Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Annual Report 63 419K
2: EX-3.6 By-Laws of Dqe 22 39K
5: EX-10.14 Non-Competition and Confidentiality Agreement 8 29K
3: EX-10.5 Dqe 1996 Stock Plan for Non-Employee Directors 9 27K
4: EX-10.7 Performance Incentive Program for Dqe 6 20K
6: EX-13.1 1996 Dqe Annual Report to Stockholders 5 34K
7: EX-23.1 Independent Auditors' Consent 1 7K
8: EX-27.1 Financial Data Schedule 2 8K
9: EX-99.1 Executive Compensation of Dqe Executive Officers 11 51K
10: EX-99.2 Directors of Dqe and Duquesne Light Company 2 10K
EX-13.1 — 1996 Dqe Annual Report to Stockholders
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EXHIBIT 13.1
[Page 1 to 1996 Annual Report to Shareholders]
DQE FINANCIAL AND OPERATING HIGHLIGHTS
[Enlarge/Download Table]
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Change Change
From From
(millions) 1996 1995 1995 1994 1994
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Electric customer sales (KWH) 12,426 0.0% 12,428 2.5% 12,122
Operating revenues $1,225 0.4% $1,220 -0.3% $1,224
Non-fuel operating and maintenance expense $377.4 0.8% $374.5 -8.4% $408.7
Depreciation and amortization $222.9 10.0% $202.6 22.1% $165.9
Operating income $302.0 -6.4% $322.5 1.8% $316.9
Other income $ 74.8 43.0% $ 52.3 21.9% $ 42.9
Net income $179.1 5.0% $170.6 8.8% $156.8
Year-end shares outstanding 77.3 -0.4% 77.6 -1.1% 78.5
Net operating cash flow (A) $378.4 -2.1% $386.4 3.8% $372.1
Capital expenditures and
other long-term investments $196.8 -30.2% $281.9 50.1% $187.8
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DQE return on average common equity 13.2% 13.1% 12.5%
Duquesne Light electric utility
return on average common equity 10.8% 12.2% 12.8%
Average cost of fuel per KWH generated 1.37c -1.4% 1.39c -3.5% 1.44c
Average cost of generation per KWH (B) 2.12c -4.5% 2.22c -0.4% 2.23c
Peak demand (MW) 2,463 -7.6% 2,666 5.2% 2,535
KWH: Kilowatt-hour. A measure of the quantity of electricity
consumed in one hour, equivalent to 1,000 watts
consumed in one hour.
MW: Megawatt. A measure of the electric generating capacity of
power plants, equal to 1,000 kilowatts.
(A): Excludes working capital and other balance sheet changes.
(B): Excludes capital cost.
Common Stock Trends
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Five-Year
Compound
Growth
1996 1995 1994 1993 1992 1991 Rate
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Earnings per share $ 2.32 $ 2.20 $ 1.98 $ 1.81 $ 1.78 $ 1.67 6.8%
Dividends paid per share $ 1.28 $ 1.19 $ 1.12 $ 1.07 $ 1.01 $ 0.96 5.9%
Market price per share
High $31.50 $30.75 $23.00 $24.67 $21.58 $20.67 8.8%
Low $25.75 $19.63 $18.42 $20.92 $17.92 $15.75 10.3%
Year-end $29.00 $30.75 $19.75 $23.00 $21.50 $20.42 7.3%
[Graph of Duquesne Light Residential Prices (Per KWH)
vs. Regional Consumer Prices (1991-2000)]
[Graph of DQE Earnings and Dividends Paid Per Share (1992-1996)]
SELECTED FINANCIAL DATA
(Millions of Dollars, Except Per Share Amounts)
[Page 17 to 1996 Annual Report to Shareholders]
[Download Table]
1996 1995
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Selected Income Statement Items:
Revenues from sales of electricity $1,133 $1,139
Fuel and purchased power expenses 237 232
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Net electric revenues 896 907
Other revenues 92 81
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Net operating revenues 988 988
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Operating and maintenance expenses 377 374
Depreciation and amortization 223 203
Taxes other than income taxes 86 89
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Non-energy operating expenses 686 666
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Operating income 302 322
Equity investment and other income 74 52
Interest and other charges 110 107
Income taxes 87 96
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Net income $ 179 $ 171
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Earnings per share $ 2.32 $ 2.20
===============================================================
Ratio of earnings to fixed charges (pre-tax) 2.69 2.73
===============================================================
Selected Balance Sheet Items:
Long-term investments $ 519 $ 441
Property, plant and equipment $2,817 $3,060
Total assets $4,639 $4,459
Total capitalization $3,055 $2,801
===============================================================
Capitalization Ratios:
Common shareholders' equity 45.6% 47.5%
Preferred and preference stock 7.3% 2.5%
Long-term debt 47.1% 50.0%
===============================================================
Selected Common Stock Information:
Average shares outstanding (millions) 77.3 77.7
Shares outstanding at year-end (millions) 77.3 77.6
Market capitalization $2,241 $2,386
Dividends declared $ 101 $ 94
Dividends declared per share $ 1.30 $ 1.21
Dividend payout ratio 55.2% 54.1%
Dividend yield at year-end 4.7% 4.2%
Price-earnings ratio at year-end 12.5 14.0
Return on average common equity 13.2% 13.1%
Book value per share at year-end $18.01 $17.13
[Graph of Depreciation and Amortization Expense (1986-1996)]
[Page 18 to 1996 Annual Report to Shareholders]
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1994 1993 1992 1991 1990 1989 1988 1987 1986
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$1,134 $1,120 $1,116 $1,139 $1,094 $1,086 $1,039 $ 855 $ 869
244 238 239 254 229 220 231 228 234
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890 882 877 885 865 866 808 627 635
90 63 37 38 31 48 43 22 15
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980 945 914 923 896 914 851 649 650
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409 403 354 361 372 342 327 250 234
166 158 132 123 123 123 117 82 74
88 71 84 94 80 93 81 67 71
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663 632 570 578 575 558 525 399 379
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317 313 344 345 321 356 326 250 271
43 31 42 36 46 (3) 30 29 (17)
110 120 132 142 157 165 175 156 148
93 80 112 105 88 75 62 (12) (4)
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$157 $ 144 $ 142 $ 134 $ 122 $ 113 $ 119 $ 135 $ 110
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$1.98 $ 1.81 $ 1.78 $ 1.67 $ 1.49 $ 1.35 $ 1.24 $ 1.23 $ 1.00
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2.57 2.29 2.24 2.10 1.90 1.78 1.72 1.58 1.51
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$196 $ 126 $ 59 $ 44 $ 18 $ -- $ -- $ -- $ --
$3,140 $3,168 $3,037 $3,053 $3,048 $3,055 $3,066 $3,098 $3,491
$4,427 $4,550 $3,778 $3,851 $3,834 $3,921 $3,881 $4,152 $3,997
$2,750 $2,781 $2,716 $2,669 $2,770 $2,827 $2,866 $3,169 $3,085
========================================================================================
46.4% 44.2% 43.1% 41.6% 39.0% 37.7% 37.4% 38.4% 39.0%
3.5% 4.8% 4.9% 5.2% 6.8% 7.8% 8.5% 8.2% 8.7%
50.1% 51.0% 52.0% 53.2% 54.2% 54.5% 54.1% 53.4% 52.3%
========================================================================================
79.0 79.5 79.4 80.1 81.6 83.7 95.6 109.3 109.4
78.5 79.5 79.4 79.4 80.6 83.0 86.7 105.1 109.7
$1,550 $1,829 $1,708 $1,621 $1,337 $1,321 $1,084 $ 824 $ 896
$ 89 $ 86 $ 81 $ 78 $ 75 $ 73 $ 78 $ 87 $ 103
$ 1.13 $ 1.08 $ 1.03 $ .97 $ .92 $ .87 $ .81 $ .80 $ .94
56.4% 58.8% 56.9% 57.6% 60.7% 63.1% 64.5% 64.9% 107.9%
5.7% 4.6% 5.0% 5.0% 5.8% 5.7% 6.8% 10.2% 9.8%
9.9 12.7 12.1 12.3 11.1 11.8 10.1 6.4 8.1
12.5% 12.0% 12.4% 12.2% 11.3% 10.6% 10.4% 11.1% 9.3%
$16.27 $15.47 $14.75 $14.00 $13.38 $12.85 $12.34 $11.58 $10.98
DQE OFFICERS [Page 64 to 1996 Annual Report to Shareholders]
DAVID D. MARSHALL, 44. President and Chief Executive Officer. Previously held
senior executive positions in finance at Central Vermont Public Service. Joined
the Company in 1985. Directorships included on page 6.
GARY L. SCHWASS, 51. Executive Vice President and Chief Financial Officer.
Previously served in a variety of senior executive positions in finance and
management with Consumers Power Company. Joined the Company in 1985.
Directorships include Chair, Western Pennsylvania Development Credit Corporation
(promotes small business through lending activities), and Vice President and
Treasurer, Holy Family Foundation (supports families in crisis).
DIANNA L. GREEN, 50. Senior Vice President. Previously held senior management
positions with Xerox Corporation. Joined the Company in 1988. Directorships
include PNC Bank; Phipps Conservatory; Chair, Urban League of Pittsburgh; and
Board President, the Whale's Tale (helps troubled youth).
JAMES D. MITCHELL, 45. Vice President. Previously held senior financial
positions with Duquesne Light and U.S. West, Inc. Joined the Company in 1988.
Directorships include Three Rivers Youth (helps troubled teenagers).
VICTOR A. ROQUE, 50. Vice President and General Counsel. Formerly Vice
President, General Counsel and Secretary for Orange and Rockland Utilities.
Joined the Company in 1994. Directorships include Pennsylvania Chamber of
Business and Industry (economic development), Hill House Association (provider
of social services) and United Way Good Neighbors Advisory Committee. Member,
Salvation Army Greater Pittsburgh Advisory Board.
JACK E. SAXER, Jr., 53. Vice President. Previously held senior financial
positions with Gulf Oil and Chevron. Joined the Company in 1989. Directorships
include Point Venture (venture capital) and Pittsburgh Consumer Health Coalition
(healthcare advocacy for the disadvantaged).
[Enlarge/Download Table]
DIANE S. EISMONT, 52 DONALD J. CLAYTON, 42 DEBORRAH E. BECK, 39 JOAN S. SENCHYSHYN, 58
Corporate Secretary Treasurer Assistant Controller Assistant Secretary
MORGAN K. O'BRIEN, 36
Controller
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Duquesne Light Company Officers
DAVID D. MARSHALL, 44 GARY R. BRANDENBERGER, 59 DIANE S.EISMONT, 52 FRED R. ALLISON, 47
President and Chief Vice President, Corporate Secretary and Assistant Controller
Executive Officer Power Supply Assistant General Counsel
GARY L. SCHWASS, 51
Senior Vice President and WILLIAM J. DELEO, 46 MORGAN K. O'BRIEN, 36 MARK S. DADAY, 36
Chief Financial Officer Vice President, Controller Assistant Treasurer
Marketing and
Corporate Performance
JAMES E. CROSS, 50 VICTOR, A. ROQUE, 50 JACK E. SAXER, JR., 53 WILLIAM F. FIELDS, 46
President, Vice President Assistant Vice President, Assistant Treasurer
Generation Group and General Counsel Administration
DIANNA L. GREEN, 50 DONALD J. CLAYTON, 42 SALLY K. WADE, 43 JOAN S. SENCHYSHYN, 58
Senior Vice President, Treasurer Assistant Vice President, Assistant Secretary
Customer Operations Human Resources
JAMES E. WILSON, 31
Assistant Controller
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Duquesne Enterprises Officers
THOMAS A. HURKMANS, 31 ANTHONY J. VILLIOTTI, 50 H. DONALD MORINE, 59 JOHN L. WEINHOLD, 60
President Vice President, President, Allegheny Vice President,
Treasurer and Controller Development Corp. and Property Ventures, Ltd.
Property Ventures, Ltd.
----------------------------------------------------------------------------------------------------------------
Montauk Officers
JAMES D. MITCHELL, 45 DONALD J. CLAYTON, 42 WILLIAM F. FIELDS, 46
President Vice President Treasurer
LYDIA E. YORK, 37 JAMES E. WILSON, 31
Vice President Controller
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DQE Energy Services Officers
ALEXIS TSAGGARIS, 48 JOHN J. DROZDOWSKI, 41
President Treasurer and Controller
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DQEnergy PARTNERS Officers
JOHN W. WELCH, 45 JOHN J. DROZDOWSKI, 41
President Treasurer and Controller
[Inside back cover to 1996 Annual Report to Shareholders]
DQE Shareholder Reference Guide
Common Stock
Trading Symbol: DQE
Stock Exchanges Listed and Traded:
New York, Philadelphia, Chicago
Number of Common Shareholders of Record at
Year-End: 76,521
DQE Internet Home Page
A variety of shareholder and customer information is available on DQE's home
page on the World Wide Web. You also can interact with us via electronic mail.
Our address is http://www.dqe.com. The site is best viewed using the latest
version of Netscape software.
Shareholder Direct
Shareholders and potential investors are invited to
call 1-888-247-0401 for the latest information on earnings and dividends.
Shareholder Services/Assistance
By telephone, representatives are available from
7:30 a.m. to 4:30 p.m. (Eastern time)
to assist you with the following services:
Direct purchase of initial shares
Direct deposit of dividends
Automatic cash contributions
Dividend reinvestment
Stock transfer
Unreceived dividend payment
Change of address
Lost stock certificate
Please feel free to call at other times. Our Message Center will record your
message and our staff will follow up on the next business day.
Financial Community Inquiries
Analysts, investment managers and brokers should direct their inquiries to 1-
412-393-4133;
FAX 1-412-393-6571. Written inquiries should be sent to the Investor Relations
Department at the address below.
Dividend Tax Status
The company estimates that all common stock
dividends paid in 1996 are taxable as dividend
income. This estimate is subject to audit by the Internal Revenue Service.
The DQE logo is a registered trademark of the
Company.
"WeatherWise(SM)" "WeatherProof Energy Bill(SM)" and "Secure Energy(SM)"
are service marks of the Company.
"E-Fuel(TM)" is a trademark of CQ Inc.
The Heinz logo is the registered trademark of
H.J. Heinz Company.
DQE and its affiliated companies are
Equal Opportunity Employers.
ELECTRI - STOCK
The following investor services are available through DQE's dividend
reinvestment and stock purchase plan:
Direct Purchase of DQE Stock
DQE offers non-shareholders the ability to pur-
chase stock directly through the company. Call or
write for a prospectus on this popular program.
Automatic Cash Contributions
Through this program, current reinvestment plan participants can make regular
cash contributions to purchase additional shares of DQE common stock by having
funds automatically withdrawn from their bank accounts.
Other Features and Services
. Purchase and sale of plan shares at nominal commissions
. Acceptance of certificates for safekeeping
. Re-registration of some or all of a shareholder's holdings
. Creation of new accounts as gifts for family,
friends or institutions you support, including a complimentary gift
certificate upon request
Stock Certificate Transfers
Individuals who are not participants in the dividend reinvestment plan and who
want to transfer stock certificates should send their certificates and related
documents to our transfer agent:
First National Bank of Boston
c/o Boston EquiServe
P.O. Box 8040
Boston, MA 02266-8040
Dividend reinvestment plan participants who want to transfer their shares should
send their certificates and related documents to DQE Shareholder Relations, at
the address below.
Direct Deposit of Dividends
Your DQE quarterly dividends can be deposited automatically into a personal
checking or savings account. Call Shareholder Relations toll-free for
more information.
DQE
Shareholder Relations
Box 68
Pittsburgh, PA 15230-0068
Toll-free: 1-800-247-0400
In Pittsburgh: 393-6167
FAX: 1-412-393-6087
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