Business Segments

3 Months Ended

Mar. 31, 2017

Segment Reporting Information [Line Items]

Business Segments

Business Segments

During the fourth quarter of 2016, DPL's management reassessed the reportable business segments in connection with recent changes in the regulatory environment, including the pending ESP case, and in preparation for the anticipated transfer of DP&L’s generation assets to AES Ohio Generation. DPL currently manages the 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 income / (loss) from continuing operations before income tax 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 520,000 retail customers who are 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 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. The T&D segment includes revenues and costs associated with our investment in OVEC and the historical results of DP&L’s Beckjord, Hutchings Coal, and East Bend generating facilities, which were either closed or sold in prior periods. As these assets will not be transferring to AES Ohio Generation when DP&L’s planned generation separation occurs, 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 and DP&L’s electric generation business. Beginning in 2001, Ohio law gave consumers the right to choose the electric generation supplier from whom they purchase retail generation services. AES Ohio Generation owns and operates peaking generating facilities, and DP&L owns multiple coal-fired and peaking electric generating facilities. Both AES Ohio Generation and DP&L primarily sell their generated energy and capacity into the PJM wholesale market as DP&L sources all of the generation for its SSO customers through a competitive bid process.

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 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 and profits 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			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 impairment (Note 14)	$	—	$	66.3		$	0.1		$	—		$	66.4
Interest expense	$	7.4	$	—		$	19.6		$	(0.1	)	$	26.9
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 March 31, 2017
Total assets	$	1,680.9	$	366.1		$	633.6		$	(416.4	)	$	2,264.2

$ in millions	T&D		Generation			Other			Adjustments and Eliminations			DPL Consolidated
Three months ended March 31, 2016
Revenues from external customers	$	204.2	$	158.2		$	1.6		$	—		$	364.0
Intersegment revenues	0.3		—			1.3			(1.6		)	—
Total revenues	$	204.5	$	158.2		$	2.9		$	(1.6	)	$	364.0
Depreciation and amortization	$	17.2	$	18.6		$	(2.4	)	$	—		$	33.4
Interest expense	$	5.4	$	0.1		$	20.9		$	(0.1	)	$	26.3
Income / (loss) from continuing operations before income tax	$	34.2	$	(12.3	)	$	(19.1	)	$	—		$	2.8
Cash capital expenditures	$	24.1	$	13.0		$	0.6		$	—		$	37.7
At December 31, 2016
Total assets	$	1,710.5	$	472.3		$	673.6		$	(437.2	)	$	2,419.2

Subsidiaries [Member]

Segment Reporting Information [Line Items]

Business Segments

Business Segments

During the fourth quarter of 2016, DP&L’s management reassessed the separate reportable business segments in connection with recent changes in the regulatory environment, including the pending ESP case, and in preparation for the anticipated transfer of DP&L’s generation assets to AES Ohio Generation. DP&L currently manages the business through two reportable operating segments, the T&D segment and the Generation segment. The primary segment performance measure is income / (loss) from operations before income tax as management has concluded that income / (loss) from operations before income tax best reflects the underlying business performance of DP&L and is the most relevant measure considered in DP&L’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 520,000 retail customers who are 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 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. The T&D segment includes revenues and costs associated with our investment in OVEC and the historical results of DP&L’s Beckjord, Hutchings Coal, and East Bend generating facilities, which were either closed or sold in prior periods. As these assets will not be transferring to AES Ohio Generation when DP&L’s planned generation separation occurs, 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 DP&L’s electric generation business. Beginning in 2001, Ohio law gave consumers the right to choose the electric generation supplier from whom they purchase retail generation services. DP&L's generation segmentowns multiple coal-fired and peaking electric generating facilities. DP&L's generation segment sells its generated energy and capacity into the wholesale market as DP&L sources all of the generation for its SSO customers through a competitive bid process.

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. Certain shared and corporate costs are allocated among reporting segments.

The following tables present financial information for each of DP&L’s reportable business segments:

$ in millions	T&D		Generation			Adjustments and Eliminations		DP&L Total
Three months ended March 31, 2017
Revenues from external customers	$	190.1	$	121.0		$	—	$	311.1
Intersegment revenues	—		—			—		—
Total revenues	$	190.1	$	121.0		$	—	$	311.1
Depreciation and amortization	$	18.1	$	5.4		$	—	$	23.5
Fixed-asset impairment (Note 14)	$	—	$	66.3		$	—	$	66.3
Interest expense	$	7.4	$	0.2		$	—	$	7.6
Income / (loss) from operations before income tax	$	25.0	$	(88.7	)	$	—	$	(63.7	)
Cash capital expenditures	$	26.3	$	7.8		$	—	$	34.1
At March 31, 2017
Total assets	$	1,680.9	$	209.0		$	—	$	1,889.9

$ in millions	T&D		Generation		Adjustments and Eliminations		DP&L Total
Three months ended March 31, 2016
Revenues from external customers	$	204.5	$	144.7	$	—	$	349.2
Intersegment revenues	—		—		—		—
Total revenues	$	204.5	$	144.7	$	—	$	349.2
Depreciation and amortization	$	17.2	$	17.1	$	—	$	34.3
Interest expense	$	5.2	$	0.1	$	—	$	5.3
Income from operations before income tax	$	34.4	$	11.7	$	—	$	46.1
Cash capital expenditures	$	24.1	$	11.7	$	—	$	35.8
At December 31, 2016
Total assets	$	1,710.5	$	324.6	$	—	$	2,035.1