DPL Reports Higher Second Quarter Earnings.Increases Earnings Guidance for 2007 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 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 $0.50 per share for the second quarter of 2007 compared to $0.20 per share for the second quarter of 2006. Significant items in the second quarter of 2007 compared to the second quarter of 2006 were: * Gain on settlement of former executive litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. of $31 million or $0.18 per share; * Increased retail revenue primarily due to weather of $15.4 million or $0.09 per share; * Increased retail rates of $11.5 million or $0.06 per share; * AEGIS insurance recovery of $14.5 million or $0.08 per share; * Gain on sale of corporate aircraft of $6.0 million or $0.03 per share; * Lower fuel costs due to outages of $12.9 million or $0.07 per share; and * Higher purchased power volume due to planned and unplanned outages of ($34.5) million or ($0.20) per share. Total basic earnings were $0.54 per share for the second quarter of 2007, which included $0.04 per share in earnings from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. resulting from gain on settlement of the former executive litigation. For the same period in 2006, total basic earnings were $0.20 per share, with no earnings from discontinued operations. "I am very pleased with the many accomplishments that our Company had in the second quarter 2007, including operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. up 24% over the second quarter of 2006, settlement of the former executive litigation, and successful implementation of the scrubber at Killen Station," stated DPL President and Chief Executive Officer Paul Barbas. "We continue to focus on cost control throughout the entire Company, while working closely with our partners to improve the operational performance of all plants in our generation portfolio." For the six months ended June 30, 2007, basic earnings per share from continuing operations were $0.98 compared to $0.63 in 2006. Including discontinued operations, total basic earnings per share were $1.07 in 2007 versus $0.70 in 2006 for the six month period. Second Quarter and Year-To-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. Financial Results Revenues increased 11% to $343.1 million for the three months ended June 30, 2007 compared to $309.0 million for the same period in 2006. This increase was primarily the result of higher average rates for retail and wholesale sales, higher retail sales volume and an increase in RTO (Recovery Time Objective) The amount of time a computer system or application can stop functioning before it is considered intolerable to the enterprise. It can be computed to be from seconds to days, depending on how critical the application is to the organization. ancillary revenue Ancillary Revenue Revenue generated from goods or services that differ from or enhance the main services or product lines of a company. By introducing new products and services or using existing products to branch into new markets, companies create additional opportunities for . Total degree days were 18% higher in the second quarter of 2007 compared to the second quarter of 2006. [TABLE OMITTED] For the six months ended June 30, 2007, revenues increased 11%, to $722.8 million from $650.1 million for the same period in 2006. Fuel, which includes coal, gas, oil and emission allowance costs, decreased $15.1 million, or 19%, in the second quarter of 2007 compared to the same period in 2006 due to lower average fuel prices and a 16% decrease in generation output. [TABLE OMITTED] Fuel costs decreased $9.0 million, or 6%, for the six months ended June 30, 2007 compared to the same period in 2006. Despite this decrease, total fuel costs for 2007 are projected to be relatively flat compared to 2006. Purchased power costs increased $46.2 million in the second quarter of 2007 compared to the same period in 2006 resulting from higher purchased power volume of $34.5 million and a $6.9 million increase due to higher average market rates. The increase in purchased power volume was primarily the result of increased sales volume and partner-operated generating facilities being less available compared to the same period in 2006 due to planned and unplanned outages. [TABLE OMITTED] For the six months ended June 30, 2007, purchased power increased $73.1 million to $135.4 million compared to $62.3 million for the same period in 2006. Gross margin increased $3.0 million, or 2%, to $196.4 million in the second quarter of 2007 compared to the same period in 2006. As a percentage of total revenues, gross margin decreased to 57.2% in the second quarter of 2007 compared to 62.6% in the second quarter of 2006. This result reflects the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact of the increase in retail revenues and lower fuel costs, offset by increased purchased power costs. For the six months ended June 30, 2007, gross margin increased $8.6 million, or 2%, to $433.6 million, compared to $425.0 million for the same period in 2006. Operation and maintenance expense decreased $9.1 million, or 13%, in the second quarter 2007 compared to the second quarter 2006, primarily resulting from a $14.5 million insurance settlement related to the litigation with three former executives, the gain on the sale of the corporate aircraft of $6.0 million, and an insurance reserve adjustment of $2.0 million. These decreases were partially offset by increased power production costs largely related to boiler boiler, device for generating steam. It consists of two principal parts: the furnace, which provides heat, usually by burning a fuel, and the boiler proper, a device in which the heat changes water into steam. maintenance of $6.6 million and other power production related charges of $5.4 million. For the six months ended June 30, 2007, operation and maintenance expense decreased $2.2 million, or 2%, to $130.8 million compared to the same period in 2006. Depreciation and amortization decreased $2.7 million and $6.1 million, respectively, for the second quarter 2007 and six months ended June 30, 2007 compared to the same periods in 2006 primarily reflecting the absence of depreciation on the Darby and Greenville peaking units and the impact of asset retirements. These decreases were partially offset by increased depreciation related to higher plant balances. Amortization of regulatory assets increased $0.8 million to $2.5 million in the second quarter 2007 compared to the same period in 2006. The increase reflects the amortization of customer billing system modifications to accommodate electric choice, deferred PJM PJM Pacific Journal of Mathematics PJM Project Manager PJM Puerto Jimenez, Costa Rica (Airport code) PJM Pennsylvania New Jersey Maryland Interconnection LLC (Mid-Atlantic region power pool) administrative fees, and incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. storm costs incurred in 2004 and 2005. These costs are being recovered through retail rate riders that went into effect at various times throughout 2006. For the six months ended June 30, 2007, amortization of regulatory assets increased $2.6 million compared to the same period in 2006. Investment income increased $0.8 million to $5.3 million in the second quarter of 2007 compared to the second quarter in 2006. The increase was primarily the result of $3.2 million in 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. from the sale of a portion of the financial assets Financial assets Claims on real assets. held in DP&L's Master Trust Plan used in the litigation settlement with the three former executives, partially offset by lower interest income reflecting lower cash 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. investment balances. For the six months ended June 30, 2007, investment income decreased $2.6 million to $8.3 million compared to the same period in 2006. Interest expense for the second quarter of 2007 decreased $6.5 million, or 25%, compared to the same period in 2006. Decreases in interest expense resulted from the redemption of DPL's $225 million 8.25% Senior Notes on March 1, 2007 and higher capitalized interest Capitalized interest Interest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time. In the context of project financing, interest that is paid by additional borrowing. associated with DP&L's major construction projects. These decreases were partially offset by additional interest expense resulting from DP&L's $100 million 4.8% Series Pollution Control Bonds issued September 13, 2006. For the first six months ended June 30, 2007, interest expense decreased $9.7 million, or 19%, compared to the same period in 2006. Liquidity and Cash Flow DPL's cash and cash equivalents totaled $103.9 million at June 30, 2007, compared to $262.2 million at December 31, 2006, a decrease of $158.3 million. In addition, DPL had $2.2 million in restricted funds at June 30, 2007 compared to $10.1 million at December 31, 2006. The decrease in cash and cash equivalents was primarily attributable to the retirement of DPL's $225 million 8.25% Senior Notes, $171.2 million in capital expenditures and $55.8 million in dividends paid on common stock, partially offset by $112.4 million in cash generated from operating activities and $158.4 million in proceeds realized from the sale of Darby and Greenville peakers and corporate aircraft. Capital expenditures were $171.2 million for the six months ended June 30, 2007 compared to $200.3 million for the first six months in 2006. Settlement of Executive Litigation On May 21, 2007, DPL settled the litigation with the three former executives for $25 million. Prior to the settlement date, DPL had accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. obligations of approximately $64.2 million. As part of this settlement, the three former executives dismissed all their claims against DPL and relinquished re·lin·quish tr.v. re·lin·quished, re·lin·quish·ing, re·lin·quish·es 1. To retire from; give up or abandon. 2. To put aside or desist from (something practiced, professed, or intended). 3. 1.3 million RSUs and forfeited for·feit n. 1. Something surrendered or subject to surrender as punishment for a crime, an offense, an error, or a breach of contract. 2. Games a. 3.6 million stock options. As a result of this settlement, DPL realized a net pre-tax gain in continuing and discontinued operations of approximately $31.0 million and $8.2 million, respectively. The net gain is comprised of the reversal of the $64.2 million of accrued obligations less the $25 million settlement. The $25 million settlement was funded from the sale of assets held in DP&L's Master Trust Plan, which resulted in a $3.2 million realized gain that is included in investment income for the second quarter 2007. Future Outlook Basic Earnings from Continuing Operations - The Company has increased its guidance for basic earnings per share from continuing operations from $1.60 to $1.75 for 2007 to $1.90 to $2.05. This increased estimate for 2007 is based primarily on the following one-time, non-recurring items: * Gain on settlement of former executive litigation of $0.18 per share; * AEGIS insurance recovery of $0.07 per share; and * Gain on sale of corporate aircraft of $0.03 per share. Capital Forecast Over the three-year period of 2007 through 2009, DPL is projecting to invest an estimated $675 million in capital projects, approximately 40% of which is related to changing environmental standards. This represents a $30 million increase over the previously reported estimate of $645 million and is due to increases in capital projects at partner-operated generating plants. Conference Call/Webcast DPL will conduct a webcast conference call with financial analysts on Thursday, July 26, 2007, 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 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 for three months. About DPL DPL Inc. (NYSE:DPL) is a regional electric energy and utility company. DPL's principal subsidiaries include The Dayton 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 electric utility, provides service to over 500,000 retail customers in West Central Ohio; DPLE engages in the operation of merchant peaking generation facilities; and DPLER is a competitive retail electric supplier in Ohio, selling to major industrial and commercial customers. DPL, through its subsidiaries, owns and operates approximately 3,750 megawatts of generation capacity, of which 2,800 megawatts are low cost coal-fired units and 950 megawatts are natural gas and diesel peaking units. Further information can be found at www.dplinc.com. Certain statements contained in this press release are "forward-looking statements 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 discussed in the press release that 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 expectations of future economic performance, taking into account the information currently available to management. These statements are not statements of historical fact and are typically identified by terms and phrases such as "anticipate," "believe," "intend," "estimate," "expect," "continue," "should," "could," "may," "plan," "project," "predict," "will" and similar expressions. Such forward-looking statements are subject to risks and uncertainties, and investors are cautioned that outcomes and results may vary materially from those projected due to various factors beyond DPL's control, including but not limited to: abnormal or severe weather and catastrophic weather-related damage; unusual maintenance or repair requirements; changes in fuel costs and purchased power, coal, environmental emissions, gas and other commodity prices; volatility and changes in markets for electricity and other energy-related commodities; increased competition and 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. in the electric utility industry; increased competition in the retail generation market; changes in interest rates; state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, emission levels, rate structures or tax laws; changes in federal and/or state environmental laws and regulations to which DPL and its subsidiaries are subject; the development of Regional Transmission Organizations  This August 2006 is in need of attention from an expert on the subject.Please help recruit one or [ improve this article] yourself. See the talk page for details. , including the PJM to which DPL's operating subsidiary An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. has given control of its transmission functions; changes in DPL's purchasing processes Purchasing Purchasing is the formal process of buying goods and services. The Purchasing Process can vary from one organization to another but there are some key elements that are common throughout The process usually starts with a 'Demand' or requirements , pricing, delays, contractor and supplier performance and availability; significant delays associated with large construction projects; growth in DPL's service territory and changes in demand and demographic patterns; changes in accounting rules and the effect of accounting pronouncements issued periodically by accounting standard-setting bodies; financial market conditions; the outcomes of litigation and regulatory investigations, proceedings or inquiries; general economic conditions; and the risks and other factors discussed in DPL's filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date of the document in which they are made. We disclaim 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 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. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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