Exhibit 13
(see appendix for logo description)
(see appendix for photo description)
(see appendix for logo description)
1994 Annual Report
[cover]
(see appendix for logo description)
Newsflash
December 8, 1994
DP&L Selected as Top Electric Company in the Country
The Dayton Power and Light Company has been selected as the
1994 Utility of the Year by Electric Light and Power
magazine. In a special ceremony today at DP&L's Energy
Resource Center, DPL Inc. Chairman Pete Forster received the
award from Wayne Beaty, managing editor of EL&P, the electric
industry's premiere publication.
"This award belongs to you, the employees of DP&L," said
Pete. "You are the ones who made it happen. Being selected
as Utility of the Year recognizes your hard work, commitment
to excellence and quality customer service."
EL&P cited DP&L's outstanding performance to customers,
employees and shareholders and responsible, caring corporate
citizenship as the major factors for the Company's selection
as the number one investor-owned utility in the country.
DP&L is the 26th recipient of this annual honor. The Company
and our 1994 accomplishments will be featured in the December
issue of the publication.
The Company was also recognized as Utility of the Year at the
POWER-GEN AMERICAS '94 conference, December 7, a yearly forum
for electric industry leaders to discuss energy issues.
"Every employee plays a vital role in making the Company
successful," said Pete. "This award is an excellent example
of what people can accomplish when they work together as a
team toward a common goal."
"Now, more than ever, it's important to set our sights on the
future and use this award as a stepping stone to reach a
higher level of performance in 1995," said Pete.
CONTENTS
Setting The Direction/Corporate Profile 2
Creating The Strategies/Letter to Shareholders 3
Distinguished Performance 4
Making It Happen 6
Financial Review 13, 15-16
Financial & Statistical Summary 14
Financial Statements & Notes 17-27
Corporate Information 28
[inside front cover]
Financial & Operating Highlights
1994 1993 %change
----------------------------------------------------------------------
Financial Performance:
Earnings per share of common stock $ 1.54 1.42 9
Dividends paid per share $ 1.18 1.12 5
Return on shareholders' equity % 14.1 13.7
Return on total capital % 11.3 11.0
Market value per share at December 31 $ 20-1/2 20-5/8 (1)
Book value per share at December 31 $ 11.17 10.51 6
Total electric and natural
gas revenues (millions) $ 1,180.6 1,144.0 3
Taxes per share $ 2.21 1.95 13
Number of common shareholders 51,270 53,275 (4)
Cash provided by operating
activities (millions) $ 286.9 235.3 22
First Mortgage Bond Ratings:
Duff & Phelps, Inc. AA AA-
Standard & Poor's Corporation AA- A
Moody's Investors Service A1 A2
Capital Investment Performance:
Construction additions (millions) $ 101.1 88.9 14
Construction expenditures paid from
internal funds % 100 100
DP&L Operating Performance:
Electric --
Average price per kWh-retail and
wholesale customers (calendar year) cents 6.59 6.07 9
Fuel efficiency --
Heat rate-Btu per kWh 9,836 9,793 -
Industry average 10,351 10,340 -
Fuel savings (millions) $ 11.0 12.0 (8)
System peak load-MW (calendar year) 2,824 2,765 2
Reserve margin-capacity
relative to peak load % 6.8 9.1
Gas --
Average price per MCF-retail customers
(calendar year) $ 5.44 5.42 -
1
DIRECTORS Pictured from left to right: BURNELL R. ROBERTS
(2)(3) Retired Chairman and Chief Executive Officer, The Mead
Corporation, Dayton, Ohio DAVID R. HOLMES (1)(4) Chairman,
President and Chief Executive Officer, The Reynolds and
Reynolds Company, Dayton, Ohio JAMES F. DICKE, II (2)(3)
President, Crown Equipment Corporation, New Bremen, Ohio
PETER H. FORSTER (1)(3)(4) Chairman, President and Chief
Executive Officer, DPL Inc., Chairman, DP&L, Dayton, Ohio
W AUGUST HILLENBRAND (2)(3) President and Chief Executive
Officer, Hillenbrand Industries, Batesville, Indiana JANE G.
HALEY (1)(4) President, Gosiger, Inc., Dayton, Ohio ALLEN M.
HILL (1)(4) President and Chief Executive Officer, DP&L,
Dayton, Ohio THOMAS J. DANIS (1) Former Chairman and Chief
Executive Officer, The Danis Companies, Dayton, Ohio ERNIE
GREEN (1)(4) President and Chief Executive Officer, Ernie
Green Industries, Dayton, Ohio All Directors of DPL Inc. are
also Directors of DP&L. 1994 Committee Assignments:
DPL Inc. - Finance and Audit Review (1) Compensation and
Management Review (2) Executive (3) DP&L - Community and
External Relations (4)
(see appendix for photo description)
Setting The Direction
DP&L Service Area
West Central Ohio
(see appendix for artwork description)
Corporate Profile:
The interests of shareholders, employees and the community
are all interrelated. These relationships are guided by the
Board of Directors and Management setting the direction and
creating the strategies. These strategies are fulfilled by
our employees making it happen and working together with
individual communities. Performing responsibly in all these
areas leads to greater value for the shareholder.
DPL Inc. was formed in 1986 as a holding company. Its
principal subsidiary is The Dayton Power and Light Company
("DP&L"). DP&L sells electricity and natural gas to
residential, commercial, industrial and governmental
customers in a 6,000 square mile area of West Central Ohio,
and employs over 3,000 people. Electricity for DP&L's 24
county service area is generated at eight power plants and is
distributed to 470,000 retail customers. On a wholesale
basis, electric energy is supplied to 12 municipalities.
Natural gas service is provided to 290,000 customers in 16
counties. DP&L also provides steam service to 200 customers
in downtown Dayton for heating and industrial processing.
The corporate offices of DPL Inc. are located at:
Courthouse Plaza Southwest
Dayton, Ohio 45402
(513) 224-6000
2
Creating The Strategies
(see appendix for logo description)
Dear Shareholders:
Nationally, 1994 saw utility common stock prices being
battered by a combination of increases in long-term rates,
inflation fears, uncertain economic growth and generally
below average dividend and earnings growth over-shadowed by
certain change for the utility industry as we know it today.
Against this backdrop, at DPL we focused our effort
heavily on keeping the stock price up, generating above
average earnings, substantially increasing dividends and
taking advantage of the healthy economy in our region.
Getting our success story out by visiting 20 cities, and
talking with over 400 analysts helped us swim against the
tide this past year. While the industry total return was off
16%, we finished up 5% with the stock price closing at $20-
1/2. The people who heard our strategy generally agreed that
it was right for DPL and many of them, who are long-term
investors, bought our stock. In addition, during 1994, our
credit ratings were upgraded by all three major rating
agencies, including most recently, an upgrade to "AA" by Duff
& Phelps.
Our basic belief, incorporated in our strategy since 1978,
is that we sell a commodity, and a commodity sells on price.
The components that support this belief and make DPL
successful remain unchanged:
- Consistent, superior plant operations and
low, but adequate reserves
- Closely managed costs and adoption of best
practices
- Competitive retail electric and gas prices
- A growing service area economy
- Strong financial performance and a strong
balance sheet
We also believe that we have to produce a meaningful
return to you, our shareholder, every year. We increased our
annual dividend rate by six cents a year, or 5.4%, in
February 1994 to $1.18 per share and increased it again on
January 31, 1995 by six cents, or 5.1%, to $1.24 per share.
Our continuing goal is sustainable above average earnings and
sustainable above average dividend growth. We finished the
year with earnings per share at $1.54 compared to $1.42 last
year.
A proud moment for DPL and its employees was being named
the 1994 Utility of the Year. This achievement reaffirms the
public's confidence in us and recognizes our commitment to
the communities we serve.
We believe, nationally, 1995 could be a lot like 1994.
The year will begin with a lot political change, but of
unknown impact, and an increasing interest rate environment.
We are going to stay with the basics that we know and do
well. We like our business and believe in our customers in
West Central Ohio. It's a growing, healthy part of America
and we are proud to be the energy supplier. The State of
Ohio is pro growth with a reasonable balance in government,
an experienced utility commission and elected officials
committed to growth.
Thanks for letting us work for you.
Best regards,
Peter H. Forster
Peter H. Forster
Chairman, President & CEO,
DPL Inc.
Total Return-
Five Year Average
Annual Return
Percent
(with reinvested Dividends)
--Industry Average
(see appendix for graph description)
Dividends
Per Share
Dollars
(see appendix for graph description)
Earnings
Per Share
Dollars
(see appendix for graph description)
3
Distinguished Performance
Growing Service Area Economy - 1
Setting the Direction
Enhance strong partnership with West Central Ohio to
achieve economic growth
Creating The Strategies
Promote the strengths of West Central Ohio
Attract new business and encourage expansion of existing
business
Work with local communities to enhance the quality of life
in West Central Ohio
Promote wise energy use
Making It Happen
Regional unemployment at less than 5% is below that of
Ohio and the United States
State of Ohio #1 ranked in economic development and
expansion 1991 - 1993
Solid growth in value-added jobs, business customers and
sales to business in 1994
Nationally recognized, effective and comprehensive demand-
side management program
Distinguished Performance
Managing Costs - 2
Setting The Direction
Manage costs at all levels while achieving performance
goals
Creating The Strategies
Improve Company-wide culture of cost control
Predict and control operating and maintenance expense
Manage capital expenditures to maximize reliability in
least cost manner
Making It Happen
All employees are shareholders and have incentive pay tied
directly to cost control
Predictable labor costs through the rest of the century
DP&L employment remains below 1980 levels
Capital expenditures at or below depreciation
Distinguished Performance
Strong Financial Performance - 3
Setting The Direction
Produce strong financial performance while minimizing
future risk
Creating The Strategies
Achieve above average earnings growth through energy sales
growth and control of expenses
Create and maintain financial risk profile that results in
improved credit ratings
Produce strong cashflow
Finance all capital expenditures through internal cashflow
Making It Happen
EPS growth of 8.5% in 1994 and 6.0% in 1993
Credit ratings have been upgraded from BBB+ to AA since
1992, versus trend of downgrades in industry
100% cash earnings in 1994
Refinancing stretched maturities - no short or medium-term
interest rate risk
4
Distinguished Performance
Competitive Prices - 4
Setting The Direction
Keep prices competitive relative to the state and the
region
Creating The Strategies
Achieve successful solutions which balance the needs of
customers, shareholders and employees
Implement cost-effective compliance plans for regulatory
initiatives
Making It Happen
Minimal Clean Air Act exposure will solidify competitive
position with no material price impact
Non-nuclear, 100% fossil fuel Company reduces operating
risk
Production costs are low and will be reduced further
Natural gas pipeline access and contracts ensure low
overall energy prices
Distinguished Performance
Superior Operations - 5
Setting The Direction
Achieve consistent, superior operations with the most
efficient use of existing assets
Creating The Strategies
Focus on customer service throughout the organization
Operate with low, but adequate electric reserves
Maintain national leadership position in efficiency and
productivity
Continue with fuel contracts that will ensure low costs
and enhance flexibility
Making It Happen
Customer satisfaction remains at historically high levels
Top ten in power plant efficiency and productivity nine
times out of the last ten years
Fuel contracts allow type and amount of coal procurement
options at low and predictable prices
Distinguished Performance
Return to Shareholders - 6
Setting The Direction
Deliver above average and sustainable earnings and
dividend growth - maximize shareholder value
Creating The Strategies
Achieve sustainable, above average earnings and dividend
growth
Produce strong financial performance
Differentiate the Company from the industry in terms of
performance and position
Minimize future risk through "Plain Vanilla" Balance Sheet
Making It Happen
Dividend increases in seven of last eight years, averaging
3.6% per year
Total return of 110% since 1989 versus 6% for the industry
Intensive investor relations effort in 1994 that resulted
in nearly 100 meetings with investors managing total
capital of over $4 trillion
5
Caption to photograph:
Growing Service Area Economy - 1
General Motors Corp. continues its presence in the Dayton
area. The Moraine Assembly Plant builds the popular
redesigned Chevy Blazer and GMC Jimmy.
(see appendix for photo description)
6
Making It Happen
(see appendix for logo description)
Caption:
Managing Costs - 2
DPL is recognized as being among the best in the energy
industry at managing costs. Employees are key to our
success, as all employees are shareholders and have
incentive pay tied directly to cost control.
DPL Inc. continued to distinguish itself as one of the
nation's top-performing energy companies in an extremely
challenging year. The formula for success and continued
improvement remains simple. Combine a strong West Central
Ohio economy with a quality product and excellent customer
service to produce solid financial returns for DPL
shareholders.
The West Central Ohio economy experienced remarkable
growth in 1994. Productivity and expansion is on the rise in
all sectors of West Central Ohio's diverse economy, including
light manufacturing, research and development, high
technology, transportation and professional services. This
growth means new, value-added jobs for our region which, in
turn, supports additional economic development opportunities
and expansion. Unemployment in our area was below five
percent, well under the national average, reflecting
essentially full employment.
The economic growth within our service territory continues
to outpace state and national performance. This is due, in
part, to expansion of already significant operations at
General Motors Corporation, Honda of America, Copeland
Corporation, Emery Worldwide and Whirlpool Corporation. For
the past three years, Ohio ranked first in the nation for new
manufacturing facilities and plant expansions, both in square
footage and investment dollars. That's better than states
such as Texas, North Carolina and California -- and
indications are that the state and West Central Ohio will
continue this positive trend.
We play a major role in developing our customer base and
highlighting the strengths of West Central Ohio. Through our
energy incentive programs, we have supported the creation of
more than 54,000 new jobs since 1986. These initiatives
include WorkSmart, which promotes job creation through energy-
efficient growth, and TargetSearch, which helps our
communities attract new business.
In a year when industry stock prices were down
significantly, DPL was one of only a few utilities that
produced a positive overall return for 1994. Positioning
itself as a low-risk investment in an industry currently
challenged by uncertainty, DPL followed a financial strategy
that provides shareholders with above average earnings and
dividend growth.
Caption to photograph:
Whirlpool, the world's leading
manufacturer and marketer of home appliances, announced
construction of a new, world-class assembly facility at its
Greenville, Ohio division. Currently producing mixers and
blenders, the $12.5 million project is expected to add 100
new jobs to the current work force of 350. Selected from 27
potential sites, Greenville and the dedicated loyal work
force have proven their ability to consistently build world-
class products.
(see appendix for photo and logo description)
7
(see appendix for logo description)
In 1994, earnings per share rose to $1.54, an increase of
8.5%. Dividends to our shareholders, which have increased
seven of the last eight years, were increased six cents to
$1.18 per share. And return on shareholders' equity was
14.1%. As measured by the market-to-book ratio, DPL ranks in
the top ten nationally in our industry. As an indicator of
DP&L's solid financial condition, our credit ratings were
upgraded in November 1994 by Duff & Phelps and in March 1994
by both Standard and Poor's and Moody's Investors Service.
Duff & Phelps raised our ratings to "AA" from "AA-", our
highest rating in more than twenty years. S&P's upgrade to
"AA-" was the second two-grade jump for DP&L in two years.
DP&L is the only electric utility to achieve such upgrades in
the last five years.
The Company successfully issued 3.2 million common shares
in March 1994 through a public offering in difficult market
conditions. The offering was well-received by key
institutional buyers and proceeds from the sale of shares
were used to redeem 75% of DP&L's outstanding preferred
stock. This action saves millions of dollars each year in
preferred dividends.
DP&L again achieved national recognition for its high
standard of excellence in operating performance. In Electric
Light and Power magazine's review of 1993 power generation
marks at more than 100 utilities, DP&L's heat rate ranked as
the second most efficient in the nation. This ranking was
our best ever for heat rate, which measures the amount of
energy it takes to produce one kilowatt of electricity. DP&L
has placed in the top ten nine of the past ten years and in
the top five for four consecutive years. Our 1994 heat rate
of 9,836 Btu/kWh is expected to again be among the industry
leaders.
High operational standards and the effective use of
resources combined with planned maintenance resulted in an
equivalent forced outage rate ("EFOR") of 4.6%. EFOR
measures the amount of time that an unplanned outage occurs
at a generating unit. Over the past ten years, we saved our
customers more than $250 million through our efficiency and
productivity improvements.
DP&L remains committed to its energy strategy of being an
all-coal company. Flexible coal procurement contracts, in
terms of cost, quality and volume, are in
Caption to artwork:
Sidney, Ohio is one of the many thriving West Central Ohio
communities known for a quality work force and strong work
ethic. DP&L continues to help communities attract new
business and works closely with local, regional and state
organizations to build partnerships for success in
economic growth.
(see appendix for artwork description)
Caption:
Strong Financial Performance - 3
DPL is committed to providing above average financial
performance for shareholders. In 1994, 3.2 million Common
Shares were issued, with the proceeds used to redeem
Preferred Stock of The Dayton Power and Light Company.
This action results in preferred dividend savings of $7
million annually.
8
Caption to photograph:
Competitive Prices - 4
Airborne Express continues to expand its current
operational hub in Wilmington, Ohio to a nightly lift
capacity of about three million pounds - with a fleet of
nearly 100 aircraft. The complex also includes the
Airborne Stock Exchange, a combined critical parts
warehouse and rapid response delivery system.
(see appendix for photo description)
9
Caption to photograph:
Superior Operations - 5
Corning has formed a partnership with both its customers
and employees. Glass melting and forming in the
Greenville, Ohio plant is a complex process using state-of-
the-art technology. This plant manufactures consumer
Pyrex(trademark), and pressed glass for both the
automotive lighting and consumer markets. Employees work
to continuously improve production processes, product
quality, and customer service.
(see appendix for photo description)
10
(see appendix for logo description)
place and take advantage of plentiful coal supplies in the
region. As a result, the Company is well-positioned to meet
the requirements of the Clear Air Act Amendments, and
compliance is expected to have only an insignificant impact
on prices.
Our employees were put to the test in 1994 when severe
weather pushed DP&L's natural gas and electric system
capabilities to new levels. This June, DP&L set an all-time
peak of 2,824,000 kilowatts of electricity. In January, our
electric system set a new winter peak of 2,747,000 kilowatts,
and our natural gas customer use was 630,000 MCF, the largest
one day usage in over 20 years. During both peaks, there
were no forced service curtailments, particularly significant
in light of DP&L's low reserve margin of 7% versus an
industry average of 20%. Our customers also experienced only
minimal weather-related outages.
Anticipating the growing energy needs of West Central
Ohio, DP&L continues to operate its plants as efficiently as
possible and plans to add a small number of peaking units.
The new units will be clean, dual-fired combustion turbines
that can burn natural gas or low sulfur fuel oil. Because of
their small size, the units can be built economically,
providing additional flexibility to efficiently meet the
increasing energy demands of our customers. The first
peaking unit is planned to be operational in Summer 1995.
DP&L is uniquely positioned for the future as a full-
service electric and natural gas provider. This year, the
Company added 53 miles of new gas pipelines in the northern
part of our service territory. These additions strengthen
the Company's natural gas distribution system and increase
customers' supply and transportation options, supporting our
regional strength as a total energy provider.
Exceeding our customers' expectations continues to be a
priority at DP&L and we regularly seek customer feedback on
our progress. Our track record of providing quality customer
service is confirmed by the results of frequent surveys. To
ensure ongoing customer satisfaction, all employees have
incentive compensation tied to factors related to quality
customer service.
To accomplish our customer service goals, we start with
the basics. DP&L's 23 customer service centers, located
throughout West Central Ohio, ensure our customers receive
Caption to photograph:
Way To Go, the umbrella name for
our energy conservation
programs, emphasizes our belief that being energy smart
and money wise is definitely the Way To Go!
Lucky the Dog, featured in numerous promotions, has
attained local celebrity status and is part of our award
winning consumer awareness campaign and an energy
awareness program.
(see appendix for artwork and logo description)
Caption:
Return to Shareholders - 6
DPL worked hard to provide top of the industry returns to
our shareholders in 1994.
11
(see appendix for logo description)
reliable, quality service 24 hours a day, seven days a week.
From there, we take additional steps to offer programs and
services that go beyond our customers expectations.
DP&L's Way To Go energy conservation program has reached a
broad section of our customer base. Over the past two years,
more than 100,000 business and residential customers have
been introduced to the value of energy efficiency through our
energy and money-saving programs that include energy audits,
lighting and motor rebates, and workshops.
Supporting DP&L's commitment to the customer is our Energy
Resource Center which showcases the latest in energy saving
technology. In the first year of operation, this state-of-
the-art learning center set new standards for customer
service within the industry. More than 7,000 customers,
including energy professionals, participated in hands-on
programs at the Center.
DP&L invests in the communities it serves through our
education activities and employees' volunteer efforts. In
1994, DPL's "In Concert With the Environment" reached 10,000
future energy users and taught the importance of energy
efficiency and protection of the environment. Additionally,
36,000 children learned energy conservation techniques and
electricity and natural gas safety from DP&L employee
volunteers.
DP&L's Way To Go Scholars initiative combines academic
excellence with valuable on-the-job experience. Since 1991,
DP&L has instituted 11 scholarship programs at area
universities and colleges, providing up to 44 students with
tuition assistance and cooperative education opportunities
each year.
In recognition of a defining year of accomplishment for
our customers, shareholders and employees, DP&L was named
"1994 Utility of the Year" by Electric Light and Power
magazine. Looking forward, we will seek out every
opportunity for improvement, no matter how small. We are
committed to being a full service electricity and natural gas
provider that meets our customers' total energy needs -- and
we continue to chart a steady financial course to ensure that
DPL remains a low-risk investment in the heart of America
that provides you, our shareholders, with an above average
return on your investment.
Caption to artwork and logo:
Located in Washington Court House, Ohio, FoxMeyer's
300,000-square foot pharmaceutical distribution center is
scheduled to be operational by May 1995. Employing up to
200 people in the eastern edge of DP&L's service area,
the FoxMeyer facility will be the largest, most automated
distribution center in the world.
(see appendix for artwork and logo description)
12
Financial Review
Electric Revenues Gas Revenues Total Taxes
$ in millions $ in millions $ in millions
(see appendix for (see appendix for (see appendix for
graph description) graph description) graph description)
Electric Sales Gas Sales Operating Expenses
Thousands of GWH Millions of MCF $ in millions
(see appendix for (see appendix for (see appendix for
graph description) graph description) graph description)
Average Price-Electric Average Price-Gas Construction Costs
Calendar Year Calendar Year $ in millions
cents/kWh $/MCF
(see appendix for (see appendix for (see appendix for
graph description) graph description) graph description)
13
Financial and Statistical Summary DPL Inc.
1994 1993 1992 1991 1990
-----------------------------------------------------------------------------------------------------------------------
For the years ended December 31,
DPL Inc.: Earnings per share of common stock . . . . . $ 1.54 1.42 1.34 1.15 1.49
Dividends paid per share . . . . . . . . . . $ 1.18 1.12 1.08 1.08 1.04
Dividend payout ratio . . . . . . . . . . . % 76.6 78.9 80.6 93.9 69.8
Return on shareholders' equity . . . . . . . % 14.1 13.7 13.0 11.0 14.7
Net income (millions) . . . . . . . . . . . $ 154.9 139.0 138.8 119.2 153.0
Utility service revenues (millions) . . . . $ 1,187.9 1,151.3 1,017.3 995.6 945.5
Construction additions (millions) . . . . . $ 101.1 88.9 59.0 117.4 249.2
Market value per share at December 31 . . . $ 20-1/2 20-5/8 19-3/4 17-1/4 12-7/8
DP&L: Electric sales (millions of kWh)--
Residential . . . . . . . . . . . . . . . 4,465 4,558 4,260 4,571 4,125
Commercial . . . . . . . . . . . . . . . . 3,068 3,006 2,896 2,945 2,738
Industrial . . . . . . . . . . . . . . . . 4,388 4,089 3,938 3,949 3,958
Other . . . . . . . . . . . . . . . . . . 2,298 3,023 2,960 1,850 1,807
------ ------ ------ ------ ------
Total . . . . . . . . . . . . . . . . . 14,219 14,676 14,054 13,315 12,628
Gas sales (thousands of MCF)--
Residential . . . . . . . . . . . . . . . 27,911 28,786 27,723 26,594 25,486
Commercial . . . . . . . . . . . . . . . . 8,081 8,468 8,642 8,368 8,259
Industrial . . . . . . . . . . . . . . . . 3,150 3,056 4,914 6,014 5,934
Other . . . . . . . . . . . . . . . . . . 2,909 3,171 3,402 3,187 3,076
Transportation gas delivered . . . . . . . 15,147 13,401 10,811 8,494 8,093
------ ------ ------ ------ ------
Total . . . . . . . . . . . . . . . . . 57,198 56,882 55,492 52,657 50,848
At December 31,
DPL Inc.: Book value per share . . . . . . . . . . . . $ 11.17 10.51 9.75 10.38 10.31
Total assets (millions) . . . . . . . . . . $ 3,232.7 3,302.0 2,976.7 2,972.7 2,914.8
Long-term debt and preferred stock with
mandatory redemption provisions
(millions) $ 1,093.7 1,132.9 990.6 1,047.1 1,055.5
DP&L: First mortgage bond ratings--
Duff & Phelps, Inc. . . . . . . . . . . . AA AA- A+ BBB+ BBB+
Standard & Poor's Corporation . . . . . . AA- A A BBB+ BBB+
Moody's Investors Service . . . . . . . . A1 A2 A2 A3 A3
Number of Shareholders
DPL Inc.: Common . . . . . . . . . . . . . . . . . . . 51,270 53,275 54,023 53,846 53,030
DP&L: Preferred . . . . . . . . . . . . . . . . . 795 1,873 1,969 2,034 2,100
14
Financial Review
The 1994 earnings are $1.54 per share, compared to earnings per share of
$1.42 in 1993 and $1.34 in 1992. The return on shareholders' equity was 14.1%
in 1994 compared to 13.7% in 1993 and 13.0% in 1992.
In 1994, electric revenues increased 5% with a 2% growth in retail sales
reflecting the continued strength of the West Central Ohio economy. In 1993,
warm summer temperatures contributed to an 11% increase in electric revenues
and a 5% increase in retail sales. Implementation of the second and third
steps of the electric rate increase phased in at 6.4% in 1993 and 1994 also
caused revenues to increase in both years. (See Financial Statement Note 2.)
Gas revenues decreased 3% in 1994. An overall sales increase of 1%
reflected strong sales to transportation gas customers despite mild
temperatures in late 1994. The 20% increase in gas revenues in 1993 reflected
significantly higher gas cost rates and the 6.2% increase in base rates in
March 1992.
Interest and other income includes interest income associated with federal
income tax refunds of $3 million in 1994 and $6 million in 1993.
Operating and administrative expenses decreased 13% in 1994 and increased
17% in 1993. Bond redemption costs of $23 million and $9 million were incurred
in 1993 and 1992, respectively.
Maintenance expense decreased 5% in 1994 and increased 17% in 1993
reflecting changes in the level of planned maintenance programs on the
Company's production and distribution equipment.
Regulatory assets recorded during the phase-in of electric rates are now
being amortized over a seven year recovery period that began in 1994.
Additionally, deferred interest charges on the William H. Zimmer Generating
Station ("Zimmer") are being amortized at a rate of $3 million annually over
the life of the plant.
In conjunction with the Public Utilities Commission of Ohio
("PUCO")-approved electric phase-in plan, a baseline return on equity of 13%
(subject to upward adjustment) was established for DP&L. In the event the
return exceeds the allowed return by between one to two percent, then one half
of the excess return will be used to reduce the unrecovered cost of demand-side
management programs, and any return that exceeds the allowed return by more
than two percent will be entirely credited to these programs.
Total income taxes increased in 1994 and 1993 resulting from higher pre-tax
income. Additionally, in 1993, the corporate tax rate was increased to 35%,
increasing income taxes by $3 million.
Credit Ratings
In late 1994, DP&L's first mortgage bond credit rating was upgraded to "AA"
from "AA-" and preferred stock to "AA-" from "A+" by Duff & Phelps. The
Company's senior debt credit ratings were also upgraded to "AA-" by Standard &
Poor's and to "A1" by Moody's Investors Service earlier in 1994. These
upgrades reflect the Company's strong financial performance, cost reductions
and competitive position. Duff & Phelps had
Income Statement Highlights
$ in millions except per share amounts 1994 1993 1992
---------------------------------------------------------------------------------------------------------
Electric Utility:
Revenues . . . . . . . . . . . . . . . . . . . . . . $944 $899 $807
Fuel used in production . . . . . . . . . . . . . . 218 225 219
---- ---- ----
Net revenues . . . . . . . . . . . . . . . . . . . 726 674 588
Gas Utility:
Revenues . . . . . . . . . . . . . . . . . . . . . . 237 245 204
Gas purchased for resale . . . . . . . . . . . . . . 151 156 118
---- ---- ----
Net revenues . . . . . . . . . . . . . . . . . . . 86 89 86
Interest and other income . . . . . . . . . . . . . . . 30 27 22
Operating and administrative . . . . . . . . . . . . . 160 185 158
Maintenance of equipment and facilities . . . . . . . . 86 90 77
Amortization (deferral) of regulatory assets, net . . . 11 (26) (59)
Income taxes . . . . . . . . . . . . . . . . . . . . . 101 78 68
Net income . . . . . . . . . . . . . . . . . . . . . . 155 139 139
Earnings per share of common stock . . . . . . . . . . 1.54 1.42 1.34
Return on shareholders' equity . . . . . . . . . . . . 14.1% 13.7% 13.0%
15
previously upgraded the Company's credit ratings in 1993. During the first
quarter of 1992, DP&L's bond, preferred stock and commercial paper ratings were
upgraded by all three credit rating agencies, reflecting the positive outcome
of the Zimmer coal conversion project and rate settlement agreement. Each of
these credit ratings is considered investment grade.
Construction Program and Financing
Construction additions were $101 million, $89 million and $59 million in
1994, 1993 and 1992, respectively. Construction additions are expected to
total $567 million during 1995-1999. The construction program includes plans
for the construction of a series of 70 MW combustion turbine generating units,
the first of which is scheduled for completion in Summer 1995. During this
same period, a total of $85 million will be required for debt maturities and
sinking funds for bonds and notes.
During 1994, total cash provided by operating activities was $287 million.
At year-end, cash and temporary cash investments were $96 million and there
were no short-term borrowings.
In March 1994, DPL Inc. issued 3,200,000 shares of common stock through a
public offering. Proceeds from the sale were used in connection with the
redemption of all outstanding shares of DP&L's Preferred Stock Series D, E, F,
H and I.
During late 1992 and early 1993, DP&L took advantage of favorable market
conditions to reduce its cost of debt and extend maturities through early
refundings. Overall, five new series of First Mortgage Bonds were issued,
aggregating approximately $766 million with an average interest rate of 7.9%.
The proceeds were used to redeem a similar principal amount of debt securities
with an average interest rate of 8.7%.
Issuance of additional amounts of First Mortgage Bonds by DP&L is limited
by provisions of its mortgage. The amounts and timing of future financings
will depend upon market and other conditions, rate increases, levels of sales
and construction plans. DPL Inc. anticipates that it has sufficient capacity
to issue DP&L First Mortgage Bonds to satisfy its requirements in connection
with its construction and refunding program during 1995-1999.
DPL Inc. has a revolving credit agreement, renewable through 1999, which
allows total borrowings by DPL Inc. and its subsidiaries of $200 million. At
year-end 1994, DPL Inc. had no borrowings outstanding under this credit
agreement.
DP&L also has $97 million available in short-term lines of credit. At
year-end, DP&L had no borrowings outstanding from these lines of credit and no
commercial paper outstanding.
Issues and Financial Risks
As a public utility, DP&L is subject to processes which determine the rates
it charges for energy services. Regulators determine which costs are eligible
for recovery in the rate setting process and when the recovery will occur.
They also establish the rate of return on utility investments which are valued
under Ohio law based on historical costs.
The utility industry is subject to inflationary pressures similar to those
experienced by other capital-intensive industries. Because rates for regulated
services are based on historical costs, cash flows may not cover the total
future costs of providing services. Projected construction costs over the next
five years average $113 million annually, which is less than the projected
depreciation over the same period.
The National Energy Policy Act allows the federal government to mandate
access by others to a utility's transmission system and may accelerate
competition in the supply of electricity.
In January 1994, DP&L, the Staff of the PUCO and the Office of the Ohio
Consumers' Counsel submitted to the PUCO an agreement which resolves issues
relating to the recovery of natural gas "transition costs" to be billed to DP&L
by interstate pipeline companies. The agreement, which was approved by the
PUCO in July 1994, provides for the full recovery of these transition costs
from DP&L customers. The interstate pipelines are continuing to file with the
Federal Energy Regulatory Commission for authority to recover these transition
costs, the exact magnitude of which has not been established.
The Federal Environmental Protection Agency ("EPA") has notified numerous
parties, including DP&L, that they are considered "Potentially Responsible
Parties" for clean up of four hazardous waste sites in Ohio. The EPA has
estimated total costs of $56 million for its preferred clean-up plans at three
of these sites and has not established an estimated cost for the fourth site.
The final resolution of these investigations will not have a material effect on
DP&L's financial position, earnings or cash flow.
Changing environmental regulations continue to increase the cost of
providing service in the utility industry. The Clean Air Act Amendments of
1990 (the "Act") limit sulfur dioxide and nitrogen oxide emissions nationwide.
The Act will restrict emissions in two phases with the Phase I compliance
completed by 1995 and Phase II completed by 2000.
In 1993, the PUCO approved DP&L's Clean Air Act Compliance Plan. This plan
outlines the methods by which the emission reduction requirements will be met.
Overall compliance is expected to have a minimal 1% to 2% price impact. DP&L
anticipates that costs to comply with the Act will be eligible for recovery in
future fuel hearings and other regulatory proceedings.
16
CONSOLIDATED STATEMENT OF RESULTS OF OPERATIONS DPL Inc.
For the years ended December 31,
$ In millions except per share amounts 1994 1993 1992
---------------------------------------------------------------------------------------------------
Income
Utility service revenues . . . . . . . . . . . . . . . . . . $1,187.9 $1,151.3 $1,017.3
Interest and other income . . . . . . . . . . . . . . . . . 30.1 26.7 22.3
-------------------------------------
Total income . . .. . . . . . . . . . . . . . . . . . . 1,218.0 1,178.0 1,039.6
-------------------------------------
Expenses
Fuel used in electric and steam production . . . . . . . . . 220.7 226.6 220.7
Gas purchased for resale . . . . . . . . . . . . . . . . . . 150.8 156.4 117.6
Operating and administrative (Note 1) . . . . . . . . . . . 159.9 184.6 157.8
Maintenance of equipment and facilities . . . . . . . . . . 85.9 90.2 77.3
Depreciation and amortization . . . . . . . . . . . . . . . 114.7 110.9 105.6
Amortization (deferral) of regulatory assets, net (Note 2) . 10.9 (25.8) (58.7)
General taxes . . . . . . . . . . . . . . . . . . . . . . . 121.1 112.0 108.5
Interest expense . . . . . . . . . . . . . . . . . . . . . . 93.2 97.0 94.3
Preferred dividend requirements of
The Dayton Power & Light Company (Note 9). . . . . . . . . 4.7 8.7 9.4
-------------------------------------
Total expenses . . . . . . . . . . . . . . . . . . . . . 961.9 960.6 832.5
-------------------------------------
Income Before Income Taxes . . . . . . . . . . . . . . . . . 256.1 217.4 207.1
Income taxes (Notes 1 and 3) . . . . . . . . . . . . . . . . 101.2 78.4 68.3
-------------------------------------
Net Income . . . . . . . .. . . .. . . . . . . . . . . . . . $ 154.9 $ 139.0 $ 138.8
=====================================
Average Number of Common Shares . . . . . . . . . . . . . . 100.4 97.7 103.5
Outstanding (millions) (Note 8)
Earnings Per Share of Common Stock . . . . . . . . . . . . . $ 1.54 $ 1.42 $ 1.34
Dividends Paid Per Share of Common Stock . . . . . . . . . . $ 1.18 $ 1.12 $ 1.08
Return on Shareholders' Equity . . . . . . . . . . . . . . . 14.1% 13.7% 13.0%
See Notes to Consolidated Financial Statements.
17
CONSOLIDATED STATEMENT OF CASH FLOWS DPL Inc.
For the years ended December 31,
$ in millions 1994 1993 1992
-------------------------------------------------------------------------------------------------------
Operating Activities
Cash received from utility customers . . . . . . . . . . . $1,199.0 $1,137.5 $1,003.8
Other operating cash receipts . . . . . . . . . . . . . . 25.4 26.4 23.5
Cash paid for:
Fuel and purchased power . . . . . . . . . . . . . . . . (226.0) (216.6) (234.0)
Purchased gas . . . . . . . . . . . . . . . . . . . . . (142.8) (146.9) (137.5)
Operating and maintenance labor . . . . . . . . . . . . (90.0) (83.3) (84.2)
Nonlabor operating expenditures . . . . . . . . . . . . (159.4) (232.7) (152.7)
Interest (net of amounts capitalized) . . . . . . . . . (92.1) (83.3) (96.8)
Income taxes . . . . . . . . . . . . . . . . . . . . . . (105.8) (54.4) (50.1)
Property, excise and payroll taxes . . . . . . . . . . . (121.4) (111.4) (98.7)
-------------------------------------
Net cash provided by operating activities . . . . . . . . 286.9 235.3 173.3
-------------------------------------
Investing Activities
Net cash used for property expenditures and other . . . . (94.3) (113.6) (63.0)
-------------------------------------
Financing Activities
Dividends paid on common stock . . . . . . . . . . . . . . (118.3) (109.5) (110.8)
Redemption of preferred stock . . . . . . . . . . . . . . (94.2) (8.5) (4.3)
Issuance (retirement) of common stock . . . . . . . . . . 77.5 - (0.1)
Purchase of treasury stock . . . . . . . . . . . . . . . . (9.4) - -
Issuance (retirement) of short-term debt . . . . . . . . . (25.0) (127.0) 67.5
Retirement of long-term debt . . . . . . . . . . . . . . . (9.2) (439.2) (321.0)
Issuance of long-term debt . . . . . . . . . . . . . . . . - 536.0 320.4
Common stock held by ESOP . . . . . . . . . . . . . . . . - - (90.0)
Receipt of funds on deposit with trustee . . . . . . . . . - - 21.7
-------------------------------------
Net cash used for financing activities . . . . . . . . . . (178.6) (148.2) (116.6)
-------------------------------------
Cash and temporary cash investments -
Net change . . . . . . . . . . . . . . . . . . . . 14.0 (26.5) (6.3)
Balance at beginning of year . . . . . . . . . . . 81.6 108.1 114.4
-------------------------------------
Balance at end of year . . . . . . . . . . . . . . $ 95.6 $ 81.6 $108.1
=====================================
See Notes to Consolidated Financial Statements.
18
CONSOLIDATED BALANCE SHEET DPL Inc.
At December 31,
$ in millions 1994 1993
---------------------------------------------------------------------------------------------------------
Assets
Utility property and plant . . . . . . . . . . . . . . . . . $3,254.1 $3,204.7
Other property and plant . . . . . . . . . . . . . . . . . . 62.3 55.5
Construction work in progress . . . . . . . . . . . . . . . . 68.6 35.8
-------------------------------------
3,385.0 3,296.0
Less--
Accumulated depreciation and amortization . . . . . . . . . (1,072.8) (977.2)
-------------------------------------
Net property and plant . . . . . . . . . . . . . . . . . . 2,312.2 2,318.8
-------------------------------------
Current Assets
Cash and temporary cash investments . . . . . . . . . . . . . 95.6 81.6
Accounts receivable, less provision for uncollectible
accounts of $7.8 and $9.1, respectively . . . . . . . . . . 103.4 135.0
Inventories, at average cost . . . . . . . . . . . . . . . . 84.6 86.4
Taxes applicable to subsequent years . . . . . . . . . . . . 78.3 72.8
Gas costs recoverable . . . . . . . . . . . . . . . . . . . . - 23.1
Prepayments and other . . . . . . . . . . . . . . . . . . . . 24.9 41.7
-------------------------------------
Total current assets . . . . . . . . . . . . . . . . . . . 386.8 440.6
-------------------------------------
Other Assets
Income taxes recoverable through future revenues (Note 1) . . 249.3 269.1
Regulatory assets (Note 2) . . . . . . . . . . . . . . . . . 168.8 169.8
Other assets . . . . . . . . . . . . . . . . . . . . . . . . 115.6 103.7
-------------------------------------
Total other assets . . . . . . . . . . . . . . . . . . . 533.7 542.6
-------------------------------------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . $3,232.7 $3,302.0
=====================================
Capitalization and Liabilities
Capitalization
Common shareholders' equity (Note 8)--
Common stock . . . . . . . . . . . . . . . . . . . . . . . . $ 1.1 $ 1.0
Other paid-in capital . . . . . . . . . . . . . . . . . . . 776.6 708.1
Common stock held by employee plans . . . . . . . . . . . . (108.7) (105.2)
Earnings reinvested in the business . . . . . . . . . . . . 459.3 423.4
-----------------------------------
Total common shareholders' equity . . . . . . . . . . . . 1,128.3 1,027.3
Preferred stock of The Dayton Power and Light Company
(Note 9)--
Without mandatory redemption provisions . . . . . . . . . . 22.9 82.9
With mandatory redemption provisions . . . . . . . . . . . . - 30.0
Long-term debt (Note 7) . . . . . . . . . . . . . . . . . . . 1,093.7 1,102.9
-----------------------------------
Total capitalization . . . . . . . . . . . . . . . . . . . 2,244.9 2,243.1
-----------------------------------
Current Liabilities
Accounts payable . . . . . . . . . . . . . . . . . . . . . . 75.3 113.1
Short-term debt (Note 6) . . . . . . . . . . . . . . . . . . - 25.0
Current portion of first mortgage bonds
and preferred stock . . . . . . . . . . . . . . . . . . . . 4.7 9.0
Accrued taxes . . . . . . . . . . . . . . . . . . . . . . . . 123.9 114.4
Accrued interest . . . . . . . . . . . . . . . . . . . . . . 24.0 24.3
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.0 51.4
------------------------------------
Total current liabilities . . . . . . . . . . . . . . . . . 254.9 337.2
------------------------------------
Deferred Credits and Other
Deferred taxes (Note 3) . . . . . . . . . . . . . . . . . . . 511.8 519.3
Unamortized investment tax credit . . . . . . . . . . . . . . 81.5 85.1
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139.6 117.3
------------------------------------
Total deferred credits and other . . . . . . . . . . . . . 732.9 721.7
------------------------------------
Total Capitalization and Liabilities . . . . . . . . . . . . $3,232.7 $3,302.0
====================================
See Notes to Consolidated Financial Statements.
19
Notes to Consolidated Financial Statements DPL Inc.
1. Summary of Significant Accounting Policies
Principles of Consolidation
The accounts of DPL Inc. and its wholly-owned subsidiaries are included in
the accompanying consolidated financial statements. The consolidated financial
statements of DPL Inc. principally reflect the results of operations and
financial condition of DPL Inc.'s public utility subsidiary, The Dayton Power
and Light Company ("DP&L"). DP&L is engaged in the business of selling
electric energy, natural gas and steam. The results of operations of
DPL Inc.'s non-utility subsidiaries currently do not have a material financial
impact on the consolidated results.
Revenues and Fuel
Revenues include amounts charged to customers through fuel and gas recovery
clauses, which are adjusted periodically for changes in such costs. Related
costs that are recoverable or refundable in future periods are deferred along
with the related income tax effects. Also included in revenues are amounts
charged to customers through a surcharge for recovery of arrearages from
certain eligible low-income households.
DP&L records revenue for services provided but not yet billed to more
closely match revenues with expenses. Accounts receivable on the Consolidated
Balance Sheet includes unbilled revenue of (in millions) $13.1 in 1994 and
$30.0 in 1993.
Operating and Administrative
Operating and administrative expenses include $22.8 million in 1993 and
$9.1 million in 1992 of redemption premiums and other costs relating to the
refinancing of various bond issues.
Property and Plant, Maintenance and Depreciation
Property and plant is shown at its original cost. Cost includes direct
labor and material, allocable overhead costs and allowance for funds used
during construction ("AFC"). AFC is reflected in the Consolidated Statement of
Results of Operations in Interest and other income and amounts to (in millions)
$0.5 in 1993 and $0.3 in 1992.
When a unit of property is retired, the original cost of that property plus
the cost of removal less any salvage value is charged to accumulated
depreciation. Maintenance costs and replacements of minor items of property
are charged to expense.
Depreciation expense is calculated using the straight-line method, which
depreciates the cost of property over its estimated useful life, at a rate of
3.4% for 1994, 1993 and 1992.
Income Taxes
Income taxes are deferred under the liability method in accordance with the
Financial Accounting Standards Board Statement No. 109, "Accounting for Income
Taxes" effective in 1993. Under the liability method, deferred income taxes
are provided for all differences between the financial statement basis and the
tax basis of assets and liabilities using the enacted tax rate. Additional
deferred income taxes and offsetting regulatory assets or liabilities are
recorded to recognize that the income taxes will be recoverable/refundable
through future revenues. Investment tax credits, previously deferred, are
being amortized over the lives of the related properties.
Consolidated Statement of Cash Flows
The temporary cash investments presented on this Statement consist of
liquid investments with an original maturity of three months or less.
Reclassifications
Reclassifications have been made in certain prior years' amounts to conform
to the current reporting presentation.
20
-------------------------------------------------------------------------------
2. Regulatory Matters
Pursuant to the 1992 PUCO-approved settlement agreement ("Agreement") among
DP&L and various consumer groups, the third and final phase of the electric
rate increase of 6.4% took effect in January 1994. Deferrals (including
carrying charges) during the phase-in period of $28.1 million in 1993 and $57.7
million in 1992 were capitalized as Regulatory assets on the Consolidated
Balance Sheet and are being recovered over a seven year period that began in
1994. Amortization, net of additional carrying charges, was $9.8 million in
1994.
This settlement included an agreement by DP&L to undertake cost-effective
demand-side management ("DSM") programs with an average annual cost of $15
million for four years commencing in 1992. The amount recovered in rates was
$4.6 million in 1992. This amount increased to $7.8 million in 1993 and
subsequent years. The difference between expenditures and amounts recovered
through rates is deferred as a Regulatory asset and is eligible for future
recovery in accordance with existing PUCO rulings.
Regulatory assets also include interest charges on Zimmer which were
previously deferred pursuant to PUCO approval. Amounts are being amortized at
$2.8 million per year over the life of Zimmer.
Regulatory assets on the Consolidated Balance Sheet were:
At December 31,
$ in millions 1994 1993
-----------------------------------------------------------------
Phase-in $ 75.9 $ 85.8
DSM 31.9 20.3
Deferred interest-Zimmer 61.0 63.7
----- -----
Total $168.8 $169.8
===== =====
The Agreement established a baseline return on equity for DP&L of 13%
(subject to upward adjustment). In the event that the return exceeds the
allowed return by between one to two percent, then one half of the excess
return will be used to reduce the unrecovered cost of DSM programs, and any
return that exceeds the allowed return by more than two percent will be
entirely credited to these programs.
-------------------------------------------------------
3. Income Taxes
For the years ended
December 31,
$ in millions 1994 1993 1992
-------------------------------------------------------
Computation of Tax Expense
Statutory income tax rate . . 35% 35% 34%
Federal income tax (a) . . . $ 91.3 $79.1 $74.1
Increases (decreases) in tax
from -
Regulatory assets . . . . . 2.2 (6.1) (11.8)
Depreciation . . . . . . . 10.4 10.2 9.3
Investment tax credit
amortized. . . . . . . . . (3.7) (3.0) (3.0)
Other, net. . . . . . . . . 1.0 (1.8) 1.1
-----------------------
Total Tax Expense . . . . $101.2 $78.4 $69.7
=======================
Components of Tax Expense
Taxes currently payable . . . $107.9 $61.2 $38.4
Deferred taxes--
Regulatory assets . . . . . 1.6 7.1 9.2
Liberalized depreciation
and amortization . . . . . 17.2 17.6 18.6
Property taxes . . . . . . (6.1) (6.1) (5.9)
Fuel and gas costs . . . . (12.7) 5.8 10.5
Other . . . . . . . . . . . (3.1) (4.6) 2.4
Deferred investment tax
credit, net . . . . . . . . (3.6) (2.6) (3.5)
-----------------------
Total Tax Expense . . . . $101.2 $78.4 $69.7
=======================
Classification of Tax Expense
Income taxes . . . . . . . . $101.2 $78.4 $68.3
Regulatory assets . . . . . . - - 1.4
-----------------------
Total Tax Expense . . . . $101.2 $78.4 $69.7
=======================
(a) Statutory rates applied to pre-tax income before
preferred dividends and before tax expenses included
in Regulatory assets.
Components of Deferred Tax Assets and Liabilities
At December 31,
$ in millions 1994 1993
----------------------------------------------------------------------
Depreciation/property basis . . . $(437.4) $(429.5)
Income taxes recoverable . . . . (88.9) (93.8)
Regulatory assets . . . . . . . . (57.0) (57.4)
Investment tax credit . . . . . . 28.4 29.7
Other . . . . . . . . . . . . . 43.1 31.7
------ -----
Net non-current liability . . . $(511.8) $(519.3)
====== =====
Net current asset (liability) . $ 2.3 $ (13.4)
====== =====
21
-------------------------------------------------------------------------------
4. Pensions and Postretirement Benefits
A. Pensions
Substantially all DP&L employees participate in pension plans paid for by
the Company. Employee benefits are based on their years of service, age at
retirement and, for salaried employees, their compensation. The plans are
funded in amounts actuarially determined to provide for these benefits.
In developing the amounts in the following tables, an interest rate of
6.25% was used in 1994 and 6.0% was used in 1993 and 1992. Actual returns on
plan assets for 1994, 1993 and 1992 were 0.9%, 6.2% and 8.8%, respectively.
Increases in compensation levels approximating 5% were used for all years.
The following table presents the components of pension cost (portions of
which were capitalized):
$ in millions 1994 1993 1992
-------------------------------------------------------
Service cost-benefits earned $ 6.1 $5.4 $ 4.3
Interest cost 13.4 12.0 12.5
Expected return on plant
assets of 7.5% in each year (18.2) (16.9) (15.2)
Net amortization (1.5) (2.0) (2.6)
----------------------
Net pension cost $(0.2) $(1.5) $(1.0)
======================
The following table sets forth the plans' funded status and amounts
recorded in Other assets on the Consolidated Balance Sheet at December 31:
$ in millions 1994 1993
-----------------------------------------------------
Plan assets at fair value (a) $247.6 $255.0
Actuarial present value of
projected benefit obligation 229.9 230.6
-----------------
Plan assets in excess of
projected benefit obligation 17.7 24.4
Unamortized transition obligation (23.8) (28.0)
Prior service cost 20.2 22.9
Changes in plan assumptions
and actuarial gains and losses 32.8 25.1
-----------------
Net pension assets $ 46.9 $ 44.4
=================
Vested benefit obligation $179.7 $183.9
Accumulated benefit obligation
without projected wage
increases $211.1 $207.4
(a) Invested in guaranteed investment contracts, fixed
income investments and equities including
$22.4 million and $22.5 million of DPL Inc. common
stock in 1994 and 1993, respectively.
-------------------------------------------------------------------------------
B. Postretirement Benefits
Qualified employees who retired prior to 1987 and their dependents are
eligible for health care and life insurance benefits. The unamortized
transition obligation associated with these benefits is being amortized over
the approximate average remaining life expectancy of the retired employees.
Active employees are eligible for life insurance benefits, and this unamortized
transition obligation is being amortized over the average remaining service
period.
The following table sets forth the accumulated
postretirement benefit amounts at December 31:
$ in millions 1994 1993
---------------------------------------------------
Accumulated postretirement benefit
obligation:
- retirees and dependents $61.4 $63.1
- active employees 1.1 1.2
---- ----
Total 62.5 64.3
Unamortized transition obligation (24.8) (27.7)
Actuarial gains and losses 3.0 -
---- ----
Accrued postretirement benefit
liability $40.7 $36.6
==== ====
The following table presents the components of
postretirement benefit cost:
$ in millions 1994 1993
---------------------------------------------------
Interest cost $ 3.7 $ 3.7
Net amortization 3.0 3.0
---- ----
Postretirement benefit cost $ 6.7 $ 6.7
==== ====
The assumed health care cost trend rate used in
measuring the unfunded accumulated postretirement
benefit obligation is 15% for 1994 and decreases
to 8% by 2004. A one percentage point increase in
each future year's assumed health care trend rate
would increase postretirement benefit cost by
$0.4 million annually and would increase the
accumulated postretirement benefit obligation by
$6.1 million. The weighted average discount rate
used in determining the accumulated postretirement
benefit obligation was 6.25% in 1994 and 6.0% in
1993.
22
------------------------------------------------------------------------------
5. Commonly Owned Facilities
DP&L owns certain electric generating and transmission facilities as
tenants in common with other Ohio utilities. Each utility is obligated to pay
its ownership share of construction and operation costs of each facility. As
of December 31, 1994, DP&L had $12.8 million of commonly owned facilities
under construction. DP&L's share of expenses is included in the Consolidated
Statement of Results of Operations.
The following table presents DP&L's share of the commonly owned
facilities:
DP&L
DP&L Share Investment
----------- ----------
Owner- Prod. Plant in
ship Capacity Service
(%) (MW) ($ in mil.)
-------------------------------------------------------
Production Units:
Beckjord Unit 6 . . . . . 50.0 210 50
Conesville Unit 4 . . . . 16.5 129 30
East Bend Station . . . . 31.0 186 149
Killen Station . . . . . 67.0 402 406
Miami Fort Units 7 & 8. . 36.0 360 113
Stuart Station . . . . . 35.0 820 236
Zimmer Station. . . . . . 28.1 365 985
Transmission (at varying
percentages) . . . . . . 66
------------------------------------------------------------------------------
6. Notes Payable and Compensating Balances
DPL Inc. and its subsidiaries have $200 million available through a
revolving credit agreement. This agreement with a consortium of banks is
renewable through 1999. Commitment fees are approximately
$350,000 per year, depending upon the aggregate unused balance of the loan.
At December 31, 1994, DPL Inc. had no outstanding borrowings under this
credit agreement.
DP&L also has $97.1 million available in short-term informal lines of
credit. To support these lines of credit, DP&L is required to maintain average
daily compensating balances of approximately $700,000 and also pay $168,000 per
year in fees.
At year-end, DP&L had no borrowings from these lines of credit and no
commercial paper outstanding.
-------------------------------------------------------------------------------
7. Long-term Debt
At December 31,
$ in millions 1994 1993
-----------------------------------------------------
First mortgage bonds maturing:
1997 5-5/8% . . . . . . . $ 40.0 $ 40.0
1998 6.87% and 7.06% (a) . 26.4 29.0
1999-2003 8.16% and 8.41% (a) . 43.0 49.0
2022-2026 8.14% . . . . . . . . 671.0 671.0
Pollution control series . . . .
maturing through 2027
- 7.97% . . . . . . . . . . . . 218.4 218.8
--------------------
998.8 1,007.8
Unamortized debt discount
and premium (net) . . . . . . (2.5) (2.5)
--------------------
996.3 1,005.3
Notes due 2007 - 7.83% . . . . . 90.0 90.0
Mortgage note due in install-
ments through 2012-10.0% . . . 7.4 7.6
--------------------
Total . . . . . . . . . . $1,093.7 $1,102.9
====================
(a) Weighted average interest rates for 1994 and
1993, respectively.
The amounts of maturities and mandatory redemptions for first mortgage
bonds and notes are (in millions) $4.7 in 1995 and 1996, $42.5 in 1997, $28.4
in 1998 and $4.4 in 1999. Substantially all property and plant of DP&L is
subject to the mortgage lien securing the first mortgage bonds.
23
-------------------------------------------------------------------------------------------------------------------------
8. Common Shareholders' Equity
Common
Common Stock(a) Stock
---------------------- Other Held By Earnings
Outstanding Paid-in Employee Reinvested in
$ in millions Shares Amount Capital Plans the Business Total
-----------------------------------------------------------------------------------------------------------------
1992: Beginning balance . . . . . 69,010,903 $ 0.7 $708.1 $ - $366.2 $1,075.0
Net income . . . . . . . . 138.8 138.8
Common stock dividends . . (110.8) (110.8)
Three-for-two stock split 34,499,095 0.3 (0.3) -
Employee stock plans . . . (103.0) (103.0)
Other . . . . . . . . . . 0.2 (0.2) -
------------------------------------------------------------------------------
Ending balance . . . . . . 103,509,998 1.0 708.0 (103.0) 394.0 1,000.0
1993: Net Income . . . . . . . . 139.0 139.0
Common stock dividends . . (109.5) (109.5)
Employee stock plans . . . (2.2) (2.2)
Other . . . . . . . . . . 0.1 (0.1) -
------------------------------------------------------------------------------
Ending balance . . . . . . 103,509,998 1.0 708.1 (105.2) 423.4 1,027.3
1994: Net income . . . . . . . . 154.9 154.9
Common stock dividends . . (118.3) (118.3)
Public offering . . . . . 3,200,000 0.1 63.1 63.2
Dividend reinvestment plan 720,225 - 14.4 14.4
Treasury stock . . . . . . (478,600) - (9.4) (9.4)
Employee stock plans . . . 0.2 (3.5) (3.3)
Other . . . . . . . . . . 0.2 (0.7) (0.5)
------------------------------------------------------------------------------
Ending balance . . . . . . 106,951,623 $ 1.1 $776.6 $(108.7) $459.3 $1,128.3
==============================================================================
(a) $0.01 par value, 250,000,000 shares authorized.
In March 1994, DPL Inc. issued 3,200,000 shares of common stock through a
public offering. The net proceeds from the sale were used in connection with
the redemption of all outstanding shares of several series of DP&L's preferred
stock. (See Note 9.)
DPL Inc. had 2,107,323 authorized but unissued shares reserved for the
dividend reinvestment plan at December 31, 1994. The plan provides that either
original issue shares or shares purchased on the open market may be used to
satisfy plan requirements.
DPL Inc. established a leveraged Employee Stock Ownership Plan ("ESOP") in
1992 to fund matching contributions to the Company's 401(k) retirement savings
plan and certain other payments to employees. The ESOP borrowed $90.0 million
from DPL Inc. and acquired 4,706,550 shares of common stock on the open
market. Common shareholders' equity is reduced for the cost of unallocated
shares held by the trust and for 1,496,848 shares related to another employee
plan. These shares reduce the number of common shares used in the calculation
of earnings per share.
Dividends received by the ESOP are used to repay the loan to DPL Inc. As
debt service payments are made on the loan, shares are released on a pro-rata
basis. Dividends on the allocated shares are charged to retained earnings, and
dividends on the unallocated shares reduce accrued interest.
In 1994 and 1993, 209,281 shares and 100,498 shares, respectively, were
allocated to employees and are outstanding for the calculation of earnings per
share. Compensation expense, which is based on the fair value of the shares
allocated, amounted to $4.0 million in 1994 and $2.0 million in 1993.
DPL Inc. has a Shareholder Rights Plan pursuant to which two-thirds of a
Right is attached to and trades with each outstanding DPL Inc. Common Share.
The Rights would separate from the Common Shares and become exercisable in the
event of certain attempted business combinations.
24
---------------------------------------------------------------------------------------------------------------
9. Preferred Stock
DPL Inc.: No par value, 8,000,000 shares authorized, no shares outstanding.
DP&L: $25 par value, 4,000,000 shares authorized, no shares outstanding; and $100 par value, 4,000,000 shares
authorized, 228,508 shares outstanding.
Without Mandatory With Mandatory
Redemption Provisions Redemption Provisions(a)
--------------------------------------------------------
Current Exercised Current ($ in millions)
Series/ Redemption Redemption Shares At December 31, At December 31,
Rate Price Price Outstanding 1994 1993 1994 1993
------------------------------------------------------------------------------------------------------------------
A 3.75% $102.50 - 93,280 $ 9.3 $ 9.3
B 3.75% $103.00 - 69,398 7.0 7.0
C 3.90% $101.00 - 65,830 6.6 6.6
D 7.48% - $103.23 - - 15.0
E 7.70% - $101.00 - - 20.0
F 7.375% - $101.00 - - 25.0
H 8-5/8% - $101.00 - - $12.0
I 9-3/8% - $101.00 - - 18.0
------- ----- ----- ----- -----
Total 228,508 $22.9 $82.9 - $30.0
======= ===== ===== ===== =====
a)Exclusive of sinking fund payment due within one year.
The shares without mandatory redemption provisions may be redeemed at the
option of DP&L at the per share prices indicated, plus accrued dividends.
Mandatory and optional redemptions (at par) of outstanding shares of Series
H and I were 40,000 and 45,000, respectively, in both 1994 and 1993.
In 1994, DP&L redeemed all outstanding shares of its Preferred Stock Series
D, E, F, H and I.
----------------------------------------------------------------------------------------------------------------
10. Fair Value of Financial Instruments
At December 31,
1994 1993
----------------------- --------------------
$ in millions Fair Value Cost Fair Value Cost
----------------------------------------------------------------------------------------------------------------
$ $ $ $
Assets
Available for sale equity securities 11.2 12.1 0.5 0.5
Held to maturity securities, including temporary cash
investments of $93.7 in 1994 and $81.1 in 1993 (a) 124.8 125.3 123.9 123.1
Liabilities
Debt (b) 1,043.3 1,098.5 1,214.0 1,132.6
Capitalization
Preferred stock with mandatory redemptions (b) - - 34.6 34.3
Unallocated stock in ESOP 90.1 84.1 95.0 88.1
(a) Contractual maturities range from 1995 to 2005.
(b) Includes current maturities.
Available for sale marketable equity securities are carried at market; the
remaining financial instruments are carried at cost. The fair value is based
upon quoted market prices or securities with similar characteristics.
------------------------------------------------------------------------------------------------------------------------
11. Reconciliation of Net Income to Net Cash Provided by Operating Activities
For the years ended December 31,
$ in millions 1994 1993 1992
-----------------------------------------------------------------------------------------------------------------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $154.9 $139.0 $138.8
Adjustments for noncash items:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . 114.7 110.9 105.6
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . (6.7) 17.2 29.9
Amortization (deferral) of regulatory assets, net . . . . . . . . . . . 10.9 (25.8) (58.7)
Changes in working capital:
Accounts receivable and unbilled revenue . . . . . . . . . . . . . . . 27.9 (2.5) (2.9)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . (40.0) 15.0 3.0
Deferred gas costs . . . . . . . . . . . . . . . . . . . . . . . . . . 28.7 (7.9) (28.8)
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.3) 11.8 (4.2)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5 10.2 (11.4)
DSM deferred costs . . . . . . . . . . . . . . . . . . . . . . . . . . . (14.4) (20.3) (2.2)
Other operating activities . . . . . . . . . . . . . . . . . . . . . . . 7.7 (12.3) 4.2
------------------------------
Net cash provided by operating activities . . . . . . . . . . . . . . . $286.9 $235.3 $173.3
==============================
25
-------------------------------------------------------------------------------------------------------------
12. Financial Information by Business Segments
For the years ended December 31,
$ in millions 1994 1993 1992
-------------------------------------------------------------------------------------------------------------
Utility service revenues
Electric . . . . . . . . . . . . . . . . . . . $ 943.5 $ 898.9 $ 806.9
Gas . . . . . . . . . . . . . . . . . . . . . . 237.1 245.1 203.8
Other . . . . . . . . . . . . . . . . . . . . . 7.3 7.3 6.6
--------------------------------------------
Total utility service revenues . . . . . . . . . . . 1,187.9 1,151.3 1,017.3
Interest and other income . . . . . . . . . . . . . . 30.1 26.7 22.3
--------------------------------------------
Total income . . . . . . . . . . . . . . . . . . . $1,218.0 $1,178.0 $1,039.6
============================================
Operating profit before tax
Electric . . . . . . . . . . . . . . . . . . . $ 325.2 $ 310.8 $ 284.7
Gas . . . . . . . . . . . . . . . . . . . . . . 10.3 19.9 22.1
Other . . . . . . . . . . . . . . . . . . . . . 6.5 5.4 8.8
--------------------------------------------
Total operating profit before tax . . . . . . . . . . 342.0 336.1 315.6
Other income, net (a) . . . . . . . . . . . . . . . . 12.0 (13.0) (4.8)
Interest expense . . . . . . . . . . . . . . . . . . (93.2) (97.0) (94.3)
Preferred dividends . . . . . . . . . . . . . . . . . (4.7) (8.7) (9.4)
--------------------------------------------
Income before income taxes . . . . . . . . . . . . $ 256.1 $ 217.4 $ 207.1
============================================
Depreciation and amortization
Electric . . . . . . . . . . . . . . . . . . . $ 104.8 $ 102.4 $ 97.9
Gas . . . . . . . . . . . . . . . . . . . . . . 6.2 5.7 5.6
Other . . . . . . . . . . . . . . . . . . . . . 3.7 2.8 2.1
--------------------------------------------
Total depreciation and amortization . . . . . . . . $ 114.7 $ 110.9 $ 105.6
============================================
Construction additions
Electric . . . . . . . . . . . . . . . . . . . $ 82.1 $ 66.3 $ 46.6
Gas . . . . . . . . . . . . . . . . . . . . . . 11.6 11.9 11.0
Other . . . . . . . . . . . . . . . . . . . . . 7.4 10.7 1.4
--------------------------------------------
Total construction additions . . . . . . . . . . . $ 101.1 $ 88.9 $ 59.0
============================================
Assets
Electric . . . . . . . . . . . . . . . . . . . $2,772.3 $2,822.5 $2,522.8
Gas . . . . . . . . . . . . . . . . . . . . . . 201.7 236.0 219.5
Other (b) . . . . . . . . . . . . . . . . . . . 258.7 243.5 234.4
--------------------------------------------
Total assets at year-end . . . . . . . . . . . . . $3,232.7 $3,302.0 $2,976.7
============================================
(a) Includes primarily interest income less bond redemption costs in 1993 and 1992.
(b) Includes primarily cash, temporary cash investments and certain deferred items.
26
Report of Independent Accountants
Price Waterhouse LLP (see appendix for logo description)
To the Board of Directors and Shareholders of DPL Inc.
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of results of operations and of cash flows present
fairly, in all material respects, the financial position of DPL Inc. and its
subsidiaries at December 31, 1994 and 1993, and the results of their operations
and their cash flows for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
Price Waterhouse LLP
Dayton, Ohio
January 18, 1995
Selected Quarterly Information
For the Three Months Ended
$ in millions except March 31, June 30, September 30, December 31,
per share amounts 1994 1993 1994 1993 1994 1993 1994 1993
-----------------------------------------------------------------------------------------------------------
$ $ $ $ $ $ $ $
Utility service revenues . . . . 372.1 345.8 257.3 238.0 263.3 262.0 295.2 305.5
Income before income taxes . . . 92.6 80.0 56.9 47.0 61.7 55.7 44.9 34.7
Net income . . . . . . . . . . . 55.4 53.2 34.9 31.4 36.9 33.1 27.7 21.3
Earnings per share of common stock 0.57 0.54 0.34 0.33 0.36 0.33 0.27 0.22
Dividends paid per share . . . . 0.295 0.28 0.295 0.28 0.295 0.28 0.295 0.28
Common stock market price-High . 21-1/4 21-1/4 21-5/8 21 20-3/4 21-7/8 21 21-5/8
-Low . . 19-3/8 19-1/4 18-7/8 19 18-5/8 20-3/8 19 19
27
Corporate Information
Transfer Agent and Registrar--
Common Stock and DP&L Preferred Stock
Securities Transfer & Shareholder Inquiries:
The First National Bank of Boston
Mail Stop 45-02-09
Box 644
Boston, MA 02102-0644
(617) 575-2900
(800) 736-3001
Dividend Reinvestment:
The First National Bank of Boston
Mail Stop 45-01-06
Box 1681
Boston, MA 02105-1681
Also dividend paying agent
(617) 575-2900
(800) 736-3001
Trustee--DP&L First Mortgage Bonds
The Bank of New York
Corporate Trust Administration
101 Barclay Street
New York, New York, 10286
Also interest paying agent
Securities Listing
The New York Stock Exchange is the only national securities exchange on which
DPL Inc. Common Stock and DP&L First Mortgage Bonds are listed. The trading
symbol of the Common Stock is DPL.
Federal Income Tax Status of 1994 Dividend Payments
Dividends paid in 1994 on Common and Preferred Stock are fully taxable as
dividend income.
Annual Meeting
The Annual Meeting of Shareholders will be held at 10:00 a.m., Tuesday, April
18, 1995, at Edison Community College Piqua, Ohio.
Communications
DPL Inc. staffs an Investor Relations Department to meet the information needs
of shareholders and investors. Inquiries are welcomed. Communications
relating to shareholder accounts should be directed to the DPL Investor
Relations Department (513) 259-7150 or (800) 322-9244 or to The First
National Bank of Boston (617) 575-2900 or (800) 736-3001.
Form 10-K Report
DPL Inc. reports details concerning its operations and other matters annually
to the Securities and Exchange Commission on Form 10-K, which will be supplied
upon request. Please direct inquiries to the Investor Relations Department.
Officers--DPL Inc. and DP&L
(Age/Years of Service)
Peter H. Forster(52/21)
Chairman, President and Chief Executive Officer--DPL Inc.
Chairman--DP&L
Allen M. Hill(49/27)
President and Chief Executive Officer--DP&L
Paul R. Anderson(52/16)
Controller--DP&L
Stephen P. Bramlage(48/26)
Assistant Vice President--DP&L
Robert M. Combs(49/4)
Vice President--DP&L
Georgene H. Dawson(45/20)
Assistant Vice President--DP&L
Jeanne S. Holihan(38/14)
Assistant Vice President--DP&L
Thomas M. Jenkins(43/17)
Group Vice President and Treasurer--DPL Inc. and DP&L
Stephen F. Koziar, Jr.(50/27)
Group Vice President and Secretary--DPL Inc. and DP&L
Judy W. Lansaw(43/16)
Group Vice President--DPL Inc. and DP&L
Bryce W. Nickel(38/14)
Assistant Vice President--DP&L
H. Ted Santo(44/23)
Group Vice President--DP&L
28
As required by Rule 304 of Regulation S-T, the following appendix lists the
graphic material contained in the 1994 DPL Inc. Annual Report to Shareholders.
This graphic material, which appears in the paper copy of the report, was
omitted from the electronically filed copy of the report.
APPENDIX
Page Item Description
----- ------ ------------------------------------------------------
Cover:
Artwork: Logo - DPL Inc.
Photograph: Picture of six children, an elderly man and
a dog standing in a scenic setting
with Dayton skyline in the background.
Artwork: Logo - "DP&L 1994 Utility of the Year" with
"Way To Go" logo, the umbrella name for energy
conservation programs of the Company.
Inside
Cover:
Artwork: Logo - "DP&L 1994 Utility of the Year" with
"Way To Go" logo, the umbrella name for energy
conservation programs of the Company.
Page 2:
Photograph: The following are pictured with their names
and titles appearing above the photo:
Burnell R. Roberts, David R. Holmes, James F. Dicke,
II, Peter H. Forster, W August Hillenbrand, Jane G.
Haley, Allen M. Hill, Thomas J. Danis, Ernie Green.
Artwork: Map of the State of Ohio, with DP&L service territory
highlighted.
Page 3:
Artwork: Logo - "DP&L 1994 Utility of the Year" with
"Way To Go" logo, the umbrella name for energy
conservation programs of the Company.
Bar Chart: Total Return -
Five Year Average
Annual Return
Percent
(with reinvested Dividends)
---------------------------------
1992 1993 1994
---- ---- ----
DPL Inc. 22.6% 21.1% 16.0%
Industry
Average 12.4% 11.2% 1.1%
Bar Chart: Dividends
Per Share
Dollars
-----------------------------
1992 $1.08
1993 $1.12
1994 $1.18
Page Item Description
----- ----- -------------------------------------------------------
Page 3:
(cont.)
Bar Chart: Earnings
Per Share
Dollars
---------------------------
1992 $1.34
1993 $1.42
1994 $1.54
Page 6:
Photograph: Assembly line at a General Motors plant.
Page 7:
Artwork: Logo - "DP&L 1994 Utility of the Year" with
"Way To Go" logo, the umbrella name for energy
conservation programs of the Company.
Photograph: Whirlpool mixer.
Artwork: Logo - Whirlpool Corporation.
Page 8:
Artwork: Logo - "DP&L 1994 Utility of the Year" with
"Way To Go" logo, the umbrella name for energy
conservation programs of the Company.
Artwork: Sign containing a map of the State of Ohio and
"Western Ohio Where Agriculture, People, and
Companies Grow".
Page 9:
Photograph: Airborne Express aircraft being loaded with cargo.
Page 10:
Photograph: View of glass manufacturing process at a Corning
Glass plant.
Page 11:
Artwork: Logo - "DP&L 1994 Utility of the Year" with
"Way To Go" logo, the umbrella name for energy
conservation programs of the Company.
Artwork: Lucky the Dog, promotional mascot for the energy
conservation programs of the Company.
Artwork: "DP&L" logo and "Way To Go" logo, the umbrella name
for energy conservation programs of the Company.
Page 12:
Artwork: Logo - "DP&L 1994 Utility of the Year" with
"Way To Go" logo, the umbrella name for energy
conservation programs of the Company.
Artwork: Artist's rendering of FoxMeyer Corporation facility
that is currently under construction.
Artwork: Logo -"FoxMeyer Corporation"
Page Item Description
----- ----- ----------------------------------------
Page 13:
Bar Charts: Electric Revenues
$ in millions
Year
---------------------
1992 1993 1994
---- ---- ----
Residential 326 374 390
Commercial 181 200 218
Industrial 190 206 229
Other 112 121 109
Total 809 901 946
Gas Revenues
$ in millions
Year
---------------------
1992 1993 1994
---- ---- ----
Residential 128 161 157
Commercial 36 44 42
Industrial 19 15 15
Transportation
& Other 21 25 23
Total 204 245 237
Total Taxes
$ in millions
Year
---------------------
1992 178
1993 190
1994 222
Electric Sales
Thousands of GWH
Year
---------------------
1992 1993 1994
---- ---- ----
Residential 4.3 4.6 4.4
Commercial 2.9 3.0 3.1
Industrial 3.9 4.1 4.4
Other 3.0 3.0 2.3
Total 14.1 14.7 14.2
Page Item Description
---- ---- ------------------------------------------
Page 13:
(cont.)
Bar Charts: Gas Sales
Millions of MCF
Year
---------------------
1992 1993 1994
---- ---- ----
Residential 28 29 28
Commercial 8 8 8
Industrial 5 3 3
Transportation
& Other 14 17 18
Total 55 57 57
Operating Expenses
$ in millions
Year
---------------------
1992 1993 1994
---- ---- ----
Fuel Used In
Production 221 227 221
Gas Purchased
For Resale 118 156 151
Operating &
Administrative 158 185 159
Maintenance 77 90 86
Total 574 658 617
Average Price - Electric
Calendar Year
cents/kWh
------------------------
1992 5.69
1993 6.07
1994 6.59
Average Price - Gas
Calendar Year
$/MCF
-----------------------
1992 4.36
1993 5.42
1994 5.44
Construction Costs
$ in millions
Year
-----------------------
1992 59
1993 89
1994 101
Page 27:
Artwork: Logo - Price Waterhouse LLP (Independent Auditors).