Business Segments

DPL currently manages its business through two reportable operating segments, the T&D segment and the Generation segment. The primary segment performance measure is income / (loss) from continuing operations before income tax as management has concluded that this measure best reflects the underlying business performance of DPL and is the most relevant measure considered in DPL’s internal evaluation of the financial performance of its segments. The segments are discussed further below:

Transmission and Distribution Segment

The T&D segment is comprised primarily of DP&L’s electric transmission and distribution businesses, which distribute electricity to residential, commercial, industrial and governmental customers. DP&L distributes electricity to more than 523,000 retail customers located in a 6,000 square mile area of West Central Ohio. DP&L’s electric transmission and distribution businesses are subject to rate regulation by federal and state regulators. Accordingly, DP&L applies the accounting standards for regulated operations to its electric transmission and distribution businesses recording 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. The T&D segment includes revenues and costs associated with our investment in OVEC and the historical results of DP&L’s Beckjord Facility, which was closed in 2014 and transferred to a third party in the first quarter of 2018, and Hutchings Coal, which was closed in 2013. As these assets did not transfer to AES Ohio Generation as part of DP&L's Generation Separation on October 1, 2017, they are grouped with the T&D assets for segment reporting purposes. In addition, regulatory deferrals and collections, which include fuel deferrals in historical periods, are included in the T&D segment.

Generation Segment

The Generation segment is comprised of AES Ohio Generation's electric generation business. Prior to October 1, 2017, AES Ohio Generation owned and operated peaking generating facilities, and DP&L owned multiple coal-fired and peaking electric generating facilities. As a result of Generation Separation on October 1, 2017, the DP&L-owned generating facilities were transferred to AES Ohio Generation. On March 27, 2018, after receipt of all necessary regulatory approvals, AES Ohio Generation sold its peaking generating facilities, including those that it had obtained from DP&L as described above. As a result of this transaction, AES Ohio Generation’s remaining generation fleet consists of ownership interests in the Stuart generating station 2-4 and diesels, Killen Unit 2 and combustion turbine and Conesville Unit 4. For more information on this transaction, see Note 14 – Dispositions. AES Ohio Generation sells all of its generated energy and capacity into the PJM wholesale market.

Included within the “Other” column are other businesses that do not meet the GAAP requirements for disclosure as reportable segments as well as certain corporate costs, which include interest expense on DPL’s long-term debt and adjustments related to purchase accounting from the Merger. 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, costs of sales and expenses are eliminated in consolidation. Certain shared and corporate costs are allocated among reporting segments.

The following tables present financial information for each of DPL’s reportable business segments:



$ in millions	T&D		Generation ^(a)			Other ^(a)			Adjustments and Eliminations			DPL Consolidated
Three months ended March 31, 2018
Revenues from external customers	$	195.8	$	95.0		$	2.4		$	—		$	293.2
Intersegment revenues	0.2		—			0.6			(0.8		)	—
Total revenues	$	196.0	$	95.0		$	3.0		$	(0.8	)	$	293.2

Depreciation and amortization	$	18.6	$	1.5		$	—		$	—		$	20.1
Fixed-asset Impairments (Note 15)	$	—	$	—		$	—		$	—		$	—
Interest expense	$	8.2	$	—		$	19.8		$	—		$	28.0
Income / (loss) from continuing operations before income tax	$	19.3	$	71.0		$	(69.8	)	$	—		$	20.5

Cash capital expenditures	$	24.6	$	1.7		$	1.0		$	—		$	27.3

At March 31, 2018
Total assets	$	1,666.9	$	228.9		$	580.4		$	(580.9	)	$	1,895.3

(a) During the three months ended March 31, 2018, the Generation segment recorded a gain on the sale of the Peaker assets of $52.5 million, and the Other segment recorded a loss on the sale of the Peaker assets of $54.4 million, due to the asset values established by applying purchase accounting. These gains / (losses) resulted in a consolidated DPL loss on the sale of the Peaker assets of $1.9 million and are included in Income / (loss) from continuing operations before income tax.

$ in millions	T&D		Generation			Other			Adjustments and Eliminations			DPL Consolidated
Three months ended March 31, 2017
Revenues from external customers	$	189.8	$	131.8		$	2.3		$	—		$	323.9
Intersegment revenues	0.3		—			1.4			(1.7		)	—
Total revenues	$	190.1	$	131.8		$	3.7		$	(1.7	)	$	323.9

Depreciation and amortization	$	18.1	$	7.0		$	2.9		$	—		$	28.0
Fixed-asset Impairments (Note 15)	$	—	$	66.3		$	0.1		$	—		$	66.4
Interest expense	$	7.6	$	—		$	19.8		$	(0.1	)	$	27.3
Income / (loss) from continuing operations before income tax	$	25.0	$	(86.8	)	$	(21.4	)	$	—		$	(83.2	)

Cash capital expenditures	$	26.3	$	14.1		$	1.0		$	—		$	41.4

At December 31, 2017
Total assets	$	1,689.4	$	275.0		$	468.0		$	(383.2	)	$	2,049.2