Fixed Asset Impairment

12 Months Ended

Dec. 31, 2016

During the years ended December 31, 2016, 2015 and 2014, DPL had the following fixed-asset impairments:



		Years ended December 31,
	Measurement Date	2016		2015		2014
Killen	December 31, 2016	$	75.4	$	—	$	—
Stuart	December 31, 2016	228.5		—		—
Miami Fort	December 31, 2016	149.4		—		—
Zimmer	December 31, 2016	144.7		—		—
Conesville	December 31, 2016	23.9		—		—
Hutchings peaking facilities	December 31, 2016	1.6		—		—
Killen	June 30, 2016	230.8		—		—
Certain peaking facilities	June 30, 2016	4.7		—		—
East Bend	March 31, 2014	—		—		11.5

Total impairment loss		$	859.0	$	—	$	11.5

Killen, Stuart, Miami Fort, Zimmer, Conesville and Hutchings, December 31, 2016 - During the fourth quarter of 2016, we tested the recoverability of our long-lived coal-fired generation assets and one gas-fired peaking plant. Additional uncertainty around the useful life of Stuart and Killen related to the DP&L ESP proceedings along with lower expectations of forward dark spreads and capacity prices beyond the cleared period were collectively determined to be an impairment indicator for these assets. Market information indicating that there was a significant decrease in the fair value of Zimmer and Miami Fort was determined to be an indicator of impairment for these assets. The lower forward dark spreads and capacity prices, along with the indicators at the other coal-fired facilities, collectively, resulted in an indicator of impairment for the Conesville asset group. For the gas-fired peaking plant, significant incremental capital expenditures relative to its fair value along with the fact that an impairment charge was previously taken at this facility in Q2 2016, were collectively determined to be an impairment indicator for this asset. DP&L performed a long-lived asset impairment analysis for each of these asset groups and determined that their carrying amounts were not recoverable. The Killen, Stuart, Miami Fort, Zimmer and Conesville coal-fired facility asset groups and the Hutchings gas-fired peaking plant asset group were determined to have a fair value of $42.8 million, $57.4 million, $36.5 million, $23.7 million, $1.1 million and $1.6 million, respectively, using the market approach for Miami Fort and Zimmer and the income approach for the remaining asset groups. As a result, DPL recognized a total pre-tax asset impairment expense of $623.5 million.

Killen and DP&L peaking facilities, June 30, 2016 - 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 amounts 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, DPL recognized an asset impairment expense of $230.8 million and $4.7 million for Killen and these DP&L peaking generating facilities, respectively.

East Bend, March 31, 2014 - During the first quarter of 2014, DPL tested the recoverability of long-lived assets at East Bend, a 186 MW coal-fired plant in Kentucky jointly-owned by DP&L. Indications during that quarter that the fair value of the asset group was less than its carrying amount were determined to be impairment indicators given how narrowly these long-lived assets had passed the recoverability test during the fourth quarter of 2013. DPL performed a long-lived asset impairment test and determined that the carrying amount of the asset group was not recoverable. The East Bend asset group was determined to have a fair value of $2.7 million using the market approach. As a result, we recognized an asset impairment expense of $11.5 million. East Bend is reported in the T&D segment, however, this impairment is shown within Other in Note 14 – Business Segments due to acquisition adjustments at DPL which were not pushed down to the T&D or Generation segments. In May 2014, an agreement was signed for the sale of DP&L’s interest in the generating assets at East Bend. This transaction closed on December 30, 2014.

THE DAYTON POWER AND LIGHT COMPANY [Member]

Entity Information [Line Items]

Fixed-asset Impairment

During the years ended December 31, 2016, 2015 and 2014, DP&L had the following fixed-asset impairments:



		Years ended December 31,
	Measurement Date	2016		2015		2014
Killen	December 31, 2016	$	75.3	$	—	$	—
Stuart	December 31, 2016	149.9		—		—
Miami Fort	December 31, 2016	157.7		—		—
Zimmer	December 31, 2016	91.3		—		—
Conesville	December 31, 2016	20.8		—		—
Hutchings peaking facilities	December 31, 2016	1.4		—		—
Stuart	June 30, 2016	292.0		—		—
Killen	June 30, 2016	246.2		—		—
Zimmer	June 30, 2016	318.9		—		—

Total impairment loss		$	1,353.5	$	—	$	—

Killen, Stuart, Miami Fort, Zimmer, Conesville and Hutchings peakers - December 31, 2016 - During the fourth quarter of 2016, we tested the recoverability of our long-lived coal-fired generation assets and one gas-fired peaking plant. Additional uncertainty around the useful life of Stuart and Killen related to the DP&L ESP proceedings along with lower expectations of forward dark spreads and capacity prices beyond the cleared period were collectively determined to be an impairment indicator for these assets. Market information indicating that there was a significant decrease in the fair value of Zimmer and Miami Fort was determined to be an indicator of impairment for these assets. The lower forward dark spreads and capacity prices, along with the indicators at the other coal-fired facilities, collectively, resulted in an indicator of impairment for the Conesville asset group. For the gas-fired peaking plant, significant incremental capital expenditures relative to its fair value along with the fact that an impairment charge was previously taken at DPL for this facility in Q2 2016, were collectively determined to be an impairment indicator for this asset. DP&L performed a long-lived asset impairment analysis for each of these asset groups and determined that their carrying amounts were not recoverable. The Killen, Stuart, Miami Fort, Zimmer and Conesville coal-fired facility asset groups and the Hutchings gas-fired peaking plant asset group were determined to have a fair value of $42.8 million, $57.4 million, $36.5 million, $23.7 million, $1.1 million and $1.6 million, respectively, using the market approach for Miami Fort and Zimmer and the income approach for the remaining asset groups. As a result, DP&L recognized a total pre-tax asset impairment expense of $496.4 million.

Killen, Stuart and Zimmer - June 30, 2016 - 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, DP&L recognized asset impairment expenses of $292.0 million, $246.2 million and $318.9 million for Stuart, Killen and Zimmer, respectively.