Business Segments

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Business Segments

Note 10 – Business Segments

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 9 – Related Party Transactions). 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. Any excess energy and capacity is 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 as well as certain corporate costs including interest expense on DPL’s debt. 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:

$ in millions	Utility Segment		Other			Adjustments and Eliminations			DPL Consolidated
For the three months ended March 31, 2016
Revenues from external customers	$	348.9	$	15.1		$	—		$	364.0
Intersegment revenues	0.3		1.3			(1.6		)	—
Total revenues	349.2		16.4			(1.6		)	364.0
Fuel	62.9		4.0			—			66.9
Purchased power	121.3		1.2			(0.6		)	121.9
Gross margin	$	165.0	$	11.2		$	(1.0	)	$	175.2
Depreciation and amortization	$	34.3	$	(0.9	)	$	—		$	33.4
Interest expense	$	5.3	$	21.0		$	—		$	26.3
Income tax expense / (benefit)	$	12.4	$	(11.8	)	$	—		$	0.6
Net income / (loss) from continuing operations	$	33.7	$	(31.5	)	$	—		$	2.2
Discontinued operations, net of tax	$	—	$	29.6		$	—		$	29.6
Net income / (loss)	$	33.7	$	(1.9	)	$	—		$	31.8
Cash capital expenditures	$	35.8	$	1.9		$	—		$	37.7
at March 31, 2016
Total assets	$	3,318.1	$	1,222.3		$	(1,337.5	)	$	3,202.9

$ in millions	Utility Segment		Competitive Retail		Other			Adjustments and Eliminations			DPL Consolidated
For the three months ended March 31, 2015
Revenues from external customers	$	350.6	$	122.3	$	21.6		$	—		$	494.5
Intersegment revenues	110.7		—		1.6			(112.3		)	—
Total revenues	461.3		122.3		23.2			(112.3		)	494.5
Fuel	69.3		—		7.1			—			76.4
Purchased power	189.7		111.7		4.2			(111.4		)	194.2
Gross margin	$	202.3	$	10.6	$	11.9		$	(0.9	)	$	223.9
Depreciation and amortization	$	34.7	$	0.3	$	—		$	—		$	35.0
Interest expense	$	8.7	$	—	$	21.9		$	(0.1	)	$	30.5
Income tax expense / (benefit)	$	14.8	$	1.3	$	(3.4	)	$	—		$	12.7
Net income / (loss)	$	36.5	$	1.6	$	(9.4	)	$	—		$	28.7
Cash capital expenditures	$	33.1	$	0.2	$	0.4		$	—		$	33.7
at December 31, 2015
Total assets	$	3,359.6	$	—	$	1,304.5		$	(1,339.4	)	$	3,324.7