DPL Reports Third Quarter 2002 Results.Business Editors 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 , Ohio--(BUSINESS WIRE)--Oct. 30, 2002 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 announced third quarter results of $0.54 per share, compared to $0.70 per share in 2001 and $0.55 per share in 2000. All earnings per share numbers are before share 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. and nonrecurring items. During the third quarter of 2002, retail revenues increased $25 million or 9% over the prior year period to $293 million as a result of higher residential and commercial sales resulting primarily from warmer than normal weather. "These higher revenues were offset by lower wholesale energy prices and higher amounts of purchased power which limited our ability to maximize the benefits of that weather," said Chief Executive Officer-Elect Stephen Koziar. Wholesale revenues decreased $34 million or 42% to $48 million as compared to the prior year primarily as a result of lower energy prices offset somewhat by higher sales volumes in the current year period. The net margin on wholesale sales in the current year period totaled $14 million. Purchased power costs in the third quarter of 2002 of $26 million increased $6 million or 28% over the prior year period as a result of increased sales volumes and lower plant availability, offset by lower energy prices. Operation and maintenance expense during the current quarter increased $1 million or 4%. Lower planned outage out·age n. 1. A quantity or portion of something lacking after delivery or storage. 2. A temporary suspension of operation, especially of electric power. and ash disposal costs were offset by higher employee benefit costs. Investment income from DPL's portfolio of financial assets Financial assets Claims on real assets. during the third quarter was $14 million as compared to $18 million during the third quarter of last year. For the first nine months of 2002, DPL's earnings were $0.52 per share, after the impact of a second quarter impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of certain financial assets of $0.77 per share. Earnings for the same period in 2001 and 2000 were $1.53 and $1.18 per share, respectively. Retail revenues increased $27 million or 3% as a result of higher residential and commercial sales volumes driven primarily by warmer than normal weather in the third quarter. These increases were offset by the decrease in wholesale revenues of $67 million or 41% as a result of lower wholesale energy prices. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , exclusive of fuel and purchased power, increased $10 million or 3% from the first nine months last year as a result of increased depreciation related to the addition of 480 and 544 megawatts of peaking generation capacity in the summers of 2002 and 2001, respectively and higher general taxes attributable to the change in tax law as a result of 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. . These increases were offset by a $7 million or 6% decrease in operations and maintenance expense as a result of lower plant operating and outage costs offset by higher employee benefit costs. Year to date, the financial asset portfolio contributed investment income of $57 million, before consideration of the second quarter impairment write-down related to certain financial assets. Results for the first nine months of 2001 include $1.0 million or $0.01 per share reflecting the adoption of the new accounting standard for derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. and a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $3 million after income tax or $0.03 per share associated with a voluntary early retirement program completed in June 2001. Earnings for the year 2002, excluding investment income, are estimated to be $1.25 to $1.30 per share. This compares to basic earnings per share excluding investment income and nonrecurring items of $1.57 and $1.13 in 2001 and 2000, respectively. The current year estimate assumes normal weather in the fourth quarter, modest sales and economic recovery, continued pressure on energy prices, and political stability. Investment income contributed an average of $0.25 to basic earnings per share in 2001, 2000 and 1999. For the first nine months of 2002, the financial asset portfolio has contributed $0.29 per share, excluding the second quarter impairment write-down. "Our plan for 2003 is to leverage our fundamental strengths of efficient, low-cost operations, mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. cost increases and manage
through and around an ever-changing and difficult economic and industry
landscape," said Koziar. Given the pressure on earnings caused by
the current down cycle in the electric sector, and the uncertainty
surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. overall economic conditions, DPL is currently reviewing its estimate of 2003 earnings and will provide guidance in the future. 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 operates over 4,600 megawatts of generation capacity and markets wholesale energy 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. 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 2001 Annual Report and Form 10-K/A.
EARNINGS RELEASE
DPL Inc.
FINANCIAL DATA
(Unaudited)
(in millions, except per share amounts)
Three Months Ended
September 30,
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2002 2001
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Earnings Per Share of Common Stock - Basic: $ 0.54 $ 0.70
Earnings Per Share of Common Stock - Diluted: $ 0.54 $ 0.67
Earnings $ 64.7 $ 83.7
Average Number of Common Shares Outstanding:
Basic 119.0 118.8
Diluted 119.0 125.2
Nine Months Ended
September 30,
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2002 2001
---- ----
Earnings Per Share of Common Stock - Basic: $ 0.52 $ 1.52
Earnings Per Share of Common Stock - Diluted: $ 0.50 $ 1.41
Earnings $ 61.9 $180.5
Average Number of Common Shares Outstanding:
Basic 119.1 119.1
Diluted 122.9 127.8
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