ML20055A388

Annual Financial Rept 1981

ML20055A388
Person / Time
Site:	Comanche Peak
Issue date:	07/06/1982
From:	Farrington J DALLAS POWER & LIGHT CO.
To:
Shared Package
ML20055A370	List: ML20055A373 ML20055A381 ML20055A382 ML20055A386 ML20055A387 ML20055A388 TXX-3533, Forwards Annual Financial Rept 1981 of Facility Owners,Per 10CFR50.71(b)
References
NUDOCS 8207160241
Download: ML20055A388 (30)

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Dallas Power 1981 Annual & Light Company M Report i

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Dallar Pouer & light Company Operating Highlights Thousands of Dollars 1981 1980 Operating Revenues . S 623,733 $ 523,816 Operating Expenses . . .... 523,224 434,010 Fueland Purchased Power Expenses . 267,010 210,507 Other Operation and Maintenante Expense . I19,152 103.125 Taxes.. . ....... 103,138 87,243 ExpendituresforConstruction 121,784 121,693 Electric Plant at Year.End . . 1,490,134 1,372,482 TotalGeneratingCapabilityatYear End(Kilowatts). 4,055,834 4,055,834 Source of Revenue neeientiai 4i 9%

Ownrnenial 39 6%

Industrial 12.5 %

G,vernrnent.

Munkipal arul other 6 0%

N Fuel 40 8%

Operarnin arul Maintenarme 19.7%

Divkieruls an<l Retained Earninn 12.3%

Internt arul Mmellarrous 5.4 % $6%

Depredarkin Provnk.n Fuel Mix = " 75 m f

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TO OUR SitAHiIIOI.DI.RS stock were sold for $29.5 million. Ad-During 1981 the Company's service ditional long term financing is planned area retained a strong economy as during 1982.

reflected by a large number of non. Providing customers' long range residential construction projects, need,s for elatric power will include unemployment below both state and continued energy conservation and national levels, and new businesses and load management efforts to achieve residents moving to the area. His improved efficiency in energy use, growth requires continuing planning During the year DP&Lintroduced new flexibility, while inflation, high interest incenove programs for customers who rates and escalating fuel prices add to install energy-efficient equipment, the challenge of maintaining reliable theret helping to reduce the growth electric service at reasonable cost. in demand.

Through the performance of is with deep regret that the death dedicated, capable employees, the of Robert IL Cullum, a ditator of the Company is meeting this challenge. Company for almost 25 years, is rnord.

He average residential use of elec. ed. Ilis dedication and capable advice tricity in 1981 was 11,567 kilowatt. will be missed by everyone.

hours which reflected a more normal he people of DP&L are aware that 1981 summer compared with the our customers depend on us for good record heat of 1980. He 1981 summer service provided around the chxk and peak demand was 2,825,000 kilowatts, sometimes under difficult conditions.

only slightly lower than the 2,841,000 It is a'so recognized that cost contro,1 kw in 1980. DP&L customers set a new and pn>ducuvity improvement are im-winter peak demand of 1,977,000 kw portant and the responsibility of each on February 5,1982, of us. Good service with a watchful eye Much of the long-range fuel wnver. on cost racived daily attention during sion program staned in the 1960s has the year and is a commitment for the been completed and is continuing to future.

benefit our customers. In 1981 more Continued growth in the economy than 50% of DP&L's electricity was of the service area and the quality of generated by lignite coal, providing life available here indicate the fuel cost savings to customers along desirability of Dallas as a place to work with the reliability of diversified fuel and live. Le employees of DP&L are sources. The remaining fuel re. dedicated to providing the electric ser-quirements during 1981 were provided vice which helps sustam and enhance by natural gas along with a small that quality oflife.

amount of fuel oil. Additional fuel (

diversification will be achieved with the

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completion of the two Comanche Peak L

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nudear units which are now scheduled for operation in 1984 and 1985.

he Company's construction pro-f f gram has leveled from the histoncal Jerry Farn.ngton highs experienced during the late l'""'knt and ChiefErecutive 1970s. Construction expenditures in 1981 totaled $122 million, approx-imately the same level as in 1980 but - -

down considerably from $168 million  !. P in 1979. Construction expenditures for I Sig 1982 are estimated to be $143 million. F i "% '

Inng-term financing during 1981 totaled approximately $65 million. He k<M' E .,J '

major portion of this was the sale of

$50 million of 15' 8% first mongage . . _

bond 3 u.Juin-. Ahe. . I% ember 1980, one million shares of common ,

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F 4" ' % _ giR - WMW ;;MS yy34pdagsmgji PL\NNING ANI) IM 'lLI) LNG western part of the service area. Gin-1OR LLilU\ll H nil 1)$ struction was started on a new service Providing fi>r the future eleuric ser- (enter in iat Nonh Dallas to improve vite needs of DP&L customers requires ellitiency by kicating work (rews in this an on-going planning pnxess. Em. growth area.

phasis is placed on generation that pro-

, 3 gg vides fuel diversifkanon and ficxibility, transmission and distribution facilities lhe 0""Pd"Y'" "'t di"" Cx ditures fi>r 1981 were $122 milhon,PC"-and fi>r the future, and improved pnxluc-tivit . Adequate planning also indudes are expated u> be appn?ximately $143 loa management and energy u>nser- milhon in 1982, $,146 milhon in 1983, vation programs to slow the gnawth in and $153 milhon in 1984. G>no,nuing peak demand. efTorts are made to manage the ain-Steady progress continues in u>n- struajon nyam so that expenditures struuion of the G>manche Peak ren n re atjvely level as penent of nudear plant, of which DP&L owns total capitahzanon.

18 % %. During the year the estimated f.inanted

'Ihe 1981 (onstru(tion pn> gram was completion dates for Unit I and Unit 2 partially from the sale mjune were revised from 1982 and 1984 to of $50 million of first mortga);c bonds, 1984 and 1985, respeuively. Estimated due 2011, at a (ou;xin rate of 15%%;

unt of the total projnt was increased and in November by the tssuan(c of from $2.235 bilhon to $3.44 billion. $15.26 million of tax-exempt [x>llution

'lhe primary reasons fi>r the revised unt (ontrol revenue lx>nds with an interest and schedule fi>r G>manche Peak are rate of 13 % %. *lhese rates are the design (hanges and required modifka- h.ighest ever paid by the G>mpany fi,>r tions. Due to the delay in u>mpletion sinular secunties and refle t the uinun-of the units, the inacase in the unt of uing p(essures on the Company of the, funds used during umstruoion is a mreasing unis of rmng capnal. Add -

major fauor in the higher estimate. nonal long term finana,ng is planned

'lhe new estimate continues to uim. fi>r 1982.

pare favorably with estimates of nudcar g,gi;s units xheduled fi>r compiction by Ihause of the pressure ut on other compames in the same peruxL operations by the inucaseI>u>st of Ikcauscof the ri(e of nudcar fuel, the ap plant will pnx u(e clatncal energy at a capital phed fi>r and inflation, inacased rates inthe SeptemGimpanber -

cost that compares favorably wnh other 1980. New rates which refleued an in-available altemauves at the time it (rease in o rating revenues of 11.4 %

beu>mes o crational.

wue bille eginning in March 1981.

DP&L a so owns a 20% share m- two At year-end the G)mpany was review-future hgn,tei fueled units which are ing revenue requirements to determine puntly owned wnh ,lexas Eintric Scr- the need and uming of additional rate vac Company and Texas Power &

rdief.

Light Gimpany. Forest Grove 1 is scheduled for operation in 1989, and HIMARCli Martin 12ke 4 in 1990. A varied rescanh and development Two new substations were plated in program reflats the G>m;)any's in-servae during 1981, and a site was ac- terest in evaluating supplemental l quired and work was started on a new sources of generation, developing more

network substation to be built just efficicnt methods of transmission and nonh of downtown Dallas. Also during distribution and a uintinuing contem the year DP&L(ompleted construction about the envininment and energy of a 345 kv transmission line in the uniservation.

DP&L participates in the wide-ranging research effi>rts of the Elatric Power Rescanh Institute, a non-profit organization sponsored by clntric utilities throughout the United States.

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. .i - - ii EPRI is placing an increasing emphasis customers who install qualifying high on load management techruques and efficiency heat pumps or air condinon-the efficient use of electricity, as well as ing when their existing systems have to the development of new energy be replated. Nc,v homes that meet technology and sounes. At year-end (nergy efliciency standards of the Com-the institute had over 1200 projects pany's E-OK program are also underway. qualified for the YES program when As one of the pioneer supporters of eflicient cooling and heating equip-the Texas Atomic Energy Reseanh ment is installed. Le coupons are used Foundation since 1957, DP&L is invohed by the customer to apply to DP&L in fusion rescanh at the U: vsity electric bills. Customers who install cer-of Texas at Austin. DP&L's i wh tain solar and heat recovery devices to also includes work at the Big N.r - supplement electric water heaters are Environmental Reseanh Center a also eligible for the coupons.

Fairfield, Texas, which marked its tenth Hundreds of thousands of people year of operation in 1981. saw the advantages of the YES pro-New projects begun by the Com- gram demonstrated in the Company's pany in 1981 foms on the feasibility of exhibit at the 1981 State Fair of Texas.

small wind generators in Dallas and Many other customers have heard their effect on the DP&L system, as about YES through community well as a study of the energy re- presentations by DP&L employees and quirements of four downtown high-rise through the Company's mass com-office buildings and the most energy- munications efforts.

eflicient methods oflighting, heanng At year-end over 3500 customers and cooling them. had participated in the YES program, The Company will also be monitor- providing an estimated 4800 kw reduc-ing the apphcanon of electric vehides tion in peak demand. Le YES pro-in the U.S. Postal Service fleet in the gram has been expanded in 1982 to in.

DP&L service area. clude certain non-residential customers.

DP&L began a program of home 51 RVING CL'STOMERS BEITDI energy audits for rcsidential customers 1.OAD.1fANAGEllENTAND in 1981. his program makes available CONSEE4770N to customers a study of their homes' DP&L has initiated various load ener6y efliciency, suggestions for im-management programs designed to proving conservation in the home, limit the growth of peak demand, im- estimated costs of those improvements prove the system load factor and help and the energy savings which would hold down future capital requirements. result.

He Company's E-OK certification load management activities for program remains a strong incentive for business customers include emphasis builders to provide ener on thermal storage systems, an incen-new home construction.gy DP&L also efficiency en- in program for high efficiency fluores-tive courages its customers to conserve cent lighting and various other pro-energy through wise use and home im- grams to encourage business customers provement projects. to reduce their peak demand on Com-In May 1981 the Company intro- pany facilities whkh also reduces their dated the YES (Your Energy Share) cost of energy.

precarn for residential customers.

In cugh the YES program, the Com- ElfERCENCYPREPAREDI ESS pany offers incentive coupons to %e Company's plans f >r handling emergencies were reviewec during the year. Diis induded activation of the Emergency Restoration Center which serves as a central location for coordina-tion and information exchange during 5

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Lm significant emergencies. The center was struction and service crews were in operation during three days of ex- relocated within the service area to tremely wld weather inJanuary 1982. place them closer to their daily work locations, which saves on transponation l'RODUC7H'IT)'13fPROl'DfEN75 (osts and reduces travel time in In striving to provide electric service responding to customers' service needs.

at the most reasonable cost, Company people take pride in efficiency and pro- IRAINING AND SAIHF ductivity improvement as an imponant Responding well to customer needs part of holding costs down. requires trained and dedicated While the number of DP&L employees. During 1981 almost 1700 customers increased substantially dur. DP&L employees received training ing 1981, the number of employees re. through intensive courses conducted by mained almost level, reflecting a con. instructors from industry and univer-tinued emphasis on productivity. sities and from within the Company. l Through a rearrangement of meter Under the tuition aid program over 100 reading routes the same number of employees pursued advanced studies DP&L meter readers are reading during the year in career fields such as substantially more meters than ever engineering, accounting, business ad.

before. Improvements in the Com- ministration and computer science.

pany's customer information system, The Company continued its com-upgraded radio and microwave com- mitment to keeping safety foremost in munications systems, and a new on- the minds of all employees. However, line order entry system have helped the accident severity rate in 1981 in-improve timely and accurate respon- creased primarily because of a severe siveness to customers. In 1981 accident which resulted in a fatality. By Customer Service personnel handled an contrast, the personal accident frequen-18% increase in customer mquiries cy rate was maintained substantially with increased efficiency and without below the national average for the elec-additional personnel. tric utility industry. Traffic safety received As a result of an engineering and special attention during the year, operating reassessment of the load car- and employees responded, reducing rying capability of the Company's the traffic accident rate by over 25%

transmission and distribution facilities, from 1980. Job safety education pro-progress to increase loading on the ex- grams are a continuing activity, and isting system is continuing. This pro- work procedures are regularly reviewed gram will result in maximum utiliza- to mamtain the highest possible stan-tion of the electrical system while dards of safety for employees and the maintaining service reliability to our public. Employees are encouraged to customers. be ever mindful of safe working prac.

Organizational realignments and tices and best efforts are pledged to procedural changes were competed maintain a safe working environment.

during the year to allow improved coordmation and processing of con. MAN AGDIENT CH ANGl3 struction projects to meet customer ser- Management changes during 1981 vice requirements from the initial pro-included the election of George M.

ject design through actual placement of Hamilton, Ill as DP&L corporate facilities in service. In addition con- secretary.

SERVING DAU.AS GROWHi The well-diversified economy of DP&L's service area and the entire Dallas-Fort Wonh Metroplex continued to be relatisely strong during 1981. At year-end unemployment was about 4%, just under the state level of 4.5%

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8.3%. Non residential building per. I u , AI AND Hl:Gt:1.A10RY mits issued in Dallas County exceeded 51ATi m

$2 billion for the first time. His During 1981 the Company and represents a doubling of the previous other Texas Utilities System companies record high in 1980. He central continued a six-yearpanicipation in business district led the county with regulatory and judicial proceedings in-more than nine million square feet of volving Central and South West Cor-office construction started, including poration (CSW). InJanuary 1982 the the 26-story Americas Tower addition Federal Energy Regulatory Commission to the Plaza of the Americas complex, (FERC) issued an order approving a the 20-story Pacific Place and the proposed settlement based upon an 50-story First City Center. agreement between the Texas Utilities Other major construction which System companies, CSW, Houston began in 1981 includes SanJacinto I;ghting & Power Company (HL&P)

Tower, the new Southwestem Bell and other utilities in Texas which pro.

Tower and Computer Center, and vides for two direct current interstate Dallas Galleria, a complex located in interconnections established in a man-far Nonh Dallas which includes a ner that will have no adverse effect shopping center, a 440-room hotel and upon service reliability or customer a 25-story office building. costs. An integral part of the approved Almost 11 million square feet of settlement provides that the Texas planned new downtown office space Utilities System companies and HL&P was announced in 1981, indudirg the will continue to be exempt from 70-plus story Main Center I, which will FERC's general jurisdiction. It is ex-be Dallas' tallest building. pected that other related proceedings New residential dwelling units com- will be settled under similar terms and  !

pleted in 1981 totaled slightly over conditions.

10,000. Of these, 7000 were multi- Following hearings in 1979 the family units and 3000 were single fami- Public Utility Commission of Texas ly. New residential starts in the service (PUC) issued an order concerning cer-area showed a continuation in the tain transactions among the Company, decline ofindividual home construc- Texas Electric Service Compa tion. During 1981 residential stans (TESCO), Texas Power & Li Com-totaled 6900 multi family units and pany (TP&L) and other sub idiaries of 2300 single family, duplexes and Texas Utilities. The order concluded townhomes. that the transactions reviewed were Dallas continues as one of the top generally in the public interest and convention cities in America. During found that the Company and its sister 1981 more than one and a half million companies were not affiliates of each persons attended conventions in other.

Dallas, which accounted for the direct in December 1980 a hearing was addition of nearly half a billion dollars concluded in state district coun in con-to the local economy. The Dallas-Fort nection with appeals of the PUC order.

Wonb Metroplex also remained the In December 1981 the coun issued an state's top tourist destination last year, order finding, among other things, drawing an estimated 7.5 milhon that the Company and its sister com-visitors who spent nearly $2.5 billion. panies were affiliates and that the Texas Public Utility Regulatory Act required a prior determination by the PUC of the reasonableness of charges in trans-actions among such affiliated interests.

He Company, TESCO and TP&L ap-pealed the court order and, in the in.

terim, have requested the regulatory authorities to adopt a new procedure to provide for prior approval of payments to affiliates.

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Dallas Pouer & light Company Selected Financial Data HNANCIAL STATISTICS Year Ended December it, 1981 1980 1979 1978 1977 TOTAL ASSETS end of> ear (thousands) . 5 1,224,710 $ 1,126,170 $ 1,100,995 $ 1,017.450 $ 945.202 ELECTRIC PLANT end of year (t housands) 5 1,490,134 $ 1,372,482 $ 1,318,354 $ 1,244,412 $ 1,078,157 Auumulated depreciation - end of year 5 345,508 $ 313,797 5 277,817 $ 245,683 $ 218,848 Construc: ion expenditures (induding allowan(c for funds used during construction) . 5 121,784 $ 121,693 $ 167,600 $ 158,438 $ 136,775 CAPITAUZATION end of year (thousands)

Inng. term debt 5 401,949 $ 345,817 $ 346,443 $ 373,017 $ 380,718 Preferredstock . 104,722 104,722 101,722 101,722 104.722 Common stoc k equity . 463,741 432,962 375,690 339.279 322.072 lbtal . _

$ 970,412 $ 883,501 $ 826.855 $ 817,018 $ 807,512 AVERAGE INTliREST COST ON LONG TERA 1 DEBTend ofyear. 8.2 % 6.9 % 6.6% 6.5 % 6.5 %

AVERAGE DIVIDEND COST ON PREI ERRED STOCK end ofyear . 6.3 % 6.3 % 6.3 % 6.3 % 6.3 %

NETINCOh1Etthousands) . .... . , 5 78,150 $ 67,383 $ 45,932 $ 42,953 $ 42,405 DIVIDENDS DECLARED ON COhlh10N STOCK (thousands) . 5 40,800 $ 33,040 $ 32A50 $ 19,175 $ 14,160 COhlh10N STOCK DATA Shares outstanding - average 15,000,000 14,083,333 13,833,333 13,000,000 12,083,333 Sharesoutstanding-endofyear . 15,000,000 n,000,000 14,000,000 13,000,000 13,000,000 Earningsper average share. 5 4.77 $ 4.32 $ 2.85 $ 2.80 $ 2.97 Dividendsdedared per share . . . 5 2,72 $ 2.36 $ 2.36 $ 1.48 $ 1.18 Return on average c ommon stoc k cquity 16.0 % 15.0 % 11.0 % 11.0 % 12.1 %

RATIO OF EARNINGSTO FIXED CHARGES . 4.6 4.0 3.2 3.I 3.4 SUPPLEh1 ENTAL RATIO OF EARNINGS TOFIXEDCHARGES* . 3.8 3.3 2.9 3.0 3.4 ALLOWANCE FOR RJNDS USED DURING CONSTRUCTION AS PERCENT OF EARNINGS TO COh1510N STOCK . . 16.6 % 20.4 % 41.9 % 43.2 % 35.5 %

NET RJNDS FRON1 OPERATIONS AS PERCENT OF CONSTRUCTION EXPENDITURES (exduding allowante for ftmds used during construction) . 66.5 % 56.9 % 29.3 % 35.9 % 43.8 %

'The supplemenial rano ut earnings to fixed (harges miludn the Company's alknable portion of interest on wmor notes of attihared ompanies whic h proude wnu cs to ihr Gimpany JOINTI) 04 M D GF M R snNG l' Nils IN siRVict GENE R 411NG l' NIT % l'NDI N LONS11tt LTION OR IN DLsK.N P,', '

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- - 1-_f w.n u w OPERN!1NG STA11511CS Year I:nded Dnember 31, 1981 1980 1979 1978 1977 LIICITUC ENERGY GENERA 1TD AND PURCIIASED (mwh)

Generated - net station output . 12,341,210 12,713,256 11,720,463 12,011,330 12,388,816 Purc hased and net interc hange . 320,619 131,090 165,132 89,923 22.145 li>tal generated and purt hised .... 12,624,H29 12,847,346 11,885,595 12,101,253 12,410,991 Company use, lowes, and unauounted for 686,878 598,289 585,817 652,025 563,025

'listal ein tric energy sales . I1,937,951 12.249,057 11,299,77H I1,449.22H 11,847,966 IUEL MIX IOR ELECTRIC GENERATION Gas 48,1 % 48.1 % 48.2 % 55.1 % 61.5 %

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Total. 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %

EllCERIC ENERGY SALES (mwh)

Rnidential . . 4,510,383 4,880,144 4,301,795 4,554,102 4,295,782 Conuner ial . 5,127,820 4,975,876 4,570,382 4,609,565 4,374,875 Industrial . .. .. 1,785,342 1,812,414 1,773,866 1,696,5 I i 1,616,720 Gmernment and munidpal . 347,721 365,588 320,003 319,097 287,433

'liital general business . I1,771,266 12,061,022 10,966,016 11,179,275 10,574,810 Other eintric utilities . .. 166,685 185,035 333,732 269,953 1,273,156 li>ralelettrit energy sales . I I,937,951 12.249,057 1,299,778 11,419,228 11,847,966 OPERA 11NG REVENUES (thousands)

Rnidential . . 5 266,984 $ 232,071 $ 177,173 $ 165,413 $ 14H,828 Commerdal . 252,623 197,473 167,411 144,985 133,742 Industrial . .. ,. 79,697 65,185 56,332 47,114 43,596 Gmernment and municipal 15,908 13.423 9,720 7,455 6,362 liital general business . 615,212 508,152 410,636 361,967 332,528 Othereintric utilities . 4,311 3,491 6,653 5,501 22,996

'li>tal from ein tric energy sales. 619,523 511,613 417,289 370,471 355,524 Otheroperating revenues . 4,210 12,173 5,152 4.871 6,700 Tiitaloperating revenues 5 623,733 $ 523,816 $ 422,411 $ 375,342

$_ 362.224 ELECTRIC CUSTOMERS (end of year)

Rnidential . . 286,423 273,347 254,586 241,201 228,393 Commercial . 30,500 29,855 28,567 27,272 25,614 Industrial . .. ... 2,444 2,362 2,32H 2,199 2,108 Government and municipal . 145 395 H77 H25 777

'Ihtal general businew . 319,jl2 305.959 286,358 271,497 256,922 Other eintric utilities . 2 2 2 2 2 Tiitalelettric tustomers . _ 319,514 305,961 286,360 271,499 256,924 Residential dAssification indades indirn t sales (apartments, etc.), dwelling units not inc luded in number oft ustomers 124,475 130,781 141,088 142,485 137.732 n n o us su

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Dallas Power &Ijght Company Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources The primary capital requirements of the Company for 1981 and as estimated for 1982 through 1984 are as follows:

1981 1982 1983 198-1 Thousands of Dollars Construction expenditures (excluding AFUDC). 5110,000 $126,000 $121,000 $133,000 Nudear fuel . . ..... ..

- 6,000 13,000 13,000 Maturities oflong-term debt and sinking fund requirements . 2,000 - 3-1,000 25.000 Total 5112,000 $132,000 $168.000 $171,000 For detail concerning major new construction work now in progress or contem-plated and commitments with respect thereto, see pages 3 and to of this report.

The Company generates funds from are expected to be maintained in the operations sufficient to meet operating future. To provide for immediate cash needs, pay dividends on capital stock requirements during periods between and finance a signi6 cant portion of long-term financings, the Company capital requirements. These funds are obtains short-term loans from Texas derived from net income, deprecia- Utilities Company, which has lines of tion, deferred taxes, and federal in- credit with commercial banks ag-vestment tax (redits. Factors affecting gregating $300,000,000 at December the ability of the Company to fund a 31,198,1. The Company does not portion ofits capital requirements maintain separate credit arrangements from operations include adequate rate with banks or other lenders, relief and regulatory practices allowing The Company expects to sell addi-a substantial portion of construction tional securities as needed, in amounts work in progress in rate base, ade- and of types presently undetermined.

quate depreciation rates, normaliza- Although the Company cannot tion of federal income taxes, full cur- predict future regulatory practices and rent recovery of the cost of fuel used is to some degree exposed to fluc-in the generation of electricity, and tuating economic and securities the opportunity to earn competitive market conditions, it does not current-rates of return required in the capitz. ly expect any changes in trends or markets. For 1981, approximately commitments which might 67% of the funds needed for con- significantly alter its basic financial struction was generated from opeu- position or ability to finance capital re-tions. quirements in the future.

External funds of a permaner. or See Selected Financial Data -

long-term nature are obtained by the Financial Statistics for additional infor-Company through the sales of com- mation.

mon stock, primarily to Texas 'Jtilities Results of Operations Company (parent), preferred stock Operating revenues have increased and long-term debt. The capitaliza- $99,917,000 for 1981 and tion ratios of the Company at $101,375,000 for 1980 primaril as the Dece,mber 31, 1981 consisted of ap- result of recovery of higher fuefcost on proximately 41% long-term debt, a current basis and increased rate 11% preferred stock, and 4,8% com-mon stock equity, and similar ratios levels. (See Selected Financial Data -

Operating Statistics.) Energy con-sumption is affected by material varia-tions in weather conditions. Relatively I normal temperatures prevailed during the summer of 1981 as compared to 12

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__ . '3 Y  := mum = # J;p;wm the unusually hot summer of 1980 Opinion ofIndependent and the relatively mild sumraer ofl979.

Certified Public Accountants Fuel and purchased power expense increased for all periods as a result of Dallas Power & Light Company:

higher unit costs of fuel consumed We have examined the balance and also in 1980 as a result ofincreased sheet of Dallas Power & Light generation (see Selected Financial Company as of December 31,1981 Data - Operating Statistics). Opera- and 1980 and the related statements tion and maintenance expenses have ofincome, retained earnings, and increased as a result of the continuing source of funds for construction for inflationary pressures on the cost of each of the three years in the period labor, matenals and services, and the ended December 31,1981. Our additionallignite-fueled generating examinations were made in accordance unit placed in service in 1979. such ex- with generally accepted auditii g penses were also affected by '.ye, higher standards and, accordingly, included costs of operating and mainpining ex. ,

such tests of the accounting records isting~ lignite-fueled generating units, and such other auditing procedures as including the additional costs of we considered necessary in the operating and maintainir g the pollu- circumstances.

tion control equipment regracd in In our opinion, the financial connection therewith. Inc .zes ;n statements referred to above present taxes other than income .esulted fairly the financial position of the primarily from incream in revenue. Company at December 31,1981 and Allowance for furJs used during 1980 and the results ofits operations construction dectmed in 1981 and and the source ofits funds for 1980 primarily because of the construction for each of the three years allowance of a greater portion of con- in the period ended December 31, struction work in progress in rate base 1981, in conformity with generally by the Compny's regulatory accepted accounting principles applied authorities. t ne decrease in other in- on a consistent basis.

come and deductions - net and federal incorr e taxes on other income DELOITTE HASKINS & SELLS in 1980 resulted primarily from the gain on the sale of a portion of the Comanche Peak nuclear station in 1979. Dallas, Texas The Company expects to pursue March 26,1982 adequate and timely rate reliefin the future to offset the effects ofincreases in the costs of providing electric service.

The Comptny has, prepared sup-piementary mformation concerning the effects of changing prices in com-pliance with the reponing requirements of Financial Accounting Standards Board Statement No. 33, such informa-tion is included on pages 24 and 25 of this repon.

13

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_-2 Dallas Pouer & 14ht Company Balance Sheet AssErs December 31, 1981 1980 _

Thousands of Dollars ELECTRIC PIANT In servi (c:

Production . 5 511,770 $ 505,722 Transmission 159,144 144,062 Distribution . 354,017 317,886 General . 41,928 34,870 Total 1,066,859 1,002,540 Construction work in progress . 405,286 349,623 Nuclear fuel . 16,917 17,831 Eleid for future use . 1,072 2,488 Totalelectric plant 1,490,134 1,372,482 Irssa(cumulateddepreciation . 345,508 313,797 Electric plant, less accumulated depreciation I,144,626 1,058,685 OTIIER INVESTMENTS . 469 100 CURRENT ASSET 6 Cash in baris . 2,899 2,284 Specialdeposits 8,121 4.340 Working funds . 5,872 4,755 Accounts receivable:

Customers . 32,418 26,271 Affiliates 309 350 Other . 2,327 1,011 Allowance for uncollectible accounts (2,194) (2,020)

Inventories - at average cost:

Materials and supplies 10,678 9,738 Fuel sto(k . 13,779 11,941 Othercurrent assets 2,035 6,187 Totalcurrent assets . 76,244 64,857 DEFERRED DEBITS . 3,371 2.528 TOTAL $ 1,224,710 $1,126,170 See accompanying Notes to Financial Statements.

14

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[ 7" '~ _ -- ~ l__m _ x_E '~~ - T~ "1 UAll!!JI1ES December 31, 1981 1980

'Ihousands of Dollars CAPITAL.lZATION Common stoc k(Note 3) . 5 328,500 $ 328,500 Retained rarnings(Note 4) . 135,211 104,462 Total 463,741 432,962 Preferred stmk(Note 3) Ini,722 101,722 Inng-term debt - less amounts due currently (Note 5) . 401,949 345,817

'Ibraltapitalization . 970,412 883,501 CURRENT LIAllluTIES Notes payable - Texas Utilities Company (parent) . 20,000 50,600 Auounts payable:

Affiliates 17,992 18,168 Other . 12,431 11,737 Dividendsdalared 1,60 1,613 Customers' deposits . 5,220 3,040 Taxesaurued . 47,808 35,728 Interest au rued 7,260 6.874 Matured interest . 7,624 3,840 Other(urrent liabilities 5,211 1,689 Totalcurrent liabilities 125,162 133,319 RESERVES!OR INSURANCE ANDCASUAI. TIES 2,9 12 942 ACCUMULATED DEITiRRED 11iDERAL INCOMETAXES. 59,586 51,362 UNAMORTIZED fliDERAL INVESTMENT TAX CREDITS 66,608 57,016 COMMITMENTS AND CONTINGENCIES (Notes 2 and 6)

TOTAL $ 1,224,710 $ 1,126,170 n

L Dallas Potter & likht Company Statement ofIncome Year Ended December 31.

1981 1980 1979 Thousands of Dollars OPERATING REVENUES . 5 623,733 $523.816 $422,441 OPERATING EXPENSES Fueland purchased power 267,010 210,507 174,651 Operation 75,778 65,487 55,323 hiaintenance 43,374 37,638 34,152 Depreciation 34,759 33,758 31,218 Federat income raxes(Note 7) . 48,431 38,407 21,318 Taxes other than income . 53,872 48,243 43,267 Totaloperating expenses. 523,224 434 M0 359,929 OPERATINGINCOh1E. 100,509 89.776 62,512 OTIIER INCOh1E Allowance for equity funds used during construction . 8,867 8,906 11,844 Otherincome and deductions- net 1,8M 1,275 5,432 Federalincome taxes (Note 7) . (835) (593) (5,589)

Totalotherincome . 9,836 9,588 11.687 TOTAL INCOh1E . I10,345 99,364, 74,199 INTEREST ClIARGES Interest on mortgage bonds 25,839 21,793 22,258 Interest on otherlong-term debt . 2,333 2,412 2,549 Otherinterest . 7,012 11,298 8,093 Allowance for borrowed funds used during construction (2,989) (3,522) (4,633)

Totalinterest charges 32,195 31.981 28,267 NET INCOhiE 78,150 67,383 45,932 PREFERREDSTOCK DIVIDENDS 6,571 6,$71 6,571 NETINCOh1E AFTER PREFERRED STOCK DIVIDENDS . 5 71,579 $ 60,812 $ 39,361 Average shares ofcommon stock outstandiag (thousands) . 15,000 14,083 13,833 Earnings and dividends per share ofcommon stoc k:

Earnings (on average shares outstanding) 54.77 $4.32 $2.85 Dividends declared $2.72 $2.36 $2.36 See accompanying Notes to Financial Statements.

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Dallas Potar & Imht Company

_ Statement of Herainni Earnings Year Endeil December 31.

1981 1980 1979 Thousands of Dollars BALANCE ATBEGINNING OFYEAR 51nt,462 $ 76,690 $ 69,779 ADD - Net int ome 78,150 67,383 45,932 Ti>tal I82.612 141.073 115,711 DEDUCI' Dividends (cash)

Preferred saxk:

$4 series ($ 1.00 per share per annum) . 280 280 280

$4.24 series ($4.2 i per share per annum) . 424 424 424

$4.50 series ($4.50 per share per annum) . 335 335 335

$4.80 series ($4.80 per share per annum) . 480 480 480

$6.81 scries($6.81 per share per annum) . 1,368 1,368 1,368

$7.20 series ($7.20 per share per annum) . 1,460 1,440 1,440

$7.48 series ($7.48 per share per annum) . 2,241 2,241 2,241 Gimmon sux k (for amounts per share, see Siatement ofInwme) 40,800 33,n10 32,450 lbtaldividends 47,371 39,611 39.021 BAIANCE ATEND OF YEAR (Note 4). 5135,241 $104,462 $ 76,690 See au impanying Notes to Finan(ial Statements.

1 17

g  ;-

Dallar Puu er & Light Company Statement of Source of Funds For Construction Year Ended Dnember 31, 1981 1980 1979 Thousands of Dollars IUNDS FROM OPERATIONS Net income 5 78,150 $ 67,383 $ 45,932 Depreciation 34,759 33,758 31,218 Deferred federalincome taxes- net 8,223 8,424 8,575 Federal investment tax credits - net . I1,220 4.670 14,087 Allowante for funds used during construction . (11,856) (12,428) (16,477)

Totalfunds fromoperations 120,4 % 101,807 83,335 Irss - Dividends dalated:

Preferredstock , 6,571 6,571 6,571 Common stoc k . 40,800 33,010 32,450 Totaldividendsdedared . 47,371 39,611 39,021 Net funds from operations . 73,125 62,196 44,314 IUNDS FROM FINANCING Sales of securities:

First mongage bonds 59,424 - -

Other tong-term debt . 13 279 2,750 Common stock . - 29,500 29.500 Retirement oflong-term debt . (2,025) (29,575) (10,516)

Increase (decrease) in notes payable to TexasUtilitiesCompany(parent) . (30,600) (25,900) (600)

Net funds from financing . 26,812 (25,696) 21,134 OTIIER SOURCES (USES)OF IUNDS Changes in working capital, exduding rmtes payable and long-term debt due currently:

Cash in banks and temporary cash investments . (615) 45 301 Accounts receivable- net (7.248) (515) (4,780)

Inventories . (2,778) (765) (4,643)

Accounts payable . 491 (4,274) (3,040)

Taxesaccrued . 12,080 18,853 6,428 Other - net . 9,126 (10,506) 266 Net change 11,056 2,848 (5,468)

Nudear fuel . 914 (4,776) (5,248)

Saleofelectric plant - 74,327 99,871 Other - net . (1,979) 366 (3,480)

Net other sources (uses)offunds . 9,991 _ 72,765 85,675 TOTAL $109,265 $151,123 g99,928 CONSTRUCTION EXPENDITURES Electric plant $ 121,784 $121,693 $167,600 Allowance for funds used during construction . (11,856) (12,428) (16.477)

CONSTRUCTION EXPENDITURES (excluding allowance for funds used during construction) 5109,928 $109,265 $151,123 l

See accompanying Notes to Financial Statements.

18

.m Da//as Power & Inht Company Notes to Financial Statements

1. Significant Accounting Policies January 1,1982, a rate of 9% was Electric Plant - Electric plant is ad ited.

stated at original cost. The mst of reciation - Depreciation is propeny additions charged to electric bas upon an amortization of the plant includes labor and materials, ap- original cost of depreciable propenies plicable overhead and payroll-related on a straight line basis over the costs and an allowante for funds used estimated service lives of the proper-during wnstruction. ties. Depreciation as a percent of A//owancefor Funds UsedDuring average depreciable electric plant in Construction - Allowance for funds service approximated 3.5% for 1981 used during construction (AFUDC)is and 3.6% for 1980 and 1979.

a mst a(counting procedure whereby Federa/ Income 7 axes - The Com-amounts based upon mterest (harges pany is included in the consolidated on borrowed funds and a return on federal income tax return of Texas other capital used to finance construc. Utilities Company and subsidiary tion are charged to electric plant. The companies, and federal income taxes scrual of AFUDC is in accord with are alkicated to all subsidiary com-established accounting practices of the panies based upon taxable income or industry, but does not represent cur- loss. Deferred federal inmme taxes are rent cash income. Effective)anuary 1, generally provided for differences bet-1981, the Company capitahzed ween book and taxable income; such AFUDC at a net of tax rate of 8 % % differences result primarily from the compounded semi-annually of expen- use ofliberalized depreciation and ac-ditures mcurred, except for that por- (clerated cost recovery allowable under tion of construction work in progress the Intemal Revenue Code. Invest-allowed in rate base by regulatory ment tax credits are being amonized authorities. Beginning in November to income over the estimated service 1979, AFUDC was capitalized at a rate lives of the propenies. (See Note 7.)

o(8%; prior thereto a rate of 7% had Reservefor insurance and been used. These rates were deter- as al-mined on the basis of, but are less Carua/ ties - The lowed by regulatory Company,ies, main-authont than, the cost of capital used to finance tains a reserve for major uninsured the construction program. Effective losses and claims.

2. Alliliates system, acquires, stores and delivers The Company is a subsidiary of f ucl gas and oil and provides other Texas Utilities Company (Texas fuel services for the generation of elec-Utilities) which provides common tric energy; and Texas Utilities stock capital and short-term financing Generatmg Company (Generating to the Company. Texas Electric Service Company) operates the jointly-owned Company (fexas Electric) and Texas generatmg stations and furnishes Power & Light Company (Texas related services, including the owner-Power), whose respective systems are ship and operation of fuel production intenonnected with that of the Com- facilities for the surface mining and are also subsidiaries of Texas recovery oflignite for use as fuel at pany,ies.

Utiht Texas Utilities has three othersuch stations, subsidiaries which perform specialized The Company, jointly with Texas services, at cost, for the Texas Utilities Electric and Texas Power, has entered Company System, including the Com. into agreements with Fuel Company pany: Texas Utilities Services Inc. (Ser- to prmure certain fuels and related vice Company) furnishes engineering, services and with Generating Com-financial and other services; Texas pany for the production oflignite fuel Utilities Fuel Company (Fuel Com- and the operation of electric pany) owns a natural gas pipeline generating stations; payments are at 19

(ost of the services received and are re- long. term notes of Fuel O)mpany and quired by the agreements to be "at of Generating Company through the least equivalent in the aggregate to payments described above. Such notes the annual charge to income on the mature at various dates through tw) lxx>ks" of Fuel Company and of and have interest rates ranging from Generating O>mpany. The Company 8.50% to 10.45%.

is, in effc(t, obligated for its share of For information concerning jointly-the principal, $102,384,000 at owned generating stations, see pages December 31,1981, and interest on 3 and to of this repon.

3. O>mmon and Preferred Stocks , c.m,,, . . e P-s % e ttefune adding asoemulated Ibemier 18.19el I b ember ti . *.***f decidende r Wree Wre, i vrn* ual Ouessanchng Amansae (>uotanderig Amuune tu_ nens ._. M >mm

. . _._ _um G,mnuin sein k - mehout par value; aurfunved 20Jxx).0 odarn . 15 . - - -

-.JMoJam $ 32N.'>00 --.

15 Ju x)Jun $. 628,.%0 x

Preferred somk - tumulanve, mistu>ut par valur, entnled upon hquidatain to $100 a dure, auilg> rued 23xoJA)0 durn:

$6 wnn. 70J)fo S 7,449 70fwo $ 7,0t> $103.% $10t %

$12twnn. 100,000 10,0MI 1003:00 10.0H 1 103 50 103.%

$ 4 50wnn . 74,150 7.445 74,430 7.44) lio tx) llo to

$ 4 ho wnn , 100Jyo 10Jul Hjo.fwo 10.rp> 102.79 102.7')

$6 M4 wnn . 200,imo 20.025 200Json 20.023 141.76 105.0",

$ 7 20 wnn . 200JMM 20,406 200 000 20,448 105 Os 103 21

$74Mwnn, 300JMM _ 30,073 Vo.txx) 10.073 11669 102 95 Eral . 1,446,450 $144722 1,044.430 $168.722 The Gimpany iwurd and vild, on a pre <mptive basis to conmu>n durchol.fers, durn of ns aurixwierd unnmon sunk as foll m December 19*). IJXoJ#o durn for $29.5f o 000. and March 1979, IJrx)Jxe durn for $29 *>0ll.0lx)

4. Retained Earnings Restrictions under certain conditions, rectrict The Company's articles ofincor- distributions on m acquisitions ofits poration, the mortgage, as sup- common stcxk. At necember 31, plemented, and the debenture 1981, none of the retained earnings agreements contain provisions which, was thus restricted.

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5. Iong-Term Debt - Ic:s amounts due currentiv December 31.

_1981 'e m0 1housands of Dollm hrst rrwrtgage bonds:

)%% wnesduc 1983 5 9,000 $ 9/ko 7 %% wncs duc 19x3 25.000 25.000 7 %% series duc 19M4 25,000 25,ulo 7 %% wnes duc 1985 25.000 25Ao 33/s% wrics due 1986 10,000 10,000 4I/4% senes duc 19M6 10,000 5D,000 4 %% wrin duc 1993 25.000 25,000 1%% series duc 1%6 10,000 20.m0 5 %% series due I?M 16,000 .

• 6,000 a

9%% wricsdue 2000 . 30,000 30.000 7 %% series duc 2001 30.000 30.000 7%% senesdue 2002 30,000 a .',000 8h% wrics duc 2005 . 50,000 50,000 15 %% wries due 2011. . . . . . . . . . . ...

50.000 -

13 %% Pollunon Control Series A due 2011. 15,260 -

Funds on deposir with trustee (5,836) -

Total 3 M ,424 305,000 ,

Pollution tontrol revenue bonds:

6 % % wrics duc 2006. . 8,590 8.5$ '

5.70% wriesdue 2007 7,125 7.125 6.60% wnes duc 2008 . 2.025 2,025 :

f unds sa deposit with trustee . (865) (878)

Total . 16,875 16,862 S.nking brd debenturn:

1% % duc 19H9 9.385 10.897 6 % % , due 1991 I I,453 11.966 Totaf . 20.438 2;.863 Unamortised premium and dm ouna Premium . 1,018 1.092 Dixount . (1,206) -

bral (IMP) 1,092 Liallong-term debt -less amounts due a urrently . hol,949 $145.817 Sinking fund and maturity require. 'The total amounts of Sinking Fund ments for the years 1982 through 1986 Debertures authorized in the deben-ulahr long-term debt instruments in ture agreements have been issued.

effect.a. December 31,1981 are as follows: The Company's First Mongage Bonds

%nimum may be issued in additional amounts,

$ inking Maturity Requirement W without limitation a3 to the maximum .

Year Fund (a) (we above) (a)(b, thereof, but limited by property, earn-rhouunds of Douars ings, and other provi3:ons of the tox2 . $ 3.703 $- $- mongage. None ef the long-term i9a3 3.363 34.0m 34.000 1984 . 3.166 25.000 25.053 debt is pledged, held.b .Eor for. account 1985 3,163 25,000 25,300 of the issuer, or held in its sinking or 1986 . 2.963 20.000 20.300 other special funds, Substantially all (a) Euluding amounts satisfied prior to December of the electric plant is subject to the lien H.1981: $M)0.000 for 1982, $40,000 for 198 3,

$547.000 for 1984, $ 300.000 for 1985, and of the mortgage.

$300.000 for 1986.

(b)Other requirements may be satisfied by certifna.

rmn of propeny ad.htions at the rate of 100% of stah requirements.

21

6. Commitments and Condngencies of such principal and interest for the For major new construction work years 1982 through 1986 as follows:

now in progress or contemplated, and $2,333,000 for 1982, $2,336,000 for commitments with respect thereto, see 1983, $2,328,000 for 1984, pages 3 and 10 of this report concern- $2,330,000 for 1985, and $2,322,000 ing the Company's construction program, for 1986. In addition, the Company is The Company, Texas Electric, and obligated to pay certain costs of Texas Power have entered into con- operating and maintaining the reser-tracts with public agencies to purchase voirs. For 1981 the Company's total cooling water for use in the generation payments were $2,337,000. Amounts of electric energy and have agreed, in payable under the contracts may be effect, to guarantee the principal and reduced, under certain circumstances, interest on bonds issued to finance the due to the sale of water to nonaf-reservoirs from which the water is sup- filiated parties.

plied, At December 31,1981, the The Company is involved in various Company is obligated for $26,128,000 legal and administrative proceedings principal amount of such bonds, which, in the opinion of the Com-which mature at various dates through pany, are not expected to have a 2004 and have interest rates ranging material effect upon the financial from SW% ta 10%%. The Company position or results of operation of the is required to make periodic payments Company, 7, Federal Income Taxes The details of federal income taxes are as follows:

Year Ended December 31.

19H1 1980 1979 Thousands of Dollars Charged to operating expenws:

Current federalintome taxes . 128,9N8 $25,313 $(1,344)

Deterred federal irnome taxes - net:

Differernes between depredation merbxis and lives . . . . . . . 7.265 6,480 7,433 Certain capitalized c omtru(tion (mts . 1,878 1.54 1,491 Other . (920) 410 (349)

Total . ...

8,223 8.424 8,575 Investmenr tax (redits - net 11,220 4.670 14.087 Total federal iruome taxes charged to operating expenws . 4H,431 3H,407 21,31M Charged to other income:

Gamondispositionofproperty . 55 H5 5,360 Other . 780 SOM 229 Total federal int ume taxes t harged to ot her irwome M35 593, 5.589 Total federaliruome taxes 149,266 $ W.000 $26.907 Federal income taxes were less than the amount computed by applying ihe federal statutory rate to pre-tax book income as follows:

Year l_nded Detember 31.

1981 1980 1979 Thousands of Dollars lederalintome taxesar statutory rateof 46% . $5M,6tl $ 18.9 % $13,506 Redu<inons in federal intome taxes resulting from:

Allowarv e for runds u rd durmg tomtruuson . 5,454 5,717 7.5NO Deplen 7,Homante ... 2,743 1.6 30 1,202 Amorm . ion of mvestment tax urdits 1,379 1,520 91H Other (231) 1,069 0.101) 9.345 9.9% 6,599 l Total reduuions .

Total federalin. ome taxes 1 49.266 $ 19.000 $26.907 Effet tive rax raie . 3x.7% M7% M9%

22 i

VW:%#2;M6mWh:tMsy%W ?ik&hqqMMMinl:

8. Retirement Plan capitalized, approxima:ed $6,469,000 The Company has a retirement plan for 1981, $5,656,000 for 1980, and covering substantially all employees. $4,822,000 for 1979. As of the annual The cost of the plan is determined by valuations at uly 1,1981 and 1980, an independent actuary and is funded accumulated nefits and net fund by the Com assets were as follows:

of the plan,pany Induding as accrued. The cost amounts 19M1 1980 Thousands of Dollars Attuarial present value of auumulated trnc6ts:

Vested . .. $ 47,091 $47.641 Nonvested . 4.792 1.261 Tot al . 151.NM3 $12.906 Net fund assets . $ $9.844 $ $4.428 An assume,i rare of' return of 5 % % was used in determining the value of auumulated lenc6 s.

23

DaNas Power & Ught Company pany's productive capacity that might Supplementary Information be incune i in a future period.

Depreciation on the constant d,ollar ConcerninE Effects of

. and current cost basis was determmed Changing Pn.ces by applyin$ the Company's straight-Unaudited information furnished line depreciation rates used for finan-in compliance with the reporting re- cial accounting purposes to the quirements of Financial Accounting appropriate indexed electric plant Standards Board Statement No. 33, amounts, and is the only income Financial Reporting and Changing statement item that has been restated Prices (FASB 33), follows. The State- from the Financial Statements. In ment indicates the need for ex- compliance with FASB 33, no adjust-perimentation in providing informa- ment has been made to federal in-tion about the effects of changing come taxes.

prices. Such information is intended Under rate-making rules prescribed to help readers better understand the by the Public Utility Commission of impact ofinflation on the Company. Texas, only the origmal cost of electric Because the information is presented plant is recoverable through revenues on an experimental basis, it should be as depreciation. Therefore, the excess viewed with caution. Calculation of of the cost of plant stated in terms of the information inherently involves constant dollars and current cost over the use of assumptions, approxima- the original cost is not recoverable tions, and estimates and, therefore, through rates as depreciation and is the resulting measurements should be reflected as Reduction to Net considered m that context and not as Recoverable Cost of Electric Plant. The precise indications of the effects ofin- Company believes, based on past flation. The effects of changing prices expenences, that it will be allowed to are not recognized for income tax or recover the investment in electric plant rate-making purposes; therefore the when replacement of facilities actually supplementary mformation should occurs.

not be interpreted as adjustments to During periods ofinflation, the earnings reported in the Financial holders of monetary assets suffer a loss Statements. of general purchasing power while Information conceming the effects holders of monetary liabilities ex-of general inflation (constant dollar) perience a gain. The amount shown as was determined by converting Gain From Decline in Purchasing historical cost amounts into dollars of Power of Net Amounts Owed reflects e ual purchasing power, as measured the net of these two items and is the Consumer Price Index for All primarily attributable to the substan-ban Consumers. tial amount oflong-term debt which Information concerning changes in has been used to finance electric specific prices (current cost) represent plant. Since depreciation on this elec-such changes in electric plant from the tric plant is limited by regulation to date costs were initially mcurred to the recovery of histoncal costs, a present, and differs from constant holding gam on debt is not allowed dollar information to the extent that and recovery is limited to only the the specific prices have increased at a embedded cost of debt capital. To rate different from the general rate of reflect the results of rate regulation, inflation. The current cost of electric Gain From Decline in Purchasing plant was computed by indexing the Power of Net Amounts Owed is ofta existing histoncal cost of plant by the by the Reduction to Net Recoverable Handy-Whitman Index of Pubhc Cost of Electric Plant.

Utility Construction Costs for the South Central Region and other ap-propriate indices. Such current costs are not necessarily representative of l

the replacement costs of the Com-24 j

Sumnury of Net Income Adjusted for Effects of Changing Prices Year Ended December 31.1981 Thousands of Ibilars Ihstorkal Cost Advsted for Reprted in Changing Prnes f inarxial General Inflanon Speufic Prues Statements (Constant Dollar) (Current Cost)

Average 1981 Dollars Operating revenues . 5623,733 $623,733 $623,733 OperatingexpenWa) . 523,224 566.697 571.404 Operatmgincome . 100,509 57,036 52,329 Other int ome . 9,836 9.83(3 9.836 Totalirwonne 110,345 66.h72 62.165 Interest t harges 32,195 32,195 32,195 Net irwome . 5 78,150 $ 34.677 $ 29,970 Int rease in spetific prites of electric plant held during the ycar(b) . . .....

$ 122.138 Redutrion to net retoverable cost of elettric plant . ...... ... ...

$(50.888) 8,331 Effett ofgeneralinflation on elntric plant . (176,650)

Effett of general inflation in ext ess of int rease in spetifk prkes of electric plant after reduction to net remverable wst .. ... (46,181)

Gain from dethne in purchasing power of net amountsomed . 46.853 46.853 Net t hange in purchasing power $ (4,035) $ 672 (a) Irxludes depreciation amounts of $34,759.000 for historkal mst, $78,232fxx) for constant dollar and

$82,939.000 for aurrent wst.

(b) At December 31.1981, elet tric plant, net of accumulated depretiation, was $2,142,197,000 for wrrent wst and $1,114,626.000 for historkal unt.

Comparison of Selected Financi:d Data Adjusted for Effects of Changing Prices Year Ended Daember 31, 19ML 1980 1979 1978 1977 Thousands of Aserage 1981 Dollars Operating revenues . $623,733 $578,150 $529,314 $523,251 $543.636 Constant Dollar Information Net iraome . . . ... 534,677 $ 32.207 $22,436 Earnings per sharc ofmmrnon stoc k ..... 11.87 $ 1.78 $ 1.03 Net assets at scar-end at net reuderable cost . 1550.0H6 1566,816 $569,223 Current Cost Information Net irwome . . . ... ... 129,970 $25.850 $10.350 Earnings per sharc ofcommon stoc k . . . 11.% $ 1.32 $.15 Effett of general inflation in excess of irxrease in speufic prkes of electra plant after reduction to net rnoserable unt - 5(46,18I) $(88.358) $(l13,119)

Net assets at year <nd...

at net ret rderable ont . $550,086 $566.816 $569,223 General Information Gain from detline in purchasing powerof net amounts oned . 546,853 $71,260 $87,835 Dividends dnlared per share of tommon stoc k . $2.72 $2.60 $2.% $2.06 $ 1.77 Consumerprire index - aserage 272.4 246.8 217.4 195.4 181.5 25

DIRECTORS OFFICERS

'T. L. Austin, Jr. J. S. Farrington Chairraan of the Board and Chief President and Chief Executive Executive of Texas Utihties Company W. W. Aston

Henry C. Beck, Jr. Vice President Chairman of the Boardofllenry T. L. Baker C. Beck Company Vice President 2'Lloyd S. Bowles D.J. Hampton Chairman of the Boardand President Vsce President of Dallas Federal Savings & laun G. W. Sellar Assot utro" Vice President George L. Clark bl. H. Tanner, Jr.

Chairman and Chief Executive Officer Vice President of atercantile N.itionalBank at Dalla' *G. hl. Hamilton, Ill

• • Robert B. Cullum Secretary Chairman of the hecutive Committee J. D. Karney of Cullum Companies. Inc. Treasurer and Assist. int Secretary

' 'J. S. Farnngton h President and Chief hecutive of Dallas J * ,H.,,Louh,,an Power & Qht Company W. E. Patterson J. D. Franens 3,,f,,,,it Tre.zsurer President of The Equitable Company of Texas ' Member of the Executive Committee Richard bl. Hart  : Member of the Audit Comrr'ttee .

Vice Chairman of the Boardand Chief ' Member of the Retirement Committee Adwinistratire Officer ofFirst National Bank in Dallas

• Elected August 1981 James W. Keay " Deceased December 1981 Vice Chairman of the Boardof Republic of Texas Corporation

' 2' Robert hicDonald Fre.ilert ofAt:J:rsor. Clajson roods

' John bl. Stemmons Chairman ofIndustrulProperties Corporation 26

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Etie erera,wusceswnsesm maw,um=myn-n:

TRANSFER AGENT REGISTRAR (For PreferreJ Stock) (For Preferred Stock)

First National Bank in Dallas, RepublicBank Dallas, Dallas, Texas Dallas, Texas This report is transmitted to the shareholders and employees of the Company, and to others, for the sole purpose of furnishing informa-tion conc,erning the Company and it is not issued in connection with any sale or offer for sale of, or solicitation of an offer to buy any securities of the Company.

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l3H2O WE ARE DEDICATED DP&Lis a public service business dedicated to excellence in providing electric energy at a reasonable price, while serving the interests ofits customers, employees and investors, and meeting its citizenship obligations.

To achieve this, DP&L:

• Builds, operates and maintains facilities and develops resources to pro-vide dependable and reliable electric service.

• Provides a climate for individual employee development and well-being and encourages dedication, pride and excellence in serving the community with innovative and efficient utilization of resources and technology.

• Encourages and practices energy conservation, efficient energy use and the development of viable energy sources, while supporting a sound com-munity economy and a quality en-vironment.

• Strives for public confidence, understanding and suppen by pro-viding information and assistance to customers in an efficient, courteous and concerned manner.

• Strives to maintain quality earn-ings sufficient to compensate its in-vestors, obtain required capital and operate etFciently.

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Dallas Powsr& Light Company 1981 Annual Report

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