Dispositions (Notes)

6 Months Ended

Jun. 30, 2020

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Discontinued Operations

Conesville - In May 2020, AEP, the operator of the formerly co-owned Conesville EGU, retired Conesville Unit 4 as planned. On June 5, 2020, DPL and AES Ohio Generation, together with AEP, completed the transfer of their interests in the retired Unit 4, including the associated environmental liabilities, to an unaffiliated third-party purchaser. As a result, DPL made cash expenditures of $0.6 million and recognized a gain on the transfer of $4.5 million for the three and six months ended June 30, 2020. For the transaction, DPL will make additional quarterly cash expenditures, totaling $3.4 million, through July 2022. The transfer of Conesville Unit 4 was the last step in DPL's plan to exit its AES Ohio Generation business operations.

Stuart and Killen - On May 31, 2018, DPL and AES Ohio Generation retired the Stuart Station coal-fired and diesel-fired generating units and the Killen Station coal-fired generating unit and combustion turbine, as planned. On December 20, 2019, DPL and AES Ohio Generation, together with AES Ohio Generation's joint owners in the retired Stuart and Killen generating facilities, completed the transfer of the retired generating facilities, including the associated environmental liabilities, to an unaffiliated third-party purchaser.

DPL determined that the transfers of Conesville, Stuart and Killen along with the sales of the Peaker Assets in 2018 and Miami Fort and Zimmer in 2017 constitute the disposal of a group of components, which, as a whole, represent a strategic shift to exit its AES Ohio Generation business. As such, the disposal of this group of components qualifies to be presented as discontinued operations. Therefore, the results of operations, assets and liabilities of this group of components were reported as such in the Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets for all periods presented.

The following table summarizes the major categories of assets and liabilities at the date indicated:


$ in millions	December 31, 2019
Accounts receivable, net	$	18.0


Inventories	3.7
Taxes applicable to subsequent years	0.3
Prepayments and other current assets	0.3



Intangible assets, net of amortization	0.1
Other non-current assets	1.0
Total assets of the disposal group classified as assets of discontinued operations and held-for-sale businesses in the balance sheets	$	23.4

Accounts payable	$	5.6

Accrued taxes	0.3
Accrued and other current liabilities	3.1

Deferred income taxes^(a)	(6.5)
Taxes payable	0.3

Asset retirement obligations	8.3
Other non-current liabilities	6.3
Total liabilities of the disposal group classified as liabilities of discontinued operations and held-for-sale businesses in the balance sheets	$	17.4

(a) Deferred income taxes represent the tax asset position of the discontinued group of components, which were netted with liabilities on DPL prior to classification as discontinued operations.

The following table summarizes the revenues, operating costs, other expenses and income tax of discontinued operations for the periods indicated:


	Three months ended						Six months ended
	June 30,						June 30,
$ in millions	2020		2019		2020		2019
Revenues	$	8.8	$	19.1	$	22.4	$	40.5

Operating costs and other expenses	(10.0)		(16.3)		(24.4)		(9.4)

Income from discontinued operations	(1.2)		2.8		(2.0)		31.1
Gain from disposal of discontinued operations	4.5		—		4.5		0.1
Income tax expense from discontinued operations	0.7		0.4		0.5		6.5
Net income from discontinued operations	$	2.6	$	2.4	$	2.0	$	24.7

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 $(2.7) million and $6.8 million for the three months ended June 30, 2020 and 2019, respectively, and $3.6 million and $11.6 million for the six months ended June 30, 2020 and 2019, respectively. Cash flows from investing activities for discontinued operations were $(0.6) million and $4.4 million, respectively, for the three and six months ended June 30, 2020. There were no material cash flows from investing activities for the three and six months ended June 30, 2019.

AROs of Discontinued Operations

Prior to the transfer of the retired Stuart and Killen generating facilities, the facilities carried ARO liabilities consisting primarily of river intake and discharge structures, coal unloading facilities, landfills and ash disposal facilities. In the first quarter of 2019, DPL reduced the ARO liability related to the Stuart and Killen ash ponds and landfills by $22.5 million based on updated internal analyses that reduced estimated closure costs associated with these ash ponds and landfills. As these plants were no longer in service, the reduction to the ARO liability was recorded as a credit to depreciation and amortization expense in the same amount. The credit to depreciation and amortization expense is included in operating and other expenses of discontinued operations for the six months ended June 30, 2019 in the table above.