - maximum one-hour use (mw) |
|
2,407 |
|
2,708 |
|
||
Total generation (millions of kWh) |
|
4,289 |
|
4,132 |
|
||
|
|
|
|
|
|
||
Degree Days |
|
|
|
|
|
||
Heating |
|
3,058 |
|
2,893 |
|
||
Cooling |
|
|
|
1 |
|
Inquiries concerning this report should be directed to:
Craig Jackson
Assistant Treasurer
Telephone (937) 259-7033
The information contained herein is submitted for general information
and not in connection with any sale or offer for sale of,
or solicitation of any offer to buy, any securities.