UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2002
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 1-9052
DPL INC.
(Exact name of registrant as specified in its charter)
OHIO 31-1163136
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1065 Woodman Drive
Dayton, Ohio 45432
----------------------------------------
(Address of principal executive offices)
(937) 224-6000
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
------ ------
Indicate the number of shares of the issuer's classes of common stock, as of the
latest practicable date.
Common Stock, $.01 par value
and Preferred Share Purchase Rights 126,501,404 Shares
- ------------------------------------------ -------------------------------
(Title of each class) (Outstanding at March 31, 2002)
DPL INC.
INDEX
Page No.
--------
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statement of Results of Operations 3
Consolidated Statement of Cash Flows 4
Consolidated Balance Sheet 5
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Operating Statistics 13
Item 3. Quantitative and Qualitative Disclosures about Market Risk 13
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
2
Part I. Financial Information
- --------------------------------------------------------------------------------
Item 1. Financial Statements
--------------------
DPL INC.
CONSOLIDATED STATEMENT OF RESULTS OF OPERATIONS
(Dollars in millions)
Three Months Ended
March 31,
------------------------------------
2002 2001
---- ----
Revenues
Electric revenues ....................................... $271.7 $294.4
Other revenues, net of fuel costs ....................... 3.6 3.6
------ ------
275.3 298.0
------ ------
Expenses
Fuel .................................................... 48.0 59.3
Purchased power ......................................... 21.1 17.0
Operation and maintenance ............................... 38.5 34.7
Depreciation and amortization ........................... 33.4 30.4
Amortization of regulatory assets, net .................. 11.5 12.1
General taxes ........................................... 26.9 26.2
------ ------
Total expenses ..................................... 179.4 179.7
------ ------
Operating Income ........................................ 95.9 118.3
Investment income ....................................... 13.3 26.7
Other income (deductions) ............................... 7.6 2.6
Interest expense ........................................ (38.2) (31.1)
Trust preferred distributions by subsidiary ............. (6.2) (11.7)
------ ------
Income Before Income Taxes and Cumulative Effect of
Accounting Change ..................................... 72.4 104.8
Income taxes ............................................ 27.1 42.0
------ ------
Income Before Cumulative Effect of Accounting Change .... 45.3 62.8
Cumulative effect of accounting change, net of tax ...... - 1.0
------ ------
Net Income .............................................. $ 45.3 $ 63.8
====== ======
Average Number of Common Shares Outstanding (millions)
Basic ................................................... 118.9 119.7
Diluted ................................................. 123.4 129.3
Earnings Per Common Share
Basic:
Income before cumulative effect of accounting change $ 0.38 $ 0.52
Cumulative effect of accounting change ............. - 0.01
------ ------
Total Basic ........................................ $ 0.38 $ 0.53
====== ======
Diluted:
Income before cumulative effect of accounting change $ 0.37 $ 0.49
Cumulative effect of accounting change ............. - -
------ ------
Total Diluted ...................................... $ 0.37 $ 0.49
====== ======
Dividends Paid Per Share of Common Stock ................ $0.235 $0.235
====== ======
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
3
DPL INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)
Three Months Ended
March 31,
--------------------------
2002 2001
-------- ---------
Operating Activities
Net income ......................................................................... $ 45.3 $ 63.8
Adjustments:
Depreciation and amortization ................................................. 33.4 30.4
Amortization of regulatory assets, net ........................................ 11.5 12.1
Deferred income taxes ......................................................... 19.0 15.4
Investment income ............................................................. (10.9) (24.4)
Changes in working capital:
Accounts receivable ........................................................... (1.3) 5.8
Accounts payable .............................................................. 0.6 (23.1)
Inventories ................................................................... (3.3) (6.5)
Accrued taxes payable ......................................................... (14.7) (4.4)
Accrued interest payable ...................................................... (24.3) (11.2)
Other .............................................................................. (12.2) (8.6)
-------- --------
Net cash provided by operating activities .......................................... 43.1 49.3
-------- --------
Investing Activities
Capital expenditures ............................................................... (57.3) (102.1)
Purchases of available-for-sale financial assets ................................... (24.2) (45.1)
Sales of available-for-sale financial assets ....................................... 43.3 46.9
Income taxes on gain from sale of natural gas retail distribution operations ....... - (90.9)
-------- --------
Net cash used for investing activities ............................................. (38.2) (191.2)
-------- --------
Financing Activities
Issuance of short-term debt, net ................................................... 49.0 84.8
Retirement of long-term debt ....................................................... (3.6) (3.0)
Dividends paid on common stock ..................................................... (27.9) (28.2)
Purchase of treasury stock ......................................................... - (31.0)
-------- --------
Net cash provided by financing activities .......................................... 17.5 22.6
-------- --------
Cash and temporary cash investments--
Net change ......................................................................... 22.4 (119.3)
Balance at beginning of period ..................................................... 12.3 137.1
-------- --------
Balance at end of period ........................................................... $ 34.7 $ 17.8
======== ========
Cash Paid During the Period for:
Interest ........................................................................... $ 66.9 $ 52.4
Income taxes ....................................................................... $ 13.4 $ 95.6
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
4
DPL INC.
CONSOLIDATED BALANCE SHEET
(Dollars in millions)
At At
March 31, December 31,
2002 2001
--------- ------------
ASSETS
Property
Property ............................................................ $ 4,225.0 $ 4,176.6
Less: Accumulated depreciation and amortization ..................... (1,723.7) (1,694.3)
--------- ---------
Net property ................................................... 2,501.3 2,482.3
--------- ---------
Current Assets
Cash and temporary cash investments ................................. 34.7 12.3
Accounts receivable, less provision for uncollectible accounts
of $12.1 and $12.5, respectively ............................... 165.8 164.6
Inventories, at average cost ........................................ 64.9 61.6
Prepaid taxes ....................................................... 34.0 54.8
Other ............................................................... 34.5 30.9
--------- ---------
Total current assets ........................................... 333.9 324.2
--------- ---------
Other Assets
Financial assets .................................................... 1,108.4 1,120.4
Income taxes recoverable through future revenues .................... 37.9 39.2
Other regulatory assets ............................................. 88.9 99.7
Other ............................................................... 193.4 187.7
--------- ---------
Total other assets ............................................. 1,428.6 1,447.0
--------- ---------
Total Assets ........................................................ $ 4,263.8 $ 4,253.5
========= =========
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
5
DPL INC.
CONSOLIDATED BALANCE SHEET
(Dollars in millions)
(continued)
At At
March 31, December 31,
2002 2001
--------- ------------
CAPITALIZATION AND LIABILITIES
Capitalization
Common shareholders' equity--
Common stock .................................................................. $ 1.3 $ 1.3
Other paid-in capital, net of treasury stock .................................. - -
Warrants ...................................................................... 50.0 50.0
Common stock held by employee plans ........................................... (92.3) (93.5)
Accumulated other comprehensive income ........................................ (48.6) (46.4)
Earnings reinvested in the business ........................................... 927.7 909.7
-------- --------
Total common shareholders' equity ......................................... 838.1 821.1
Preferred stock .................................................................... 22.9 22.9
Preferred stock subject to mandatory redemption .................................... 0.1 0.1
Company obligated mandatorily redeemable trust preferred
securities of subsidiary holding solely parent debentures ........................ 292.4 292.4
Long-term debt ..................................................................... 2,146.8 2,150.8
-------- --------
Total capitalization ...................................................... 3,300.3 3,287.3
-------- --------
Current Liabilities
Accounts payable ................................................................... 109.9 115.3
Accrued taxes ...................................................................... 58.6 84.7
Accrued interest ................................................................... 33.3 51.3
Short-term debt .................................................................... 61.0 12.0
Other .............................................................................. 36.4 32.9
-------- --------
Total current liabilities ................................................. 299.2 296.2
-------- --------
Deferred Credits and Other
Deferred taxes ..................................................................... 341.1 336.1
Unamortized investment tax credit .................................................. 57.4 58.0
Insurance and claims costs ......................................................... 123.8 123.6
Other .............................................................................. 142.0 152.3
-------- --------
Total deferred credits and other .......................................... 664.3 670.0
-------- --------
Total Capitalization and Liabilities ............................................... $4,263.8 $4,253.5
======== ========
See Notes to Consolidated Financial Statements.
These interim statements are unaudited.
6
Notes to Consolidated Financial Statements
1. DPL Inc. ("DPL") has prepared the consolidated financial statements in this
report without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. These consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto in
DPL's 2001 Annual Report on Form 10-K.
2. Reclassifications have been made in the presentation of certain prior years'
amounts to conform to the current reporting presentation of DPL.
In the opinion of management, the information included in this Form 10-Q
reflects all adjustments that are necessary for a fair statement of the results
of operations for the periods presented. Any adjustments are of a normal
recurring nature.
3. Basic earnings per share are based on the weighted-average number of common
shares outstanding during the year. Diluted earnings per share are based on the
weighted-average number of common and common equivalent shares outstanding
during the year.
The following illustrates the reconciliation of the numerators and denominators
of the basic and diluted EPS computations for income before cumulative effect of
accounting change:
Three Months Ended March 31,
2002 2001
------------------------ -----------------------
Per (a) Per
Income Shares Share Income Shares Share
------ ------ ----- ------ ------ -----
Basic EPS ................... $43.5 118.9 $0.38 $62.8 119.7 $0.53
Effect of Dilutive Securities
Warrants .................... 4.0 8.4
Stock Option Plan ........... 0.5 1.2
----- -----
Diluted EPS ................. $43.5 123.4 $0.37 $62.8 129.3 $0.49
===== =====
(a) Income before cumulative effect of accounting change
4. Comprehensive income for the three months ended March 31, 2002 and 2001 of
$43.1 and $25.2 million, respectively, includes reported net income adjusted by
the non-cash effect of unrealized gains on financial assets and certain
derivative instruments on an after tax basis.
7
5. DPL's transmission and distribution and base load and peaking generation
operations are managed and evaluated as a single operating segment, Electric.
Amounts attributable to segments below the quantitative thresholds for separate
disclosure are reported as "Other," which primarily includes street lighting
services, insurance, financial support services, and a natural gas supply
management subsidiary. On June 30, 2001, DPL sold substantially all of its
customer contracts at its natural gas supply management subsidiary. The sale of
these contracts did not have a material effect on overall results.
Three Months Ended March 31,
2002 2001
------ ------
Net revenues:
Electric ........................................ $202.6 $218.1
Other ........................................... 3.6 3.6
------ ------
Total ........................................ $206.2 $221.7
====== ======
Operating income:
Electric ........................................ $ 99.6 $111.4
Other (a) ....................................... (3.7) 6.9
------ ------
Total ........................................ 95.9 118.3
Investment income ............................... 13.3 26.7
Other income (deductions) ....................... 7.6 2.6
Interest expense ................................ (38.2) (31.1)
Trust preferred distributions by subsidiary ..... (6.2) (11.7)
------ ------
Income before income taxes and cumulative
effect of accounting change ..................... $ 72.4 $104.8
====== ======
(a) Includes unallocated corporate items.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
DPL Inc. ("DPL") reported earnings for the first quarter of 2002 of $0.38 per
share compared to a first quarter target of $0.42 per share and prior year
earnings of $0.53 per share before the cumulative effect of an accounting
change. The accounting change in the first quarter of 2001 resulted from the
adoption of a new accounting standard for derivatives. All earnings per share
numbers are before share dilution.
Despite significant cost reductions, work elimination, and a stabilizing
economic environment, the first quarter of 2002 fell slightly below plan. The
continuation of record mild temperatures throughout the first quarter
significantly impacted the retail sector and reduced earnings by 5 cents per
share. Industrial/commercial revenues remained constant quarter to quarter.
Wholesale power prices are beginning to increase slightly, which provides
opportunity for increased margins on sales from DPL's low cost coal units. With
the increase in announced capacity addition cancellations, the region's
generation reserves at time of peak demand, after factoring in planned outages,
are expected to be in the single digits this summer.
8
The range of expected earnings per share for the year remains unchanged at $1.87
to $2.00 and is based on continued sales and economic recovery, modest increases
in energy prices, and political stability.
Results of Operations
Three Months Ended,
March 31,
----------------------
2002 2001
------ ------
Electric revenues ................................. $271.7 $294.4
Fuel .............................................. 48.0 59.3
Purchased power ................................... 21.1 17.0
------ ------
Net electric revenues ........................ $202.6 $218.1
Operating income .................................. $ 95.9 $118.3
Net electric revenues decreased by $15.5 million or 7%. Retail revenues
decreased $5.1 million or 2% as a result of the warmest weather on record in the
last 30 years. Wholesale capacity and energy revenues decreased $17.6 million or
47% as a result of the weather and lower commodity prices. Fuel costs decreased
$11.3 million or 19% as a result of lower spot-market prices for coal and the
sales decline. Purchased power increased $4.1 million or 24% as a result of
higher generating station outages.
Operation and maintenance expense increased $3.8 million or 11% primarily as a
result of higher employee benefits expense, including lower pension credits and
a $1.1 million current year union severance charge.
Depreciation and amortization expense increased $3.0 million or 10% primarily as
a result of the addition of peaking generation capacity units in the summer of
2001.
Investment income decreased $13.4 million reflecting lower net realized gains,
partially offset by higher income from investments.
Other income (deductions) increased $5.0 million primarily as a result of a
current year insurance claim by DP&L under its business interruption policy (see
"Other Matters"). Prior year results included strategic consulting expenses,
partially offset by a gain associated with the termination of a contract.
Interest expense increased $7.1 million or 23% primarily as a result of higher
average long-term debt levels.
Trust preferred distributions by subsidiary decreased $5.5 million or 47% as a
result of the refinancing of the trust preferred securities in August 2001,
which reduced the principal outstanding and the coupon rate.
9
The prior year cumulative effect of an accounting change reflected DPL's
adoption of the provisions of the Financial Accounting Standard Board's ("FASB")
Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended ("SFAS No. 133"). SFAS No. 133 requires that all
derivatives be recognized as either assets or liabilities in the consolidated
balance sheet and be measured at fair value, and changes in the fair value be
recorded in earnings, unless they are designated as hedges of an underlying
transaction.
Capital Resources and Requirements
Construction additions were $48 million for the current quarter and are expected
to approximate $161 million for the year. First quarter results included
significant progress on DPL's NOx compliance program, power plant maintenance,
and the completion of DPL's combustion turbine program in time for the upcoming
summer period. DPL has not contracted for further capacity additions, but will
continue licensing currently owned sites and evaluating the purchase of
equipment on the secondary market. If and when market-pricing conditions
warrant, DPL will have the flexibility to expand its capacity. DPL expects to
finance its construction program in 2002 and 2003 with internal funds.
DPL's financial assets of $1,108 million at March 31, 2002 are an additional
capital resource, available to be invested in the energy sector when that market
has favorable investment conditions. The financial asset portfolio is highly
diversified both in terms of geography and industry, and is comprised of public
and private debt and equity securities. Publicly traded securities comprise 15%
of the portfolio and are valued at current market price. Private securities,
with more than 500 companies represented, are valued at cost adjusted for
negative implications or market events, which is believed to approximate market.
During the first quarter of 2001, investing cash flows included a cash payment
of $90.9 million for income taxes associated with the tax gain on the sale of
the natural gas retail distribution assets and certain liabilities that occurred
in October 2000.
DPL and its subsidiaries have $200 million available through revolving credit
agreements with a consortium of banks. Facility fees are approximately $0.3
million per year. The primary purpose of the revolving credit facilities is to
provide back-up liquidity for DPL's commercial paper program. DPL had no
borrowings outstanding under these credit agreements and $49 million in
commercial paper outstanding at March 31, 2002. The Dayton Power and Light
Company ("DP&L"), a principal subsidiary of DPL, has $75 million available in
short-term informal lines of credit. DP&L had no borrowings outstanding under
these informal lines and $12 million in commercial paper outstanding at March
31, 2002.
Issuance of additional amounts of first mortgage bonds by DP&L is limited by
provision 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. DP&L currently has sufficient capacity to issue first
mortgage bonds to satisfy requirements in connection with the financing of its
construction and refinancing programs during the five-year period 2002-2006.
10
At March 31, 2002, DPL's and DP&L's senior debt credit ratings were as follows:
DPL Inc. DP&L
-------- -----
Standard & Poor's Corp. BBB BBB+
Moody's Investors Service Baa1 A2
Market Risk
The carrying value of DPL's debt was $2,159 million at December 31, 2001,
consisting of DP&L's first mortgage bonds, DP&L's guaranteed air quality
development obligations, and DPL's notes. The fair value of this debt was $2,234
million on December 31, 2001, based on current market prices or discounted cash
flows using current rates for similar issues with similar terms and remaining
maturities. There have been no material changes in the carrying value or fair
value of DPL's long-term debt since December 31, 2001. The following table
presents the principal cash repayments and related weighted average interest
rates by maturity date for long-term, fixed-rate debt at December 31, 2001:
- ----------------------------------------------------------------------------------------------------------------------------
Expected Maturity Date
- ----------------------------------------------------------------------------------------------------------------------------
2002 2003 2004 2005 2006 Thereafter Total Fair Value
- ----------------------------------------------------------------------------------------------------------------------------
Long-term Debt
- ----------------------------------------------------------------------------------------------------------------------------
Amount ($ in millions) $8 $9 $511 $13 $16 $1,602 $2,159 $2,234
- ----------------------------------------------------------------------------------------------------------------------------
Average rate 7.8% 7.8% 6.7% 7.8% 7.8% 7.4% 7.3%
- ----------------------------------------------------------------------------------------------------------------------------
Because the long-term debt is at a fixed rate, the primary market risk to DPL is
short-term interest rate risk. The carrying value and fair value of short-term
debt was $61 million with a weighted-average interest rate of 2.3% at March 31,
2002. The interest expense risk resulting from a hypothetical 10%
increase/decrease in the quarterly weighted-average cost of this debt is
negligible.
The fair value of available-for-sale securities was $1,144 million and $1,147
million at March 31, 2002 and December 31, 2001, respectively. The equity price
risk related to these securities is estimated as the potential increase/decrease
in fair value of $114-115 million resulting from a hypothetical 10%
increase/decrease in the market prices.
DPL's financial results are impacted by changes in electricity, coal, and gas
commodity prices. Ten percent of DPL's expected 2002 revenues are from spot
energy sales in the wholesale market and sales of peaking capacity. Fuel and
purchased power costs represented 41% of total operating costs in 2001. DPL has
contracted for approximately 90% of its coal needs for 2002. A 2% change in
overall fuel costs would result in a $3.5 million change in net income.
11
Other Matters
A wholly-owned captive insurance subsidiary of DPL provides insurance coverage
solely to DPL and its subsidiaries including, among other coverages, business
interruption and specific risk coverage with respect to environmental law and
electric deregulation. "Insurance Claims and Costs" on the Consolidated Balance
Sheet includes insurance reserves of approximately $87 million for this coverage
based on actuarial methods and loss experience data. Such reserves are
determined, in the aggregate, based on a reasonable estimation of probable
insured events occurring. There is uncertainty associated with the loss
estimates, and actual results could differ from the estimates. Modification of
these loss estimates based on experience and changed circumstances are reflected
in the period in which the estimate is reevaluated. As the outcome of electric
deregulation becomes known during the three-year regulatory transition period
ending December 31, 2003, policy payments from the captive subsidiary to DP&L,
receivables for insurance claims for DP&L, or the release of the appropriate
reserves will occur and be reflected in income. Through the first quarter of
2002, a $36 million receivable has been recognized by DP&L for insurance claims
under its business interruption policy.
In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 143, "Accounting for Asset Retirement
Obligations" ("SFAS No. 143") that addresses financial accounting and reporting
for obligations associated with the retirement of tangible long-lived assets.
SFAS No. 143 is effective for DPL as of January 1, 2003. DPL has not yet
determined the extent to which its financial condition or results of operations
may be affected by the implementation of this accounting standard.
Forward-looking statements
This report contains certain forward-looking statements regarding plans and
expectations for the future. Investors are cautioned that actual outcomes and
results may vary materially from those projected due to various factors beyond
DPL's control, including abnormal weather, unusual maintenance or repair
requirements, changes in fuel costs, increased competition, regulatory changes
and decisions, changes in accounting rules, and adverse economic conditions.
12
DPL INC.
OPERATING STATISTICS
Three Months Ended
March 31, 2002
--------------------------
2002 2001
---- ----
Electric
Sales (millions of kWh)--
Residential ............................... 1,383 1,480
Commercial ................................ 843 879
Industrial ................................ 1,033 1,094
Other retail .............................. 324 314
-------- --------
Total retail ......................... 3,583 3,767
Wholesale ................................ 736 946
-------- --------
Total ................................ 4,319 4,713
Revenues (thousands of dollars)--
Residential .............................. $115,355 $120,360
Commercial ............................... 61,074 60,556
Industrial ............................... 53,831 54,758
Other retail ............................. 21,663 21,383
-------- --------
Total retail ......................... 251,923 257,057
Wholesale ................................ 19,734 37,307
-------- --------
Total ................................ $271,657 $294,364
Electric customers at end of period ........... 501,971 500,741
Item 3. Quantitative and Qualitative Disclosures about Market Risk
----------------------------------------------------------
See the "Market Risk" section of Item 2.
Part II. Other Information
- --------------------------------------------------------------------------------
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
DPL held its Annual Meeting of Shareholders on April 10, 2002 at which security
holders elected three directors nominated for three-year terms expiring in 2005.
The results of the voting were as follows:
For Withheld
----------- ----------
James F. Dicke, II 117,322,283 2,207,366
Peter H. Forster 106,872,841 12,656,808
Jane G. Haley 116,934,387 2,595,262
13
Item 5. Other Information
-----------------
The Federal Energy Regulatory Commission ("FERC") issued a final rule on
December 20, 1999 specifying the minimum characteristics and functions for
Regional Transmission Organizations ("RTO"). The rule required that all public
utilities that own, operate, or control interstate transmission file a proposal
to join an RTO by October 15, 2000 or file a description of efforts taken to
participate in an RTO, reasons for not participating in an RTO, any obstacles to
participation in an RTO, and any plans for further work towards participation.
DP&L filed with the FERC on October 16, 2000 to join the Alliance RTO. On
December 19, 2001, the FERC issued an Order that did not approve the Alliance
RTO as a stand-alone RTO. However, on April 24, 2002, the FERC approved the
Alliance Companies' proposal to form an independent transmission company that
will operate under the umbrella of an existing RTO. DPL is exploring its
operational options as a result of the FERC Order.
On July 22, 1998, the Public Utilities Commission of Ohio ("PUCO") approved the
implementation of Minimum Electric Service Standards for all of Ohio's
investor-owned electric utilities. This Order details minimum standards of
performance for a variety of service-related functions, effective July 1, 1999.
On December 21, 1999 and again on March 21, 2002, the PUCO issued additional
rules proposed by the PUCO staff, which are designed to guide the electric
utility companies as they prepare to enter into deregulation. These rules
include certification of providers of competitive retail electric services,
minimum competitive retail electric service standards, monitoring the electric
utility market, and establishing procedures for alternative dispute resolution.
There were also rules issued to amend existing rules for noncompetitive electric
service and safety standards and electric companies long-term forecast
reporting. DP&L submitted comments on the proposed rules on January 31, 2000 and
April 18, 2002. The current revisions to the rules are expected to be finalized
by the PUCO in the fall of 2002.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) There are no exhibits required by Item 601 of Regulation S-K for the
quarter ended March 31, 2002.
(b) Reports on Form 8-K.
Current report on Form 8-K dated April 22, 2002 - Item 5 reported. On April
18, 2002, DPL received notification that TRC Capital Corporation of Toronto,
Canada commenced an unsolicited "mini tender" offer to purchase up to 4,500,000
common shares of DPL Inc., or approximately 3.6% of its total common shares
outstanding, at a price of $25.30 per share in cash. In response, DPL issued a
press release (a copy of which was filed with the Form 8-K) to state that it did
not in any way recommend or endorse the TRC Capital offer, and cautioned its
shareholders that the offer was below the closing price of DPL's common stock
the day before and the day after the offer. Neither DPL nor any of its directors
is affiliated with TRC Capital.
14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DPL INC.
-----------------------------------------
(Registrant)
Date: May 15, 2002 /s/ Elizabeth M. McCarthy
------------ -----------------------------------------
Elizabeth M. McCarthy
Group Vice President and Chief Financial
Officer (principal financial officer)
15