Commission File Number | Registrant, State of Incorporation, Address and Telephone Number | I.R.S. Employer Identification No. | ||
1-9052 | DPL INC. | 31-1163136 | ||
(An Ohio Corporation) | ||||
1065 Woodman Drive Dayton, Ohio 45432 | ||||
937-259-7215 | ||||
1-2385 | THE DAYTON POWER AND LIGHT COMPANY | 31-0258470 | ||
(An Ohio Corporation) | ||||
1065 Woodman Drive Dayton, Ohio 45432 | ||||
937-259-7215 |
DPL Inc. | Yes o | No x |
The Dayton Power and Light Company | Yes o | No x |
DPL Inc. | Yes x | No o |
The Dayton Power and Light Company | Yes x | No o |
Large accelerated filer | Accelerated filer | Non- accelerated filer | Smaller reporting company | |
DPL Inc. | o | o | x | o |
The Dayton Power and Light Company | o | o | x | o |
DPL Inc. | Yes o | No x |
The Dayton Power and Light Company | Yes o | No x |
Registrant | Description | Shares Outstanding | ||
DPL Inc. | Common Stock, no par value | 1 | ||
The Dayton Power and Light Company | Common Stock, $0.01 par value | 41,172,173 |
Page No. | ||
Glossary of Terms | ||
Forward-Looking Statements | ||
Part I Financial Information | ||
Item 1 | Financial Statements – DPL Inc. and The Dayton Power and Light Company (Unaudited) | |
DPL Inc. | ||
The Dayton Power and Light Company | ||
Item 2 | ||
Item 3 | ||
Item 4 | ||
Page No. | ||
Part II Other Information | ||
Item 1 | ||
Item 1A | ||
Item 2 | ||
Item 3 | ||
Item 4 | ||
Item 5 | ||
Item 6 | ||
Other | ||
Term | Definition |
AES | The AES Corporation, a global power company and the ultimate parent company of DPL |
AES Ohio Generation | AES Ohio Generation, LLC, a wholly-owned subsidiary of DPL that owns and operates peaking generation facilities from which it makes wholesale sales |
AOCI | Accumulated Other Comprehensive Income |
ARO | Asset Retirement Obligation |
ASU | Accounting Standards Update |
CAA | U.S. Clean Air Act |
Capacity Market | The purpose of the capacity market is to enable PJM to obtain sufficient resources to reliably meet the needs of electric customers within the PJM footprint. PJM procures capacity, through a multi-auction structure, on behalf of the load serving entities to satisfy the load obligations. There are four auctions held for each Delivery Year (running from June 1 through May 31). The Base Residual Auction is held three years in advance of the Delivery Year and there is one Incremental Auction held in each of the subsequent three years. DP&L’s capacity is located in the “rest of” RTO area of PJM. |
CAIR | Clean Air Interstate Rule |
CP | In 2015, PJM adopted changes to the capacity market known as “Capacity Performance”. The CP program offers the potential for higher capacity revenues, combined with substantially increased penalties for non-performance or under-performance during certain periods identified as “capacity performance hours.” The DP&L units operate under the CP construct effective June 1, 2016. |
CRES | Competitive Retail Electric Service |
CSAPR | Cross-State Air Pollution Rule |
DPL | DPL Inc. |
DPLER | DPL Energy Resources, Inc., formerly a wholly-owned subsidiary of DPL which sold competitive electric energy and other energy services. DPLER was sold by DPL on January 1, 2016. The DPLER sale agreement was signed on December 28, 2015. |
DP&L | The Dayton Power and Light Company, the principal subsidiary of DPL and a public utility that delivers electricity to residential, commercial, industrial and governmental customers in a 6,000 square mile area of West Central Ohio |
Dths | Decatherms, unit of heat energy equal to 10 therms. One therm is equal to 100,000 British Thermal Units |
EBITDA | Earnings before interest, taxes, depreciation and amortization. EBITDA also excludes the Fixed-asset impairment |
ERISA | The Employee Retirement Income Security Act of 1974 |
ESP | The Electric Security Plan is a plan that a utility must file with the PUCO to establish SSO rates pursuant to Ohio law |
ESP 1 | ESP approved by PUCO order dated June 24, 2009 |
ESP 2 | ESP approved by PUCO order dated September 4, 2013. The Ohio Supreme Court ruled that it was invalid. DP&L withdrew its ESP 2 on July 27, 2016 and filed an amended application on October 11, 2016. |
ESP 3 | ESP filed with the PUCO by DP&L on February 22, 2016 |
FASC | Financial Accounting Standards Board (FASB) Accounting Standards Codification |
FERC | Federal Energy Regulatory Commission |
Form 10-K | DPL’s and DP&L’s combined Annual Report on Form 10-K for the fiscal year ended December 31, 2015, which was filed on February 23, 2016 |
First and Refunding Mortgage | DP&L’s First and Refunding Mortgage, dated October 1, 1935, as amended, with the Bank of New York Mellon as Trustee |
FTR | Financial Transmission Right |
GAAP | Generally Accepted Accounting Principles in the United States of America |
GLOSSARY OF TERMS (cont.) | |
Term | Definition |
GHG | Greenhouse Gas |
kV | Kilovolt, 1,000 volts |
kWh | Kilowatt-hours |
LIBOR | London Inter-Bank Offering Rate |
Master Trust | DP&L established a Master Trust to hold assets that could be used for the benefit of employees participating in employee benefit plans |
Merger | The merger of DPL and Dolphin Sub, Inc., a wholly-owned subsidiary of AES. On November 28, 2011, DPL became a wholly-owned subsidiary of AES. |
MRO | Market Rate Option, a market-based plan that a utility may file with PUCO to establish SSO rates pursuant to Ohio law |
MTM | Mark to Market |
MVIC | Miami Valley Insurance Company, a wholly-owned insurance subsidiary of DPL that provides insurance services to DPL and its subsidiaries and, in some cases, insurance services to partner companies related to jointly owned facilities operated by DP&L |
MW | Megawatt |
MWh | Megawatt-hour |
NAAQS | National Ambient Air Quality Standards |
NERC | North American Electric Reliability Corporation |
NOx | Nitrogen Oxide |
NYMEX | New York Mercantile Exchange |
Ohio EPA | Ohio Environmental Protection Agency |
OTC | Over-The-Counter |
OVEC | Ohio Valley Electric Corporation, an electric generating company in which DP&L holds a 4.9% equity interest |
PJM | PJM Interconnection, LLC, an RTO |
PRP | Potentially Responsible Party |
PUCO | Public Utilities Commission of Ohio |
RPM | Reliability Pricing Model. The Reliability Pricing Model was PJM’s capacity construct prior to the implementation of the CP program. |
RTO | Regional Transmission Organization |
SEC | Securities and Exchange Commission |
SERP | Supplemental Executive Retirement Plan |
Service Company | AES US Services, LLC, the shared services affiliate providing accounting, finance, and other support services to AES’ U.S. SBU businesses |
SO2 | Sulfur Dioxide |
SSO | Standard Service Offer represents the regulated rates, authorized by the PUCO, charged to DP&L retail customers that take retail generation service from DP&L within DP&L’s service territory |
USEPA | U.S. Environmental Protection Agency |
USF | The Universal Service Fund is a statewide program which provides qualified low-income customers in Ohio with income-based bills and energy efficiency education programs |
U.S. SBU | U. S. Strategic Business Unit, AES’ reporting unit covering the businesses in the United States, including DPL |
VIE | Variable Interest Entity is an entity in which the investor holds a controlling interest that is not based on the majority of voting rights. |
• | abnormal or severe weather and catastrophic weather-related damage; |
• | unusual maintenance or repair requirements; |
• | changes in fuel costs and purchased power, coal, environmental emission allowances, natural gas and other commodity prices; |
• | volatility and changes in markets for electricity and other energy-related commodities; |
• | performance of our suppliers; |
• | increased competition and deregulation in the electric utility industry; |
• | increased competition in the retail generation market; |
• | availability and price of capacity; |
• | state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, emission levels, rate structures or tax laws; |
• | changes in environmental laws and regulations to which DPL and its subsidiaries are subject; |
• | the development and operation of RTOs, including PJM to which DP&L has given control of its transmission functions; |
• | changes in our purchasing processes, pricing, delays, contractor and supplier performance and availability; |
• | significant delays associated with large construction projects; |
• | growth in our 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, changes in interest rates and changes in our credit ratings and availability and cost of capital; |
• | changes in tax laws and the effects of our strategies to reduce tax payments; |
• | the outcomes of litigation and regulatory investigations, proceedings or inquiries; |
• | general economic conditions; and |
• | the risks and other factors discussed in this report and other DPL and DP&L filings with the SEC. |
Part I – Financial Information |
Item 1 – Financial Statements |
DPL INC. | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
$ in millions | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues | $ | 389.3 | $ | 403.3 | $ | 1,081.6 | $ | 1,252.1 | ||||||||
Cost of revenues: | ||||||||||||||||
Fuel | 78.9 | 71.4 | 206.0 | 202.2 | ||||||||||||
Purchased power | 111.7 | 144.9 | 330.5 | 458.5 | ||||||||||||
Total cost of revenues | 190.6 | 216.3 | 536.5 | 660.7 | ||||||||||||
Gross margin | 198.7 | 187.0 | 545.1 | 591.4 | ||||||||||||
Operating expenses: | ||||||||||||||||
Operation and maintenance | 91.5 | 95.8 | 257.2 | 267.4 | ||||||||||||
Depreciation and amortization | 30.9 | 33.8 | 100.3 | 100.9 | ||||||||||||
General taxes | 21.6 | 21.7 | 64.2 | 66.7 | ||||||||||||
Fixed-asset impairment | — | — | 235.5 | — | ||||||||||||
Other | (0.7 | ) | 0.2 | (0.6 | ) | 0.4 | ||||||||||
Total operating expenses | 143.3 | 151.5 | 656.6 | 435.4 | ||||||||||||
Operating income / (loss) | 55.4 | 35.5 | (111.5 | ) | 156.0 | |||||||||||
Other income / (expense), net | ||||||||||||||||
Investment income | 0.1 | 0.1 | 0.3 | 0.1 | ||||||||||||
Interest expense | (27.0 | ) | (28.9 | ) | (79.3 | ) | (90.3 | ) | ||||||||
Charge for early retirement of debt | (0.5 | ) | (2.1 | ) | (3.1 | ) | (2.1 | ) | ||||||||
Other expense | (0.2 | ) | (0.5 | ) | (0.9 | ) | (1.2 | ) | ||||||||
Total other expense, net | (27.6 | ) | (31.4 | ) | (83.0 | ) | (93.5 | ) | ||||||||
Earnings / (loss) from continuing operations before income taxes | 27.8 | 4.1 | (194.5 | ) | 62.5 | |||||||||||
Income tax expense / (benefit) from continuing operations | 12.7 | (1.4 | ) | (75.0 | ) | 15.4 | ||||||||||
Net income / (loss) from continuing operations | 15.1 | 5.5 | (119.5 | ) | 47.1 | |||||||||||
Discontinued operations (Note 13) | ||||||||||||||||
Income / (loss) from discontinued operations | — | 4.9 | (0.7 | ) | 10.1 | |||||||||||
Gain from disposal of discontinued operations | — | — | 49.2 | — | ||||||||||||
Income tax expense / (benefit) for discontinued operations | — | 1.8 | 18.9 | (1.8 | ) | |||||||||||
Discontinued operations | — | 3.1 | 29.6 | 11.9 | ||||||||||||
Net income / (loss) | $ | 15.1 | $ | 8.6 | $ | (89.9 | ) | $ | 59.0 |
DPL INC. | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS) | ||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
$ in millions | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income / (loss) | $ | 15.1 | $ | 8.6 | $ | (89.9 | ) | $ | 59.0 | |||||||
Available-for-sale securities activity: | ||||||||||||||||
Change in fair value of available-for-sale securities, net of income tax (expense) / benefit of $0.0, $0.1, $(0.1) and $0.1 for each respective period | 0.1 | (0.3 | ) | 0.2 | (0.2 | ) | ||||||||||
Derivative activity: | ||||||||||||||||
Change in derivative fair value, net of income tax expense of $(5.2), $(4.4), $(12.3) and $(5.4) for each respective period | 9.5 | 7.8 | 22.4 | 9.6 | ||||||||||||
Reclassification to earnings, net of income tax benefit of $3.0, $1.1, $13.8 and $1.6 for each respective period | (5.5 | ) | (2.0 | ) | (24.4 | ) | (3.4 | ) | ||||||||
Total change in fair value of derivatives | 4.0 | 5.8 | (2.0 | ) | 6.2 | |||||||||||
Pension and postretirement activity: | ||||||||||||||||
Reclassification to earnings, net of income tax expense of $0.0, $0.0, $(0.1) and $(0.4) for each respective period | — | 0.1 | 0.1 | (0.1 | ) | |||||||||||
Other comprehensive income / (loss) | 4.1 | 5.6 | (1.7 | ) | 5.9 | |||||||||||
Net comprehensive income / (loss) | $ | 19.2 | $ | 14.2 | $ | (91.6 | ) | $ | 64.9 |
DPL INC. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
September 30, | December 31, | |||||||
$ in millions | 2016 | 2015 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 121.8 | $ | 32.4 | ||||
Restricted cash | 11.6 | 92.7 | ||||||
Accounts receivable, net (Note 2) | 134.9 | 120.9 | ||||||
Inventories (Note 2) | 80.0 | 109.1 | ||||||
Taxes applicable to subsequent years | 19.7 | 81.2 | ||||||
Regulatory assets, current | — | 14.4 | ||||||
Other prepayments and current assets | 37.7 | 44.5 | ||||||
Assets held for sale, current | — | 62.2 | ||||||
Total current assets | 405.7 | 557.4 | ||||||
Property, plant & equipment: | ||||||||
Property, plant & equipment | 2,701.2 | 2,909.0 | ||||||
Less: Accumulated depreciation and amortization | (479.6 | ) | (432.3 | ) | ||||
2,221.6 | 2,476.7 | |||||||
Construction work in process | 112.1 | 85.0 | ||||||
Total net property, plant & equipment | 2,333.7 | 2,561.7 | ||||||
Other non-current assets: | ||||||||
Regulatory assets, non-current | 186.9 | 179.9 | ||||||
Intangible assets, net of amortization | 0.9 | 5.0 | ||||||
Other deferred assets | 23.2 | 20.7 | ||||||
Total other non-current assets | 211.0 | 205.6 | ||||||
Total assets | $ | 2,950.4 | $ | 3,324.7 | ||||
LIABILITIES AND SHAREHOLDER'S EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt (Note 6) | $ | 79.2 | $ | 572.8 | ||||
Accounts payable | 87.4 | 97.5 | ||||||
Accrued taxes | 186.7 | 142.4 | ||||||
Accrued interest | 35.5 | 21.4 | ||||||
Security deposits | 14.6 | 15.2 | ||||||
Regulatory liabilities, current | 44.7 | 24.4 | ||||||
Insurance and claims costs | 5.9 | 5.9 | ||||||
Other current liabilities | 76.1 | 54.5 | ||||||
Deposit received on sale of DPLER | — | 75.5 | ||||||
Liabilities held for sale, current | — | 1.6 | ||||||
Total current liabilities | 530.1 | 1,011.2 | ||||||
Non-current liabilities: | ||||||||
Long-term debt (Note 6) | 1,834.8 | 1,420.5 | ||||||
Deferred taxes | 463.1 | 568.7 | ||||||
Taxes payable | 1.6 | 84.1 | ||||||
Regulatory liabilities, non-current | 129.9 | 127.0 | ||||||
Pension, retiree and other benefits | 80.5 | 87.1 | ||||||
Other deferred credits | 87.5 | 88.3 | ||||||
Total non-current liabilities | 2,597.4 | 2,375.7 | ||||||
Redeemable preferred stock of subsidiary (Note 9) | — | 18.4 | ||||||
Commitments and contingencies (Note 10) | ||||||||
Common shareholder's equity: | ||||||||
Common stock: | ||||||||
1,500 shares authorized; 1 share issued and outstanding at September 30, 2016 and December 31, 2015 | — | — | ||||||
Other paid-in capital | 2,232.8 | 2,237.7 | ||||||
Accumulated other comprehensive income | 15.7 | 17.4 | ||||||
Accumulated deficit | (2,425.6 | ) | (2,335.7 | ) | ||||
Total common shareholder's equity | (177.1 | ) | (80.6 | ) | ||||
Total liabilities and shareholder's equity | $ | 2,950.4 | $ | 3,324.7 |
DPL INC. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
Nine months ended September 30, | ||||||||
$ in millions | 2016 | 2015 | ||||||
Cash flows from operating activities: | ||||||||
Net income / (loss) | $ | (89.9 | ) | $ | 59.0 | |||
Adjustments to reconcile net income / (loss) to net cash from operating activities: | ||||||||
Depreciation and amortization | 100.3 | 104.1 | ||||||
Amortization of debt market value adjustments | 0.1 | (1.1 | ) | |||||
Charge for early redemption of debt | 3.1 | 2.1 | ||||||
Deferred income taxes | (101.4 | ) | (20.5 | ) | ||||
Fixed-asset impairment | 235.5 | — | ||||||
Gain on sale of business | (49.2 | ) | — | |||||
Changes in certain assets and liabilities: | ||||||||
Accounts receivable | 23.6 | 48.8 | ||||||
Inventories | 29.1 | 3.1 | ||||||
Prepaid taxes | 0.2 | (0.6 | ) | |||||
Taxes applicable to subsequent years | 61.5 | 58.2 | ||||||
Deferred regulatory costs, net | 19.5 | 27.6 | ||||||
Accounts payable | (10.2 | ) | (15.9 | ) | ||||
Accrued taxes payable | (34.2 | ) | (39.2 | ) | ||||
Accrued interest payable | 13.9 | 3.7 | ||||||
Security deposits | (0.6 | ) | 19.4 | |||||
Pension, retiree and other benefits | (2.2 | ) | 1.0 | |||||
Other | (0.5 | ) | 10.7 | |||||
Net cash provided by operating activities | 198.6 | 260.4 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (109.8 | ) | (93.5 | ) | ||||
Proceeds from sale of business | 75.5 | 1.3 | ||||||
Insurance proceeds | 5.2 | — | ||||||
Purchase of renewable energy credits | (0.3 | ) | (0.6 | ) | ||||
Decrease in restricted cash | 5.5 | 3.2 | ||||||
Other investing activities, net | 0.8 | 0.4 | ||||||
Net cash used in investing activities | (23.1 | ) | (89.2 | ) | ||||
Cash flows from financing activities: | ||||||||
Payments of deferred financing costs | (8.0 | ) | (5.6 | ) | ||||
Issuance of long-term debt, net of discount | 442.8 | 325.0 | ||||||
Retirement of long-term debt | (520.8 | ) | (474.5 | ) | ||||
Borrowings from revolving credit facilities | — | 70.0 | ||||||
Repayment of borrowings from revolving credit facilities | — | (60.0 | ) | |||||
Other financing activities, net | (0.1 | ) | (0.1 | ) | ||||
Net cash used in financing activities | (86.1 | ) | (145.2 | ) | ||||
Cash and cash equivalents: | ||||||||
Net change | 89.4 | 26.0 | ||||||
Balance at beginning of period | 32.4 | 17.0 | ||||||
Cash and cash equivalents at end of period | $ | 121.8 | $ | 43.0 | ||||
Supplemental cash flow information: | ||||||||
Interest paid, net of amounts capitalized | $ | 61.1 | $ | 77.3 | ||||
Income taxes paid / (refunded), net | $ | 0.3 | $ | 0.8 | ||||
Non-cash financing and investing activities: | ||||||||
Accruals for capital expenditures | $ | 15.9 | $ | 12.6 |
Accounting Standard | Description | Date of Adoption | Effect on the financial statements upon adoption |
New Accounting Standards Adopted | |||
2015-15, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements | Given the absence of authoritative guidance within ASU 2015-03, this standard clarifies that the SEC Staff would not object to an entity presenting debt issuance costs related to line-of-credit arrangements as an asset that is subsequently amortized ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. Transition method: retrospective. | January 1, 2016 | Deferred financing costs related to lines-of-credit of approximately $3.1 million recorded within Other deferred assets were not reclassified. |
2015-03, Interest - Imputation of Interest (Subtopic 835-30) | The standard simplifies the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the standard. Transition method: retrospective. | January 1, 2016 | Deferred financing costs of approximately $2.1 million previously classified within Other prepayments and current assets and $14.0 million previously classified within Other deferred assets were reclassified to reduce the related debt liabilities. |
Accounting Standard | Description | Date of Adoption | Effect on the financial statements upon adoption |
2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis | The standard makes targeted amendments to the current consolidation guidance and ends the deferral granted to investment companies from applying the VIE guidance. The standard amends the evaluation of whether (1) fees paid to a decision-maker or service providers represent a variable interest, (2) a limited partnership or similar entity has the characteristics of a VIE and (3) a reporting entity is the primary beneficiary of a VIE. Transition method: retrospective. | January 1, 2016 | There were no changes to the consolidation conclusions. |
New Accounting Standards Issued But Not Yet Effective | |||
2016-17, Consolidation (Topic 810): Interest Held through Related Parties That Are under Common Control | This standard amends the evaluation of whether a reporting entity is the primary beneficiary of a VIE by amending how a reporting entity, that is a single decision maker of a VIE, treats indirect interests in that entity held through related parties that are under common control. Transition method: retrospectively. | January 1, 2017 Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our consolidated financial statements. |
2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory | This standard requires that an entity recognizes the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Transition method: modified retrospective method. | January 1, 2018 Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our consolidated financial statements. |
2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) | This standard provides specific guidance on how certain cash transactions are presented and classified in the statement of cash flows. Transition method: retrospective method | January 1, 2018. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our consolidated financial statements, but do not anticipate a material impact. |
2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments | This standard updates the impairment model for financial assets measured at amortized cost to an expected loss model rather than an incurred loss model. It also allows for the presentation of credit losses on available-for-sale debt securities as an allowance rather than a write down. Transition method: various. | January 1, 2020 Early adoption is permitted only as of January 1, 2019. | We are currently evaluating the impact of adopting the standard on our consolidated financial statements. |
2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting | The standard simplifies the following aspects of accounting for share-based payment awards: accounting for income taxes, classification of excess tax benefits on the statement of cash flows, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities and classification of employee taxes paid on statement of cash flows when an employer withholds shares for tax-withholding purposes. Transition method: Various. | January 1, 2017. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our consolidated financial statements. |
2016-06, Derivatives and Hedging (Topic 815) - Contingent Put and Call Options in Debt Instruments | This standard clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. When a call (put) option is contingently exercisable, an entity no longer has to assess whether the event that triggers the ability to exercise a call (put) option is related to interest rates or credit risks. Transition method: a modified retrospective basis to existing debt instruments as of the effective date. | January 1, 2017. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard, but do not anticipate a material impact on our consolidated financial statements. |
2016-05, Derivatives and Hedging (Topic 815) - Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships | The standard clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not require de-designation of that hedging relationship provided that all other hedge accounting criteria (including those in paragraphs 815-20-35-14 through 35-18) continue to be met. Transition method: prospective or a modified retrospective basis. | January 1, 2017. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard, but do not anticipate a material impact on our consolidated financial statements. |
Accounting Standard | Description | Date of Adoption | Effect on the financial statements upon adoption |
2016-02, Leases (Topic 842) | The standard creates Topic 842, Leases which supersedes Topic 840, Leases, and introduces a lessee model that brings substantially all leases onto the balance sheet while retaining most of the principles of the existing lessor model in U.S. GAAP and aligning many of those principles with ASC 606, Revenue from Contracts with Customers. Transition method: modified retrospective approach with certain practical expedients. | January 1, 2019. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our consolidated financial statements. |
2016-01, Financial Instruments - Overall (Topic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities | The standard significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. Also, it amends certain disclosure requirements associated with the fair value of financial instruments. Transition: cumulative effect in Retained Earnings as of adoption or prospectively for equity investments without readily determinable fair value. | January 1, 2018. Limited early adoption permitted. | We are currently evaluating the impact of adopting the standard, but do not anticipate a material impact on our consolidated financial statements. |
2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory | The standard replaces the current lower of cost or market test with a lower of cost or net realizable value test. Transition method: prospectively. | January 1, 2017. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our consolidated financial statements. |
2014-09, 2016-08, 2016-10, 2016-12 Revenue from Contracts with Customers (Topic 606) | The Revenue from Contracts with Customers standard provides a single and comprehensive revenue recognition model for all contracts with customers to improve comparability. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and timing revenue recognition. The standard requires an entity to recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The amendments to the standard provide further clarification on contract revenue recognition specifically related to the implementation of the principal versus agent evaluation, the identification of performance obligations, clarification on accounting for licenses of intellectual property, and allows for the election to account for shipping and handling activities performed after control of a good has been transferred to the customer as a fulfillment cost. Transition method: a full retrospective or modified retrospective approach. | January 1, 2018 (deferred by ASU No. 2015-14). Earlier application is permitted only as of January 1, 2017. | We are currently evaluating the impact of adopting the standard on our consolidated financial statements. |
September 30, | December 31, | |||||||
$ in millions | 2016 | 2015 | ||||||
Accounts receivable, net: | ||||||||
Unbilled revenue | $ | 29.4 | $ | 43.3 | ||||
Customer receivables | 81.6 | 56.4 | ||||||
Amounts due from partners in jointly owned plants | 12.8 | 16.0 | ||||||
Other | 12.3 | 6.0 | ||||||
Provision for uncollectible accounts | (1.2 | ) | (0.8 | ) | ||||
Total accounts receivable, net | $ | 134.9 | $ | 120.9 | ||||
Inventories, at average cost: | ||||||||
Fuel and limestone | $ | 42.0 | $ | 72.2 | ||||
Plant materials and supplies | 36.1 | 34.9 | ||||||
Other | 1.9 | 2.0 | ||||||
Total inventories, at average cost | $ | 80.0 | $ | 109.1 |
Details about Accumulated Other Comprehensive Income / (Loss) components | Affected line item in the Condensed Consolidated Statements of Operations | Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||||
$ in millions | 2016 | 2015 | 2016 | 2015 | ||||||||||||||
Gains and losses on cash flow hedges (Note 5): | ||||||||||||||||||
Interest expense | $ | (0.2 | ) | $ | (0.2 | ) | $ | (0.7 | ) | $ | (0.7 | ) | ||||||
Revenue | (9.3 | ) | (3.8 | ) | (46.6 | ) | (7.0 | ) | ||||||||||
Purchased power | 1.0 | 0.9 | 9.1 | 2.7 | ||||||||||||||
Total before income taxes | (8.5 | ) | (3.1 | ) | (38.2 | ) | (5.0 | ) | ||||||||||
Tax expense | 3.0 | 1.1 | 13.8 | 1.6 | ||||||||||||||
Net of income taxes | (5.5 | ) | (2.0 | ) | (24.4 | ) | (3.4 | ) | ||||||||||
Amortization of defined benefit pension items (Note 8): | ||||||||||||||||||
Operation and maintenance | — | 0.1 | 0.2 | 0.3 | ||||||||||||||
Tax benefit | — | — | (0.1 | ) | (0.4 | ) | ||||||||||||
Net of income taxes | — | 0.1 | 0.1 | (0.1 | ) | |||||||||||||
Total reclassifications for the period, net of income taxes | $ | (5.5 | ) | $ | (1.9 | ) | $ | (24.3 | ) | $ | (3.5 | ) |
$ in millions | Gains / (losses) on available-for-sale securities | Gains / (losses) on cash flow hedges | Change in unfunded pension obligation | Total | ||||||||||||
Balance January 1, 2016 | $ | 0.4 | $ | 26.7 | $ | (9.7 | ) | $ | 17.4 | |||||||
Other comprehensive income before reclassifications | 0.2 | 22.4 | — | 22.6 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income / (loss) | — | (24.4 | ) | 0.1 | (24.3 | ) | ||||||||||
Net current period other comprehensive income / (loss) | 0.2 | (2.0 | ) | 0.1 | (1.7 | ) | ||||||||||
Balance September 30, 2016 | $ | 0.6 | $ | 24.7 | $ | (9.6 | ) | $ | 15.7 |
September 30, 2016 | December 31, 2015 | |||||||||||||||
$ in millions | Cost | Fair Value | Cost | Fair Value | ||||||||||||
Assets | ||||||||||||||||
Money market funds | $ | 0.3 | $ | 0.3 | $ | 0.2 | $ | 0.2 | ||||||||
Equity securities | 2.4 | 3.4 | 3.0 | 3.8 | ||||||||||||
Debt securities | 4.5 | 4.5 | 4.4 | 4.3 | ||||||||||||
Hedge funds | 0.2 | 0.2 | 0.4 | 0.4 | ||||||||||||
Real estate | 0.3 | 0.3 | 0.3 | 0.3 | ||||||||||||
Total Assets | $ | 7.7 | $ | 8.7 | $ | 8.3 | $ | 9.0 | ||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Liabilities | ||||||||||||||||
Debt | $ | 1,914.0 | $ | 1,969.4 | $ | 1,993.3 | $ | 1,975.3 |
• | Level 1 (quoted prices in active markets for identical assets or liabilities); |
• | Level 2 (observable inputs such as quoted prices for similar assets or liabilities or quoted prices in markets that are not active); or |
• | Level 3 (unobservable inputs). |
Assets and Liabilities at Fair Value | ||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
$ in millions | Fair value at September 30, 2016 | Based on Quoted Prices in Active Markets | Other Observable Inputs | Unobservable Inputs | ||||||||||||
Assets | ||||||||||||||||
Master Trust assets | ||||||||||||||||
Money market funds | $ | 0.3 | $ | 0.3 | $ | — | $ | — | ||||||||
Equity securities | 3.4 | — | 3.4 | — | ||||||||||||
Debt securities | 4.5 | — | 4.5 | — | ||||||||||||
Hedge funds | 0.2 | — | 0.2 | — | ||||||||||||
Real estate | 0.3 | — | 0.3 | — | ||||||||||||
Total Master Trust assets | 8.7 | 0.3 | 8.4 | — | ||||||||||||
Derivative Assets | ||||||||||||||||
FTRs | 0.1 | — | — | 0.1 | ||||||||||||
Forward power contracts | 33.1 | — | 32.5 | 0.6 | ||||||||||||
Total Derivative assets | 33.2 | — | 32.5 | 0.7 | ||||||||||||
Total Assets | $ | 41.9 | $ | 0.3 | $ | 40.9 | $ | 0.7 | ||||||||
Liabilities | ||||||||||||||||
Derivative Liabilities | ||||||||||||||||
Forward power contracts | 30.9 | — | 25.9 | 5.0 | ||||||||||||
Total Derivative liabilities | 30.9 | — | 25.9 | 5.0 | ||||||||||||
Debt | 1,969.4 | — | 1,951.4 | 18.0 | ||||||||||||
Total Liabilities | $ | 2,000.3 | $ | — | $ | 1,977.3 | $ | 23.0 |
Assets and Liabilities at Fair Value | ||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
$ in millions | Fair value at December 31, 2015 | Based on Quoted Prices in Active Markets | Other Observable Inputs | Unobservable Inputs | ||||||||||||
Assets | ||||||||||||||||
Master Trust assets | ||||||||||||||||
Money market funds | $ | 0.2 | $ | 0.2 | $ | — | $ | — | ||||||||
Equity securities | 3.8 | — | 3.8 | — | ||||||||||||
Debt securities | 4.3 | — | 4.3 | — | ||||||||||||
Hedge funds | 0.4 | — | 0.4 | — | ||||||||||||
Real estate | 0.3 | — | 0.3 | — | ||||||||||||
Total Master Trust assets | 9.0 | 0.2 | 8.8 | — | ||||||||||||
Derivative assets | ||||||||||||||||
Forward power contracts | 30.5 | — | 30.5 | — | ||||||||||||
FTRs | 0.2 | — | — | 0.2 | ||||||||||||
Total Derivative assets | 30.7 | — | 30.5 | 0.2 | ||||||||||||
Total Assets | $ | 39.7 | $ | 0.2 | $ | 39.3 | $ | 0.2 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | ||||||||||||||||
FTRs | $ | 0.5 | $ | — | $ | — | 0.5 | |||||||||
Forward power contracts | 27.0 | — | 23.9 | 3.1 | ||||||||||||
Total Derivative liabilities | 27.5 | — | 23.9 | 3.6 | ||||||||||||
Debt | 1,975.3 | — | 1,957.2 | 18.1 | ||||||||||||
Total Liabilities | $ | 2,002.8 | $ | — | $ | 1,981.1 | $ | 21.7 |
• | Level 1 inputs are used for derivative contracts such as heating oil futures, natural gas futures and for money market accounts that are considered cash equivalents. The fair value is determined by reference to quoted market prices and other relevant information generated by market transactions. |
• | Level 2 inputs are used to value derivatives such as forward power contracts (which are traded on the OTC market but which are valued using prices on the NYMEX for similar contracts on the OTC market). Other Level 2 assets include open-ended mutual funds that are in the Master Trust, which are valued using observable prices based on the end of day net asset value per unit. |
• | Level 3 inputs such as FTRs are considered a Level 3 input because the monthly auctions are considered inactive. Other Level 3 inputs include the credit valuation adjustment on some of the forward power contracts and forward power contracts in less active markets. Our Level 3 inputs are immaterial to our derivative balances as a whole and as such no further disclosures are presented. |
$ in millions | Nine months ended September 30, 2016 | |||||||||||||||||||
Carrying | Fair Value | Gross | ||||||||||||||||||
Amount (b) | Level 1 | Level 2 | Level 3 | Loss | ||||||||||||||||
Assets | ||||||||||||||||||||
Long-lived assets (a) | ||||||||||||||||||||
DP&L (Killen) | $ | 315.1 | $ | — | $ | — | $ | 84.3 | $ | 230.8 | ||||||||||
DP&L (peaking facilities) | $ | 9.9 | $ | — | $ | — | $ | 5.2 | $ | 4.7 |
$ in millions | Fair value | Valuation technique | Unobservable input | Range (weighted average) | ||||||
Long-lived assets held and used: | ||||||||||
DP&L (Killen) | $ | 84.3 | Discounted cash flow | Annual revenue growth | -11% to 13% (2%) | |||||
Annual pre-tax operating margin | -50% to 57% (6%) | |||||||||
Weighted-average cost of capital | 11% | |||||||||
DP&L (peaking facilities) | $ | 5.2 | Discounted cash flow | Annual revenue growth | -22% to 17% (-3%) | |||||
Annual pre-tax operating margin | -29% to 24% (-4%) | |||||||||
Weighted-average cost of capital | 7% |
Commodity | Accounting Treatment (a) | Unit | Purchases (in thousands) | Sales (in thousands) | Net Purchases/ (Sales) (in thousands) | ||||||||
FTRs | Not designated | MWh | 2.8 | — | 2.8 | ||||||||
Natural Gas Futures | Not designated | Dths | — | (20.0 | ) | (20.0 | ) | ||||||
Forward power contracts | Designated | MWh | 607.6 | (10,699.9 | ) | (10,092.3 | ) | ||||||
Forward power contracts | Not designated | MWh | 2,866.9 | (2,393.1 | ) | 473.8 |
Commodity | Accounting Treatment (a) | Unit | Purchases (in thousands) | Sales (in thousands) | Net Purchases/ (Sales) (in thousands) | ||||||||
FTRs | Not designated | MWh | 10.2 | — | 10.2 | ||||||||
Forward power contracts | Designated | MWh | 1,676.7 | (7,795.8 | ) | (6,119.1 | ) | ||||||
Forward power contracts | Not designated | MWh | 5,049.9 | (1,663.0 | ) | 3,386.9 |
Three months ended | Three months ended | |||||||||||||||
September 30, 2016 | September 30, 2015 | |||||||||||||||
Interest | Interest | |||||||||||||||
$ in millions (net of tax) | Power | Rate Hedge | Power | Rate Hedge | ||||||||||||
Beginning accumulated derivative gains in AOCI | $ | 3.4 | $ | 17.3 | $ | 1.1 | $ | 17.8 | ||||||||
Net gains associated with current period hedging transactions | 9.5 | — | 7.8 | — | ||||||||||||
Net gains / (losses) reclassified to earnings | ||||||||||||||||
Interest expense | — | (0.1 | ) | — | (0.1 | ) | ||||||||||
Revenues | (6.0 | ) | — | (2.5 | ) | — | ||||||||||
Purchased power | 0.6 | — | 0.6 | — | ||||||||||||
Ending accumulated derivative gains in AOCI | $ | 7.5 | $ | 17.2 | $ | 7.0 | $ | 17.7 | ||||||||
Nine months ended | Nine months ended | |||||||||||||||
September 30, 2016 | September 30, 2015 | |||||||||||||||
Interest | Interest | |||||||||||||||
$ in millions (net of tax) | Power | Rate Hedge | Power | Rate Hedge | ||||||||||||
Beginning accumulated derivative gains in AOCI | $ | 9.2 | $ | 17.5 | $ | 0.2 | $ | 18.3 | ||||||||
Net gains associated with current period hedging transactions | 22.4 | — | 9.6 | — | ||||||||||||
Net gains / (losses) reclassified to earnings | ||||||||||||||||
Interest expense | — | (0.3 | ) | — | (0.6 | ) | ||||||||||
Revenues | (30.0 | ) | — | (4.5 | ) | — | ||||||||||
Purchased power | 5.9 | — | 1.7 | — | ||||||||||||
Ending accumulated derivative gains in AOCI | $ | 7.5 | $ | 17.2 | $ | 7.0 | $ | 17.7 | ||||||||
Portion expected to be reclassified to earnings in the next twelve months (a) | $ | — | $ | 0.6 | ||||||||||||
Maximum length of time that we are hedging our exposure to variability in future cash flows related to forecasted transactions (in months) | 15 | 0 |
For the three months ended September 30, 2016 | ||||||||||||||||
$ in millions | FTRs | Power | Natural Gas | Total | ||||||||||||
Change in unrealized gain / (loss) | $ | — | $ | 1.2 | $ | (0.3 | ) | $ | 0.9 | |||||||
Realized gain / (loss) | (0.1 | ) | (2.4 | ) | 0.2 | (2.3 | ) | |||||||||
Total | $ | (0.1 | ) | $ | (1.2 | ) | $ | (0.1 | ) | $ | (1.4 | ) | ||||
Recorded in Income Statement: gain / (loss) | ||||||||||||||||
Revenues | $ | — | $ | (10.4 | ) | $ | — | $ | (10.4 | ) | ||||||
Purchased power | (0.1 | ) | 9.2 | (0.1 | ) | 9.0 | ||||||||||
Total | $ | (0.1 | ) | $ | (1.2 | ) | $ | (0.1 | ) | $ | (1.4 | ) |
For the three months ended September 30, 2015 | ||||||||||||||||
$ in millions | Heating Oil | FTRs | Power | Total | ||||||||||||
Change in unrealized gain / (loss) | $ | 0.1 | $ | 0.1 | $ | (3.2 | ) | $ | (3.0 | ) | ||||||
Realized loss | (0.2 | ) | (0.1 | ) | (4.3 | ) | (4.6 | ) | ||||||||
Total | $ | (0.1 | ) | $ | — | $ | (7.5 | ) | $ | (7.6 | ) | |||||
Recorded in Income Statement: gain / (loss) | ||||||||||||||||
Revenues | $ | — | $ | — | $ | 3.5 | $ | 3.5 | ||||||||
Purchased power | — | — | (11.0 | ) | (11.0 | ) | ||||||||||
Fuel | (0.1 | ) | — | — | $ | (0.1 | ) | |||||||||
Total | $ | (0.1 | ) | $ | — | $ | (7.5 | ) | $ | (7.6 | ) |
For the nine months ended September 30, 2016 | ||||||||||||||||
$ in millions | FTRs | Power | Natural Gas | Total | ||||||||||||
Change in unrealized gain | $ | 0.4 | $ | 2.3 | $ | — | $ | 2.7 | ||||||||
Realized gain / (loss) | (0.4 | ) | (5.3 | ) | 0.7 | (5.0 | ) | |||||||||
Total | $ | — | $ | (3.0 | ) | $ | 0.7 | $ | (2.3 | ) | ||||||
Recorded in Income Statement: gain / (loss) | ||||||||||||||||
Revenues | $ | — | $ | (13.1 | ) | $ | — | $ | (13.1 | ) | ||||||
Purchased power | — | 10.1 | 0.7 | 10.8 | ||||||||||||
Total | $ | — | $ | (3.0 | ) | $ | 0.7 | $ | (2.3 | ) |
For the nine months ended September 30, 2015 | ||||||||||||||||||||
$ in millions | Heating Oil | FTRs | Power | Natural Gas | Total | |||||||||||||||
Change in unrealized gain / (loss) | $ | 0.4 | $ | 0.2 | $ | (4.9 | ) | $ | 0.1 | $ | (4.2 | ) | ||||||||
Realized loss | (0.3 | ) | (0.1 | ) | (8.1 | ) | (0.1 | ) | (8.6 | ) | ||||||||||
Total | $ | 0.1 | $ | 0.1 | $ | (13.0 | ) | $ | — | $ | (12.8 | ) | ||||||||
Recorded on Balance Sheet: gain | ||||||||||||||||||||
Regulatory asset | $ | 0.1 | $ | — | $ | — | $ | — | $ | 0.1 | ||||||||||
Recorded in Income Statement: gain / (loss) | ||||||||||||||||||||
Revenue | — | — | 8.9 | — | 8.9 | |||||||||||||||
Purchased power | — | 0.1 | (21.9 | ) | — | (21.8 | ) | |||||||||||||
Total | $ | 0.1 | $ | 0.1 | $ | (13.0 | ) | $ | — | $ | (12.8 | ) |
Fair Values of Derivative Instruments | ||||||||||||||||||
at September 30, 2016 | ||||||||||||||||||
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets | ||||||||||||||||||
$ in millions | Hedging Designation | Gross Fair Value as presented in the Condensed Consolidated Balance Sheets | Financial Instruments with Same Counterparty in Offsetting Position | Cash Collateral | Net Balance Fair Value | |||||||||||||
Assets | ||||||||||||||||||
Short-term derivative positions (presented in Other prepayments and current assets) | ||||||||||||||||||
Forward power contracts | Designated | $ | 15.6 | $ | (13.3 | ) | $ | — | $ | 2.3 | ||||||||
Forward power contracts | Not designated | 8.7 | (7.6 | ) | — | 1.1 | ||||||||||||
FTRs | Not designated | 0.1 | — | — | 0.1 | |||||||||||||
Long-term derivative positions (presented in Other deferred assets) | ||||||||||||||||||
Forward power contracts | Designated | 7.4 | (1.1 | ) | — | 6.3 | ||||||||||||
Forward power contracts | Not designated | 1.4 | (0.7 | ) | — | 0.7 | ||||||||||||
Total assets | $ | 33.2 | $ | (22.7 | ) | $ | — | $ | 10.5 | |||||||||
Liabilities | ||||||||||||||||||
Short-term derivative positions (presented in Other current liabilities) | ||||||||||||||||||
Forward power contracts | Designated | $ | 16.1 | $ | (13.3 | ) | $ | (2.7 | ) | $ | 0.1 | |||||||
Forward power contracts | Not designated | 12.8 | (7.6 | ) | (2.4 | ) | 2.8 | |||||||||||
Long-term derivative positions (presented in Other deferred credits) | ||||||||||||||||||
Forward power contracts | Designated | 1.1 | (1.1 | ) | — | — | ||||||||||||
Forward power contracts | Not designated | 0.9 | (0.7 | ) | — | 0.2 | ||||||||||||
Total liabilities | $ | 30.9 | $ | (22.7 | ) | $ | (5.1 | ) | $ | 3.1 |
Fair Values of Derivative Instruments | ||||||||||||||||||
at December 31, 2015 | ||||||||||||||||||
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets | ||||||||||||||||||
$ in millions | Hedging Designation | Gross Fair Value as presented in the Condensed Consolidated Balance Sheets | Financial Instruments with Same Counterparty in Offsetting Position | Cash Collateral | Net Balance Fair Value | |||||||||||||
Assets | ||||||||||||||||||
Short-term derivative positions (presented in Other prepayments and current assets) | ||||||||||||||||||
Forward power contracts | Designated | $ | 16.2 | $ | (7.1 | ) | $ | — | $ | 9.1 | ||||||||
Forward power contracts | Not designated | 7.3 | (5.5 | ) | — | 1.8 | ||||||||||||
FTRs | Not designated | 0.2 | (0.2 | ) | — | — | ||||||||||||
Long-term derivative positions (presented in Other deferred assets) | ||||||||||||||||||
Forward power contracts | Designated | 3.0 | (2.4 | ) | — | 0.6 | ||||||||||||
Forward power contracts | Not designated | 4.0 | (2.7 | ) | — | 1.3 | ||||||||||||
Total assets | $ | 30.7 | $ | (17.9 | ) | $ | — | $ | 12.8 | |||||||||
Liabilities | ||||||||||||||||||
Short-term derivative positions (presented in Other current liabilities) | ||||||||||||||||||
Forward power contracts | Designated | $ | 7.1 | $ | (7.1 | ) | $ | — | $ | — | ||||||||
Forward power contracts | Not designated | 14.5 | (5.5 | ) | (8.0 | ) | 1.0 | |||||||||||
FTRs | Not designated | 0.5 | (0.2 | ) | — | 0.3 | ||||||||||||
Long-term derivative positions (presented in Other deferred credits) | ||||||||||||||||||
Forward power contracts | Designated | 2.7 | (2.4 | ) | — | 0.3 | ||||||||||||
Forward power contracts | Not designated | 2.7 | (2.7 | ) | — | — | ||||||||||||
Total liabilities | $ | 27.5 | $ | (17.9 | ) | $ | (8.0 | ) | $ | 1.6 |
Interest | September 30, | December 31, | ||||||||||
$ in millions | Rate | Maturity | 2016 | 2015 | ||||||||
Term loan - rate at 4.00% (a) | 2022 | $ | 445.0 | $ | — | |||||||
First mortgage bonds | 1.875% | 2016 | — | 445.0 | ||||||||
Pollution control series | 4.8% | 2036 | 100.0 | 100.0 | ||||||||
Pollution control series - rates from 1.29% - 1.36% (a) and 1.13% - 1.17% (b) | 2020 | 200.0 | 200.0 | |||||||||
U.S. Government note | 4.2% | 2061 | 18.0 | 18.1 | ||||||||
Unamortized deferred financing costs | (5.6 | ) | (5.0 | ) | ||||||||
Unamortized debt discount and premiums, net | (11.1 | ) | (3.6 | ) | ||||||||
Total long-term debt at subsidiary | 746.3 | 754.5 | ||||||||||
Bank term loan - rates from 2.67% - 2.77% (a) and 2.44% - 2.67% (b) | 2020 | 125.0 | 125.0 | |||||||||
Senior unsecured bonds | 6.5% | 2016 | 57.0 | 130.0 | ||||||||
Senior unsecured bonds | 6.75% | 2019 | 200.0 | 200.0 | ||||||||
Senior unsecured bonds | 7.25% | 2021 | 780.0 | 780.0 | ||||||||
Note to DPL Capital Trust II (c) | 8.125% | 2031 | 15.6 | 15.6 | ||||||||
Unamortized deferred financing costs | (9.3 | ) | (11.1 | ) | ||||||||
Unamortized debt discounts and premiums, net | (0.6 | ) | (0.7 | ) | ||||||||
Total long-term debt | 1,914.0 | 1,993.3 | ||||||||||
Less: current portion | (79.2 | ) | (572.8 | ) | ||||||||
Total long-term debt | $ | 1,834.8 | $ | 1,420.5 |
(a) | Range of interest rates for the nine months ended September 30, 2016. |
(b) | Range of interest rates for the year ended December 31, 2015. |
(c) | Note payable to related party. See Note 11 – Related Party Transactions for additional information. |
Three months ended | Nine months ended | |||||||
September 30, | September 30, | |||||||
2016 | 2015 | 2016 | 2015 | |||||
DPL | 45.7% | (34.1)% | 38.6% | 24.6% |
Net Periodic Benefit Cost | Pension | |||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
$ in millions | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Service cost | $ | 1.4 | $ | 1.7 | $ | 4.2 | $ | 5.3 | ||||||||
Interest cost | 3.7 | 4.4 | 11.1 | 13.0 | ||||||||||||
Expected return on plan assets | (5.7 | ) | (5.7 | ) | (17.1 | ) | (17.0 | ) | ||||||||
Amortization of unrecognized: | ||||||||||||||||
Prior service cost | 0.4 | 0.5 | 1.4 | 1.5 | ||||||||||||
Actuarial loss | 1.1 | 1.5 | 3.2 | 4.4 | ||||||||||||
Net periodic benefit cost | $ | 0.9 | $ | 2.4 | $ | 2.8 | $ | 7.2 |
Net Periodic Benefit Cost | Postretirement | |||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
$ in millions | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Service cost | $ | — | $ | 0.1 | $ | 0.1 | $ | 0.1 | ||||||||
Interest cost | 0.2 | 0.2 | 0.4 | 0.5 | ||||||||||||
Expected return on plan assets | (0.1 | ) | (0.1 | ) | (0.1 | ) | (0.1 | ) | ||||||||
Amortization of unrecognized: | ||||||||||||||||
Prior service cost | — | — | — | — | ||||||||||||
Actuarial gain | (0.1 | ) | (0.1 | ) | (0.4 | ) | (0.3 | ) | ||||||||
Net periodic benefit cost | $ | — | $ | 0.1 | $ | — | $ | 0.2 |
$ in millions | Pension | Postretirement | ||||||
2016 | $ | 6.2 | $ | 0.4 | ||||
2017 | 25.2 | 1.6 | ||||||
2018 | 25.8 | 1.5 | ||||||
2019 | 26.3 | 1.4 | ||||||
2020 | 26.7 | 1.4 | ||||||
2021 - 2025 | 134.8 | 5.7 |
• | The federal CAA and state laws and regulations (including State Implementation Plans) which require compliance, obtaining permits and reporting as to air emissions; |
• | Litigation with federal and certain state governments and certain special interest groups regarding whether modifications to or maintenance of certain coal-fired generating stations require additional permitting or pollution control technology, or whether emissions from coal-fired generating stations cause or contribute to climate change; |
• | Rules and future rules issued by the USEPA and the Ohio EPA that require or will require substantial reductions in SO2, particulates, mercury, acid gases, NOx, and other air emissions. DP&L has installed |
• | Rules and future rules issued by the USEPA, the Ohio EPA or other authorities that require or will require reporting and reductions of GHGs; |
• | Rules and future rules issued by the USEPA associated with the federal Clean Water Act, which prohibits the discharge of pollutants into waters of the United States except pursuant to appropriate permits; and |
• | Solid and hazardous waste laws and regulations, which govern the management and disposal of certain waste. The majority of solid waste created from the combustion of coal and fossil fuels consists of fly ash and other coal combustion by-products. |
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
$ in millions | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Transactions with the Service Company | ||||||||||||||||
Charges for services provided | $ | 9.7 | $ | 8.9 | $ | 32.8 | $ | 28.5 | ||||||||
Charges to the Service Company | $ | 1.1 | $ | 1.1 | $ | 3.4 | $ | 5.1 | ||||||||
Transactions with other AES affiliates: | ||||||||||||||||
Charges for health, welfare and benefit plans | $ | 3.9 | $ | 4.3 | $ | 5.6 | $ | 12.5 | ||||||||
Transactions with the Service Company: | At September 30, 2016 | At December 31, 2015 | ||||||||||||||
Net payable to the Service Company | $ | (1.4 | ) | $ | (0.5 | ) |
$ in millions | Utility Segment | Other | Adjustments and Eliminations | DPL Consolidated | ||||||||||||
For the three months ended September 30, 2016 | ||||||||||||||||
Revenues from external customers | $ | 368.0 | $ | 21.3 | $ | — | $ | 389.3 | ||||||||
Intersegment revenues | 0.4 | 2.0 | (2.4 | ) | — | |||||||||||
Total revenues | 368.4 | 23.3 | (2.4 | ) | 389.3 | |||||||||||
Fuel | 71.0 | 7.9 | — | 78.9 | ||||||||||||
Purchased power | 110.0 | 3.0 | (1.3 | ) | 111.7 | |||||||||||
Gross margin | $ | 187.4 | $ | 12.4 | $ | (1.1 | ) | $ | 198.7 | |||||||
Depreciation and amortization | $ | 24.1 | $ | 6.8 | $ | — | $ | 30.9 | ||||||||
Interest expense | $ | 6.5 | $ | 20.3 | $ | 0.2 | $ | 27.0 | ||||||||
Income tax expense / (benefit) | $ | 19.7 | $ | (7.0 | ) | $ | — | $ | 12.7 | |||||||
Net income / (loss) | $ | 30.1 | $ | (15.0 | ) | $ | — | $ | 15.1 | |||||||
Cash capital expenditures | $ | 26.5 | $ | 4.2 | $ | — | $ | 30.7 |
$ in millions | Utility Segment | Competitive Retail | Other | Adjustments and Eliminations | DPL Consolidated | |||||||||||||||
For the three months ended September 30, 2015 | ||||||||||||||||||||
Revenues from external customers | $ | 323.2 | $ | 77.0 | $ | 13.9 | $ | — | $ | 414.1 | ||||||||||
Intersegment revenues | 66.0 | — | 1.5 | (67.5 | ) | — | ||||||||||||||
Total revenues | 389.2 | 77.0 | 15.4 | (67.5 | ) | 414.1 | ||||||||||||||
Fuel | 69.0 | — | 2.4 | — | 71.4 | |||||||||||||||
Purchased power | 142.5 | 66.6 | 3.0 | (66.7 | ) | 145.4 | ||||||||||||||
Gross margin | $ | 177.7 | $ | 10.4 | $ | 10.0 | $ | (0.8 | ) | $ | 197.3 | |||||||||
Depreciation and amortization | $ | 34.6 | $ | 0.2 | $ | — | $ | — | $ | 34.8 | ||||||||||
Interest expense | $ | 6.9 | $ | — | $ | 22.1 | $ | (0.1 | ) | $ | 28.9 | |||||||||
Income tax expense / (benefit) | $ | 0.8 | $ | 1.6 | $ | (2.1 | ) | $ | — | $ | 0.3 | |||||||||
Net income / (loss) | $ | 15.5 | $ | 2.6 | $ | (9.5 | ) | $ | — | $ | 8.6 | |||||||||
Cash capital expenditures | $ | 27.9 | $ | 0.3 | $ | 0.5 | $ | — | $ | 28.7 |
$ in millions | Utility Segment | Other | Adjustments and Eliminations | DPL Consolidated | ||||||||||||
For the nine months ended September 30, 2016 | ||||||||||||||||
Revenues from external customers | $ | 1,030.3 | $ | 51.3 | $ | — | $ | 1,081.6 | ||||||||
Intersegment revenues | 1.0 | 4.2 | (5.2 | ) | — | |||||||||||
Total revenues | 1,031.3 | 55.5 | (5.2 | ) | 1,081.6 | |||||||||||
Fuel | 189.5 | 16.5 | — | 206.0 | ||||||||||||
Purchased power | 328.0 | 4.9 | (2.4 | ) | 330.5 | |||||||||||
Gross margin | $ | 513.8 | $ | 34.1 | $ | (2.8 | ) | $ | 545.1 | |||||||
Depreciation and amortization | $ | 95.2 | $ | 5.1 | $ | — | $ | 100.3 | ||||||||
Fixed-asset impairment | $ | 857.1 | $ | (621.6 | ) | $ | — | $ | 235.5 | |||||||
Interest expense | $ | 17.2 | $ | 61.6 | $ | 0.5 | $ | 79.3 | ||||||||
Income tax expense / (benefit) | $ | (271.6 | ) | $ | 196.6 | $ | — | $ | (75.0 | ) | ||||||
Net income / (loss) from continuing operations | $ | (467.8 | ) | $ | 348.3 | $ | — | $ | (119.5 | ) | ||||||
Discontinued operations, net of tax | $ | — | $ | 29.6 | $ | — | $ | 29.6 | ||||||||
Net income / (loss) | $ | (467.8 | ) | $ | 377.9 | $ | — | $ | (89.9 | ) | ||||||
Cash capital expenditures | $ | 98.3 | $ | 11.5 | $ | — | $ | 109.8 | ||||||||
at September 30, 2016 | ||||||||||||||||
Total assets | $ | 2,460.8 | $ | 1,303.8 | $ | (814.2 | ) | $ | 2,950.4 |
$ in millions | Utility Segment | Competitive Retail | Other | Adjustments and Eliminations | DPL Consolidated | |||||||||||||||
For the nine months ended September 30, 2015 | ||||||||||||||||||||
Revenues from external customers | $ | 957.6 | $ | 274.5 | $ | 49.4 | $ | — | $ | 1,281.5 | ||||||||||
Intersegment revenues | 245.0 | — | 4.4 | (249.4 | ) | — | ||||||||||||||
Total revenues | 1,202.6 | 274.5 | 53.8 | (249.4 | ) | 1,281.5 | ||||||||||||||
Fuel | 188.9 | — | 13.3 | — | 202.2 | |||||||||||||||
Purchased power | 452.3 | 247.0 | 7.8 | (246.9 | ) | 460.2 | ||||||||||||||
Gross margin | $ | 561.4 | $ | 27.5 | $ | 32.7 | $ | (2.5 | ) | $ | 619.1 | |||||||||
Depreciation and amortization | $ | 103.5 | $ | 0.6 | $ | — | $ | — | $ | 104.1 | ||||||||||
Interest expense | $ | 24.6 | $ | 0.1 | $ | 65.8 | $ | (0.2 | ) | $ | 90.3 | |||||||||
Income tax expense / (benefit) | $ | 25.0 | $ | (2.6 | ) | $ | (8.9 | ) | $ | — | $ | 13.5 | ||||||||
Net income / (loss) | $ | 75.9 | $ | 10.9 | $ | (27.8 | ) | $ | — | $ | 59.0 | |||||||||
Cash capital expenditures | $ | 91.2 | $ | 0.6 | $ | 1.7 | $ | — | $ | 93.5 | ||||||||||
at December 31, 2015 | ||||||||||||||||||||
Total assets | $ | 3,359.6 | $ | — | $ | 1,304.5 | $ | (1,339.4 | ) | $ | 3,324.7 |
$ in millions | December 31, 2015 | |||||||||||||||
Accounts receivable, net | $ | 31.0 | ||||||||||||||
Property, plant & equipment, net | 4.6 | |||||||||||||||
Intangible assets, net | 24.6 | |||||||||||||||
Other assets | 2.0 | |||||||||||||||
Total assets of the disposal group classified as held for sale in the balance sheets | $ | 62.2 | ||||||||||||||
Accounts payable | $ | 0.8 | ||||||||||||||
Other liabilities | 0.8 | |||||||||||||||
Total liabilities of the disposal group classified as held for sale in the balance sheets | $ | 1.6 | ||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Revenues | $ | — | $ | 77.1 | $ | — | $ | 274.6 | ||||||||
Cost of revenues | — | (66.5 | ) | — | (247.0 | ) | ||||||||||
Operating expenses | — | (5.7 | ) | (0.7 | ) | (17.5 | ) | |||||||||
(Loss) / income from discontinued operations before income taxes | — | 4.9 | (0.7 | ) | 10.1 | |||||||||||
Gain from disposal of discontinued operations | — | — | 49.2 | — | ||||||||||||
Income tax expense / (benefit) | — | 1.8 | 18.9 | (1.8 | ) | |||||||||||
Income on discontinued operations | $ | — | $ | 3.1 | $ | 29.6 | $ | 11.9 |
THE DAYTON POWER AND LIGHT COMPANY | ||||||||||||||||
CONDENSED STATEMENTS OF OPERATIONS | ||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
$ in millions | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues | $ | 368.4 | $ | 389.2 | $ | 1,031.3 | $ | 1,202.6 | ||||||||
Cost of revenues: | ||||||||||||||||
Fuel | 71.0 | 69.0 | 189.5 | 188.9 | ||||||||||||
Purchased power | 110.0 | 142.5 | 328.0 | 452.3 | ||||||||||||
Total cost of revenues | 181.0 | 211.5 | 517.5 | 641.2 | ||||||||||||
Gross margin | 187.4 | 177.7 | 513.8 | 561.4 | ||||||||||||
Operating expenses: | ||||||||||||||||
Operation and maintenance | 85.5 | 93.5 | 248.0 | 261.6 | ||||||||||||
Depreciation and amortization | 24.1 | 34.6 | 95.2 | 103.5 | ||||||||||||
General taxes | 21.2 | 21.1 | 62.8 | 65.0 | ||||||||||||
Gain on termination of contract | — | — | (27.7 | ) | — | |||||||||||
Fixed-asset impairment | — | — | 857.1 | — | ||||||||||||
Other | — | — | 0.2 | 0.4 | ||||||||||||
Total operating expenses | 130.8 | 149.2 | 1,235.6 | 430.5 | ||||||||||||
Operating income / (loss) | 56.6 | 28.5 | (721.8 | ) | 130.9 | |||||||||||
Other income / (expense), net: | ||||||||||||||||
Investment income | 0.1 | — | 0.3 | 0.2 | ||||||||||||
Interest expense | (6.5 | ) | (6.9 | ) | (17.2 | ) | (24.6 | ) | ||||||||
Charge for early retirement of debt | (0.5 | ) | (5.0 | ) | (0.5 | ) | (5.0 | ) | ||||||||
Other income / (expense), net: | 0.1 | (0.3 | ) | (0.2 | ) | (0.6 | ) | |||||||||
Total other expense, net | (6.8 | ) | (12.2 | ) | (17.6 | ) | (30.0 | ) | ||||||||
Earnings / (loss) before income taxes | 49.8 | 16.3 | (739.4 | ) | 100.9 | |||||||||||
Income tax expense / (benefit) | 19.7 | 0.8 | (271.6 | ) | 25.0 | |||||||||||
Net income / (loss) | 30.1 | 15.5 | (467.8 | ) | 75.9 | |||||||||||
Dividends on preferred stock | 0.3 | 0.3 | 0.7 | 0.7 | ||||||||||||
Income / (loss) attributable to common stock | $ | 29.8 | $ | 15.2 | $ | (468.5 | ) | $ | 75.2 |
THE DAYTON POWER AND LIGHT COMPANY | ||||||||||||||||
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS) | ||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
$ in millions | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income / (loss) | $ | 30.1 | $ | 15.5 | $ | (467.8 | ) | $ | 75.9 | |||||||
Available-for-sale securities activity: | ||||||||||||||||
Change in fair value of available-for-sale securities, net of income tax (expense) / benefit of $0.0, $0.1, $(0.1) and $0.1 for each respective period | 0.1 | (0.3 | ) | 0.2 | (0.3 | ) | ||||||||||
Reclassification to earnings, net of income tax expense of $0.0, $0.0, $0.0 and $0.0 for each respective period | — | — | — | — | ||||||||||||
Total change in fair value of available-for-sale securities | 0.1 | (0.3 | ) | 0.2 | (0.3 | ) | ||||||||||
Derivative activity: | ||||||||||||||||
Change in derivative fair value, net of income tax (expense) / benefit of $5.2, $(4.4), $(12.2) and $(5.4) for each respective period | 9.5 | 7.8 | 22.5 | 9.6 | ||||||||||||
Reclassification to earnings, net of income tax benefit of $3.0, $1.2, $13.5 and $1.9 for each respective period | (5.6 | ) | (2.0 | ) | (24.8 | ) | (3.3 | ) | ||||||||
Total change in fair value of derivatives | 3.9 | 5.8 | (2.3 | ) | 6.3 | |||||||||||
Pension and postretirement activity: | ||||||||||||||||
Reclassification to earnings, net of income tax expense of $(0.4), $(0.6), $(1.6) and $(1.6) for each respective period | 0.7 | 0.8 | 1.7 | 2.6 | ||||||||||||
Total change in unfunded pension obligation | 0.7 | 0.8 | 1.7 | 2.6 | ||||||||||||
Other comprehensive income / (loss) | 4.7 | 6.3 | (0.4 | ) | 8.6 | |||||||||||
Net comprehensive income / (loss) | $ | 34.8 | $ | 21.8 | $ | (468.2 | ) | $ | 84.5 |
THE DAYTON POWER AND LIGHT COMPANY | ||||||||
CONDENSED BALANCE SHEETS | ||||||||
September 30, | December 31, | |||||||
$ in millions | 2016 | 2015 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 92.9 | $ | 5.4 | ||||
Restricted cash | 11.6 | 44.8 | ||||||
Accounts receivable, net (Note 2) | 136.3 | 119.5 | ||||||
Inventories (Note 2) | 78.6 | 108.0 | ||||||
Taxes applicable to subsequent years | 19.2 | 79.2 | ||||||
Regulatory assets, current | — | 14.4 | ||||||
Other prepayments and current assets | 36.7 | 46.3 | ||||||
Total current assets | 375.3 | 417.6 | ||||||
Property, plant & equipment: | ||||||||
Property, plant & equipment | 3,073.4 | 5,244.7 | ||||||
Less: Accumulated depreciation and amortization | (1,285.8 | ) | (2,584.0 | ) | ||||
1,787.6 | 2,660.7 | |||||||
Construction work in process | 89.9 | 78.0 | ||||||
Total net property, plant & equipment | 1,877.5 | 2,738.7 | ||||||
Other non-current assets: | ||||||||
Regulatory assets, non-current | 186.9 | 179.9 | ||||||
Intangible assets, net of amortization | 0.9 | 5.0 | ||||||
Other deferred assets | 20.2 | 18.4 | ||||||
Total other non-current assets | 208.0 | 203.3 | ||||||
Total assets | $ | 2,460.8 | $ | 3,359.6 | ||||
LIABILITIES AND SHAREHOLDER'S EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt (Note 6) | $ | 3.5 | $ | 443.1 | ||||
Short-term debt (Note 11) | — | 35.0 | ||||||
Accounts payable | 76.8 | 94.1 | ||||||
Accrued taxes | 122.2 | 86.2 | ||||||
Accrued interest | 1.0 | 4.1 | ||||||
Security deposits | 14.6 | 15.1 | ||||||
Regulatory liabilities, current | 44.7 | 24.4 | ||||||
Other current liabilities | 75.6 | 51.0 | ||||||
Advance on contract termination | — | 27.7 | ||||||
Total current liabilities | 338.4 | 780.7 | ||||||
Non-current liabilities: | ||||||||
Long-term debt (Note 6) | 745.0 | 313.6 | ||||||
Deferred taxes | 314.4 | 631.2 | ||||||
Taxes payable | 1.5 | 82.1 | ||||||
Regulatory liabilities, non-current | 129.9 | 127.0 | ||||||
Pension, retiree and other benefits | 80.5 | 87.1 | ||||||
Unamortized investment tax credit | 18.3 | 20.0 | ||||||
Other deferred credits | 82.1 | 82.3 | ||||||
Total non-current liabilities | 1,371.7 | 1,343.3 | ||||||
Redeemable preferred stock (Note 9) | — | 22.9 | ||||||
Commitments and contingencies (Note 10) | ||||||||
Common shareholder's equity: | ||||||||
Common stock, at par value of $0.01 per share | 0.4 | 0.4 | ||||||
Other paid-in capital | 810.6 | 803.7 | ||||||
Accumulated other comprehensive loss | (29.1 | ) | (28.7 | ) | ||||
Retained earnings / (Accumulated deficit) | (31.2 | ) | 437.3 | |||||
Total common shareholder's equity | 750.7 | 1,212.7 | ||||||
Total liabilities and shareholder's equity | $ | 2,460.8 | $ | 3,359.6 |
THE DAYTON POWER AND LIGHT COMPANY | ||||||||
CONDENSED STATEMENTS OF CASH FLOWS | ||||||||
Nine months ended September 30, | ||||||||
$ in millions | 2016 | 2015 | ||||||
Cash flows from operating activities: | ||||||||
Net income / (loss) | $ | (467.8 | ) | $ | 75.9 | |||
Adjustments to reconcile net income / (loss) to net cash from operating activities: | ||||||||
Depreciation and amortization | 95.2 | 103.5 | ||||||
Charge for early redemption of debt | 0.5 | 5.0 | ||||||
Deferred income taxes | (314.2 | ) | (14.2 | ) | ||||
Fixed-asset impairment | 857.1 | — | ||||||
Changes in certain assets and liabilities: | ||||||||
Accounts receivable | (11.0 | ) | 37.3 | |||||
Inventories | 29.4 | 3.0 | ||||||
Prepaid taxes | 2.7 | (0.4 | ) | |||||
Taxes applicable to subsequent years | 59.9 | 56.4 | ||||||
Deferred regulatory costs, net | 19.5 | 27.6 | ||||||
Accounts payable | (13.5 | ) | (20.0 | ) | ||||
Accrued taxes payable | (43.2 | ) | (29.1 | ) | ||||
Accrued interest payable | (3.3 | ) | (8.8 | ) | ||||
Pension, retiree and other benefits | (2.2 | ) | 1.0 | |||||
Other | 11.3 | 10.5 | ||||||
Net cash provided by operating activities | 220.4 | 247.7 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (98.3 | ) | (91.2 | ) | ||||
Purchase of renewable energy credits | (0.3 | ) | (0.6 | ) | ||||
Decrease in restricted cash | 5.5 | 3.2 | ||||||
Insurance proceeds | 5.6 | 4.3 | ||||||
Other investing activities, net | 0.9 | 0.4 | ||||||
Net cash used in investing activities | (86.6 | ) | (83.9 | ) | ||||
Cash flows from financing activities: | ||||||||
Dividends paid on common stock to parent | — | (50.0 | ) | |||||
Borrowings from revolving credit facilities | — | 50.0 | ||||||
Repayment of borrowings from revolving credit facilities | — | (40.0 | ) | |||||
Dividends paid on preferred stock | (0.7 | ) | (0.7 | ) | ||||
Issuance of long-term debt, net of discount | 442.8 | 200.0 | ||||||
Retirement of long-term debt | (445.3 | ) | (314.5 | ) | ||||
Payments of deferred financing costs | (8.0 | ) | (3.3 | ) | ||||
Issuance of short-term debt - related party | 5.0 | — | ||||||
Repayment of short-term debt - related party | (40.0 | ) | — | |||||
Other financing activities, net | (0.1 | ) | — | |||||
Net cash used in financing activities | (46.3 | ) | (158.5 | ) | ||||
Cash and cash equivalents: | ||||||||
Net change | 87.5 | 5.3 | ||||||
Balance at beginning of period | 5.4 | 5.4 | ||||||
Cash and cash equivalents at end of period | $ | 92.9 | $ | 10.7 | ||||
Supplemental cash flow information: | ||||||||
Interest paid, net of amounts capitalized | $ | 16.3 | $ | 26.8 | ||||
Income taxes paid, net | $ | 0.3 | $ | 0.8 | ||||
Non-cash financing and investing activities: | ||||||||
Accruals for capital expenditures | $ | 10.1 | $ | 12.6 | ||||
Equity contribution to settle liability | $ | 7.5 | — |
Accounting Standard | Description | Date of Adoption | Effect on the financial statements upon adoption |
New Accounting Standards Adopted | |||
2015-15, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements | Given the absence of authoritative guidance within ASU 2015-03, this standard clarifies that the SEC Staff would not object to an entity presenting debt issuance costs related to line-of-credit arrangements as an asset that is subsequently amortized ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. Transition method: retrospective. | January 1, 2016 | Deferred financing costs related to lines-of-credit of approximately $0.7 million recorded within Other deferred assets were not reclassified. |
2015-03, Interest - Imputation of Interest (Subtopic 835-30) | The standard simplifies the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the standard. Transition method: retrospective. | January 1, 2016 | Deferred financing costs of approximately $1.8 million previously classified within Other prepayments and current assets and $4.5 million previously classified within Other deferred assets were reclassified to reduce the related debt liabilities. |
2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis | The standard makes targeted amendments to the current consolidation guidance and ends the deferral granted to investment companies from applying the VIE guidance. The standard amends the evaluation of whether (1) fees paid to a decision-maker or service providers represent a variable interest, (2) a limited partnership or similar entity has the characteristics of a VIE and (3) a reporting entity is the primary beneficiary of a VIE. Transition method: retrospective. | January 1, 2016 | There were no changes to the consolidation conclusions. |
New Accounting Standards Issued But Not Yet Effective | |||
2016-17, Consolidation (Topic 810): Interest Held through Related Parties That Are under Common Control | This standard amends the evaluation of whether a reporting entity is the primary beneficiary of a VIE by amending how a reporting entity, that is a single decision maker of a VIE, treats indirect interests in that entity held through related parties that are under common control. Transition method: retrospectively. | January 1, 2017 Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our financial statements. |
2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory | This standard requires that an entity recognizes the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Transition method: modified retrospective method. | January 1, 2018 Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our financial statements. |
2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) | This standard provides specific guidance on how certain cash transactions are presented and classified in the statement of cash flows. Transition method: retrospective method | January 1, 2018. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our financial statements but do not anticipate a material impact. |
Accounting Standard | Description | Date of Adoption | Effect on the financial statements upon adoption |
2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments | This standard updates the impairment model for financial assets measured at amortized cost to an expected loss model rather than an incurred loss model. It also allows for the presentation of credit losses on available-for-sale debt securities as an allowance rather than a write down. Transition method: various. | January 1, 2020 Early adoption is permitted only as of January 1, 2019. | We are currently evaluating the impact of adopting the standard on our financial statements. |
2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting | The standard simplifies the following aspects of accounting for share-based payment awards: accounting for income taxes, classification of excess tax benefits on the statement of cash flows, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities and classification of employee taxes paid on statement of cash flows when an employer withholds shares for tax-withholding purposes. Transition method: Various. | January 1, 2017. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our financial statements. |
2016-06, Derivatives and Hedging (Topic 815) - Contingent Put and Call Options in Debt Instruments | This standard clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. When a call (put) option is contingently exercisable, an entity no longer has to assess whether the event that triggers the ability to exercise a call (put) option is related to interest rates or credit risks. Transition method: a modified retrospective basis to existing debt instruments as of the effective date. | January 1, 2017. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard, but do not anticipate a material impact on our financial statements. |
2016-05, Derivatives and Hedging (Topic 815) - Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships | The standard clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not require de-designation of that hedging relationship provided that all other hedge accounting criteria (including those in paragraphs 815-20-35-14 through 35-18) continue to be met. Transition method: prospective or a modified retrospective basis. | January 1, 2017. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard, but do not anticipate a material impact on our financial statements. |
2016-02, Leases (Topic 842) | The standard creates Topic 842, Leases which supersedes Topic 840, Leases, and introduces a lessee model that brings substantially all leases onto the balance sheet while retaining most of the principles of the existing lessor model in U.S. GAAP and aligning many of those principles with ASC 606, Revenue from Contracts with Customers. Transition method: modified retrospective approach with certain practical expedients. | January 1, 2019. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our financial statements. |
2016-01, Financial Instruments - Overall (Topic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities | The standard significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. Also, it amends certain disclosure requirements associated with the fair value of financial instruments. Transition: cumulative effect in Retained Earnings as of adoption or prospectively for equity investments without readily determinable fair value. | January 1, 2018. Limited early adoption permitted. | We are currently evaluating the impact of adopting the standard, but do not anticipate a material impact on our financial statements. |
2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory | The standard replaces the current lower of cost or market test with a lower of cost or net realizable value test. Transition method: prospectively. | January 1, 2017. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our financial statements. |
Accounting Standard | Description | Date of Adoption | Effect on the financial statements upon adoption |
2014-09, 2016-08, 2016-10, 2016-12 Revenue from Contracts with Customers (Topic 606) | The Revenue from Contracts with Customers standard provides a single and comprehensive revenue recognition model for all contracts with customers to improve comparability. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and timing revenue recognition. The standard requires an entity to recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The amendments to the standard provide further clarification on contract revenue recognition specifically related to the implementation of the principal versus agent evaluation, the identification of performance obligations, clarification on accounting for licenses of intellectual property, and allows for the election to account for shipping and handling activities performed after control of a good has been transferred to the customer as a fulfillment cost. Transition method: a full retrospective or modified retrospective approach. | January 1, 2018 (deferred by ASU No. 2015-14). Earlier application is permitted only as of January 1, 2017. | We are currently evaluating the impact of adopting the standard on our financial statements. |
September 30, | December 31, | |||||||
$ in millions | 2016 | 2015 | ||||||
Accounts receivable, net: | ||||||||
Unbilled revenue | $ | 29.4 | $ | 43.3 | ||||
Customer receivables | 79.2 | 54.1 | ||||||
Amounts due from partners in jointly owned plants | 12.8 | 16.0 | ||||||
Other | 16.1 | 6.9 | ||||||
Provision for uncollectible accounts | (1.2 | ) | (0.8 | ) | ||||
Total accounts receivable, net | $ | 136.3 | $ | 119.5 | ||||
Inventories, at average cost: | ||||||||
Fuel and limestone | $ | 42.0 | $ | 72.2 | ||||
Plant materials and supplies | 34.7 | 33.7 | ||||||
Other | 1.9 | 2.1 | ||||||
Total inventories, at average cost | $ | 78.6 | $ | 108.0 |
Details about Accumulated Other Comprehensive Income / (Loss) components | Affected line item in the Condensed Statements of Operations | Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||||
$ in millions | 2016 | 2015 | 2016 | 2015 | ||||||||||||||
Gains and losses on cash flow hedges (Note 5): | ||||||||||||||||||
Interest expense | $ | (0.3 | ) | $ | (0.3 | ) | $ | (0.9 | ) | $ | (0.9 | ) | ||||||
Revenue | (9.3 | ) | (3.8 | ) | (46.5 | ) | (7.0 | ) | ||||||||||
Purchased power | 1.0 | 0.9 | 9.1 | 2.7 | ||||||||||||||
Total before income taxes | (8.6 | ) | (3.2 | ) | (38.3 | ) | (5.2 | ) | ||||||||||
Tax expense | 3.0 | 1.2 | 13.5 | 1.9 | ||||||||||||||
Net of income taxes | (5.6 | ) | (2.0 | ) | (24.8 | ) | (3.3 | ) | ||||||||||
Amortization of defined benefit pension items (Note 8): | ||||||||||||||||||
Operation and maintenance | 1.1 | 1.4 | 3.3 | 4.2 | ||||||||||||||
Tax benefit | (0.4 | ) | (0.6 | ) | (1.6 | ) | (1.6 | ) | ||||||||||
Net of income taxes | 0.7 | 0.8 | 1.7 | 2.6 | ||||||||||||||
Total reclassifications for the period, net of income taxes | $ | (4.9 | ) | $ | (1.2 | ) | $ | (23.1 | ) | $ | (0.7 | ) |
$ in millions | Gains / (losses) on available-for-sale securities | Gains / (losses) on cash flow hedges | Change in unfunded pension obligation | Total | ||||||||||||
Balance January 1, 2016 | $ | 0.5 | $ | 11.2 | $ | (40.4 | ) | $ | (28.7 | ) | ||||||
Other comprehensive income before reclassifications | 0.2 | 22.5 | — | 22.7 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income / (loss) | — | (24.8 | ) | 1.7 | (23.1 | ) | ||||||||||
Net current period other comprehensive income / (loss) | 0.2 | (2.3 | ) | 1.7 | (0.4 | ) | ||||||||||
Balance September 30, 2016 | $ | 0.7 | $ | 8.9 | $ | (38.7 | ) | $ | (29.1 | ) |
September 30, 2016 | December 31, 2015 | |||||||||||||||
$ in millions | Cost | Fair Value | Cost | Fair Value | ||||||||||||
Assets | ||||||||||||||||
Money market funds | $ | 0.3 | $ | 0.3 | $ | 0.2 | $ | 0.2 | ||||||||
Equity securities | 2.4 | 3.4 | 3.0 | 3.8 | ||||||||||||
Debt securities | 4.5 | 4.5 | 4.4 | 4.3 | ||||||||||||
Hedge funds | 0.2 | 0.2 | 0.4 | 0.4 | ||||||||||||
Real estate | 0.3 | 0.3 | 0.3 | 0.3 | ||||||||||||
Total assets | $ | 7.7 | $ | 8.7 | $ | 8.3 | $ | 9.0 | ||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Liabilities | ||||||||||||||||
Debt | $ | 748.5 | $ | 763.5 | $ | 756.7 | $ | 764.2 |
• | Level 1 (quoted prices in active markets for identical assets or liabilities); |
• | Level 2 (observable inputs such as quoted prices for similar assets or liabilities or quoted prices in markets that are not active); or |
• | Level 3 (unobservable inputs). |
Assets and Liabilities at Fair Value | ||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
$ in millions | Fair value at September 30, 2016 | Based on Quoted Prices in Active Markets | Other Observable Inputs | Unobservable Inputs | ||||||||||||
Assets | ||||||||||||||||
Master Trust assets | ||||||||||||||||
Money market funds | $ | 0.3 | $ | 0.3 | $ | — | $ | — | ||||||||
Equity securities | 3.4 | — | 3.4 | — | ||||||||||||
Debt securities | 4.5 | — | 4.5 | — | ||||||||||||
Hedge funds | 0.2 | — | 0.2 | — | ||||||||||||
Real estate | 0.3 | — | 0.3 | — | ||||||||||||
Total Master Trust assets | 8.7 | 0.3 | 8.4 | — | ||||||||||||
Derivative assets | ||||||||||||||||
FTRs | 0.1 | — | — | 0.1 | ||||||||||||
Forward power contracts | 33.2 | — | 32.6 | 0.6 | ||||||||||||
Total derivative assets | 33.3 | — | 32.6 | 0.7 | ||||||||||||
Total assets | $ | 42.0 | $ | 0.3 | $ | 41.0 | $ | 0.7 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | ||||||||||||||||
Forward power contracts | $ | 31.0 | $ | — | $ | 26.0 | $ | 5.0 | ||||||||
Total derivative liabilities | 31.0 | — | 26.0 | 5.0 | ||||||||||||
Debt | 763.5 | — | 745.5 | 18.0 | ||||||||||||
Total liabilities | $ | 794.5 | $ | — | $ | 771.5 | $ | 23.0 |
Assets and Liabilities at Fair Value | ||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
$ in millions | Fair value at December 31, 2015 | Based on Quoted Prices in Active Markets | Other Observable Inputs | Unobservable Inputs | ||||||||||||
Assets | ||||||||||||||||
Master Trust assets | ||||||||||||||||
Money market funds | $ | 0.2 | $ | 0.2 | $ | — | $ | — | ||||||||
Equity securities | 3.8 | — | 3.8 | — | ||||||||||||
Debt securities | 4.3 | — | 4.3 | — | ||||||||||||
Hedge funds | 0.4 | — | 0.4 | — | ||||||||||||
Real estate | 0.3 | — | 0.3 | — | ||||||||||||
Total Master Trust assets | 9.0 | 0.2 | 8.8 | — | ||||||||||||
Derivative assets | ||||||||||||||||
FTRs | 0.2 | — | — | 0.2 | ||||||||||||
Forward power contracts | 30.6 | — | 30.6 | — | ||||||||||||
Total Derivative assets | 30.8 | — | 30.6 | 0.2 | ||||||||||||
Total assets | $ | 39.8 | $ | 0.2 | $ | 39.4 | $ | 0.2 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | ||||||||||||||||
FTRs | $ | 0.5 | $ | — | $ | — | $ | 0.5 | ||||||||
Forward power contracts | 27.0 | — | 23.9 | 3.1 | ||||||||||||
Total Derivative liabilities | 27.5 | — | 23.9 | 3.6 | ||||||||||||
Debt | 764.2 | — | 746.1 | 18.1 | ||||||||||||
Total liabilities | $ | 791.7 | $ | — | $ | 770.0 | $ | 21.7 |
• | Level 1 inputs are used for derivative contracts such as heating oil futures, natural gas futures and for money market accounts that are considered cash equivalents. The fair value is determined by reference to quoted market prices and other relevant information generated by market transactions. |
• | Level 2 inputs are used to value derivatives such as forward power contracts (which are traded on the OTC market but which are valued using prices on the NYMEX for similar contracts on the OTC market). Other Level 2 assets include open-ended mutual funds that are in the Master Trust, which are valued using observable prices based on the end of day net asset value per unit. |
• | Level 3 inputs such as FTRs are considered a Level 3 input because the monthly auctions are considered inactive. Other Level 3 inputs include the credit valuation adjustment on some of the forward power contracts and forward power contracts in less active markets. Our Level 3 inputs are immaterial to our derivative balances as a whole and as such no further disclosures are presented. |
Carrying | Fair Value | Gross | ||||||||||||||||||
$ in millions | Amount (b) | Level 1 | Level 2 | Level 3 | Loss | |||||||||||||||
Nine months ended September 30, 2016 | ||||||||||||||||||||
Long-lived assets (a) | ||||||||||||||||||||
DP&L (Stuart) | $ | 456.4 | $ | — | $ | — | $ | 164.4 | $ | 292.0 | ||||||||||
DP&L (Killen) | $ | 330.5 | $ | — | $ | — | $ | 84.3 | $ | 246.2 | ||||||||||
DP&L (Zimmer) | $ | 429.9 | $ | — | $ | — | $ | 111.0 | $ | 318.9 |
$ in millions | Fair value | Valuation technique | Unobservable input | Range (weighted average) | ||||||
Long-lived assets held and used: | ||||||||||
DP&L (Stuart) | $ | 164.4 | Discounted cash flow | Annual revenue growth | -9% to 10% (2%) | |||||
Annual pre-tax operating margin | -29% to 52% (5%) | |||||||||
Weighted-average cost of capital | 9% | |||||||||
DP&L (Killen) | $ | 84.3 | Discounted cash flow | Annual revenue growth | -11% to 13% (2%) | |||||
Annual pre-tax operating margin | -50% to 67% (6%) | |||||||||
Weighted-average cost of capital | 11% | |||||||||
DP&L (Zimmer) | $ | 111.0 | Discounted cash flow | Annual revenue growth | -14% to 13% (1%) | |||||
Annual pre-tax operating margin | -46% to 80% (4%) | |||||||||
Weighted-average cost of capital | 9% |
Commodity | Accounting Treatment (a) | Unit | Purchases (in thousands) | Sales (in thousands) | Net Purchases/ (Sales) (in thousands) | ||||||||
FTRs | Not designated | MWh | 2.8 | — | 2.8 | ||||||||
Natural gas futures | Not designated | Dths | — | (20.0 | ) | (20.0 | ) | ||||||
Forward power contracts | Designated | MWh | 607.6 | (10,699.9 | ) | (10,092.3 | ) | ||||||
Forward power contracts | Not designated | MWh | 2,866.9 | (2,419.8 | ) | 447.1 |
Commodity | Accounting Treatment (a) | Unit | Purchases (in thousands) | Sales (in thousands) | Net Purchases/ (Sales) (in thousands) | ||||||||
FTRs | Not designated | MWh | 10.2 | — | 10.2 | ||||||||
Forward power contracts | Designated | MWh | 1,676.7 | (7,795.8 | ) | (6,119.1 | ) | ||||||
Forward power contracts | Not designated | MWh | 5,049.9 | (1,665.7 | ) | 3,384.2 |
Three months ended | Three months ended | |||||||||||||||
September 30, 2016 | September 30, 2015 | |||||||||||||||
Interest | Interest | |||||||||||||||
$ in millions (net of tax) | Power | Rate Hedge | Power | Rate Hedge | ||||||||||||
Beginning accumulated derivative gains in AOCI | $ | 3.4 | $ | 1.6 | $ | 1.1 | $ | 2.2 | ||||||||
Net gains associated with current period hedging transactions | 9.5 | — | 7.8 | — | ||||||||||||
Net gains / (losses) reclassified to earnings | ||||||||||||||||
Interest expense | — | (0.2 | ) | — | (0.1 | ) | ||||||||||
Revenues | (6.0 | ) | — | (2.5 | ) | — | ||||||||||
Purchased power | 0.6 | — | 0.6 | — | ||||||||||||
Ending accumulated derivative gains in AOCI | $ | 7.5 | $ | 1.4 | $ | 7.0 | $ | 2.1 | ||||||||
Nine months ended | Nine months ended | |||||||||||||||
September 30, 2016 | September 30, 2015 | |||||||||||||||
Interest | Interest | |||||||||||||||
$ in millions (net of tax) | Power | Rate Hedge | Power | Rate Hedge | ||||||||||||
Beginning accumulated derivative gains in AOCI | $ | 9.2 | $ | 2.0 | $ | 0.2 | $ | 2.6 | ||||||||
Net gains associated with current period hedging transactions | 22.5 | — | 9.6 | — | ||||||||||||
Net gains / (losses) reclassified to earnings | ||||||||||||||||
Interest expense | — | (0.6 | ) | — | (0.5 | ) | ||||||||||
Revenues | (30.1 | ) | — | (4.5 | ) | — | ||||||||||
Purchased power | 5.9 | — | 1.7 | — | ||||||||||||
Ending accumulated derivative gains in AOCI | $ | 7.5 | $ | 1.4 | $ | 7.0 | $ | 2.1 | ||||||||
Portion expected to be reclassified to earnings in the next twelve months (a) | $ | — | $ | (0.7 | ) | |||||||||||
Maximum length of time that we are hedging our exposure to variability in future cash flows related to forecasted transactions (in months) | 15 | 0 |
(a) | The actual amounts that we reclassify from AOCI to earnings related to power can differ from the estimate above due to market price changes. |
For the three months ended September 30, 2016 | ||||||||||||||||
$ in millions | FTRs | Power | Natural Gas | Total | ||||||||||||
Change in unrealized gain / (loss) | $ | — | $ | 1.2 | $ | (0.3 | ) | $ | 0.9 | |||||||
Realized gain / (loss) | (0.1 | ) | (2.4 | ) | 0.2 | (2.3 | ) | |||||||||
Total | $ | (0.1 | ) | $ | (1.2 | ) | $ | (0.1 | ) | $ | (1.4 | ) | ||||
Recorded in Income Statement: gain / (loss) | ||||||||||||||||
Revenues | $ | — | $ | (10.4 | ) | $ | — | $ | (10.4 | ) | ||||||
Purchased power | (0.1 | ) | 9.2 | (0.1 | ) | 9.0 | ||||||||||
Total | $ | (0.1 | ) | $ | (1.2 | ) | $ | (0.1 | ) | $ | (1.4 | ) |
For the three months ended September 30, 2015 | ||||||||||||||||
$ in millions | Heating Oil | FTRs | Power | Total | ||||||||||||
Change in unrealized gain / (loss) | $ | 0.1 | $ | 0.1 | $ | (3.3 | ) | $ | (3.1 | ) | ||||||
Realized loss | (0.2 | ) | (0.1 | ) | (4.3 | ) | (4.6 | ) | ||||||||
Total | $ | (0.1 | ) | $ | — | $ | (7.6 | ) | $ | (7.7 | ) | |||||
Recorded in Income Statement: gain / (loss) | ||||||||||||||||
Revenues | $ | — | $ | — | $ | 3.4 | $ | 3.4 | ||||||||
Purchased power | — | — | (11.0 | ) | (11.0 | ) | ||||||||||
Fuel | (0.1 | ) | — | — | (0.1 | ) | ||||||||||
Total | $ | (0.1 | ) | $ | — | $ | (7.6 | ) | $ | (7.7 | ) |
For the nine months ended September 30, 2016 | ||||||||||||||||
$ in millions | FTRs | Power | Natural Gas | Total | ||||||||||||
Change in unrealized gain | $ | 0.4 | $ | 2.3 | $ | — | $ | 2.7 | ||||||||
Realized gain / (loss) | (0.4 | ) | (5.3 | ) | 0.7 | (5.0 | ) | |||||||||
Total | $ | — | $ | (3.0 | ) | $ | 0.7 | $ | (2.3 | ) | ||||||
Recorded in Income Statement: gain / (loss) | ||||||||||||||||
Revenues | $ | — | $ | (13.1 | ) | $ | — | $ | (13.1 | ) | ||||||
Purchased power | — | 10.1 | 0.7 | 10.8 | ||||||||||||
Total | $ | — | $ | (3.0 | ) | $ | 0.7 | $ | (2.3 | ) |
For the nine months ended September 30, 2015 | ||||||||||||||||||||
$ in millions | Heating Oil | FTRs | Power | Natural Gas | Total | |||||||||||||||
Change in unrealized gain / (loss) | $ | 0.4 | $ | 0.2 | $ | (5.0 | ) | 0.1 | $ | (4.3 | ) | |||||||||
Realized loss | (0.3 | ) | (0.1 | ) | (8.1 | ) | (0.1 | ) | (8.6 | ) | ||||||||||
Total | $ | 0.1 | $ | 0.1 | $ | (13.1 | ) | $ | — | $ | (12.9 | ) | ||||||||
Recorded in Balance Sheet: | ||||||||||||||||||||
Regulatory asset | $ | 0.1 | $ | — | $ | — | $ | — | $ | 0.1 | ||||||||||
Recorded in Income Statement: gain / (loss) | ||||||||||||||||||||
Purchased power | — | 0.1 | (21.9 | ) | — | (21.8 | ) | |||||||||||||
Fuel | — | — | 8.8 | — | 8.8 | |||||||||||||||
Total | $ | 0.1 | $ | 0.1 | $ | (13.1 | ) | $ | — | $ | (12.9 | ) |
Fair Values of Derivative Instruments | ||||||||||||||||||
at September 30, 2016 | ||||||||||||||||||
Gross Amounts Not Offset in the Condensed Balance Sheets | ||||||||||||||||||
$ in millions | Hedging Designation | Gross Fair Value as presented in the Condensed Balance Sheets | Financial Instruments with Same Counterparty in Offsetting Position | Cash Collateral | Net Balance Fair Value | |||||||||||||
Assets | ||||||||||||||||||
Short-term derivative positions (presented in Other prepayments and current assets) | ||||||||||||||||||
Forward power contracts | Designated | $ | 15.6 | $ | (13.3 | ) | $ | — | $ | 2.3 | ||||||||
Forward power contracts | Not designated | 8.8 | (7.7 | ) | — | 1.1 | ||||||||||||
FTRs | Not designated | 0.1 | — | — | 0.1 | |||||||||||||
Long-term derivative positions (presented in Other deferred assets) | ||||||||||||||||||
Forward power contracts | Designated | 7.4 | (1.1 | ) | — | 6.3 | ||||||||||||
Forward power contracts | Not designated | 1.4 | (0.7 | ) | — | 0.7 | ||||||||||||
Total assets | $ | 33.3 | $ | (22.8 | ) | $ | — | $ | 10.5 | |||||||||
Liabilities | ||||||||||||||||||
Short-term derivative positions (presented in Other current liabilities) | ||||||||||||||||||
Forward power contracts | Designated | $ | 16.1 | $ | (13.3 | ) | $ | (2.7 | ) | $ | 0.1 | |||||||
Forward power contracts | Not designated | 12.9 | (7.7 | ) | (2.4 | ) | 2.8 | |||||||||||
Long-term derivative positions (presented in Other deferred credits) | ||||||||||||||||||
Forward power contracts | Designated | 1.1 | (1.1 | ) | — | — | ||||||||||||
Forward power contracts | Not designated | 0.9 | (0.7 | ) | — | 0.2 | ||||||||||||
Total liabilities | $ | 31.0 | $ | (22.8 | ) | $ | (5.1 | ) | $ | 3.1 |
Fair Values of Derivative Instruments | ||||||||||||||||||
at December 31, 2015 | ||||||||||||||||||
Gross Amounts Not Offset in the Condensed Balance Sheets | ||||||||||||||||||
$ in millions | Hedging Designation | Gross Fair Value as presented in the Condensed Balance Sheets | Financial Instruments with Same Counterparty in Offsetting Position | Cash Collateral | Net Balance Fair Value | |||||||||||||
Assets | ||||||||||||||||||
Short-term derivative positions (presented in Other prepayments and current assets) | ||||||||||||||||||
Forward power contracts | Designated | $ | 16.2 | $ | (7.1 | ) | $ | — | $ | 9.1 | ||||||||
Forward power contracts | Not designated | 7.4 | (5.5 | ) | — | 1.9 | ||||||||||||
FTRs | Not designated | 0.2 | (0.2 | ) | — | — | ||||||||||||
Long-term derivative positions (presented in Other deferred assets) | ||||||||||||||||||
Forward power contracts | Designated | 3.0 | (2.4 | ) | — | 0.6 | ||||||||||||
Forward power contracts | Not designated | 4.0 | (2.7 | ) | — | 1.3 | ||||||||||||
Total assets | $ | 30.8 | $ | (17.9 | ) | $ | — | $ | 12.9 | |||||||||
Liabilities | ||||||||||||||||||
Short-term derivative positions (presented in Other current liabilities) | ||||||||||||||||||
Forward power contracts | Designated | $ | 7.1 | $ | (7.1 | ) | $ | — | $ | — | ||||||||
Forward power contracts | Not designated | 14.5 | (5.5 | ) | (8.0 | ) | 1.0 | |||||||||||
FTRs | Not designated | 0.5 | (0.2 | ) | — | 0.3 | ||||||||||||
Long-term derivative positions (presented in Other deferred credits) | ||||||||||||||||||
Forward power contracts | Designated | 2.7 | (2.4 | ) | — | 0.3 | ||||||||||||
Forward power contracts | Not designated | 2.7 | (2.7 | ) | — | — | ||||||||||||
Total liabilities | $ | 27.5 | $ | (17.9 | ) | $ | (8.0 | ) | $ | 1.6 |
Interest | September 30, | December 31, | ||||||||||
$ in millions | Rate | Maturity | 2016 | 2015 | ||||||||
Term loan - rates from 4.00% - 4.00% (a) | 2022 | $ | 445.0 | $ | — | |||||||
First mortgage bonds | 1.875% | 2016 | — | 445.0 | ||||||||
Pollution control series | 4.8% | 2036 | 100.0 | 100.0 | ||||||||
Pollution control series - rates from 1.29% - 1.36% (a) and 1.13% - 1.17% (b) | 2020 | 200.0 | 200.0 | |||||||||
U.S. Government note | 4.2% | 2061 | 18.0 | 18.1 | ||||||||
Unamortized deferred financing costs | (12.3 | ) | (6.2 | ) | ||||||||
Unamortized debt discount | (2.2 | ) | (0.2 | ) | ||||||||
Total long-term debt | 748.5 | 756.7 | ||||||||||
Less: current portion | (3.5 | ) | (443.1 | ) | ||||||||
Total | $ | 745.0 | $ | 313.6 |
Three months ended | Nine months ended | |||||||
September 30, | September 30, | |||||||
2016 | 2015 | 2016 | 2015 | |||||
DP&L | 39.6% | 4.9% | 36.7% | 24.8% |
Net Periodic Benefit Cost | Pension | |||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
$ in millions | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Service cost | $ | 1.4 | $ | 1.8 | $ | 4.2 | $ | 5.3 | ||||||||
Interest cost | 3.7 | 4.2 | 11.1 | 12.8 | ||||||||||||
Expected return on plan assets | (5.7 | ) | (5.6 | ) | (17.1 | ) | (16.8 | ) | ||||||||
Amortization of unrecognized: | ||||||||||||||||
Prior service cost | 0.8 | 0.9 | 2.3 | 2.5 | ||||||||||||
Actuarial loss | 1.8 | 2.4 | 5.4 | 7.2 | ||||||||||||
Net periodic benefit cost | $ | 2.0 | $ | 3.7 | $ | 5.9 | $ | 11.0 |
Net Periodic Benefit Cost | Postretirement | |||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
$ in millions | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Service cost | $ | — | $ | 0.1 | $ | 0.1 | $ | 0.1 | ||||||||
Interest cost | 0.1 | 0.1 | 0.4 | 0.5 | ||||||||||||
Expected return on plan assets | (0.1 | ) | (0.1 | ) | (0.1 | ) | (0.1 | ) | ||||||||
Amortization of unrecognized: | ||||||||||||||||
Prior service cost | 0.1 | 0.1 | 0.1 | 0.1 | ||||||||||||
Actuarial gain | (0.1 | ) | (0.2 | ) | (0.5 | ) | (0.5 | ) | ||||||||
Net periodic benefit cost | $ | — | $ | — | $ | — | $ | 0.1 |
$ in millions | Pension | Postretirement | ||||||
2016 | $ | 6.2 | $ | 0.4 | ||||
2017 | 25.2 | 1.6 | ||||||
2018 | 25.8 | 1.5 | ||||||
2019 | 26.3 | 1.4 | ||||||
2020 | 26.7 | 1.4 | ||||||
2021 - 2025 | 134.8 | 5.7 |
• | The federal CAA and state laws and regulations (including State Implementation Plans) which require compliance, obtaining permits and reporting as to air emissions; |
• | Litigation with federal and certain state governments and certain special interest groups regarding whether modifications to or maintenance of certain coal-fired generating stations require additional permitting or pollution control technology, or whether emissions from coal-fired generating stations cause or contribute to climate change; |
• | Rules and future rules issued by the USEPA and the Ohio EPA that require or will require substantial reductions in SO2, particulates, mercury, acid gases, NOx, and other air emissions. DP&L has installed emission control technology and is taking other measures to comply with required and anticipated reductions; |
• | Rules and future rules issued by the USEPA, the Ohio EPA or other authorities that require or will require reporting and reductions of GHGs; |
• | Rules and future rules issued by the USEPA associated with the federal Clean Water Act, which prohibits the discharge of pollutants into waters of the United States except pursuant to appropriate permits; and |
• | Solid and hazardous waste laws and regulations, which govern the management and disposal of certain waste. The majority of solid waste created from the combustion of coal and fossil fuels consists of fly ash and other coal combustion by-products. |
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
$ in millions | 2016 | 2015 | 2016 | 2015 | ||||||||||||
DP&L revenues: | ||||||||||||||||
Sales to DPLER (including MC Squared) (a) | $ | — | $ | 66.0 | $ | — | $ | 245.0 | ||||||||
DP&L Operation & Maintenance Expenses: | ||||||||||||||||
Premiums paid for insurance services provided by MVIC (b) | $ | (0.8 | ) | $ | (0.8 | ) | $ | (2.5 | ) | $ | (2.4 | ) | ||||
Expense recoveries for services provided to DPLER (c) | $ | — | $ | 0.6 | $ | — | $ | 1.8 | ||||||||
Transactions with the Service Company: | ||||||||||||||||
Charges for services provided | $ | 9.4 | $ | 7.6 | $ | 29.2 | $ | 24.3 | ||||||||
Charges to the Service Company | $ | 1.1 | $ | 1.1 | $ | 3.3 | $ | 5.0 | ||||||||
Transactions with other AES affiliates: | ||||||||||||||||
Charges / (credits) for health, welfare and benefit plans | $ | 3.8 | $ | 4.1 | $ | 5.5 | $ | 11.9 | ||||||||
Balances with related parties: | At September 30, 2016 | At December 31, 2015 | ||||||||||||||
Net payable to the Service Company | $ | (1.4 | ) | $ | (0.5 | ) | ||||||||||
Short-term loan with DPL (d) | $ | — | $ | 35.0 | ||||||||||||
Receivable from MVIC (b) | $ | 4.3 | $ | 2.8 |
(a) | DP&L sold power to DPLER and MC Squared to satisfy the electric requirements of their retail customers. The revenue dollars associated with sales to DPLER and MC Squared are recorded as wholesale revenues in DP&L’s Financial Statements. These agreements were terminated upon the sale of DPLER on January 1, 2016. |
(b) | MVIC, a wholly-owned captive insurance subsidiary of DPL, provides insurance coverage to DP&L and other DPL subsidiaries for workers’ compensation, general liability, property damages and directors’ and officers’ liability. These amounts represent insurance premiums paid by DP&L to MVIC. DP&L received insurance proceeds from MVIC of $0.2 million and $0.5 million for the three months ended September 30, 2016 and 2015, respectively, and $0.4 million and $4.3 million for the nine months ended September 30, 2016 and 2015, respectively. |
(c) | Prior to the sale of DPLER, in the normal course of business DP&L incurred and recorded expenses on behalf of DPLER. Such expenses included but were not limited to employee-related expenses, accounting, information technology, payroll, legal and other administration expenses. DP&L subsequently charged these expenses to DPLER at DP&L’s cost and credited the expense in which they were initially recorded. |
(d) | On December 31, 2015, DPL loaned $35.0 million to DP&L through an intercompany short-term loan at 2.67%. |
Three months ended | Three months ended | |||||||
September 30, 2016 | September 30, 2015 | |||||||
Electric Customers (a) | Sales (in millions of kWh) | Electric Customers (a) | Sales (in millions of kWh) | |||||
Supplied by DPLER while an affiliate | — | — | 112,726 | 991 | ||||
Supplied by non-affiliated CRES providers | 259,978 | 2,903 | 124,625 | 1,656 | ||||
Total in DP&L's service territory | 259,978 | 2,903 | 237,351 | 2,647 | ||||
Distribution customers/sales by DP&L in our service territory (b) | 517,607 | 3,970 | 515,372 | 3,646 | ||||
Nine months ended | Nine months ended | |||||||
September 30, 2016 | September 30, 2015 | |||||||
Electric Customers (a) | Sales (in millions of kWh) | Electric Customers (a) | Sales (in millions of kWh) | |||||
Supplied by DPLER while an affiliate | — | — | 112,726 | 3,094 | ||||
Supplied by non-affiliated CRES providers | 259,978 | 8,151 | 124,625 | 4,525 | ||||
Total in DP&L's service territory | 259,978 | 8,151 | 237,351 | 7,619 | ||||
Distribution customers/sales by DP&L in our service territory (b) | 517,607 | 11,126 | 515,372 | 10,659 |
(a) | Customers at the end of each period. |
(b) | The volumes supplied by DPLER, prior to its sale on January 1, 2016, represented approximately 27% and 29% of DP&L’s total distribution volumes during the three and nine months ended September 30, 2015, respectively. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
$ in millions | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues: | ||||||||||||||||
Retail | $ | 197.4 | $ | 203.2 | $ | 553.1 | $ | 606.3 | ||||||||
Wholesale | 138.3 | 142.2 | 368.0 | 471.7 | ||||||||||||
RTO revenues | 16.8 | 18.3 | 47.2 | 53.8 | ||||||||||||
RTO capacity revenues | 32.9 | 37.3 | 104.6 | 113.3 | ||||||||||||
Other revenues | 3.9 | 2.3 | 8.7 | 7.0 | ||||||||||||
Total revenues | 389.3 | 403.3 | 1,081.6 | 1,252.1 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Fuel costs | 80.4 | 72.1 | 210.9 | 203.2 | ||||||||||||
Gains from the sale of coal | (1.9 | ) | (0.5 | ) | (4.9 | ) | (0.7 | ) | ||||||||
Mark-to-market losses / (gains) | 0.4 | (0.2 | ) | — | (0.3 | ) | ||||||||||
Total fuel | 78.9 | 71.4 | 206.0 | 202.2 | ||||||||||||
Purchased power | 86.1 | 81.9 | 254.5 | 280.4 | ||||||||||||
RTO charges | 23.2 | 24.4 | 60.2 | 79.5 | ||||||||||||
RTO capacity charges | 3.6 | 35.4 | 18.5 | 94.0 | ||||||||||||
Mark-to-market losses / (gains) | (1.2 | ) | 3.2 | (2.7 | ) | 4.6 | ||||||||||
Total purchased power | 111.7 | 144.9 | 330.5 | 458.5 | ||||||||||||
Total cost of revenues | 190.6 | 216.3 | 536.5 | 660.7 | ||||||||||||
Gross margin (a) | $ | 198.7 | $ | 187.0 | $ | 545.1 | $ | 591.4 | ||||||||
Gross margin as a percentage of revenues | 51 | % | 46 | % | 50 | % | 47 | % | ||||||||
Operating income / (loss) | $ | 55.4 | $ | 35.5 | $ | (111.5 | ) | $ | 156.0 |
(a) | For purposes of discussing operating results, we present and discuss gross margins. This format is useful to investors because it allows analysis and comparability of operating trends and includes the same information that is used by management to make decisions regarding our financial performance. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Heating degree days (a) | 31 | 35 | 3,212 | 3,707 | ||||||||
Cooling degree days (a) | 874 | 637 | 1,175 | 1,048 |
(a) | Heating and cooling degree days are a measure of the relative heating or cooling required for a home or business. The heating degrees in a day are calculated as the difference of the average actual daily temperature below 65 degrees |
Three months ended | Nine months ended | |||||||
September 30, | September 30, | |||||||
$ in millions | 2016 v 2015 | 2016 v 2015 | ||||||
Retail | ||||||||
Rate | $ | (21.4 | ) | $ | (68.4 | ) | ||
Volume | 16.7 | 14.3 | ||||||
Other miscellaneous | (1.1 | ) | 0.9 | |||||
Total retail change | (5.8 | ) | (53.2 | ) | ||||
Wholesale | ||||||||
Rate | (20.5 | ) | (96.1 | ) | ||||
Volume | 16.6 | (7.6 | ) | |||||
Total wholesale change | (3.9 | ) | (103.7 | ) | ||||
RTO revenues and RTO capacity revenues | ||||||||
RTO revenues and RTO capacity revenues | (5.9 | ) | (15.3 | ) | ||||
Other | ||||||||
Other | 1.6 | 1.7 | ||||||
Total other revenue | 1.6 | 1.7 | ||||||
Total revenues change | $ | (14.0 | ) | $ | (170.5 | ) |
• | Retail revenues decreased $5.8 million primarily due to lower average DP&L retail rates. The decrease in retail rates was primarily driven by decreased retail revenue from SSO customers as the competitive auction rate, which represents 100% of DP&L SSO load in 2016 compared to 60% in 2015, is lower than the non-auction generation rate. Warmer summer weather in 2016 contributed to the volume increase as cooling degree days increased by 237. The aforementioned impacts resulted in an unfavorable $21.4 million retail price variance and a favorable $16.7 million retail volume variance. In addition, there was an unfavorable $1.1 million variance in other miscellaneous retail revenues. |
• | Wholesale revenues decreased $3.9 million primarily as a result of an unfavorable $20.5 million wholesale price variance and a favorable $16.6 million wholesale volume variance. The price decrease of $20.5 million was primarily due to lower market prices in 2016 and higher prices on sales to DPLER in 2015. This price decrease was partially offset by a favorable wholesale volume variance due to the fact that DP&L had excess generation available to be sold in the wholesale market in 2016 resulting from 100% of its SSO load being served through the competitive bid process compared to 60% during 2015. In addition, there was a 10.2% increase in internal generation from DP&L's co-owned and operated plants in 2016 compared to the |
• | RTO capacity and other revenues, consisting primarily of compensation for use of DP&L’s transmission assets, regulation services, reactive supply and operating reserves, and capacity payments under the RPM construct, decreased $5.9 million compared to the prior year. This decrease was the result of a $1.5 million decrease in RTO transmission and congestion revenue and a $4.4 million decrease in revenue realized from the PJM capacity auction due to lower capacity cleared in the auction. The capacity prices that became effective in June 2016 were $59/MW-day under the base RPM auction and $134/MW-day for the transitional CP auction, compared to $136/MW-day in June 2015. |
• | Retail revenues decreased $53.2 million primarily due to lower average DP&L retail rates. The decrease in retail rates was primarily driven by decreased retail revenue from SSO customers as the competitive auction rate, which represents 100% of DP&L SSO load in 2016 compared to 60% in 2015, is lower than the non-auction generation rate. Warmer weather in 2016 contributed to the volume increase as cooling degree days increased by 127 along with increased sales to commercial and industrial customers. The aforementioned impacts resulted in an unfavorable $68.4 million retail price variance and a favorable $14.3 million retail volume variance. In addition, there was a favorable other miscellaneous variance of $0.9 million. |
• | Wholesale revenues decreased $103.7 million primarily as a result of an unfavorable $96.1 million wholesale price variance and an unfavorable $7.6 million wholesale volume variance. The price decrease of $96.1 million was primarily due to lower market prices in 2016 and higher prices on sales to DPLER in 2015. Although DP&L had excess generation available to be sold in the wholesale market in 2016 resulting from 100% of its SSO load being served through the competitive bid process compared to 60% during 2015, DPL had a decrease in volume due to the sale of DPLER, as DP&L previously had full requirements sales to DPLER in 2015. These sales were previously eliminated in consolidation prior to DPLER being reported as a discontinued operation. |
• | RTO capacity and other revenues, consisting primarily of compensation for use of DP&L’s transmission assets, regulation services, reactive supply and operating reserves, and capacity payments under the RPM construct, decreased $15.3 million compared to the prior year. This decrease was the result of a $6.6 million decrease in RTO transmission and congestion revenue, as 2015 congestion revenue charges were higher due to the fact that the winter weather was milder in 2016 than 2015. There was also an $8.7 million decrease in revenue realized from the PJM capacity auction in 2016 due to plant outages in the first quarter and lower capacity cleared in the auction. The capacity prices that became effective in June 2016 were $59/MW-day under the base RPM auction and $134/MW-day for the transitional CP auction, compared to $136/MW-day in June 2015 and $126/MW-day in June 2014. |
• | Net fuel costs, which include coal, gas, oil and emission allowance costs, increased $7.5 million compared to the same period in the prior year primarily due to a 15.7% increase in internal generation, partially offset by a 3.7% decrease in average fuel cost per MWh. |
• | Net purchased power decreased $33.2 million compared to the same period in the prior year. This decrease was driven by the following factors: |
◦ | Purchased power increased $4.2 million compared to the same period in the prior year primarily due to an unfavorable price variance of $10.5 million driven by prices in the competitive bid process. This unfavorable price variance was partially offset by a $6.3 million volume decrease |
◦ | RTO charges decreased $1.2 million compared to the same period in the prior year primarily as a result of no longer having a DP&L retail load obligation as a result of 100% SSO sales being sourced through the competitive auction. The remaining charges primarily relate to serving the loads of other parties through their competitive bid process. RTO charges are incurred by DP&L as a member of PJM and primarily include costs associated with load obligations for retail customers. |
◦ | RTO capacity charges decreased $31.8 million compared to the same period in the prior year primarily due to DP&L no longer having a retail load requirement in 2016, resulting from the SSO load being 100% sourced through competitive bid in 2016 as opposed to 60% in 2015 and resulting from the fact that DP&L no longer provides power to DPLER in 2016. The remaining charges primarily relate to serving the load of other parties through their competitive bid process. As noted in the revenue section above, RTO capacity prices are set through PJM's annual auction. |
◦ | Mark-to-market losses decreased $4.4 million compared to the same period in the prior year primarily due to less significant decreases in power prices in the three month period ended September 30, 2016, causing lower losses on derivative forward power purchase contracts. |
• | Net fuel costs, which include coal, gas, oil and emission allowance costs, increased $3.8 million compared to the same period in the prior year primarily due to a 5.5% increase in internal generation, partially offset by a 1.7% decrease in average fuel cost per MWh. |
• | Net purchased power decreased $128.0 million compared to the same period in the prior year. This decrease was driven by the following factors: |
◦ | Purchased power decreased $25.9 million compared to the same period in the prior year primarily due to a $51.2 million volume decrease as DP&L no longer purchases power to source DPLER customers due to the sale of DPLER on January 1, 2016. This was partially offset by increased purchases as DP&L now sources 100% of SSO load through the competitive bid process in 2016 as opposed to 60% in 2015. DPL purchases power for the SSO load sourced through the competitive bid process and to serve auction load requirements in service territories other than DP&L's. The decrease in volume was offset by an unfavorable price variance of $25.3 million driven by higher prices in the competitive bid process. |
◦ | RTO charges decreased $19.3 million compared to the same period in the prior year primarily as a result of no longer having a DP&L retail load obligation as a result of 100% SSO sales being sourced through the competitive auction. The remaining charges primarily relate to serving the loads of other parties through their competitive bid process. RTO charges are incurred by DP&L as a member of PJM and primarily include costs associated with load obligations for retail customers. |
◦ | RTO capacity charges decreased $75.5 million compared to the same period in the prior year primarily due to DP&L no longer having a retail load requirement in 2016, resulting from the SSO load being 100% sourced through competitive bid in 2016 as opposed to 60% in 2015 and resulting from the fact that DP&L no longer provides power to DPLER in 2016. The remaining charges primarily relate to serving the load of other parties through their competitive bid process. As noted in the revenue section above, RTO capacity prices are set by an annual auction. |
◦ | Mark-to-market losses decreased $7.3 million compared to the same period in the prior year due to less significant decreases in power prices in the nine month period ended September 30, 2016, causing lower losses on derivative forward power purchase contracts. |
Three months ended | Nine months ended | |||||||
September 30, | September 30, | |||||||
$ in millions | 2016 v 2015 | 2016 v 2015 | ||||||
Deferred storm costs (a) | $ | (4.4 | ) | $ | (13.1 | ) | ||
Generating facilities operating and maintenance expenses | (2.0 | ) | (8.1 | ) | ||||
Group insurance / Long-term disability | 0.9 | (4.4 | ) | |||||
Reversal of Economic Development Fund accrual | (1.7 | ) | (1.7 | ) | ||||
Retirement benefits | (1.2 | ) | (0.7 | ) | ||||
Alternative energy and maintenance expenses (a) | 4.9 | 12.6 | ||||||
Low-income payment program (a) | 1.9 | 4.9 | ||||||
Maintenance of overhead transmission and distribution lines | (0.9 | ) | 1.1 | |||||
Other, net | (1.8 | ) | (0.8 | ) | ||||
Total change in operation and maintenance expense | $ | (4.3 | ) | $ | (10.2 | ) |
(a) | There is a corresponding offset in Revenues associated with these programs. |
• | decreased storm costs, which were recognized in 2015 as they were recovered through customer rates; |
• | decreased maintenance expenses at our generating facilities; |
• | decreased expenses due to the reversal of the Economic Development Fund expense, resulting from the withdrawal of ESP 2; |
• | decreased retirement benefits; and |
• | decreased maintenance of overhead transmission and distribution lines. |
• | increased expenses related to alternative energy and energy efficiency programs, which have a corresponding offset in Revenues associated with these programs; |
• | increased expenses for the low-income payment program, which is funded by the USF revenue rate rider; and |
• | increased group insurance/long-term disability expenses. |
• | decreased storm costs, which were recognized in 2015 as they were recovered through customer rates; |
• | decreased maintenance expenses at our generating facilities; |
• | decreased group insurance/long-term disability expenses associated with participation in the AES self-insurance plan; |
• | decreased expenses due to the reversal of the Economic Development Fund expense, resulting from the withdrawal of ESP 2; and |
• | decreased retirement benefits. |
• | increased expenses related to alternative energy and energy efficiency programs, which have a corresponding offset in Revenues associated with these programs; |
• | increased expenses for the low-income payment program, which is funded by the USF revenue rate rider; and |
• | increased maintenance of overhead transmission and distribution lines, due to storms. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
$ in millions | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues: | ||||||||||||||||
Retail | $ | 197.7 | $ | 203.6 | $ | 554.1 | $ | 607.5 | ||||||||
Wholesale | 127.9 | 138.9 | 347.2 | 451.4 | ||||||||||||
RTO revenues | 15.2 | 16.4 | 43.9 | 50.3 | ||||||||||||
RTO capacity revenues | 27.6 | 30.3 | 86.2 | 93.4 | ||||||||||||
Other mark-to-market losses | — | — | (0.1 | ) | — | |||||||||||
Total revenues | 368.4 | 389.2 | 1,031.3 | 1,202.6 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Fuel costs | 72.5 | 69.7 | 194.4 | 189.9 | ||||||||||||
Gains from the sale of coal | (1.9 | ) | (0.5 | ) | (4.9 | ) | (0.7 | ) | ||||||||
Mark-to-market losses / (gains) | 0.4 | (0.2 | ) | — | (0.3 | ) | ||||||||||
Total fuel | 71.0 | 69.0 | 189.5 | 188.9 | ||||||||||||
Purchased power | 85.3 | 82.1 | 254.2 | 280.5 | ||||||||||||
RTO charges | 22.7 | 24.0 | 59.1 | 75.8 | ||||||||||||
RTO capacity charges | 3.3 | 33.4 | 17.4 | 91.4 | ||||||||||||
Mark-to-market losses / (gains) | (1.3 | ) | 3.0 | (2.7 | ) | 4.6 | ||||||||||
Total purchased power | 110.0 | 142.5 | 328.0 | 452.3 | ||||||||||||
Total cost of revenues | 181.0 | 211.5 | 517.5 | 641.2 | ||||||||||||
Gross margin (a) | $ | 187.4 | $ | 177.7 | $ | 513.8 | $ | 561.4 | ||||||||
Gross margin as a percentage of revenues | 51 | % | 46 | % | 50 | % | 47 | % | ||||||||
Operating income / (loss) | $ | 56.6 | $ | 28.5 | $ | (721.8 | ) | $ | 130.9 |
(a) | For purposes of discussing operating results, we present and discuss gross margins. This format is useful to investors because it allows analysis and comparability of operating trends and includes the same information used by management to make decisions regarding our financial performance. |
Three months ended | Nine months ended | |||||||
September 30, | September 30, | |||||||
$ in millions | 2016 v 2015 | 2016 v 2015 | ||||||
Retail | ||||||||
Rate | $ | (21.6 | ) | $ | (69.1 | ) | ||
Volume | 16.5 | 13.6 | ||||||
Other miscellaneous | (0.8 | ) | 2.1 | |||||
Total retail change | (5.9 | ) | (53.4 | ) | ||||
Wholesale | ||||||||
Rate | (20.3 | ) | (84.4 | ) | ||||
Volume | 9.3 | (19.8 | ) | |||||
Total wholesale change | (11.0 | ) | (104.2 | ) | ||||
RTO revenues and RTO capacity revenues | ||||||||
RTO revenues and RTO capacity revenues | (3.9 | ) | (13.6 | ) | ||||
Other | ||||||||
Unrealized MTM | — | (0.1 | ) | |||||
Total revenues change | $ | (20.8 | ) | $ | (171.3 | ) |
• | Retail revenues decreased $5.9 million primarily due to lower average retail rates. The decrease in retail rates is primarily driven by decreased retail revenue from SSO customers as the competitive auction rate, which represents 100% of DP&L SSO load in 2016 as compared to 60% in 2015, is lower than our non-auction generation rate. Warmer summer weather in 2016 contributed to the volume increase as cooling degree days increased by 237. The aforementioned impacts resulted in an unfavorable $21.6 million retail price variance and a favorable $16.5 million retail volume variance. There was also an unfavorable other miscellaneous variance of $0.8 million. |
• | Wholesale revenues decreased $11.0 million primarily as a result of an unfavorable $20.3 million wholesale price variance and a favorable $9.3 million wholesale volume variance. The price decrease of $20.3 million was primarily due to lower market prices in 2016 and higher prices on sales to DPLER in 2015. This price decrease was partially offset by a favorable wholesale volume variance due to the fact that DP&L had excess generation available to be sold in the wholesale market in 2016 resulting from 100% of its SSO load being served through the competitive bid process compared to 60% during 2015. In addition, there was a 10.2% increase in internal generation from DP&L's co-owned and operated plants in 2016 compared to the prior year. This favorable wholesale volume variance was partially offset by a decrease in volume due to the contract termination with DPLER, as DP&L previously had full requirements sales to DPLER in 2015. |
• | RTO capacity and other revenues, consisting primarily of compensation for use of DP&L’s transmission assets, regulation services, reactive supply and operating reserves, and capacity payments under the RPM construct, decreased $3.9 million. This decrease was primarily the result of a $1.2 million decrease in RTO transmission and congestion revenue and a $2.7 million decrease in revenue realized from the PJM capacity auction due to lower capacity cleared in the auction. The capacity prices that became effective in June 2016 were $59/MW-day under the base RPM auction and $134/MW-day for the transitional CP auction, compared to $136/MW-day in June 2015. |
• | Retail revenues decreased $53.4 million primarily due to lower average retail rates. The decrease in retail rates is primarily driven by decreased retail revenue from SSO customers as the competitive auction rate, which represents 100% of DP&L SSO load in 2016 as compared to 60% in 2015, is lower than our non-auction generation rate. Warmer weather in 2016 contributed to the volume increase as cooling degree days increased by 127 along with increased sales to commercial and industrial customers. The aforementioned impacts resulted in an unfavorable $69.1 million retail price variance and a favorable $13.6 million retail volume variance. In addition, there was a favorable other miscellaneous variance of $2.1 million. |
• | Wholesale revenues decreased $104.2 million primarily as a result of an unfavorable $84.4 million wholesale price variance and an unfavorable $19.8 million wholesale volume variance. The price decrease of $84.4 million was primarily due to lower market prices in 2016 and higher prices on sales to DPLER in 2015. Although DP&L had excess generation available to be sold in the wholesale market in 2016 resulting from 100% of its SSO load being served through the competitive bid process compared to 60% during 2015, DP&L had a decrease in volume due to the contract termination with DPLER, as DP&L previously had full requirements sales to DPLER in 2015. |
• | RTO capacity and other revenues, consisting primarily of compensation for use of DP&L’s transmission assets, regulation services, reactive supply and operating reserves, and capacity payments under the RPM construct, decreased $13.6 million. This decrease was the result of a $6.4 million decrease in RTO transmission and congestion revenue, as 2015 congestion revenue charges were higher due to the fact that the winter weather was milder in 2016 than 2015. There was also a $7.2 million decrease in revenue realized from the PJM capacity auction in 2016 due to plant outages in the first quarter and lower capacity cleared in the auction. The capacity prices that became effective in June 2016 were $59/MW-day under the base RPM auction and $134/MW-day for the transitional CP auction, compared to $136/MW-day in June 2015 and $126/MW-day in June 2014. |
• | Net fuel costs, which include coal, gas, oil and emission allowance costs, increased $2.0 million primarily due to a 10.2% increase in internal generation, partially offset by a 5.5% decrease in average fuel cost per MWh. |
• | Net purchased power decreased $32.5 million compared to the prior year. This decrease was driven by the following factors: |
◦ | Purchased power increased $3.2 million compared to the same period in the prior year primarily due to a $9.9 million price increase driven by higher prices in the competitive bid process. This price increase was partially offset by a volume decrease of $6.7 million. The volume decrease was primarily attributable to the fact that DP&L no longer purchases power to source DPLER customers due to the DPLER contract termination associated with the sale of DPLER by DPL on January 1, 2016. The volume decrease due to the contract termination was partially offset by increased purchases as DP&L now sources 100% of SSO load through the competitive bid process in 2016 as opposed to 60% in 2015. DP&L purchases power for the SSO load sourced through the competitive bid process and to serve auction load requirements in service territories other than DP&L's. |
◦ | RTO charges decreased $1.3 million compared to the same period in the prior year primarily as a result of no longer having a DP&L retail load obligation as a result of 100% SSO sales being sourced through the competitive auction. The remaining charges primarily relate to serving the loads of other parties through their competitive bid process. RTO charges are incurred as a member of PJM and primarily include costs associated with load obligations for retail customers. |
◦ | RTO capacity charges decreased $30.1 million compared to the same period in the prior year primarily due to DP&L no longer having a retail load requirement in 2016, resulting from the SSO load being 100% sourced through competitive bid in 2016 as opposed to 60% in 2015 and resulting from the fact that DP&L no longer provides power to DPLER in 2016. The remaining charges primarily relate to serving the load of other parties through their competitive bid process. As noted in the revenue section above, RTO capacity prices are set by an annual auction. |
◦ | Mark-to-market losses decreased $4.3 million compared to the same period in the prior year due to less significant decreases in power prices in the three month period ended September 30, 2016, causing lower losses on derivative forward power purchase contracts. |
• | Net fuel costs, which include coal, gas, oil and emission allowance costs, increased $0.6 million, compared to the same period in the prior year primarily due to a 2.4% increase in internal generation, partially offset by $4.2 million of increased gains from coal sales. |
• | Net purchased power decreased $124.3 million compared to the prior year. This decrease was driven by the following factors: |
◦ | Purchased power decreased $26.3 million compared to the same period in the prior year primarily due to a $51.5 million volume decrease largely attributable to the fact that DP&L no longer purchases power to source DPLER customers due to the DPLER contract termination associated with the sale of DPLER by DPL on January 1, 2016. The decrease in volume due to the sale of DPLER was partially offset by increased purchases as DP&L now sources 100% of SSO load through the competitive bid process in 2016 as opposed to 60% in 2015. DP&L purchases power for the SSO load sourced through the competitive bid process and to serve auction load requirements in service territories other than DP&L's. The decrease in volume was also partially offset by an unfavorable price variance of $25.2 million driven by prices in the competitive bid process. |
◦ | RTO charges decreased $16.7 million compared to the same period in the prior year primarily as a result of no longer having a DP&L retail load obligation as a result of 100% SSO sales being sourced through the competitive auction. The remaining charges primarily relate to serving the loads of other parties through their competitive bid process. RTO charges are incurred as a member of PJM and primarily include costs associated with load obligations for retail customers. |
◦ | RTO capacity charges decreased $74.0 million compared to the same period in the prior year primarily due to DP&L no longer having a retail load requirement in 2016, resulting from the SSO load being 100% sourced through competitive bid in 2016 as opposed to 60% in 2015 and resulting from the fact that DP&L no longer provides power to DPLER in 2016. The remaining charges primarily relate to serving the load of other parties through their competitive bid process. As noted in the revenue section above, RTO capacity prices are set by an annual auction. |
◦ | Mark-to-market losses decreased $7.3 million compared to the same period in the prior year due to less significant decreases in power prices in the nine month period ended September 30, 2016, causing lower losses on derivative forward power purchase contracts. |
Three months ended | Nine months ended | |||||||
September 30, | September 30, | |||||||
$ in millions | 2016 v 2015 | 2016 v 2015 | ||||||
Deferred storm costs (a) | $ | (4.4 | ) | $ | (13.1 | ) | ||
Generating facilities operating and maintenance expenses | (3.1 | ) | (11.5 | ) | ||||
Group insurance / Long-term disability | 1.1 | (3.9 | ) | |||||
Insurance recoveries | (3.4 | ) | (3.1 | ) | ||||
Reversal of Economic Development Fund accrual | (1.7 | ) | (1.7 | ) | ||||
Retirement benefits | (1.4 | ) | (1.3 | ) | ||||
Alternative energy and maintenance expenses (a) | 4.9 | 12.6 | ||||||
Low-income payment program (a) | 1.9 | 4.9 | ||||||
Maintenance of overhead transmission and distribution lines | (0.9 | ) | 1.1 | |||||
Other, net | (1.0 | ) | 2.4 | |||||
Total change in operation and maintenance expense | $ | (8.0 | ) | $ | (13.6 | ) |
(a) | There is a corresponding offset in Revenues associated with these programs. |
• | decreased storm costs, which were recognized in 2015 as they were recovered through customer rates; |
• | decreased maintenance expenses at our generating facilities; |
• | insurance recoveries from MVIC; |
• | decreased expenses due to the reversal of the Economic Development Fund expense, resulting from the withdrawal of ESP 2; |
• | decreased retirement benefit costs; and |
• | decreased maintenance of overhead transmission and distribution lines. |
• | increased expenses related to alternative energy and energy efficiency programs, which have a corresponding offset in Revenues associated with these programs; |
• | increased expenses for the low-income payment program, which is funded by the USF revenue rate rider; and |
• | increased group insurance/long-term disability expenses; |
• | decreased storm costs, which were recognized in 2015 as they were recovered through customer rates; |
• | decreased maintenance expenses at our generating facilities; |
• | decreased group insurance/long-term disability expenses due to the resolution of uncertainties associated with our participation in the AES self-insurance plan in the second quarter of 2016; |
• | insurance recoveries from MVIC; |
• | decreased expenses due to the reversal of the Economic Development Fund expense, resulting from the withdrawal of ESP 2; and |
• | decreased retirement benefit costs. |
• | increased expenses related to alternative energy and energy efficiency programs, which have a corresponding offset in Revenues associated with these programs; |
• | increased expenses for the low-income payment program, which is funded by the USF revenue rate rider; and |
• | increased maintenance of overhead transmission and distribution lines, due to storms. |
$ in millions | Type | Maturity | Commitment | Amounts available as of filing date | ||||||||
DP&L | Revolving | July 2020 | $ | 175.0 | $ | 158.6 | ||||||
DPL | Revolving | July 2020 | 205.0 | 203.2 | ||||||||
$ | 380.0 | $ | 361.8 |
DPL | DP&L | Outlook | Effective or Affirmed | |||||
Fitch Ratings | BB(a) / BB-(b) | BBB (c) | Negative | July 2016 | ||||
Moody's Investors Service, Inc. | Ba3 (b) | Baa2 (c) | Negative | August 2016 | ||||
Standard & Poor's Financial Services LLC | BB (b) | BBB- (c) | Negative | June 2016 |
DPL | DP&L | Outlook | Effective or Affirmed | |||||
Fitch Ratings | B+ | BB+ | Negative | July 2016 | ||||
Moody's Investors Service, Inc. | Ba3 | Baa3 | Negative | August 2016 | ||||
Standard & Poor's Financial Services LLC | BB | BB | Negative | June 2016 |
(a) | Rating relates to DPL’s Senior secured debt. |
(b) | Rating relates to DPL's Senior unsecured debt. |
(c) | Rating relates to DP&L’s Senior secured debt. |
DPL | Nine months ended | |||||
September 30, | ||||||
2016 | 2015 | |||||
Percent of electric revenues from wholesale market | 34 | % | 38 | % | ||
DP&L | Nine months ended | |||||
September 30, | ||||||
2016 | 2015 | |||||
Percent of electric revenues from wholesale market | 34 | % | 38 | % |
$ in millions | DPL | DP&L | ||||||
Effect of 10% change in price per MWh | $ | 32.2 | $ | 30.7 |
PJM Delivery Year | ||||||||||||||||||||
($/MW-day) | 2015/16 | 2016/17 | 2017/18 | 2018/19 | 2019/20 | |||||||||||||||
Capacity clearing price | $ | 136 | $ | 134 | $ | 152 | $ | 165 | $ | 100 |
Calendar Year | ||||||||||||||||||||
($/MW-day) | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||
Computed average capacity price | $ | 132 | $ | 135 | $ | 145 | $ | 159 | $ | 127 |
$ in millions | DPL | DP&L | ||||||
Effect of $10/MW-day change in capacity auction pricing | $ | 6.2 | $ | 5.1 |
$ in millions | DPL | DP&L | ||||||
Effect of 10% change in fuel and purchased power | $ | 39.7 | $ | 40.1 |
DPL | ||||||||||||||||||||||||||||||||
Principal payments due | At September 30, 2016 | |||||||||||||||||||||||||||||||
during the twelve months ending | ||||||||||||||||||||||||||||||||
September 30, | Principal | Fair | ||||||||||||||||||||||||||||||
$ in millions | 2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | Amount | Value | ||||||||||||||||||||||||
Variable-rate debt | $ | 22.1 | $ | 29.5 | $ | 29.5 | $ | 260.7 | $ | 4.5 | $ | 423.7 | $ | 770.0 | $ | 770.0 | ||||||||||||||||
Average interest rate (a) | 3.0% | 3.0% | 3.0% | 1.7% | 4.0% | 4.0% | ||||||||||||||||||||||||||
Fixed-rate debt | $ | 57.1 | $ | 0.1 | $ | 0.2 | $ | 200.2 | $ | 0.2 | $ | 912.8 | 1,170.6 | 1,199.4 | ||||||||||||||||||
Average interest rate | 6.5% | 4.2% | 4.2% | 6.7% | 4.2% | 6.9% | ||||||||||||||||||||||||||
Total | $ | 1,940.6 | $ | 1,969.4 |
(a) | Based on rates in effect at September 30, 2016 |
DP&L | ||||||||||||||||||||||||||||||||
Principal payments due | At September 30, 2016 | |||||||||||||||||||||||||||||||
during the twelve months ending | ||||||||||||||||||||||||||||||||
September 30, | Principal | Fair | ||||||||||||||||||||||||||||||
$ in millions | 2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | Amount | Value | ||||||||||||||||||||||||
Variable-rate debt | $ | 3.3 | $ | 4.5 | $ | 4.5 | $ | 204.5 | $ | 4.5 | $ | 423.7 | $ | 645.0 | $ | 645.0 | ||||||||||||||||
Average interest rate (a) | 4.0% | 4.0% | 4.0% | 1.4% | 4.0% | 4.0% | ||||||||||||||||||||||||||
Fixed-rate debt | $ | 0.1 | $ | 0.1 | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 117.2 | 118.0 | 118.5 | ||||||||||||||||||
Average interest rate | 4.2% | 4.2% | 4.2% | 4.2% | 4.2% | 4.7% | ||||||||||||||||||||||||||
Total | $ | 763.0 | $ | 763.5 |
(a) | Based on rates in effect at September 30, 2016 |
DPL | At September 30, 2016 | One percent | ||||||||||
Principal | Fair | interest rate | ||||||||||
$ in millions | Amount | Value | risk | |||||||||
Long-term debt | ||||||||||||
Variable-rate debt | $ | 770.0 | $ | 770.0 | $ | 7.7 | ||||||
Fixed-rate debt | 1,170.6 | $ | 1,199.4 | 12.0 | ||||||||
Total | $ | 1,940.6 | $ | 1,969.4 | $ | 19.7 |
DP&L | At September 30, 2016 | One percent | ||||||||||
Principal | Fair | interest rate | ||||||||||
$ in millions | Amount | Value | risk | |||||||||
Long-term debt | ||||||||||||
Variable-rate debt | $ | 645.0 | $ | 645.0 | $ | 6.5 | ||||||
Fixed-rate debt | 118.0 | 118.5 | 1.2 | |||||||||
Total | $ | 763.0 | $ | 763.5 | $ | 7.7 |
ELECTRIC SALES AND CUSTOMERS (a) | |||||||||||||
DPL (b) | DP&L (c) | DPLER (d) | |||||||||||
Three months ended | Three months ended | Three months ended | |||||||||||
September 30, | September 30, | September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||
Electric Sales (millions of kWh) | 4,810 | 3,949 | 4,586 | 4,297 | — | 1,391 | |||||||
Billed electric customers (end of period) | 517,607 | 515,372 | 517,607 | 515,372 | — | 128,405 | |||||||
Nine months ended | Nine months ended | Nine months ended | |||||||||||
September 30, | September 30, | September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||
Electric Sales (millions of kWh) | 12,753 | 11,312 | 12,242 | 12,735 | — | 4,762 | |||||||
Billed electric customers (end of period) | 517,607 | 515,372 | 517,607 | 515,372 | — | 128,405 |
(a) | For 2016, this table contains wholesale sales in PJM market and to other utilities. |
(b) | Electric sales excludes 400 million kWh and 1,668 million kWh relating to DPLER during the three and nine months ended September 30, 2015, respectively. Billed electric customers excludes DPLER customers outside of the DP&L service territory of 15,679 customers for the quarter ended September 30, 2015. |
(c) | Included within this column are 991 million kWh and 3,094 million kWh of power that DP&L sold to DPLER within the DP&L service territory for the three and nine months ended September 30, 2015, respectively. |
(d) | For DPLER, in 2015, this table includes all sales of DPLER, both within and outside of the DP&L service territory. |
DPL Inc. | DP&L | Exhibit Number | Exhibit | Location |
X | X | 4.1 | Credit Agreement, dated August 24, 2016, among The Dayton Power and Light Company, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, Morgan Stanley Senior Funding, Inc., as a lender and BMO Capital Markets Corp., Fifth Third Securities, The Huntington National Bank, PNC Capital Markets LLC, RBC Capital Markets, LLC, Regions Capital Markets, a division of Regions Bank, and SunTrust Robinson Humphrey, Inc., as managing agents | Exhibit 4.1 to Report on Form 8-K filed on August 30, 2016 (File No. 1-02385) |
X | X | 4.2 | Pledge and Security Agreement, dated as of August 24, 2016, between The Dayton Power and Light Company and JPMorgan Chase Bank, N.A., as collateral agent | Exhibit 4.2 to Report on Form 8-K filed on August 30, 2016 (File No. 1-02385) |
X | X | 4.3 | Fiftieth Supplemental Indenture, between The Bank of New York Mellon, as Trustee, and The Dayton Power and Light Company | Exhibit 4.3 to Report on Form 8-K filed on August 30, 2016 (File No. 1-02385) |
X | 31(a) | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith as Exhibit 31(a) | |
X | 31(b) | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith as Exhibit 31(b) | |
X | 31(c) | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith as Exhibit 31(c) | |
X | 31(d) | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith as Exhibit 31(d) | |
X | 32(a) | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Filed herewith as Exhibit 32(a) | |
X | 32(b) | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Filed herewith as Exhibit 32(b) | |
X | 32(c) | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Filed herewith as Exhibit 32(c) | |
X | 32(d) | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Filed herewith as Exhibit 32(d) | |
X | X | 101.INS | XBRL Instance | Filed herewith as Exhibit 101.INS |
X | X | 101.SCH | XBRL Taxonomy Extension Schema | Filed herewith as Exhibit 101.SCH |
X | X | 101.CAL | XBRL Taxonomy Extension Calculation Linkbase | Filed herewith as Exhibit 101.CAL |
X | X | 101.DEF | XBRL Taxonomy Extension Definition Linkbase | Filed herewith as Exhibit 101.DEF |
X | X | 101.LAB | XBRL Taxonomy Extension Label Linkbase | Filed herewith as Exhibit 101.LAB |
X | X | 101.PRE | XBRL Taxonomy Extension Presentation Linkbase | Filed herewith as Exhibit 101.PRE |
DPL Inc. | ||
(Registrant) | ||
Date: | November 3, 2016 | /s/ Kenneth J. Zagzebski |
Kenneth J. Zagzebski | ||
President and Chief Executive Officer | ||
(principal executive officer) | ||
November 3, 2016 | /s/ Craig L. Jackson | |
Craig L. Jackson | ||
Chief Financial Officer | ||
(principal financial officer) | ||
November 3, 2016 | /s/ Kurt A. Tornquist | |
Kurt A. Tornquist | ||
Controller | ||
(principal accounting officer) |
The Dayton Power and Light Company | ||
(Registrant) | ||
Date: | November 3, 2016 | /s/ Thomas A. Raga |
Thomas A. Raga | ||
President and Chief Executive Officer | ||
(principal executive officer) | ||
November 3, 2016 | /s/ Craig L. Jackson | |
Craig L. Jackson | ||
Chief Financial Officer | ||
(principal financial officer) | ||
November 3, 2016 | /s/ Kurt A. Tornquist | |
Kurt A. Tornquist | ||
Controller | ||
(principal accounting officer) |
1. | I have reviewed this quarterly report on Form 10-Q of DPL Inc. ; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Kenneth J. Zagzebski |
Kenneth J. Zagzebski |
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of DPL Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Craig L. Jackson |
Craig L. Jackson |
Chief Financial Officer |
1. | I have reviewed this quarterly report on Form 10-Q of The Dayton Power and Light Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Thomas A. Raga |
Thomas A. Raga |
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of The Dayton Power and Light Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Craig L. Jackson |
Craig L. Jackson |
Chief Financial Officer |
/s/ Kenneth J. Zagzebski |
Kenneth J. Zagzebski |
President and Chief Executive Officer |
/s/ Craig L. Jackson |
Craig L. Jackson |
Chief Financial Officer |
/s/ Thomas A. Raga |
Thomas A. Raga |
President and Chief Executive Officer |
/s/ Craig L. Jackson |
Craig L. Jackson |
Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Nov. 03, 2016 |
|
Entity Registrant Name | DPL INC | |
Entity Central Index Key | 0000787250 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 1 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Entity Voluntary Filers | Yes | |
Entity Well-known Seasoned Issuer | No | |
THE DAYTON POWER AND LIGHT COMPANY [Member] | ||
Entity Registrant Name | DAYTON POWER & LIGHT CO | |
Entity Central Index Key | 0000027430 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 41,172,173 | |
Entity Voluntary Filers | Yes | |
Entity Well-known Seasoned Issuer | No |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Common stock, shares authorized | 1,500 | 1,500 |
Common stock, shares issued | 1 | 1 |
Common stock, shares outstanding | 1 | 1 |
THE DAYTON POWER AND LIGHT COMPANY [Member] | ||
Common stock, shares authorized | 250,000,000 | |
Common stock, shares outstanding | 41,172,173 | |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Overview and Summary of Significant Accounting Policies |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Overview and Summary of Significant Accounting Policies | Overview and Summary of Significant Accounting Policies Description of Business DPL is a diversified regional energy company organized in 1985 under the laws of Ohio. DPL’s one reportable segment is the Utility segment, comprised of its DP&L subsidiary. DPLER, which was DPL's competitive retail segment, was sold January 1, 2016. See Note 12 – Business Segments for more information relating to these reportable segments. The terms “we,” “us,” “our” and “ours” are used to refer to DPL and its subsidiaries. DPL is an indirectly wholly-owned subsidiary of AES. DP&L is a public utility incorporated in 1911 under the laws of Ohio. Beginning in 2001, Ohio law gave Ohio consumers the right to choose the electric generation supplier from whom they purchase retail generation service; however, distribution and transmission retail services are still regulated. DP&L has the exclusive right to provide such distribution and transmission services to approximately 518,000 customers located in West Central Ohio. Additionally, DP&L offers retail SSO electric service to residential, commercial, industrial and governmental customers in a 6,000 square mile area of West Central Ohio. DP&L owns multiple coal-fired and peaking electric generating facilities as well as numerous transmission facilities, all of which are included in the financial statements at amortized cost. DP&L sources 100% of the generation for its SSO customers through a competitive bid process. Principal industries located in DP&L’s service territory include automotive, food processing, paper, plastic, manufacturing and defense. DP&L's distribution sales reflect the general economic conditions, seasonal weather patterns, retail competition in our service territory and the market price of electricity. DP&L sells all of its energy and capacity into the wholesale market. DPL’s other significant subsidiaries include AES Ohio Generation, which owns and operates peaking generating facilities from which it sells all of its energy and capacity into the wholesale market, and MVIC, our captive insurance company that provides insurance services to DPL and our subsidiaries. DPL owns all of the common stock of its subsidiaries. DPL also has a wholly-owned business trust, DPL Capital Trust II, formed for the purpose of issuing trust capital securities to investors. DP&L’s electric transmission and distribution businesses are subject to rate regulation by federal and state regulators while its generation business is deemed competitive under Ohio law. Accordingly, DP&L applies the accounting standards for regulated operations to its electric transmission and distribution businesses and records regulatory assets when incurred costs are expected to be recovered in future customer rates, and regulatory liabilities when current cost recoveries in customer rates relate to expected future costs. DPL and its subsidiaries employed 1,171 people as of September 30, 2016, of which 1,163 were employed by DP&L. Approximately 62% of all DPL employees are under a collective bargaining agreement that expires on October 31, 2017. Financial Statement Presentation DPL’s Condensed Consolidated Financial Statements include the accounts of DPL and its wholly-owned subsidiaries except for DPL Capital Trust II, which is not consolidated, consistent with the provisions of GAAP. DP&L has undivided ownership interests in five coal-fired generating facilities, various peaking generating facilities and numerous transmission facilities, all of which are included in the financial statements at amortized cost, which was adjusted to fair value at the date of the Merger for DPL. Operating revenues and expenses of these facilities are included on a pro rata basis in the corresponding lines in the Condensed Consolidated Statements of Operations. Certain immaterial amounts from prior periods have been reclassified to conform to the current period presentation. All material intercompany accounts and transactions are eliminated in consolidation. These financial statements have been prepared in accordance with GAAP for interim financial statements, the instructions of Form 10-Q and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been omitted from this interim report. Therefore, our interim financial statements in this report should be read along with the annual financial statements included in our Form 10-K for the fiscal year ended December 31, 2015. In the opinion of our management, the Condensed Consolidated Financial Statements presented in this report contain all adjustments necessary to fairly state our financial position as of September 30, 2016; our results of operations for the three and nine months ended September 30, 2016 and 2015 and our cash flows for the nine months ended September 30, 2016 and 2015. Unless otherwise noted, all adjustments are normal and recurring in nature. Due to various factors, including, but not limited to, seasonal weather variations, the timing of outages of EGUs, changes in economic conditions involving commodity prices and competition, and other factors, interim results for the three and nine months ended September 30, 2016 may not be indicative of our results that will be realized for the full year ending December 31, 2016. The preparation of financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the revenues and expenses of the periods reported. Actual results could differ from these estimates. Significant items subject to such estimates and judgments include: the carrying value of property, plant and equipment; unbilled revenues; the valuation of derivative instruments; the valuation of insurance and claims liabilities; the valuation of allowances for receivables and deferred income taxes; regulatory assets and liabilities; liabilities recorded for income tax exposures; litigation; contingencies; the valuation of AROs; and assets and liabilities related to employee benefits. As a result of push down accounting, DPL’s Condensed Consolidated Statements of Operations subsequent to the Merger include depreciation of fixed assets based upon their fair value at the Merger date. Accounting for Taxes Collected from Customers and Remitted to Governmental Authorities DP&L collects certain excise taxes levied by state or local governments from its customers. These taxes are accounted for on a net basis and not included in revenue. The amounts of such taxes collected for the three months ended September 30, 2016 and 2015 were $14.4 million and $13.0 million, respectively. The amounts of such taxes collected for the nine months ended September 30, 2016 and 2015 were $38.9 million and $38.5 million, respectively. New Accounting Pronouncements The following table provides a brief description of recent accounting pronouncements that could have a material impact on our consolidated financial statements:
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Overview and Summary of Significant Accounting Policies | Overview and Summary of Significant Accounting Policies Description of Business DP&L is a public utility incorporated in 1911 under the laws of Ohio. Beginning in 2001, Ohio law gave Ohio consumers the right to choose the electric generation supplier from whom they purchase retail generation service; however, distribution and transmission retail services are still regulated. DP&L has the exclusive right to provide such distribution and transmission services to approximately 518,000 customers located in West Central Ohio. Additionally, DP&L offers retail SSO electric service to residential, commercial, industrial and governmental customers in a 6,000 square mile area of West Central Ohio. DP&L owns multiple coal-fired and peaking electric generating facilities as well as numerous transmission facilities, all of which are included in the financial statements at amortized cost. DP&L sources 100% of the generation for its SSO customers through a competitive bid process. Principal industries located in DP&L’s service territory include automotive, food processing, paper, plastic, manufacturing and defense. DP&L's distribution sales reflect the general economic conditions, seasonal weather patterns, retail competition in our service territory and the market price of electricity. DP&L sells all of its energy and capacity into the wholesale market. DP&L is a subsidiary of DPL. DP&L’s electric transmission and distribution businesses are subject to rate regulation by federal and state regulators while its generation business is deemed competitive under Ohio law. Accordingly, DP&L applies the accounting standards for regulated operations to its electric transmission and distribution businesses and records regulatory assets when incurred costs are expected to be recovered in future customer rates, and regulatory liabilities when current cost recoveries in customer rates relate to expected future costs. DP&L employed 1,163 people as of September 30, 2016. Approximately 62% of all employees are under a collective bargaining agreement which expires on October 31, 2017. Financial Statement Presentation DP&L does not have any subsidiaries. DP&L has undivided ownership interests in five coal-fired generating facilities, peaking electric generating facilities and numerous transmission facilities, all of which are included in the financial statements at amortized cost. Operating revenues and expenses of these facilities are included on a pro rata basis in the corresponding lines in the Condensed Statements of Operations. Certain immaterial amounts from prior periods have been reclassified to conform to the current period presentation. These financial statements have been prepared in accordance with GAAP for interim financial statements, the instructions of Form 10-Q and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been omitted from this interim report. Therefore, our interim financial statements in this report should be read along with the annual financial statements included in our Form 10-K for the fiscal year ended December 31, 2015. In the opinion of our management, the Condensed Financial Statements presented in this report contain all adjustments necessary to fairly state our financial position as of September 30, 2016; our results of operations for the three and nine months ended September 30, 2016 and 2015 and our cash flows for the nine months ended September 30, 2016 and 2015. Unless otherwise noted, all adjustments are normal and recurring in nature. Due to various factors, including, but not limited to, seasonal weather variations, the timing of outages of EGUs, changes in economic conditions involving commodity prices and competition, and other factors, interim results for the nine months ended September 30, 2016 may not be indicative of our results that will be realized for the full year ending December 31, 2016. The preparation of financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the revenues and expenses of the periods reported. Actual results could differ from these estimates. Significant items subject to such estimates and judgments include: the carrying value of property, plant and equipment; unbilled revenues; the valuation of derivative instruments; the valuation of insurance and claims liabilities; the valuation of allowances for receivables and deferred income taxes; regulatory assets and liabilities; liabilities recorded for income tax exposures; litigation; contingencies; the valuation of AROs; and assets and liabilities related to employee benefits. Accounting for Taxes Collected from Customers and Remitted to Governmental Authorities DP&L collects certain excise taxes levied by state or local governments from its customers. These taxes are accounted for on a net basis and not included in revenue. The amounts of such taxes collected for the three months ended September 30, 2016 and 2015 were $14.4 million and $13.0 million, respectively. The amounts of such taxes collected for the nine months ended September 30, 2016 and 2015 were $38.9 million and $38.5 million, respectively. New Accounting Pronouncements The following table provides a brief description of recent accounting pronouncements that could have a material impact on our financial statements:
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Supplemental Financial Information |
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Supplemental Financial Information | Supplemental Financial Information Accounts receivable and Inventories are as follows at September 30, 2016 and December 31, 2015:
Accounts receivable of $31.0 million as of December 31, 2015 have been excluded from the above table as they have been reclassified as "Assets held for sale". See Note 13 – Discontinued Operations. Accumulated Other Comprehensive Income / (Loss) The amounts reclassified out of Accumulated Other Comprehensive Income / (Loss) by component during the three and nine months ended September 30, 2016 and 2015 are as follows:
The changes in the components of Accumulated Other Comprehensive Income / (Loss) during the nine months ended September 30, 2016 are as follows:
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Supplemental Financial Information | Supplemental Financial Information Accounts receivable and Inventories are as follows at September 30, 2016 and December 31, 2015:
Accumulated Other Comprehensive Income / (Loss) The amounts reclassified out of Accumulated Other Comprehensive Income / (Loss) by component during the three and nine months ended September 30, 2016 and 2015 are as follows:
The changes in the components of Accumulated Other Comprehensive Income / (Loss) during the nine months ended September 30, 2016 are as follows:
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Regulatory Matters (Notes) |
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Sep. 30, 2016 | |
Regulatory Matters [Abstract] | |
Schedule of Regulatory Assets and Liabilities [Text Block] | Regulatory Matters Ohio law requires that all Ohio distribution utilities file either an ESP or MRO to establish rates for SSO service. Although it has been in effect since January 2014, on June 20, 2016, the Supreme Court of Ohio (Court) issued an opinion in the appeal of DP&L’s ESP 2, which had been approved by the PUCO for the years 2014-2016 and which, among other matters, permitted DP&L to collect a non-bypassable service stability rider equal to approximately $9.2 million per month for each of those years and required DP&L to legally separate its generation assets by January 1, 2017. Over the period of ESP 2, DP&L has used all available cash flow to fund, among other things, debt repayments and necessary investments to ensure reliability and system performance. No dividends have been paid by DPL to AES during this period. In the opinion, the Court stated briefly, without expanding upon the basis, that the PUCO’s approval of the ESP was reversed on the authority of one of the Court’s prior rulings in a separate case not involving DP&L. In view of that reversal, on July 27, 2016 DP&L filed a motion to withdraw ESP 2 and implement rates consistent with those in effect as a result of ESP 1. On August 26, 2016, the PUCO granted DP&L's motion to withdraw ESP 2, thereby terminating ESP 2 and its provisions, terms and conditions, including the requirement for DP&L to legally separate its generation assets by January 1, 2017. While DP&L may legally separate its generation assets, it is continuing to evaluate its options and timing with respect to separation. Further, the PUCO granted DP&L's motion to implement the provisions, terms and conditions of ESP 1 until a subsequent standard service offer is authorized by the PUCO. Tariffs consistent with the PUCO's Finding and Order were filed and became effective September 1, 2016. The rates under ESP 1 will be in place until rates consistent with the outcome for DP&L’s pending ESP 3 filing are approved and effective. The impact of reverting to ESP 1 is expected to result in a revenue reduction of approximately $3.0 million per month compared to those collected under ESP 2. On February 22, 2016, DP&L filed ESP 3 at the PUCO seeking an effective date of January 1, 2017. On September 23, 2016, DP&L withdrew part of its ESP 3 filing that requested a Reliable Electricity Rider (RER). On October 11, 2016, DP&L filed an amended application requesting to recover $145.0 million per year for seven years that supports the alternative to the RER, named the Distribution Modernization Rider. Also as part of its plan, DP&L recommends including renewable energy attributes as part of the product that is competitively bid, and seeks recovery of approximately $10.5 million of regulatory assets. The plan also proposes a new Distribution Investment Rider to allow DP&L to recover costs associated with future distribution equipment and infrastructure needs. Additionally, the plan establishes new riders set initially at zero, related to energy reductions from DP&L’s energy efficiency programs, and certain environmental costs DP&L may incur. An evidentiary hearing is scheduled to begin December 5, 2016. There can be no assurance that ESP 3 will be approved as filed or on a timely basis. If ESP 3 is not approved on a timely basis or if the final ESP 3 provides for terms that are more adverse than those submitted in DP&L's application, our results of operations, financial condition and cash flows could be materially impacted. |
Fair Value |
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value The fair values of our financial instruments are based on published sources for pricing when possible. We rely on valuation models only when no other methods exist. The value of our financial instruments represents our best estimates of the fair value, which may not be the value realized in the future. The following table presents the fair value, carrying value and cost of our non-derivative instruments at September 30, 2016 and December 31, 2015. Information about the fair value of our derivative instruments can be found in Note 5 – Derivative Instruments and Hedging Activities.
These financial instruments are not subject to master netting agreements or collateral requirements and as such are presented in the Condensed Consolidated Balance Sheet at their gross fair value, except for Debt, which is presented at amortized carrying value. Debt Unrealized gains or losses are not recognized in the financial statements as debt is presented at cost, net of unamortized premium or discount and deferred financing costs in the financial statements. The debt amounts include the current portion payable in the next twelve months and have maturities that range from 2016 to 2061. Master Trust Assets DP&L established Master Trusts to hold assets that could be used for the benefit of employees participating in employee benefit plans and these assets are not used for general operating purposes. These assets are primarily comprised of open-ended mutual funds, which are valued using the net asset value per unit. These investments are recorded at fair value within Other deferred assets on the balance sheets and classified as available-for-sale. Any unrealized gains or losses are recorded in AOCI until the securities are sold. DPL had $0.9 million ($0.6 million after tax) of unrealized gains and immaterial unrealized losses on the Master Trust assets in AOCI at September 30, 2016 and $0.7 million ($0.5 million after tax) of unrealized gains and $0.1 million ($0.1 million after tax) in unrealized losses on the Master Trust assets in AOCI at December 31, 2015. During the nine months ended September 30, 2016, $2.3 million ($1.5 million after tax) of various investments were sold to facilitate the distribution of benefits and the unrealized gains were reversed into earnings. An immaterial amount of unrealized gains are expected to be reversed to earnings as investments are sold over the next twelve months to facilitate the distribution of benefits. Fair Value Hierarchy Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. These inputs are then categorized as:
Valuations of assets and liabilities reflect the value of the instrument including the values associated with counterparty risk. We include our own credit risk and our counterparty’s credit risk in our calculation of fair value using global average default rates based on an annual study conducted by a large rating agency. We did not have any transfers of the fair values of our financial instruments between Level 1 and Level 2 of the fair value hierarchy during the nine months ended September 30, 2016 and 2015. The fair value of assets and liabilities at September 30, 2016 and December 31, 2015 and the respective category within the fair value hierarchy for DPL was determined as follows:
Our financial instruments are valued using the market approach in the following categories:
Approximately 93% of the inputs to the fair value of our derivative instruments are from quoted market prices. Our debt is fair valued for disclosure purposes only and most of the fair values are determined using quoted market prices in inactive markets. These fair value inputs are considered Level 2 in the fair value hierarchy. As the Wright-Patterson Air Force Base loan is not publicly traded, fair value is assumed to equal carrying value. These fair value inputs are considered Level 3 in the fair value hierarchy as there are no observable inputs. Additional Level 3 disclosures are not presented since debt is not recorded at fair value. Cash Equivalents DPL had $90.1 million in money market funds included as part of cash and cash equivalents in its Consolidated Balance Sheet at September 30, 2016. The money market funds have quoted prices that are generally equivalent to par. Non-recurring Fair Value Measurements We use the cost approach to determine the fair value of our AROs, which is estimated by discounting expected cash outflows to their present value at the initial recording of the liability. Cash outflows are based on the approximate future disposal cost as determined by market information, historical information or other management estimates. These inputs to the fair value of the AROs would be considered Level 3 inputs under the fair value hierarchy. AROs for ash ponds, asbestos, river structures and underground storage tanks increased by a net amount of $3.0 million and increased by a net amount of $38.7 million during the nine months ended September 30, 2016 and 2015, respectively. When evaluating impairment of long-lived assets, we measure fair value using the applicable fair value measurement guidance. Impairment expense is measured by comparing the fair value at the evaluation date to the carrying amount. The following table summarizes Long-lived assets measured at fair value on a non-recurring basis during the nine months ended September 30, 2016 and their level within the fair value hierarchy (there were no impairments during the nine months ended September 30, 2015):
(a)See Note 14 – Fixed-asset Impairment for further information (b)Carrying amount at date of valuation The following summarizes the significant unobservable inputs used in the Level 3 measurement on a non-recurring basis during the nine months ended September 30, 2016:
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value The fair values of our financial instruments are based on published sources for pricing when possible. We rely on valuation models only when no other methods exist. The value of our financial instruments represents our best estimates of the fair value, which may not be the value realized in the future. The following table presents the fair value, carrying value and cost of our non-derivative instruments at September 30, 2016 and December 31, 2015. Information about the fair value of our derivative instruments can be found in Note 5 – Derivative Instruments and Hedging Activities.
These financial instruments are not subject to master netting agreements or collateral requirements and as such are presented in the Condensed Balance Sheet at their gross fair value, except for Debt, which is presented at amortized carrying value. Debt Unrealized gains or losses are not recognized in the financial statements as debt is presented at cost, net of unamortized premium or discount and deferred financing costs in the financial statements. The debt amounts include the current portion payable in the next twelve months and have maturities that range from 2016 to 2061. Master Trust Assets DP&L established Master Trusts to hold assets that could be used for the benefit of employees participating in employee benefit plans and these assets are not used for general operating purposes. These assets are primarily comprised of open-ended mutual funds, which are valued using the net asset value per unit. These investments are recorded at fair value within Other deferred assets on the balance sheets and classified as available-for-sale. Any unrealized gains or losses are recorded in AOCI until the securities are sold. DP&L had $1.1 million ($0.7 million after tax) of unrealized gains and immaterial unrealized losses on the Master Trust assets in AOCI at September 30, 2016 and $0.8 million ($0.5 million after tax) in unrealized gains and $0.1 million ($0.1 million after tax) in unrealized losses on the Master Trust assets in AOCI at December 31, 2015. During the nine months ended September 30, 2016, $2.3 million ($1.5 million after tax) of various investments were sold to facilitate the distribution of benefits and the unrealized gains were reversed into earnings. An immaterial amount of unrealized gains are expected to be reversed to earnings as investments are sold over the next twelve months to facilitate the distribution of benefits. Fair Value Hierarchy Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. These inputs are then categorized as:
Valuations of assets and liabilities reflect the value of the instrument including the values associated with counterparty risk. We include our own credit risk and our counterparty’s credit risk in our calculation of fair value using global average default rates based on an annual study conducted by a large rating agency. We did not have any transfers of the fair values of our financial instruments between Level 1 and Level 2 of the fair value hierarchy during the nine months ended September 30, 2016 and 2015. The fair value of assets and liabilities at September 30, 2016 and December 31, 2015 and the respective category within the fair value hierarchy for DP&L was determined as follows:
Our financial instruments are valued using the market approach in the following categories:
Our debt is fair valued for disclosure purposes only and most of the fair values are determined using quoted market prices in inactive markets. These fair value inputs are considered Level 2 in the fair value hierarchy. As the Wright-Patterson Air Force Base loan is not publicly traded, fair value is assumed to equal carrying value. These fair value inputs are considered Level 3 in the fair value hierarchy as there are no observable inputs. Additional Level 3 disclosures are not presented since debt is not recorded at fair value. Approximately 93% of the inputs to the fair value of our derivative instruments are from quoted market prices. Cash Equivalents DP&L had $90.1 million in money market funds included as part of cash and cash equivalents in its Balance Sheet at September 30, 2016. The money market funds have quoted prices that are generally equivalent to par. Non-recurring Fair Value Measurements We use the cost approach to determine the fair value of our AROs, which is estimated by discounting expected cash outflows to their present value at the initial recording of the liability. Cash outflows are based on the approximate future disposal cost as determined by market information, historical information or other management estimates. These inputs to the fair value of the AROs would be considered Level 3 inputs under the fair value hierarchy. AROs for ash ponds, asbestos, river structures and underground storage tanks increased by a net amount of $3.0 million and increased by a net amount of $38.7 million during the nine months ended September 30, 2016 and 2015, respectively. When evaluating impairment of long-lived assets, we measure fair value using the applicable fair value measurement guidance. Impairment expense is measured by comparing the fair value at the evaluation date to the carrying amount. The following table summarizes Long-lived assets measured at fair value on a non-recurring basis during the nine months ended September 30, 2016 and their level within the fair value hierarchy (there were no impairments during the nine months ended September 30, 2015):
(a)See Note 12 – Fixed-asset Impairment for further information (b)Carrying amount at date of valuation The following summarizes the significant unobservable inputs used in the Level 3 measurement on a non-recurring basis during the nine months ended September 30, 2016:
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Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities In the normal course of business, DPL enters into various financial arrangements, including derivative financial instruments. We use derivatives principally to manage the risk of changes in market prices for commodities. The derivatives that we use to economically hedge these risks are governed by our risk management policies for forward and futures contracts. Our net positions are continually assessed within our structured hedging programs to determine whether new or offsetting transactions are required. The objective of the hedging program is to mitigate financial risks while ensuring that we have adequate resources to meet our requirements. We monitor and value derivative positions monthly as part of our risk management processes. We use published sources for pricing, when possible, to mark positions to market. All of our derivative instruments are used for risk management purposes and are designated as normal purchase/normal sale, cash flow hedges or marked to market each reporting period. At September 30, 2016, DPL had the following outstanding derivative instruments:
(a) Refers to whether the derivative instruments have been designated as a cash flow hedge. At December 31, 2015, DPL had the following outstanding derivative instruments:
(a) Refers to whether the derivative instruments have been designated as a cash flow hedge. Cash Flow Hedges As part of our risk management processes, we identify the relationships between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking various hedge transactions. The fair value of cash flow hedges is determined by observable market prices available as of the balance sheet dates and will continue to fluctuate with changes in market prices up to contract expiration. The effective portion of the hedging transaction is recognized in AOCI and transferred to earnings using specific identification of each contract when the forecasted hedged transaction takes place or when the forecasted hedged transaction is probable of not occurring. The ineffective portion of the cash flow hedge is recognized in earnings in the current period. All risk components were taken into account to determine the hedge effectiveness of the cash flow hedges. We enter into forward power contracts to manage commodity price risk exposure related to our generation of electricity. We do not hedge all commodity price risk. We reclassify gains and losses on forward power contracts from AOCI into earnings in those periods in which the contracts settle. The following table provides information for DPL concerning gains or losses recognized in AOCI for the cash flow hedges for the three and nine months ended September 30, 2016 and 2015:
(a)The actual amounts that we reclassify from AOCI to earnings related to power can differ from the estimate above due to market price changes. Derivatives not designated as hedges Certain derivative contracts are entered into on a regular basis as part of our risk management program but do not qualify for hedge accounting or the normal purchase and sales exceptions under FASC 815. Accordingly, such contracts are recorded at fair value with changes in the fair value charged or credited to the Condensed Consolidated Statements of Operations in the period in which the change occurred. This is commonly referred to as “MTM accounting.” Contracts we enter into as part of our risk management program may be settled financially, by physical delivery, or net settled with the counterparty. FTRs, heating oil futures, natural gas, and certain forward power contracts are currently marked to market. Certain qualifying derivative instruments have been designated as normal purchases or normal sales contracts, as provided under GAAP. Derivative contracts that have been designated as normal purchases or normal sales under GAAP are not subject to MTM accounting and are recognized in the Condensed Consolidated Statements of Operations on an accrual basis. Regulatory Assets and Liabilities In accordance with regulatory accounting under GAAP, a cost or loss that is probable of recovery in future rates should be deferred as a regulatory asset and revenue or a gain that is probable of being returned to customers should be deferred as a regulatory liability. Therefore, a portion of the heating oil futures are assigned to the retail jurisdiction and deferred as a regulatory asset or liability until the contracts settle. If these unrealized gains and losses are no longer deemed to be probable of recovery through our rates, they will be reclassified into earnings in the period such determination is made. Beginning January 1, 2016, we no longer assign any portion of the heating oil futures to our retail jurisdiction as all of our SSO retail sales are sourced through the competitive bid process. Financial Statement Effect The following tables present the amount and classification within the Condensed Consolidated Statements of Operations or Condensed Consolidated Balance Sheets of the gains and losses on DPL’s derivatives not designated as hedging instruments for the three and nine months ended September 30, 2016 and 2015:
DPL has elected not to offset derivative assets and liabilities and not to offset net derivative positions against the right to reclaim cash collateral pledged (an asset) or the obligation to return cash collateral received (a liability) under derivative agreements. The following tables summarize the derivative positions presented in the balance sheet where a right of offset exists under these arrangements and related cash collateral received or pledged. The following table presents the fair value and balance sheet classification of DPL’s derivative instruments at September 30, 2016:
The following table presents the fair value and balance sheet classification of DPL’s derivative instruments at December 31, 2015:
Credit risk-related contingent features Certain of our OTC commodity derivative contracts are under master netting agreements that contain provisions that require us to post collateral if our credit ratings drop below certain thresholds. We have crossed that threshold with one counterparty to the derivative instruments and they could request that we post collateral of $0.9 million at this time. The aggregate fair value of DPL’s commodity derivative instruments that were in a MTM loss position at September 30, 2016 was $30.9 million. $5.1 million of collateral was posted directly with third parties and in a broker margin account which offsets our loss positions on the forward contracts. This liability position is further offset by the asset position of counterparties with master netting agreements of $22.7 million. Since our debt is below investment grade, we could have to post collateral for the remaining $3.1 million. |
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities In the normal course of business, DP&L enters into various financial arrangements, including derivative financial instruments. We use derivatives principally to manage the risk of changes in market prices for commodities. The derivatives that we use to economically hedge these risks are governed by our risk management policies for forward and futures contracts. Our net positions are continually assessed within our structured hedging programs to determine whether new or offsetting transactions are required. The objective of the hedging program is to mitigate financial risks while ensuring that we have adequate resources to meet our requirements. We monitor and value derivative positions monthly as part of our risk management processes. We use published sources for pricing, when possible, to mark positions to market. All of our derivative instruments are used for risk management purposes and are designated as normal purchase/normal sale, cash flow hedges or marked to market each reporting period. At September 30, 2016, DP&L had the following outstanding derivative instruments:
(a) Refers to whether the derivative instruments have been designated as a cash flow hedge. At December 31, 2015, DP&L had the following outstanding derivative instruments:
(a) Refers to whether the derivative instruments have been designated as a cash flow hedge. Cash Flow Hedges As part of our risk management processes, we identify the relationships between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking various hedge transactions. The fair value of cash flow hedges is determined by observable market prices available as of the balance sheet dates and will continue to fluctuate with changes in market prices up to contract expiration. The effective portion of the hedging transaction is recognized in AOCI and transferred to earnings using specific identification of each contract when the forecasted hedged transaction takes place or when the forecasted hedged transaction is probable of not occurring. The ineffective portion of the cash flow hedge is recognized in earnings in the current period. All risk components were taken into account to determine the hedge effectiveness of the cash flow hedges. We enter into forward power contracts to manage commodity price risk exposure related to our generation of electricity. We do not hedge all commodity price risk. We reclassify gains and losses on forward power contracts from AOCI into earnings in those periods in which the contracts settle. The following table provides information for DP&L concerning gains or losses recognized in AOCI for the cash flow hedges for the three and nine months ended September 30, 2016 and 2015:
Derivatives not designated as hedges Certain derivative contracts are entered into on a regular basis as part of our risk management program but do not qualify for hedge accounting or the normal purchase and sales exceptions under FASC 815. Accordingly, such contracts are recorded at fair value with changes in the fair value charged or credited to the Condensed Statements of Operations in the period in which the change occurred. This is commonly referred to as “MTM accounting.” Contracts we enter into as part of our risk management program may be settled financially, by physical delivery, or net settled with the counterparty. FTRs, heating oil futures, natural gas, and certain forward power contracts are currently marked to market. Certain qualifying derivative instruments have been designated as normal purchases or normal sales contracts, as provided under GAAP. Derivative contracts that have been designated as normal purchases or normal sales under GAAP are not subject to MTM accounting and are recognized in the Condensed Statements of Operations on an accrual basis. Regulatory Assets and Liabilities In accordance with regulatory accounting under GAAP, a cost or loss that is probable of recovery in future rates should be deferred as a regulatory asset and revenue or a gain that is probable of being returned to customers should be deferred as a regulatory liability. Therefore, a portion of the heating oil futures are assigned to the retail jurisdiction and deferred as a regulatory asset or liability until the contracts settle. If these unrealized gains and losses are no longer deemed to be probable of recovery through our rates, they will be reclassified into earnings in the period such determination is made. Beginning January 1, 2016, we no longer assign any portion of the heating oil futures to our retail jurisdiction as all of our SSO retail sales are sourced through the competitive bid process. Financial Statement Effect The following tables present the amount and classification within the Condensed Statements of Operations or Condensed Balance Sheets of the gains and losses on DPL’s derivatives not designated as hedging instruments for the three and nine months ended September 30, 2016 and 2015:
DP&L has elected not to offset derivative assets and liabilities and not to offset net derivative positions against the right to reclaim cash collateral pledged (an asset) or the obligation to return cash collateral received (a liability) under derivative agreements. The following tables summarize the derivative positions presented in the balance sheet where a right of offset exists under these arrangements and related cash collateral received or pledged. The following table presents the fair value and balance sheet classification of DP&L’s derivative instruments at September 30, 2016:
The following table presents the fair value and balance sheet classification of DP&L’s derivative instruments at December 31, 2015:
Credit risk-related contingent features Certain of our OTC commodity derivative contracts are under master netting agreements that contain provisions that require us to post collateral if our credit ratings drop below certain thresholds. We have crossed that threshold with one counterparty to the derivative instruments and they could request that we post collateral of $0.9 million at this time. The aggregate fair value of DP&L’s commodity derivative instruments that were in a MTM loss position at September 30, 2016 was $31.0 million. $22.8 million of collateral was posted directly with third parties and in a broker margin account which offsets our loss positions on the forward contracts. This liability position is further offset by the asset position of counterparties with master netting agreements of $5.1 million. Since our debt is below investment grade, we could have to post collateral for the remaining $3.1 million. |
Debt Obligations |
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Debt Obligations | Debt The following table provides a summary of DPL's outstanding debt.
Premiums or discounts recognized at the date of the Merger are amortized over the remaining life of the debt using the effective interest method. Significant transactions On February 5, 2016, $73.0 million of DPL's $130.0 million 6.5% Senior Unsecured Notes Due 2016 were redeemed under the indenture's make-whole call provision, which allows for the bonds to be called prior to maturity with a make-whole payment as determined by discounting the bond's future cash flow by a similarly maturing U.S. Treasury bond's yield plus 50 basis points. On the call date, principal plus the make-whole payment due totaled $75.4 million, which was paid with cash on hand. On October 17, 2016, the remaining $57.0 million of the 6.5% Senior Unsecured Notes Due 2016 were redeemed at maturity with cash on hand. On August 24, 2016, DP&L refinanced its $445.0 million of 1.875% First Mortgage Bonds due 2016, with a variable rate Term Loan B of $445.0 million maturing on August 24, 2022 and secured by a pledge of DP&L First Mortgage Bonds. The variable interest rate on the loan is calculated based on LIBOR plus a spread of 3.25%, with a LIBOR floor of 0.75%. Up to the maturity date but not starting until March 31, 2017, the loan amortizes 0.25% of the initial principal balance quarterly, and contains covenants and restrictions that are generally consistent with existing DP&L credit agreements. Debt covenants and restrictions DP&L’s unsecured revolving credit agreement and Bond Purchase and Covenants Agreement have two financial covenants. The first financial covenant measures Total Debt to Total Capitalization. The Total Debt to Total Capitalization ratio is calculated, at the end of each fiscal quarter, by dividing total debt at the end of the quarter by total capitalization at the end of the quarter. The second financial covenant ratio compares EBITDA to Interest Expense. The EBITDA to Interest Expense ratio is calculated, at the end of each fiscal quarter, by dividing EBITDA for the four prior fiscal quarters by the consolidated interest charges for the same period. The cost of borrowing under DP&L's unsecured revolving credit agreement and Bond Purchase and Covenants Agreement adjust under certain credit rating scenarios. DPL’s revolving credit agreement and term loan have two financial covenants. The first financial covenant, a Total Debt to EBITDA ratio, is calculated at the end of each fiscal quarter by dividing total debt at the end of the current quarter by consolidated EBITDA for the four prior fiscal quarters. The second financial covenant, an EBITDA to Interest Expense ratio, is calculated, at the end of each fiscal quarter, by dividing EBITDA for the four prior fiscal quarters by the consolidated interest charges for the same period. The cost of borrowing under DPL's revolving credit agreement and term loan adjust under certain credit rating scenarios. DPL’s revolving credit agreement, term loan, and senior unsecured notes due 2019 restrict dividend payments from DPL to AES. Substantially all property, plant & equipment of DP&L is subject to the lien of the mortgage securing DP&L’s First and Refunding Mortgage. |
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Debt Obligations | Debt The following table provides a summary of DP&L's outstanding debt.
(a)Range of interest rates for the nine months ended September 30, 2016. (b)Range of interest rates for the year ended December 31, 2015. Significant transactions On August 24, 2016, DP&L refinanced its 1.875% First Mortgage Bonds Due 2016, with a variable rate Term Loan B of $445.0 million maturing on August 24, 2022 and secured by a pledge of DP&L First Mortgage Bonds. The variable interest rate on the loan is calculated based on LIBOR plus a spread of 3.25%, with a LIBOR floor of 0.75%. Up to the maturity date but not starting until March 31, 2017, the loan amortizes 0.25% of the initial principal balance quarterly, and contains covenants and restrictions that are generally consistent with existing DP&L credit agreements. Debt covenants and restrictions DP&L’s unsecured revolving credit agreement and Bond Purchase and Covenants Agreement have two financial covenants. The first measures Total Debt to Total Capitalization and is calculated, at the end of each fiscal quarter, by dividing total debt at the end of the quarter by total capitalization at the end of the quarter. The second financial covenant measures EBITDA to Interest Expense. The EBITDA to Interest Expense ratio is calculated, at the end of each fiscal quarter, by dividing EBITDA for the four prior fiscal quarters by the consolidated interest charges for the same period. The cost of borrowing under DP&L's unsecured revolving credit agreement and Bond Purchase and Covenants Agreement adjusts under certain credit rating scenarios. Substantially all property, plant & equipment of DP&L is subject to the lien of the mortgage securing DP&L’s First and Refunding Mortgage. |
Income Taxes |
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Income Taxes | Income Taxes The following table details the effective tax rates for the three and nine months ended September 30, 2016 and 2015.
Income tax expense for the nine months ended September 30, 2016 and 2015 was calculated using the estimated annual effective income tax rates for 2016 and 2015 of 38.6% and 30.8%, respectively. For the three and nine months ended September 30, 2016 and 2015, management estimated the annual effective tax rate based on its forecast of annual pre-tax income. To the extent that actual pre-tax results for the year differ from the forecasts applied to the most recent interim period, the rates estimated could be materially different from the actual effective tax rates. For the three months ended September 30, 2016, DPL’s current period effective tax rate was greater than the estimated annual effective rate primarily due to a change in its uncertain tax positions. The increase in the annual effective rate compared to the same period in 2015 is primarily due to a forecasted pre-tax loss in the 2016 tax year. |
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Income Taxes | Income Taxes The following table details the effective tax rates for the three and nine months ended September 30, 2016 and 2015.
Income tax expense for the three and nine months ended September 30, 2016 and 2015 was calculated using the estimated annual effective income tax rates for 2016 and 2015 of 36.7% and 29.0%, respectively. For the three and nine months ended September 30, 2016 and 2015 management estimated the annual effective tax rate based on its forecast of annual pre-tax income. To the extent that actual pre-tax results for the year differ from the forecasts applied to the most recent interim period, the rates estimated could be materially different from the actual effective tax rates. For the three months ended September 30, 2016, DP&L’s current period effective tax rate was greater than the estimated annual effective rate primarily due to a change in its uncertain tax positions and the deduction for the preferred stock dividends. The increase in the annual effective rate compared to the same period in 2015 is primarily due to a forecasted pre-tax loss in the 2016 tax year. |
Benefit Plans |
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Pension and Postretirement Benefits | Benefit Plans DP&L sponsors a defined benefit pension plan for the vast majority of its employees. We generally fund pension plan benefits as accrued in accordance with the minimum funding requirements of ERISA and, in addition, make voluntary contributions from time to time. There were $5.0 million in employer contributions made during the nine months ended September 30, 2016 and $5.0 million in employer contributions during the nine months ended September 30, 2015. The amounts presented in the following tables for pension include the collective bargaining plan formula, the traditional management plan formula, the cash balance plan formula and the SERP, in the aggregate. The amounts presented for postretirement include both health and life insurance. The pension and postretirement costs below have not been adjusted for amounts billed to the Service Company for former DP&L employees who are now employed by the Service Company but are still participants in the DP&L plan. See Note 11 – Related Party Transactions. The net periodic benefit cost of the pension and postretirement benefit plans for the three and nine months ended September 30, 2016 and 2015 was:
Benefit payments and Medicare Part D reimbursements, which reflect future service, are estimated to be paid as follows:
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THE DAYTON POWER AND LIGHT COMPANY [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Entity Information [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Postretirement Benefits | Benefit Plans DP&L sponsors a defined benefit pension plan for the vast majority of its employees. We generally fund pension plan benefits as accrued in accordance with the minimum funding requirements of ERISA and, in addition, make voluntary contributions from time to time. There were $5.0 million in employer contributions made during the nine months ended September 30, 2016 and $5.0 million in employer contributions during the nine months ended September 30, 2015. The amounts presented in the following tables for pension include the collective bargaining plan formula, the traditional management plan formula, the cash balance plan formula and the SERP, in the aggregate. The amounts presented for postretirement include both health and life insurance. The pension and postretirement costs below have not been adjusted for amounts billed to the Service Company for former DP&L employees who are now employed by the Service Company but are still participants in the DP&L plan. See Note 11 – Related Party Transactions. The net periodic benefit cost of the pension and postretirement benefit plans for the three and nine months ended September 30, 2016 and 2015 was:
Benefit payments and Medicare Part D reimbursements, which reflect future service, are estimated to be paid as follows:
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Shareholder's Equity |
9 Months Ended |
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Sep. 30, 2016 | |
THE DAYTON POWER AND LIGHT COMPANY [Member] | |
Class of Stock [Line Items] | |
Shareholder's Equity | Shareholder’s Equity DP&L has 250,000,000 authorized $0.01 par value common shares, of which 41,172,173 are outstanding at September 30, 2016. All common shares are held by DP&L’s parent, DPL. As part of the PUCO’s approval of the Merger, DP&L agreed to maintain a capital structure that includes an equity ratio, calculated as total equity divided by total capitalization, of at least 50 percent and not to have a negative retained earnings balance. After the fixed-asset impairment recorded during the second quarter of 2016 and as of September 30, 2016, DP&L's equity ratio was 50% and retained earnings balance was negative. It is unknown what impact, if any, this will have on DP&L. In the generation separation order dated September 17, 2014, the PUCO permitted DP&L to temporarily maintain long-term debt of $750.0 million or 75% of its rate base, whichever is greater, until January 1, 2018. On October 13, 2016 (the "Redemption Date"), DP&L redeemed all of its issued and outstanding preferred stock, consisting of the following series: Preferred Stock, 3.75% Series A, Cumulative (the “Series A Stock”); Preferred Stock, 3.75% Series B, Cumulative (the “Series B Stock”); and Preferred Stock, 3.90% Series C, Cumulative (the “Series C Stock” and, together with the Series A Stock and the Series B Stock, the “Preferred Stock”). On the Redemption Date, the Preferred Stock of each series was redeemed at the following prices as specified in DP&L’s Amended and Restated Articles of Incorporation, plus, in each case an amount equal to all accrued dividends payable with respect to such Preferred Stock to the Redemption Date: a price of $102.50 per share for the Series A Stock, a price of $103.00 per share for the Series B Stock, and a price of $101.00 per share for the Series C Stock. Dividends on the Preferred Stock ceased to accrue on the Redemption Date. Upon redemption, the Preferred Stock was no longer outstanding, and all rights of the holders thereof as shareholders of DP&L, except the right to payment of the redemption price, ceased to exist. As we issued the notice to redeem the preferred stock in the third quarter, the $23.5 million redemption value was included in Other Current Liabilities as of September 30, 2016. The difference between the carrying value of the Redeemable Preferred Stock and the redemption amount was charged to Other paid-in capital. In addition, with DP&L preferred stock no longer outstanding, certain provisions in DP&L's Amended Articles of Incorporation which could limit the payment of cash dividends on any of its common stock, no longer apply. Equity settlement of related party payable DP&L settled a $7.5 million payable to DPL relating to income taxes. This payable balance was settled through equity and DPL's investment in DP&L was increased by $7.5 million as consideration for extinguishing the payable. |
Redeemable Preferred Stock of Subsidiary (Notes) |
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Redeemable Preferred Stock of Subsidiary [Abstract] | |
Preferred Stock [Text Block] | Redeemable Preferred Stock of Subsidiary On October 13, 2016 (the "Redemption Date"), DPL's subsidiary, DP&L, redeemed all of its issued and outstanding preferred stock, consisting of the following series: Preferred Stock, 3.75% Series A, Cumulative (the “Series A Stock”); Preferred Stock, 3.75% Series B, Cumulative (the “Series B Stock”); and Preferred Stock, 3.90% Series C, Cumulative (the “Series C Stock” and, together with the Series A Stock and the Series B Stock, the “Preferred Stock”). On the Redemption Date, the Preferred Stock of each series was redeemed at the following prices as specified in DP&L’s Amended and Restated Articles of Incorporation, plus, in each case an amount equal to all accrued dividends payable with respect to such Preferred Stock to the Redemption Date: a price of $102.50 per share for the Series A Stock, a price of $103.00 per share for the Series B Stock, and a price of $101.00 per share for the Series C Stock. Dividends on the Preferred Stock ceased to accrue on the Redemption Date. Upon redemption, the Preferred Stock is no longer outstanding, and all rights of the holders thereof as shareholders of DP&L, except the right to payment of the redemption price, ceased to exist. As we issued the notice to redeem the preferred stock of DP&L in the third quarter, the $23.5 million redemption value was included in Other Current Liabilities as of September 30, 2016. The difference between the carrying value of the Redeemable Preferred Stock of Subsidiary and the redemption amount was charged to Other paid-in capital. In addition, with DP&L preferred stock no longer outstanding, certain provisions in DP&L's Amended Articles of Incorporation which could limit the payment of cash dividends on any of its common stock, no longer apply. |
Contractual Obligations, Commercial Commitments and Contingencies |
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Contractual Obligations, Commercial Commitments and Contingencies | Contractual Obligations, Commercial Commitments and Contingencies Guarantees In the normal course of business, DPL enters into various agreements with its wholly-owned subsidiary, AES Ohio Generation, providing financial or performance assurance to third parties. These agreements are entered into primarily to support or enhance the creditworthiness otherwise attributed to these subsidiaries on a stand-alone basis, thereby facilitating the extension of sufficient credit to accomplish these subsidiaries’ intended commercial purposes. At September 30, 2016, DPL had $16.6 million of guarantees on behalf of AES Ohio Generation to third parties for future financial or performance assurance under such agreements. The guarantee arrangements entered into by DPL with these third parties cover select present and future obligations of AES Ohio Generation to such beneficiaries and are terminable by DPL upon written notice to the beneficiaries within a certain time. The carrying amount of obligations for commercial transactions covered by these guarantees recorded in our Condensed Consolidated Balance Sheets was $4.8 million and $0.5 million at September 30, 2016 and December 31, 2015, respectively. To date, DPL has not incurred any losses related to the guarantees of AES Ohio Generation’s obligations and we believe it is remote that DPL would be required to perform or incur any losses in the future associated with any of the above guarantees. Equity Ownership Interest DP&L owns a 4.9% equity ownership interest in OVEC, which is recorded using the cost method of accounting under GAAP. As of September 30, 2016, DP&L could be responsible for the repayment of 4.9%, or $74.9 million, of a $1,528.0 million debt obligation that has maturities from 2018 to 2040. This would only happen if OVEC defaulted on its debt payments. As of September 30, 2016, we have no knowledge of such a default. Commercial Commitments and Contractual Obligations There have been no material changes, outside the ordinary course of business, to our commercial commitments and to the information disclosed in the contractual obligations table in our Form 10-K for the fiscal year ended December 31, 2015. Contingencies In the normal course of business, we are subject to various lawsuits, actions, proceedings, claims and other matters asserted under various laws and regulations. We believe the amounts provided in our Condensed Consolidated Financial Statements, as prescribed by GAAP, are adequate in light of the probable and estimable contingencies. However, there can be no assurances that the actual amounts required to satisfy alleged liabilities from various legal proceedings, claims, tax examinations and other matters discussed below, and to comply with applicable laws and regulations, will not exceed the amounts reflected in our Condensed Consolidated Financial Statements. As such, costs, if any, that may be incurred in excess of those amounts provided as of September 30, 2016, cannot be reasonably determined. Environmental Matters DPL’s and DP&L’s facilities and operations are subject to a wide range of federal, state and local environmental regulations and laws. The environmental issues that may affect us include:
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||
Entity Information [Line Items] | |||||||||||||||||||||||||
Contractual Obligations, Commercial Commitments and Contingencies | Contractual Obligations, Commercial Commitments and Contingencies Equity Ownership Interest DP&L owns a 4.9% equity ownership interest in OVEC, which is recorded using the cost method of accounting under GAAP. As of September 30, 2016, DP&L could be responsible for the repayment of 4.9%, or $74.9 million, of a $1,528.0 million debt obligation that has maturities from 2018 to 2040. This would only happen if OVEC defaulted on its debt payments. As of September 30, 2016, we have no knowledge of such a default. Commercial Commitments and Contractual Obligations There have been no material changes, outside the ordinary course of business, to our commercial commitments and to the information disclosed in the contractual obligations table in our Form 10-K for the fiscal year ended December 31, 2015. Contingencies In the normal course of business, we are subject to various lawsuits, actions, proceedings, claims and other matters asserted under various laws and regulations. We believe the amounts provided in our Condensed Financial Statements, as prescribed by GAAP, are adequate in light of the probable and estimable contingencies. However, there can be no assurances that the actual amounts required to satisfy alleged liabilities from various legal proceedings, claims, tax examinations and other matters discussed below, and to comply with applicable laws and regulations, will not exceed the amounts reflected in our Condensed Financial Statements. As such, costs, if any, that may be incurred in excess of those amounts provided as of September 30, 2016, cannot be reasonably determined. Environmental Matters DP&L’s facilities and operations are subject to a wide range of federal, state and local environmental regulations and laws. The environmental issues that may affect us include:
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Related Party Transactions |
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Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | Related Party Transactions Service Company Effective January 1, 2014, the Service Company began providing services including operations, accounting, legal, human resources, information technology and other corporate services on behalf of companies that are part of the U.S. SBU, including, among other companies, DPL and DP&L. The Service Company allocates the costs for these services based on cost drivers designed to result in fair and equitable allocations. This includes ensuring that the regulated utilities served, including DP&L, are not subsidizing costs incurred for the benefit of other businesses. Benefit plans DPL has an agreement with AES or one of its affiliates to participate in a group benefits program, including but not limited to, health, dental, vision and life benefits. AES or its affiliate administers the financial aspects of the group insurance program, receives all premium payments from the participating affiliates, and makes all vendor payments. The following table provides a summary of these transactions:
DPL Capital Trust II DPL has a wholly-owned business trust, DPL Capital Trust II (the "Trust"), formed for the purpose of issuing trust capital securities to third-party investors. Effective in 2003, DPL deconsolidated the Trust upon adoption of the accounting standards related to variable interest entities and currently treats the Trust as a nonconsolidated subsidiary. The Trust holds mandatorily redeemable trust capital securities. The investment in the Trust, which amounts to $0.3 million and $0.3 million at September 30, 2016 and December 31, 2015, respectively, is included in Other deferred assets within Other non-current assets. DPL also has a note payable to the Trust amounting to $15.6 million and $15.6 million at September 30, 2016 and December 31, 2015, respectively, that was established upon the Trust’s deconsolidation in 2003. See Note 6 – Debt for additional information. In addition to the obligations under the note payable mentioned above, DPL also agreed to a security obligation which represents a full and unconditional guarantee of payments to the capital security holders of the Trust. Income taxes AES files federal and state income tax returns which consolidate DPL and its subsidiaries. Under a tax sharing agreement with AES, DPL is responsible for the income taxes associated with its own taxable income and records the provision for income taxes using a separate return method. DPL had net payable balances of $97.0 million and $50.5 million at September 30, 2016 and December 31, 2015, respectively, which are recorded in Accounts receivable, net and Accrued taxes on the accompanying Balance Sheets on a gross basis. |
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THE DAYTON POWER AND LIGHT COMPANY [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Related Party Transactions | Related Party Transactions Service Company Effective January 1, 2014, the Service Company began providing services including operations, accounting, legal, human resources, information technology and other corporate services on behalf of companies that are part of the U.S. SBU, including, among other companies, DPL and DP&L. The Service Company allocates the costs for these services based on cost drivers designed to result in fair and equitable allocations. This includes ensuring that the regulated utilities served, including DP&L, are not subsidizing costs incurred for the benefit of other businesses. Benefit plans DPL has an agreement with AES or one of its affiliates to participate in a group benefits program, including but not limited to, health, dental, vision and life benefits. AES or its affiliate administers the financial aspects of the group insurance program, receives all premium payments from the participating affiliates, and makes all vendor payments. The following table provides a summary of these transactions:
Income taxes AES files federal and state income tax returns which consolidate DPL and its subsidiaries, including DP&L. Under a tax sharing agreement with DPL, DP&L is responsible for the income taxes associated with its own taxable income and records the provision for income taxes using a separate return method. DP&L had a net payable balance of $36.2 million at September 30, 2016 which is recorded in Accounts receivable, net and Accrued taxes on the accompanying Balance Sheets and a net receivable balance of $1.5 million at December 31, 2015 which is recorded in Accounts receivable, net and Accrued taxes on the accompanying Balance Sheets on a gross basis. Gain on termination of contract On January 1, 2016, DPL closed on the sale of DPLER. Also on January 1, 2016, DP&L terminated the contract it had with DPLER for the supply of electricity. The agreement terminating the contract was signed on December 28, 2015 and DP&L received $27.7 million of restricted cash on December 31, 2015 for the early termination of the contract. For the nine months ended September 30, 2016, this amount was recorded in Gain on termination of contract in the Condensed Statements of Operations and the cash received was included in Cash flows from operating activities in the Condensed Statements of Cash Flows. |
Business Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments | Business Segments At December 31, 2015, DPL had two segments consisting of the operations of two of its wholly-owned subsidiaries, DP&L (Utility segment) and DPLER (Competitive Retail segment which included DPLER's wholly-owned subsidiary, MC Squared). This is how we viewed our business and made decisions on how to allocate resources and evaluate performance. The Competitive Retail segment, DPLER’s competitive retail electric service business, was sold on January 1, 2016 (see Note 13 – Discontinued Operations). DPL now operates through one segment, the Utility segment. Segment disclosures for 2015 have not been restated to show the competitive retail segment as a discontinued operation and therefore do not tie to the Condensed Consolidated Statement of Operations. The Utility segment is comprised of DP&L’s electric generation, transmission and distribution businesses which generate and deliver electricity to residential, commercial, industrial and governmental customers. DP&L generates electricity at five coal-fired power plants and DP&L distributes power to approximately 518,000 retail customers who are located in a 6,000 square mile area of West Central Ohio. Prior to the sale of DPLER, DP&L also sold electricity to DPLER and to other Ohio utilities. In 2016, all of DP&L's electricity for SSO customers was sourced through a competitive bid auction and DP&L's energy and capacity was primarily sold into the PJM wholesale market. DP&L’s transmission and distribution businesses are subject to rate regulation by federal and state regulators while rates for its generation business are deemed competitive under Ohio law. The Competitive Retail segment’s electric energy used to meet its sales obligations was purchased from DP&L. Intercompany sales from DP&L to DPLER were based on fixed-price contracts for each customer; the price approximated market prices for wholesale power at the inception of each customer’s contract. These agreements were terminated in connection with the sale of DPLER on January 1, 2016. Included in the “Other” column in the following tables are other businesses that do not meet the GAAP requirements for disclosure as reportable segments, certain corporate costs including interest expense on DPL’s debt, and adjustments related to purchase accounting from the Merger. Management evaluates segment performance based on gross margin. The accounting policies of the reportable segments are the same as those described in Note 1 – Overview and Summary of Significant Accounting Policies. Intersegment sales and profits are eliminated in consolidation. The following tables present financial information for each of DPL’s reportable business segments:
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Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations | Discontinued Operations On January 1, 2016, DPL closed on the sale of DPLER, its competitive retail business. The sale agreement was signed on December 28, 2015 and DPL received $75.5 million of restricted cash on December 31, 2015 for the sale. This amount was shown as Restricted cash with the associated liability shown as "Deposit received on sale of DPLER" on the Balance Sheet as of December 31, 2015. Assets and liabilities related to DPLER were reclassified to "Assets held for sale" and "Liabilities held for sale" in the December 31, 2015 Condensed Consolidated Balance Sheet. DPL recorded a gain on this transaction of $49.2 million in the first quarter of 2016. The gain includes the impact of DPLER’s liability to DP&L that transferred with the sale on January 1, 2016 but was eliminated in consolidation at December 31, 2015. Deferred taxes and intercompany balances were not reclassified to held for sale. Operating activities related to DPLER have been reclassified to "Discontinued operations" in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2015. The following table summarizes the major categories of assets, liabilities at the dates indicated, and the revenues, cost of revenues, operating expenses and income tax of discontinued operations as of and for the periods indicated:
DPLER purchased its power from DP&L during 2015. Prior to DPLER being presented as a discontinued operation, this purchased power and DP&L's corresponding wholesale revenue would have been eliminated in consolidation. Cash flows related to discontinued operations are included in our Condensed Consolidated Statements of Cash Flows. Cash flows from operating activities for discontinued operations were $(0.7) million and $28.4 million for the nine months ended September 30, 2016 and 2015, respectively. Cash flows from investing activities for discontinued operations were $75.5 million and $0.7 million for the nine months ended September 30, 2016 and 2015, respectively. All cash generated from discontinued operations was paid to DPL through dividends for all periods presented. |
Fixed-asset Impairment (Notes) |
9 Months Ended |
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Sep. 30, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |
Asset Impairment Charges [Text Block] | Fixed-asset Impairment During the second quarter of 2016, we tested the recoverability of our long-lived assets at certain of our generation facilities at DP&L. A ruling by the Supreme Court of Ohio on June 20, 2016, lower expectation of future capacity revenue resulting from the most recent PJM capacity auction and a higher anticipated level of environmental compliance costs resulting from third party studies were collectively determined to be an impairment indicator for these assets. We performed a long-lived asset impairment analysis and determined that the carrying amount of Killen and certain DP&L peaking generating facilities were not recoverable. The asset groups of Killen and these DP&L peaking generating facilities were determined to have fair values of $84.3 million and $5.2 million, respectively, using the discounted cash flows under the income approach. As a result, we recognized an asset impairment expense of $230.8 million and $4.7 million for Killen and these DP&L peaking generating facilities, respectively. |
THE DAYTON POWER AND LIGHT COMPANY [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Asset Impairment Charges [Text Block] | Fixed-asset Impairment During the second quarter of 2016, we tested the recoverability of our long-lived assets at certain of our generation facilities at DP&L. A ruling by the Supreme Court of Ohio on June 20, 2016, lower expectation of future capacity revenue resulting from the most recent PJM capacity auction and a higher anticipated level of environmental compliance costs resulting from third party studies were collectively determined to be an impairment indicator for these assets. We performed a long-lived asset impairment test and determined that the carrying amounts of the asset groups of Stuart, Killen and Zimmer were not recoverable. The asset groups of Stuart, Killen and Zimmer were determined to have fair values of $164.4 million, $84.3 million and $111.0 million, respectively, using the discounted cash flows under the income approach. As a result, we recognized asset impairment expenses of $292.0 million, $246.2 million and $318.9 million for Stuart, Killen and Zimmer, respectively during the nine months ended September 30, 2016. |
Summary of Significant Accounting Policies (Policy) |
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Significant Accounting Policies [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Business | Description of Business DPL is a diversified regional energy company organized in 1985 under the laws of Ohio. DPL’s one reportable segment is the Utility segment, comprised of its DP&L subsidiary. DPLER, which was DPL's competitive retail segment, was sold January 1, 2016. See Note 12 – Business Segments for more information relating to these reportable segments. The terms “we,” “us,” “our” and “ours” are used to refer to DPL and its subsidiaries. DPL is an indirectly wholly-owned subsidiary of AES. DP&L is a public utility incorporated in 1911 under the laws of Ohio. Beginning in 2001, Ohio law gave Ohio consumers the right to choose the electric generation supplier from whom they purchase retail generation service; however, distribution and transmission retail services are still regulated. DP&L has the exclusive right to provide such distribution and transmission services to approximately 518,000 customers located in West Central Ohio. Additionally, DP&L offers retail SSO electric service to residential, commercial, industrial and governmental customers in a 6,000 square mile area of West Central Ohio. DP&L owns multiple coal-fired and peaking electric generating facilities as well as numerous transmission facilities, all of which are included in the financial statements at amortized cost. DP&L sources 100% of the generation for its SSO customers through a competitive bid process. Principal industries located in DP&L’s service territory include automotive, food processing, paper, plastic, manufacturing and defense. DP&L's distribution sales reflect the general economic conditions, seasonal weather patterns, retail competition in our service territory and the market price of electricity. DP&L sells all of its energy and capacity into the wholesale market. DPL’s other significant subsidiaries include AES Ohio Generation, which owns and operates peaking generating facilities from which it sells all of its energy and capacity into the wholesale market, and MVIC, our captive insurance company that provides insurance services to DPL and our subsidiaries. DPL owns all of the common stock of its subsidiaries. DPL also has a wholly-owned business trust, DPL Capital Trust II, formed for the purpose of issuing trust capital securities to investors. DP&L’s electric transmission and distribution businesses are subject to rate regulation by federal and state regulators while its generation business is deemed competitive under Ohio law. Accordingly, DP&L applies the accounting standards for regulated operations to its electric transmission and distribution businesses and records regulatory assets when incurred costs are expected to be recovered in future customer rates, and regulatory liabilities when current cost recoveries in customer rates relate to expected future costs. DPL and its subsidiaries employed 1,171 people as of September 30, 2016, of which 1,163 were employed by DP&L. Approximately 62% of all DPL employees are under a collective bargaining agreement that expires on October 31, 2017. |
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Financial Statement Presentation | Financial Statement Presentation DPL’s Condensed Consolidated Financial Statements include the accounts of DPL and its wholly-owned subsidiaries except for DPL Capital Trust II, which is not consolidated, consistent with the provisions of GAAP. DP&L has undivided ownership interests in five coal-fired generating facilities, various peaking generating facilities and numerous transmission facilities, all of which are included in the financial statements at amortized cost, which was adjusted to fair value at the date of the Merger for DPL. Operating revenues and expenses of these facilities are included on a pro rata basis in the corresponding lines in the Condensed Consolidated Statements of Operations. Certain immaterial amounts from prior periods have been reclassified to conform to the current period presentation. All material intercompany accounts and transactions are eliminated in consolidation. These financial statements have been prepared in accordance with GAAP for interim financial statements, the instructions of Form 10-Q and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been omitted from this interim report. Therefore, our interim financial statements in this report should be read along with the annual financial statements included in our Form 10-K for the fiscal year ended December 31, 2015. In the opinion of our management, the Condensed Consolidated Financial Statements presented in this report contain all adjustments necessary to fairly state our financial position as of September 30, 2016; our results of operations for the three and nine months ended September 30, 2016 and 2015 and our cash flows for the nine months ended September 30, 2016 and 2015. Unless otherwise noted, all adjustments are normal and recurring in nature. Due to various factors, including, but not limited to, seasonal weather variations, the timing of outages of EGUs, changes in economic conditions involving commodity prices and competition, and other factors, interim results for the three and nine months ended September 30, 2016 may not be indicative of our results that will be realized for the full year ending December 31, 2016. The preparation of financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the revenues and expenses of the periods reported. Actual results could differ from these estimates. Significant items subject to such estimates and judgments include: the carrying value of property, plant and equipment; unbilled revenues; the valuation of derivative instruments; the valuation of insurance and claims liabilities; the valuation of allowances for receivables and deferred income taxes; regulatory assets and liabilities; liabilities recorded for income tax exposures; litigation; contingencies; the valuation of AROs; and assets and liabilities related to employee benefits. As a result of push down accounting, DPL’s Condensed Consolidated Statements of Operations subsequent to the Merger include depreciation of fixed assets based upon their fair value at the Merger date. |
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Accounting for Taxes Collected from Customers and Remitted to Governmental Authorities | Accounting for Taxes Collected from Customers and Remitted to Governmental Authorities DP&L collects certain excise taxes levied by state or local governments from its customers. These taxes are accounted for on a net basis and not included in revenue. The amounts of such taxes collected for the three months ended September 30, 2016 and 2015 were $14.4 million and $13.0 million, respectively. The amounts of such taxes collected for the nine months ended September 30, 2016 and 2015 were $38.9 million and $38.5 million, respectively. |
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Recently Issued Accounting Standards | New Accounting Pronouncements The following table provides a brief description of recent accounting pronouncements that could have a material impact on our consolidated financial statements:
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Business | Description of Business DP&L is a public utility incorporated in 1911 under the laws of Ohio. Beginning in 2001, Ohio law gave Ohio consumers the right to choose the electric generation supplier from whom they purchase retail generation service; however, distribution and transmission retail services are still regulated. DP&L has the exclusive right to provide such distribution and transmission services to approximately 518,000 customers located in West Central Ohio. Additionally, DP&L offers retail SSO electric service to residential, commercial, industrial and governmental customers in a 6,000 square mile area of West Central Ohio. DP&L owns multiple coal-fired and peaking electric generating facilities as well as numerous transmission facilities, all of which are included in the financial statements at amortized cost. DP&L sources 100% of the generation for its SSO customers through a competitive bid process. Principal industries located in DP&L’s service territory include automotive, food processing, paper, plastic, manufacturing and defense. DP&L's distribution sales reflect the general economic conditions, seasonal weather patterns, retail competition in our service territory and the market price of electricity. DP&L sells all of its energy and capacity into the wholesale market. DP&L is a subsidiary of DPL. DP&L’s electric transmission and distribution businesses are subject to rate regulation by federal and state regulators while its generation business is deemed competitive under Ohio law. Accordingly, DP&L applies the accounting standards for regulated operations to its electric transmission and distribution businesses and records regulatory assets when incurred costs are expected to be recovered in future customer rates, and regulatory liabilities when current cost recoveries in customer rates relate to expected future costs. DP&L employed 1,163 people as of September 30, 2016. Approximately 62% of all employees are under a collective bargaining agreement which expires on October 31, 2017. |
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Financial Statement Presentation | Financial Statement Presentation DP&L does not have any subsidiaries. DP&L has undivided ownership interests in five coal-fired generating facilities, peaking electric generating facilities and numerous transmission facilities, all of which are included in the financial statements at amortized cost. Operating revenues and expenses of these facilities are included on a pro rata basis in the corresponding lines in the Condensed Statements of Operations. Certain immaterial amounts from prior periods have been reclassified to conform to the current period presentation. These financial statements have been prepared in accordance with GAAP for interim financial statements, the instructions of Form 10-Q and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been omitted from this interim report. Therefore, our interim financial statements in this report should be read along with the annual financial statements included in our Form 10-K for the fiscal year ended December 31, 2015. In the opinion of our management, the Condensed Financial Statements presented in this report contain all adjustments necessary to fairly state our financial position as of September 30, 2016; our results of operations for the three and nine months ended September 30, 2016 and 2015 and our cash flows for the nine months ended September 30, 2016 and 2015. Unless otherwise noted, all adjustments are normal and recurring in nature. Due to various factors, including, but not limited to, seasonal weather variations, the timing of outages of EGUs, changes in economic conditions involving commodity prices and competition, and other factors, interim results for the nine months ended September 30, 2016 may not be indicative of our results that will be realized for the full year ending December 31, 2016. The preparation of financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the revenues and expenses of the periods reported. Actual results could differ from these estimates. Significant items subject to such estimates and judgments include: the carrying value of property, plant and equipment; unbilled revenues; the valuation of derivative instruments; the valuation of insurance and claims liabilities; the valuation of allowances for receivables and deferred income taxes; regulatory assets and liabilities; liabilities recorded for income tax exposures; litigation; contingencies; the valuation of AROs; and assets and liabilities related to employee benefits. |
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Accounting for Taxes Collected from Customers and Remitted to Governmental Authorities | Accounting for Taxes Collected from Customers and Remitted to Governmental Authorities DP&L collects certain excise taxes levied by state or local governments from its customers. These taxes are accounted for on a net basis and not included in revenue. The amounts of such taxes collected for the three months ended September 30, 2016 and 2015 were $14.4 million and $13.0 million, respectively. The amounts of such taxes collected for the nine months ended September 30, 2016 and 2015 were $38.9 million and $38.5 million, respectively. |
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Recently Issued Accounting Standards | New Accounting Pronouncements The following table provides a brief description of recent accounting pronouncements that could have a material impact on our financial statements:
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Summary of Significant Accounting Policies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of New Accounting Pronouncements | The following table provides a brief description of recent accounting pronouncements that could have a material impact on our consolidated financial statements:
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of New Accounting Pronouncements | The following table provides a brief description of recent accounting pronouncements that could have a material impact on our financial statements:
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Supplemental Financial Information (Tables) |
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Supplemental Financial Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Supplemental Financial Information | Accounts receivable and Inventories are as follows at September 30, 2016 and December 31, 2015:
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Reclassification out of Accumulated Other Comprehensive Income | The amounts reclassified out of Accumulated Other Comprehensive Income / (Loss) by component during the three and nine months ended September 30, 2016 and 2015 are as follows:
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Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in the components of Accumulated Other Comprehensive Income / (Loss) during the nine months ended September 30, 2016 are as follows:
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Financial Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Supplemental Financial Information | Accounts receivable and Inventories are as follows at September 30, 2016 and December 31, 2015:
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Reclassification out of Accumulated Other Comprehensive Income | The amounts reclassified out of Accumulated Other Comprehensive Income / (Loss) by component during the three and nine months ended September 30, 2016 and 2015 are as follows:
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Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in the components of Accumulated Other Comprehensive Income / (Loss) during the nine months ended September 30, 2016 are as follows:
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Fair Value (Tables) |
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value and Cost Of Non-Derivative Instruments | The following table presents the fair value, carrying value and cost of our non-derivative instruments at September 30, 2016 and December 31, 2015. Information about the fair value of our derivative instruments can be found in Note 5 – Derivative Instruments and Hedging Activities.
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Fair Value of Assets and Liabilities Measured on Recurring Basis | The fair value of assets and liabilities at September 30, 2016 and December 31, 2015 and the respective category within the fair value hierarchy for DPL was determined as follows:
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Fair Value Measurements, Nonrecurring [Table Text Block] | When evaluating impairment of long-lived assets, we measure fair value using the applicable fair value measurement guidance. Impairment expense is measured by comparing the fair value at the evaluation date to the carrying amount. The following table summarizes Long-lived assets measured at fair value on a non-recurring basis during the nine months ended September 30, 2016 and their level within the fair value hierarchy (there were no impairments during the nine months ended September 30, 2015):
(a)See Note 14 – Fixed-asset Impairment for further information (b)Carrying amount at date of valuation |
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Fair Value Inputs, Assets, Quantitative Information [Table Text Block] | The following summarizes the significant unobservable inputs used in the Level 3 measurement on a non-recurring basis during the nine months ended September 30, 2016:
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value and Cost Of Non-Derivative Instruments | The following table presents the fair value, carrying value and cost of our non-derivative instruments at September 30, 2016 and December 31, 2015. Information about the fair value of our derivative instruments can be found in Note 5 – Derivative Instruments and Hedging Activities.
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Fair Value of Assets and Liabilities Measured on Recurring Basis | The fair value of assets and liabilities at September 30, 2016 and December 31, 2015 and the respective category within the fair value hierarchy for DP&L was determined as follows:
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Fair Value Measurements, Nonrecurring [Table Text Block] | When evaluating impairment of long-lived assets, we measure fair value using the applicable fair value measurement guidance. Impairment expense is measured by comparing the fair value at the evaluation date to the carrying amount. The following table summarizes Long-lived assets measured at fair value on a non-recurring basis during the nine months ended September 30, 2016 and their level within the fair value hierarchy (there were no impairments during the nine months ended September 30, 2015):
(a)See Note 12 – Fixed-asset Impairment for further information (b)Carrying amount at date of valuation |
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Fair Value Inputs, Assets, Quantitative Information [Table Text Block] | The following summarizes the significant unobservable inputs used in the Level 3 measurement on a non-recurring basis during the nine months ended September 30, 2016:
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Derivative Instruments and Hedging Activities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions | At September 30, 2016, DPL had the following outstanding derivative instruments:
(a) Refers to whether the derivative instruments have been designated as a cash flow hedge. At December 31, 2015, DPL had the following outstanding derivative instruments:
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Gains or Losses Recognized in AOCI for the Cash Flow Hedges | The following table provides information for DPL concerning gains or losses recognized in AOCI for the cash flow hedges for the three and nine months ended September 30, 2016 and 2015:
(a)The actual amounts that we reclassify from AOCI to earnings related to power can differ from the estimate above due to market price changes. |
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Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The following tables present the amount and classification within the Condensed Consolidated Statements of Operations or Condensed Consolidated Balance Sheets of the gains and losses on DPL’s derivatives not designated as hedging instruments for the three and nine months ended September 30, 2016 and 2015:
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following tables summarize the derivative positions presented in the balance sheet where a right of offset exists under these arrangements and related cash collateral received or pledged. The following table presents the fair value and balance sheet classification of DPL’s derivative instruments at September 30, 2016:
The following table presents the fair value and balance sheet classification of DPL’s derivative instruments at December 31, 2015:
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions | At September 30, 2016, DP&L had the following outstanding derivative instruments:
(a) Refers to whether the derivative instruments have been designated as a cash flow hedge. At December 31, 2015, DP&L had the following outstanding derivative instruments:
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Gains or Losses Recognized in AOCI for the Cash Flow Hedges | The following table provides information for DP&L concerning gains or losses recognized in AOCI for the cash flow hedges for the three and nine months ended September 30, 2016 and 2015:
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Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The following tables present the amount and classification within the Condensed Statements of Operations or Condensed Balance Sheets of the gains and losses on DPL’s derivatives not designated as hedging instruments for the three and nine months ended September 30, 2016 and 2015:
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | DP&L’s derivative instruments at September 30, 2016:
The following table presents the fair value and balance sheet classification of DP&L’s derivative instruments at December 31, 2015:
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Debt (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt |
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THE DAYTON POWER AND LIGHT COMPANY [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt |
|
Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Entity Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rates | The following table details the effective tax rates for the three and nine months ended September 30, 2016 and 2015.
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Entity Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rates | The following table details the effective tax rates for the three and nine months ended September 30, 2016 and 2015.
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Benefit Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Entity Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Benefit Cost / (Income) | The net periodic benefit cost of the pension and postretirement benefit plans for the three and nine months ended September 30, 2016 and 2015 was:
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Estimated Future Benefit Payments and Medicare Part D Reimbursements | Benefit payments and Medicare Part D reimbursements, which reflect future service, are estimated to be paid as follows:
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Entity Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Benefit Cost / (Income) | The net periodic benefit cost of the pension and postretirement benefit plans for the three and nine months ended September 30, 2016 and 2015 was:
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Estimated Future Benefit Payments and Medicare Part D Reimbursements | Benefit payments and Medicare Part D reimbursements, which reflect future service, are estimated to be paid as follows:
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Related Party Transactions (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | The following table provides a summary of these transactions:
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THE DAYTON POWER AND LIGHT COMPANY [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | The following table provides a summary of these transactions:
|
Business Segments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Reporting for Reportable Business Segments | The following tables present financial information for each of DPL’s reportable business segments:
|
Discontinued Operations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Balance Sheet and Profit and Loss Information for Discontinued Operations | The following table summarizes the major categories of assets, liabilities at the dates indicated, and the revenues, cost of revenues, operating expenses and income tax of discontinued operations as of and for the periods indicated:
|
Regulatory Matters (Details) - USD ($) $ in Millions |
Oct. 11, 2016 |
Sep. 01, 2016 |
Jul. 27, 2016 |
---|---|---|---|
Service Stability Rider | $ 9.2 | ||
Revenue Reduction Per Month From Reverting Back to ESP 1 | $ 3.0 | ||
Subsidiaries [Member] | |||
Service Stability Rider | $ 9.2 | ||
Revenue Reduction Per Month From Reverting Back to ESP 1 | $ 3.0 | ||
Subsequent Event [Member] | |||
Distribution Modernization Rider | $ 145.0 | ||
Regulatory Assets, Renewable Energy Recovery | 10.5 | ||
Subsequent Event [Member] | Subsidiaries [Member] | |||
Distribution Modernization Rider | 145.0 | ||
Regulatory Assets, Renewable Energy Recovery | $ 10.5 |
Fair Value Cash Equivalents (Details) $ in Millions |
Sep. 30, 2016
USD ($)
|
---|---|
Money Market Funds, at Carrying Value | $ 90.1 |
Subsidiaries [Member] | |
Money Market Funds, at Carrying Value | $ 90.1 |
Income Taxes (Narrative) (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Entity Information [Line Items] | ||||
Effective income tax rates | 45.70% | (34.10%) | 38.60% | 24.60% |
Estimated annual effective income tax rate | 38.60% | 30.80% | ||
THE DAYTON POWER AND LIGHT COMPANY [Member] | ||||
Entity Information [Line Items] | ||||
Effective income tax rates | 39.60% | 4.90% | 36.70% | 24.80% |
Estimated annual effective income tax rate | 36.70% | 29.00% |
Benefit Plans (Estimated Future Benefit Payments and Medicare Part D Reimbursements) (Details) $ in Millions |
Sep. 30, 2016
USD ($)
|
---|---|
Pension [Member] | |
2016 | $ 6.2 |
2017 | 25.2 |
2018 | 25.8 |
2019 | 26.3 |
2020 | 26.7 |
2021 - 2025 | 134.8 |
Postretirement [Member] | |
2016 | 0.4 |
2017 | 1.6 |
2018 | 1.5 |
2019 | 1.4 |
2020 | 1.4 |
2021 - 2025 | 5.7 |
THE DAYTON POWER AND LIGHT COMPANY [Member] | Pension [Member] | |
2016 | 6.2 |
2017 | 25.2 |
2018 | 25.8 |
2019 | 26.3 |
2020 | 26.7 |
2021 - 2025 | 134.8 |
THE DAYTON POWER AND LIGHT COMPANY [Member] | Postretirement [Member] | |
2016 | 0.4 |
2017 | 1.6 |
2018 | 1.5 |
2019 | 1.4 |
2020 | 1.4 |
2021 - 2025 | $ 5.7 |
Shareholder's Equity Equity Settlement of Related Party Payable (Details) - USD ($) $ in Millions |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Jan. 01, 2016 |
Dec. 31, 2015 |
|
Accounts Payable, Related Parties, Current | $ 1.4 | $ 0.5 | ||
Subsidiaries [Member] | ||||
Accounts Payable, Related Parties, Current | 1.4 | $ 0.5 | ||
Subsidiaries [Member] | Subsidiary of Common Parent [Member] | ||||
Accounts Payable, Related Parties, Current | $ 7.5 | |||
Equity Settlement of Related Party Payable | $ 7.5 | $ 0.0 |
Contractual Obligations, Commercial Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Public Utility, Property, Plant and Equipment [Line Items] | ||
Due to third parties, current | $ 4.8 | $ 0.5 |
THE DAYTON POWER AND LIGHT COMPANY [Member] | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Debt maturity, earliest | 2018 | |
Debt maturity, latest | 2040 | |
DPLE [Member] | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Third party guarantees | $ 16.6 | |
Debt Obligation on 4.9% Equity Ownership [Member] | THE DAYTON POWER AND LIGHT COMPANY [Member] | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Equity ownership interest | 4.90% | |
Equity ownership interest aggregate cost | $ 74.9 | |
Electric Generation Company [Member] | THE DAYTON POWER AND LIGHT COMPANY [Member] | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Debt obligation | $ 1,528.0 |
Business Segments (Narrative) (Details) |
9 Months Ended |
---|---|
Sep. 30, 2016
mi²
segment
customer
power_plant
| |
Segment Reporting Information [Line Items] | |
Number of operating segments | segment | 2 |
THE DAYTON POWER AND LIGHT COMPANY [Member] | |
Segment Reporting Information [Line Items] | |
Number of coal fired power plants | power_plant | 5 |
Approximate number of retail customers | customer | 518,000 |
Service area, square miles | mi² | 6,000 |
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