DPL Reports First Quarter Earnings; Earnings from Continuing Operations Improved Quarter over Quarter.DAYTON, Ohio Dayton is a city in southwestern Ohio, United States. It is the county seat and largest city of Montgomery County. As of the 2005 census estimate, the population of Dayton was 158,873. -- 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 basic earnings per share from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $0.43 per share for the first quarter of 2006 compared to $0.30 per share for the first quarter of 2005. Including discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , basic earnings per share for the first quarter of 2006 were $0.49 versus $0.61 for the first quarter of 2005. The $0.12 per share decrease was primarily related to the gain on the sale of the Company's private equity funds in the first quarter of 2005. Income and gains from the private equity funds are not included in continuing operations. "We delivered solid first quarter results from continuing operations," stated Jim Mahoney For the Australian rules football umpire, see . James Thomas Mahoney (born on May 26, 1934 in Englewood, New Jersey) is a former Major League Baseball shortstop. He was signed by the Philadelphia Phillies before the 1953 season and played for the Boston Red Sox (1959), the , DPL President and Chief Executive Officer. "Improved plant availability, strong wholesale sales, reduced interest expense and the ability to recover our fuel costs all helped to offset lower retail sales due to milder weather." First Quarter Financial Results Total revenues increased 11% to $341.1 million in the first quarter of 2006 compared to $307.1 million for the first quarter of 2005. This increase primarily reflects an increase in retail and wholesale electric market rates and wholesale electric volume partially offset by lower electric retail volume. Heating degree days Heating degree day (HDD) and cooling degree day (CDD) are quantitative indices demonstrated to reflect demand for energy to heat or cool houses and businesses. These indices are derived from daily temperature observations and power demand. were down 13% compared to the same period for 2005.
YTD Ended March 31,
$ in millions 2006 2005 Variance
----------------------------------------------------------------------
Electric Revenues - Retail $283.3 $263.9 $19.4
Electric Revenues - Wholesale 37.4 25.1 12.3
Electric Revenues - RTO ancillary 17.7 15.5 2.2
Other Revenues, Net of Fuel Costs 2.7 2.6 0.1
------------------------
Total Revenues $341.1 $307.1 $34.0
Fuel, which includes coal, gas, oil and emission EMISSION, med. jur. The act by which any matter whatever is thrown from the body; thus it is usual to say, emission of urine, emission of semen, &c. 2. allowance costs, increased by $5.7 million, or 7%, for the first quarter of 2006 compared to 2005 driven by increased output at our generating plants.
YTD Ended March 31,
$ in millions 2006 2005 Variance
----------------------------------------------------------------------
Coal $81.5 $73.0 $8.5
Gas 0.6 1.5 (0.9)
Oil 1.3 1.2 0.1
Emission Costs 0.8 2.8 (2.0)
------------------------
Total Fuel Costs $84.2 $78.5 $5.7
Purchased power costs decreased by $3.5 million, or 12%, in the first quarter of 2006 compared to the same period in 2005 largely as a result of higher plant availability, which reduced the need to purchase power to satisfy the electricity requirements of consumers.
YTD Ended March 31,
$ in millions 2006 2005 Variance
----------------------------------------------------------------------
Purchased Power $13.2 $18.0 ($4.8)
PJM Ancillaries 12.1 10.8 1.3
------------------------
Total Purchased Power $25.3 $28.8 ($3.5)
Gross margin (revenues minus fuel and purchased power) of $231.6 million for the first quarter of 2006 increased by $31.8 million from $199.8 million for the first quarter of 2005. As a percentage of total revenues, gross margin increased by 2.8 percentage points to 67.9%. This increase was driven by improved wholesale sales (pricing and volume) and the ability to recover additional retail fuel costs. Operation and maintenance expense increased $8.7 million, or 16%, for the three months ended March 31, 2006 compared to the same period in 2005. The primary reasons for higher operation and maintenance expense were an increase of $2.7 million in legal costs, $2.6 million in service operations costs relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc electric line clearance CLEARANCE, com. law. The name of a certificate given by the collector of a port, in which is stated the master or commander (naming him) of a ship or vessel named and described, bound for a port, named, and having on board goods described, has entered and cleared his ship or vessel and electric system overhead and substation costs, $2.4 million in mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. adjustments for restricted stock units Restricted stock units Similar to restricted stock. However, the unit represents a promise that employees will receive stock in the future. The units do not pay dividends until the stock is vested. (RSUs), $1.7 million in injuries and damages reserves, and $1.3 million in low-income low-in·come adj. Of or relating to individuals or households supported by an income that is below average. payment program costs. These increases were partially offset by a $2.8 million decrease in Directors' and Officers' liability insurance directors' and officers' liability insurance A type of insurance taken to protect a firm's directors and officers against lawsuits  mainly suits instituted by unhappy shareholders of the firm. costs.Interest expense decreased $12.8 million, or 33%, in the first quarter of 2006 compared to the first quarter of 2005 primarily due to debt reduction of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $450 million, which occurred in the third quarter of 2005. Other income for the first quarter of 2006 decreased $11.7 million compared to the first quarter of 2005. This decrease is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the $12.4 million gain on the sale of emission allowances in the first quarter of 2005. There were no emission allowance sales in the first quarter of 2006. Liquidity and Cash Flow DPL's cash and cash equivalents totaled $391.1 million and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments available for sale totaled $126.8 million at March 31, 2006, compared to $595.8 million in cash and cash equivalents and $125.8 million in short-term investments at December December: see month. 31, 2005. This decrease was primarily attributed to the stock buyback Stock buyback A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share. stock buyback See buyback. and increased capital expenditures. Capital expenditures were $110.9 million for the first quarter of 2006 compared to $43.0 million for the first quarter of 2005. Capital additions are expected to approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. $365 million in 2006. DPL expects to finance its capital additions in 2006 with a combination of cash and short-term investments, internally generated funds and debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay . Stock Buyback As of March 31, 2006, DPL has repurchased a total of 5.9 million shares at a cost of $161 million. The stock buyback is part of a previously announced $400 million program. Future Outlook The Company reaffirmed its full-year 2006 guidance of $1.35 to $1.50 basic earnings per share from continuing operations. Conference Call/Webcast DPL will conduct a webcast conference call with financial analysts Thursday Thursday: see week. , May 4, 2006, at 9:00 a.m. Eastern Time to discuss results. Interested parties, including investors and the media, can access the webcast conference call real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. on DPL's website at www.dplinc.com in the Company's investor relations Investor relations The process by which the corporation communicates with its investors. section. Please go to the website at least fifteen minutes prior to the start of the event to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software to listen to the webcast. For those who are unable to listen to the live webcast, it will be archived on the DPL Inc. website. About DPL DPL Inc. (NYSE:DPL) is a regional electric energy and utility company. DPL's principal subsidiaries include The Dayton Dayton, city (1990 pop. 182,044), seat of Montgomery co., SW Ohio, on the Great Miami River where it is joined by the Stillwater River; inc. 1805. It is the trade center for a fertile farm area, but is best known for its involvement with industry, invention, and Power and Light Company (DP&L); DPL Energy, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control (DPLE DPLE Declarative Programming Languages in Education (conference) DPLE Digital Principle Local Exchange DPLE Danish Primary Laboratory for Electricity ); and DPL Energy Resources, Inc. (DPLER). DP&L, a regulated reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. electric utility, provides service to over 500,000 retail customers in West Central Ohio; DPLE engages in the operation of merchant peaking generation facilities; and DPLER is a competitive retail electric supplier in Ohio, selling to major industrial and commercial customers. DPL, through its subsidiaries, owns and operates approximately 4,400 megawatts of generation capacity, of which 2,800 megawatts are low cost coal-fired Adj. 1. coal-fired - fueled by burning coal; "a coal-fired ship" coal-burning fueled - heated, driven, or produced by burning fuel units and 1,600 megawatts are natural gas and diesel peaking units. Further information can be found at www.dplinc.com. Certain statements contained in this release are "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. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Matters presented which relate to events or developments that are expected to occur in the future, including management's expectations, strategic objectives, business prospects, anticipated economic performance and financial condition and other similar matters constitute forward-looking statements. Forward-looking statements are based on management's beliefs, assumptions and expectation of the Company's future economic performance, taking into account the information currently available to management. These statements are not statements of historical fact. Such forward-looking statements are subject to risks and uncertainties and investors are cautioned that outcomes and results may vary materially from those projected due to many factors beyond DPL's control. Forward-looking statements speak only as of the date of the document in which they are made. We disclaim dis·claim v. dis·claimed, dis·claim·ing, dis·claims v.tr. 1. To deny or renounce any claim to or connection with; disown. 2. To deny the validity of; repudiate. 3. any obligation or undertaking to provide any updates or revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. to any forward-looking statement to reflect any change in our expectations or any change in events, conditions or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or on which the forward-looking statement is based.
DPL Inc.
FINANCIAL DATA
(Unaudited)
(in millions, except per share amounts)
Three Months Ended
March 31,
---------------------
2006 2005
---------- ----------
Earnings Per Share of Common Stock - Basic:
--From Continuing Operations $0.43 $0.30
--From Discontinued Operations $0.06 $0.31
---------- ----------
Total $0.49 $0.61
========== ==========
Earnings Per Share of Common Stock - Diluted:
--From Continuing Operations $0.40 $0.28
--From Discontinued Operations $0.06 $0.30
---------- ----------
Total $0.46 $0.58
========== ==========
Earnings
--From Continuing Operations $51.3 $36.1
--From Discontinued Operations $7.6 $37.6
---------- ----------
Total $58.9 $73.7
========== ==========
Average Number of Common Stocks Outstanding:
Basic 120.2 120.4
Diluted 129.3 127.7
DPL Inc.
CONSOLIDATED STATEMENTS OF RESULTS OF OPERATIONS
Three Months Ended
March 31,
---------------------
2006 2005
---------------------
$ in millions except per share amounts (unaudited)
----------------------------------------------------------------------
Revenues $341.1 $307.1
Cost of revenues:
Fuel 84.2 78.5
Purchased power 25.3 28.8
---------- ----------
Total cost of revenues 109.5 107.3
---------- ----------
Gross margin 231.6 199.8
Operating expenses:
Operation and maintenance 62.4 53.7
Depreciation and amortization 36.9 35.9
General taxes 28.0 27.8
Amortization of regulatory assets, net 1.1 0.5
---------- ----------
Total operating expenses 128.4 117.9
---------- ----------
Operating income 103.2 81.9
Investment income 6.4 6.1
Interest expense (26.3) (39.1)
Other income (deductions) (0.3) 11.4
---------- ----------
Earnings from continuing operations before
income taxes 83.0 60.3
Income tax expense 31.7 24.2
---------- ----------
Earnings from continuing operations 51.3 36.1
---------- ----------
Discontinued operations
(Loss) Income from discontinued operations (0.5) 35.0
Gain on disposal of discontinued operations 13.2 28.8
Income tax expense 5.1 26.2
---------- ----------
Earnings from discontinued operations 7.6 37.6
---------- ----------
Net Income $58.9 $73.7
========== ==========
Average common shares outstanding (millions):
Basic 120.2 120.4
Diluted 129.3 127.7
Basic earnings per share of common stock:
Earnings from continuing operations $0.43 $0.30
Earnings from discontinued operations 0.06 0.31
---------- ----------
Net income per basic common share $0.49 $0.61
========== ==========
Diluted earnings per share of common stock:
Earnings from continuing operations $0.40 $0.28
Earnings from discontinued operations 0.06 0.30
---------- ----------
Net income per diluted common share $0.46 $0.58
========== ==========
Dividends paid per share of common stock $0.250 $0.240
Book value per share $7.97 $8.82
DPL Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31,
---------------------
2006 2005
---------------------
$ in millions (unaudited)
----------------------------------------------------------------------
Cash flows from operating activities:
Net income $58.9 $73.7
Less: Earnings from discontinued operations (7.6) (37.6)
---------- ----------
Earnings from continuing operations 51.3 36.1
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 36.9 35.9
Amortization of regulatory assets, net 1.1 0.5
Deferred income taxes (2.4) 14.7
Captive insurance provision 1.2 1.3
Gain on sale of other investments (1.0) (4.2)
Changes in certain assets and liabilities (1.8) (27.7)
Deferred compensation assets (0.5) 3.5
Deferred compensation obligations (3.5) 0.7
Other 10.3 (1.0)
---------- ----------
Net cash provided by operating activities 91.6 59.8
Cash flows from investing activities:
Capital expenditures (110.9) (43.0)
Purchases of short-term investments and
securities (494.8) (7.1)
Sales of short-term investments and securities 494.8 25.1
Cash flow from discontinued operations - 747.2
---------- ----------
Net cash provided by / (used for)
investing activities (110.9) 722.2
Cash flows from financing activities:
Purchase of treasury shares (155.3) -
Exercise of stock options 0.2 -
Registration of warrants (0.1) -
Retirement of long-term debt - (6.0)
Retirement of preferred securities - (0.1)
Dividends paid on common stock (30.2) (28.5)
---------- ----------
Net cash (used for) financing activities (185.4) (34.6)
Cash and cash equivalents:
Net change (204.7) 747.4
Balance at beginning of period 595.8 202.1
---------- ----------
Cash and cash equivalents at end of period $391.1 $949.5
========== ==========
Supplemental cash flow information:
Interest paid, net of capitalized interest $32.6 $54.2
Income taxes paid, net $22.4 $6.7
DPL Inc.
CONSOLIDATED BALANCE SHEETS
At At
March 31, December 31,
2006 2005
-------------------------
$ in millions (unaudited)
----------------------------------------------------------------------
Assets
Property:
Property, plant and equipment $4,762.1 $4,667.7
Less: Accumulated depreciation and
amortization (2,129.0) (2,094.8)
------------ ------------
Net property 2,633.1 2,572.9
Current assets:
Cash and cash equivalents 391.1 595.8
Short-term investments available for sale 126.8 125.8
Accounts receivable, less provision for
uncollectible accounts of $1.0 and $1.0,
respectively 201.7 194.9
Inventories, at average cost 87.6 80.2
Taxes applicable to subsequent years 34.4 45.9
Other current assets 21.8 20.2
------------ ------------
Total current assets 863.4 1,062.8
Other assets:
Regulatory assets 82.4 83.8
Other deferred assets 74.3 72.2
------------ ------------
Total other assets 156.7 156.0
------------ ------------
Total Assets $3,653.2 $3,791.7
============ ============
Capitalization and Liabilities
Capitalization:
Common shareholders' equity:
Common stock, at par value of $0.01 per
share $1.2 $1.3
Other paid-in capital, net of treasury
stock - 25.1
Warrants 50.0 50.0
Common stock held by employee plans (76.1) (86.1)
Accumulated other comprehensive income (15.0) (14.2)
Earnings reinvested in the business 964.6 1,062.0
------------ ------------
Total common shareholders' equity 924.7 1,038.1
Preferred stock 22.9 22.9
Long-term debt
First mortgage bonds 683.0 683.0
Other long-term obligations 769.0 994.1
------------ ------------
Total long-term debt 1,452.0 1,677.1
------------ ------------
Total capitalization 2,399.6 2,738.1
Current liabilities:
Current portion - long-term debt 225.9 0.9
Accounts payable 145.9 130.2
Accrued taxes 148.6 178.5
Accrued interest 21.5 28.9
Other current liabilities 29.0 31.1
------------ ------------
Total current liabilities 570.9 369.6
Deferred credits:
Deferred taxes 333.4 327.0
Unamortized investment tax credit 45.7 46.4
Insurance and claims costs 25.5 24.3
Other deferred credits 278.1 286.3
------------ ------------
Total deferred credits 682.7 684.0
------------ ------------
Total Capitalization and Liabilities $3,653.2 $3,791.7
============ ============
DPL Inc.
OPERATING STATISTICS
(unaudited)
Three Months Ended
March 31,
---------------------
2006 2005
----------------------------------------------------------------------
Sales (millions of kWh):
Residential 1,468 1,535
Commercial 893 885
Industrial 988 1,010
Other retail 338 331
Other miscellaneous revenues - -
---------- ----------
Total retail 3,687 3,761
Wholesale 819 617
---------- ----------
Total sales 4,506 4,378
========== ==========
Revenues ($ in thousands):
Residential $130,631 $125,932
Commercial 71,299 63,610
Industrial 57,805 52,860
Other retail 20,607 18,756
Other miscellaneous revenues 2,979 2,750
---------- ----------
Total retail 283,321 263,908
Wholesale 37,420 25,097
RTO ancillary revenues 17,704 15,502
Other revenues, net of fuel costs 2,698 2,638
---------- ----------
Total revenues $341,143 $307,145
========== ==========
Other Statistics:
Average price per kWh - retail (cents) 7.60 6.94
Fuel cost per net kWh generated (cents) 1.88 1.85
Electric customers at end of period 514,380 511,180
Average kWh use per residential customer 3,212 3,378
Peak demand - maximum one-hour use (mw) 2,307 2,617
Degree Days
Heating 2,514 2,897
Cooling - -
----------------------------------------------------------------------
Inquiries concerning this report should be directed to:
Arthur Meyer
Vice President
Telephone (937) 259-7208
The information contained herein is submitted for general information
and not in connection with any sale or offer for sale of,
or solicitation of any offer to buy, any securities.
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