DPL Reports EPS of $0.28 for Second Quarter and $0.73 for First Half; DPL Raises 2003 Guidance.Business Editors DAYTON, Ohio--(BUSINESS WIRE)--Aug. 5, 2003 DPL (Digital PowerLine) An earlier technology for transmitting a 1 Mbps data signal over electric power lines from Nortel Networks. It was developed in the late 1990s, but later abandoned due to implementation difficulties. See broadband over power lines. Inc. (NYSE NYSE See: New York Stock Exchange :DPL) today reported second quarter basic earnings of $0.28 per share, reversing last year's loss of $0.36 per share in the same period. The company reported first-half earnings of $0.73 per share, versus a loss of $0.02 per share in the first six months of 2002 and twelve-month-ended June earnings of $1.48 versus $0.83 last year. Six and 12-month numbers include net after tax gain of $0.14 per share for cumulative accounting change. Earnings per share numbers are before dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. . "DPL's second quarter was highlighted by solid plant operating performance and year to date we've seen free cash flow of $97 million. To date our total liquidity - cash and public securities - increased to $301 million," said Caroline E. Muhlenkamp, Group Vice President & Interim Chief Financial Officer. "The company's solid results in the second quarter were achieved despite lower revenues due to unseasonably cool and wet weather, increased insurance costs and plant maintenance and continued weakness in overall economic conditions." "We remain fully focused on maintaining our strong dividend and creating long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. shareholder value, while further strengthening DPL's balance sheet," said Muhlenkamp. "The key elements to this are to refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. up to $750 million in long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. at favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. rates to reduce overall debt by as much as $300 million over the next 30 months, thereby saving as much as $10 to $20 million in annual interest costs, and bringing our debt to total capital ratio below 60%. In addition, we will continue to harvest return of capital and income from the financial asset portfolio, to profitably operate low-cost coal-fired generation for retail load and to maximize revenues from our non-retail generating capacity." The outlook for the full year 2003 now appears to be in the range of $1.15 to $1.25 from the energy business. This number excludes results from the company's financial asset portfolio. Additionally, in May 2003, the company entered into interest rate hedges in anticipation of the announced refinancing Refinancing An extension and/or increase in amount of existing debt. program. These hedges were settled in July at a final market value of $51.4 million. This value will be included in the company's third quarter results with the ultimate effectiveness of the hedges amortized to interest expense over the life of any newly issued first mortgage bonds and the remaining market value recognized immediately in earnings. During the second quarter, electric wholesale revenues increased by $7.6 million over last year, resulting from the sale of available generating capacity into the wholesale market at market rates. Residential sales were down 14% reflecting cool wet summer weather. Commercial and Industrial sales were down 3% driven by both weather and general economic conditions. Cooling degree-days for the quarter were down 55%. Fuel costs decreased $2.6 million or 5% due to lower retail sales and the increased use of purchased power to supply wholesale sales. Purchased power costs were $5.8 million higher in the second quarter reflecting higher market prices and increased wholesale sales. Investment income for the second quarter was comprised of realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. and income from public securities of $2.5 million and from private securities under the cost method of $3.9 million, less losses of $14.9 million from private securities under the equity method. Investment income for the second quarter of last year was $2.1 million of realized gains and investment income from the public securities and $9.5 million of income from private investments under the cost method, offset by losses of $123.5 million for equity method private investments. Other income totaled $32.0 million for the quarter as a result of the settlement in the quarter of business interruption insurance Noun 1. business interruption insurance - insurance that provides protection for the loss of profits and continuing fixed expenses resulting from a break in commercial activities due to the occurrence of a peril coverage related to deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. . DPL's operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. year to date increased 25%, driven by improvements in operating activities and decreased cash required for working capital. The Company had no short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. outstanding at quarter end versus $55.0 million at the end of the second quarter of 2002. Capital expenditures were $66 million for the first half of 2003 and are expected to approximate $110 million for the year. Current year additions relate to DPL's environmental compliance program, power plant equipment, and the installation of meters and distribution lines. DPL expects to finance its 2003 construction program, debt maturities, and investments in financial assets Financial assets Claims on real assets. with internal funds internal funds Funds that are raised within a firm. For example, income after taxes and noncash expenses, such as depreciation, provide a firm with funds to use in the acquisition of investments. . In 2004, DPL expects to finance its construction program and investments in financial assets with internal funds. About DPL DPL Inc. is a diversified diversified (di·verˑ·s regional energy company. DPL's principal subsidiaries include The Dayton Power & Light Company (DP&L) and DPL Energy. DP&L provides electric services to over 500,000 retail customers in West Central Ohio. DPL Energy markets over 4,600 megawatts of generation capacity throughout the eastern United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . DPL Inc., through its subsidiaries, ranks among the top energy companies in generation efficiency and productivity. Further information on DPL Inc. can be found at www.dplinc.com. Reported Results Unaudited This press release may contain certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. regarding plans and expectations for the future. Investors are cautioned that actual outcomes may vary materially from those projected due to various factors beyond DPL's control. Such matters are described in the Company's 2002 Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . See attached tables.
EARNINGS RELEASE
DPL Inc.
FINANCIAL DATA
(Unaudited)
(in millions, except per share amounts)
Three Months Ended
June 30, 2003
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2003 2002
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Earnings Per Share of Common Stock - Basic $0.28 $(0.36)
Earnings Per Share of Common Stock - Diluted $0.28 $(0.36)
Earnings $34.1 $(43.4)
Average Number of Common Stocks Outstanding:
Basic 120.0 119.2
Diluted 120.0 119.2
Six Months Ended
June 30, 2003
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2003 2002
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Earnings Per Share of Common Stock - Basic $0.73 $(0.02)
Earnings Per Share of Common Stock - Diluted $0.73 $(0.02)
Earnings $87.2 $(2.8)
Average Number of Common Stocks Outstanding:
Basic 119.9 119.1
Diluted 119.9 119.1
Twelve Months Ended
June 30, 2003
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2003 2002
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Earnings Per Share of Common Stock - Basic $1.48 $0.83
Earnings Per Share of Common Stock - Diluted $1.48 $0.79
Earnings $177.3 $98.3
Average Number of Common Stocks Outstanding:
Basic 119.4 119.0
Diluted 119.5 124.4
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