dpl-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________________________________

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2024

-OR-

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-9052

DPL Inc.

(Exact name of registrant as specified in its charter)


Ohio			31-1163136
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
1065 Woodman Drive
Dayton, Ohio			45432
(Address of principal executive offices)			(Zip Code)
Registrant's telephone number, including area code:			(937) 259-7215

Commission File Number 1-2385

THE DAYTON POWER AND LIGHT COMPANY

(Exact name of registrant as specified in its charter)

d/b/a AES Ohio


Ohio			31-0258470
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
1065 Woodman Drive
Dayton, Ohio			45432
(Address of principal executive offices)			(Zip Code)
Registrant's telephone number, including area code:			(937) 259-7215


Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
N/A	N/A	N/A

Indicate by check mark whether each registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

DPL Inc.

Yes

☐

☒

The Dayton Power and Light Company

Yes

☐

☒

DPL Inc. and The Dayton Power and Light Company are voluntary filers. DPL Inc. and The Dayton Power and Light Company have filed all applicable reports under Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months.

Indicate by check mark whether each registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

DPL Inc.

Yes

☒

☐

The Dayton Power and Light Company

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large
accelerated
Filer

Accelerated
Filer

Non-accelerated Filer

Smaller
reporting
company

Emerging growth company

DPL Inc.

☐

☒

☐

Large
accelerated
Filer

Accelerated
Filer

Non-accelerated Filer

Smaller
reporting
company

Emerging growth company

The Dayton Power and Light Company

☐

☒

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.


DPL Inc.			☐
The Dayton Power and Light Company			☐

Indicate by check mark whether each registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

DPL Inc.

Yes

☐

☒

The Dayton Power and Light Company

Yes

☐

☒

All of the outstanding common stock of DPL Inc. is indirectly owned by The AES Corporation. All of the outstanding common stock of The Dayton Power and Light Company is owned by DPL Inc.

As of May 2, 2024, each registrant had the following shares of common stock outstanding:

Registrant

Description

Shares Outstanding

DPL Inc.

Common Stock, no par value

The Dayton Power and Light Company

Common Stock, $0.01 par value

41,172,173

This combined Form 10-Q is separately filed by DPL Inc. and The Dayton Power and Light Company. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. Each registrant makes no representation as to information relating to a registrant other than itself.

DPL Inc. and AES Ohio

Form 10-Q for the Quarterly Period ended March 31, 2024


		Table of Contents	Page No.
GLOSSARY OF TERMS			5
FORWARD–LOOKING STATEMENTS			7
PART I: FINANCIAL INFORMATION
	ITEM 1	FINANCIAL STATEMENTS
		DPL Inc.
		Condensed Consolidated Statements of Operations	11
		Condensed Consolidated Statements of Comprehensive Income	12
		Condensed Consolidated Balance Sheets	13
		Condensed Consolidated Statements of Cash Flows	14
		Condensed Consolidated Statements of Shareholder's Equity	15
		Notes to Unaudited Condensed Consolidated Financial Statements	16
		Note 1. Overview and Summary of Significant Accounting Policies	16
		Note 2. Regulatory Matters	19
		Note 3. Fair Value	19
		Note 4. Derivative Instruments and Hedging Activities	20
		Note 5. Debt	21
		Note 6. Income Taxes	21
		Note 7. Benefit Plans	22
		Note 8. Shareholder's Equity	22
		Note 9. Commitments and Contingencies	22
		Note 10. Business Segments	23
		Note 11. Revenue	24


		AES Ohio
		Condensed Statements of Operations	27
		Condensed Statements of Comprehensive Income	28
		Condensed Balance Sheets	29
		Condensed Statements of Cash Flows	30
		Condensed Statements of Shareholder's Equity	31
		Notes to Unaudited Condensed Financial Statements	32
		Note 1 . Overview and Summary of Significant Accounting Policies	32
		Note 2 . Regulatory Matters	35
		Note 3 . Fair Value	35
		Note 4 . Debt	37
		Note 5 . Income Taxes	37
		Note 6 . Benefit Plans	38
		Note 7 . Shareholder's Equity	38
		Note 8 . Commitments and Contingencies	38
		Note 9 . Revenue	39


	ITEM 2	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	41
		Executive Summary	41
		Results of Operations – DPL	43
		Results of Operations by Segment – DPL	47
		Results of Operations – AES Ohio	48
		Key Trends and Uncertainties	51
		Capital Resources and Liquidity	52
		Critical Accounting Policies and Estimates	56
	ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	56
	ITEM 4	CONTROLS AND PROCEDURES	56

PART II: OTHER INFORMATION
	ITEM 1	LEGAL PROCEEDINGS	57
	ITEM 1A	RISK FACTORS	57
	ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	57
	ITEM 3	DEFAULTS UPON SENIOR SECURITIES	57
	ITEM 4	MINE SAFETY DISCLOSURES	57
	ITEM 5	OTHER INFORMATION	57
	ITEM 6	EXHIBITS	58
SIGNATURES			59

Table of Contents

DPL Inc. and AES Ohio

Form 10-Q for the Quarterly Period ended March 31, 2024

GLOSSARY OF TERMS

The following select terms, abbreviations or acronyms are used in this Form 10-Q:


Term			Definition


AES			The AES Corporation - a global power company and the ultimate parent company of DPL
AES Ohio			The Dayton Power and Light Company, which does business as AES Ohio
AES Ohio Credit Agreement			$250.0 million AES Ohio Amended and Restated Credit Agreement, dated as of December 22, 2022
AES Ohio Generation			AES Ohio Generation, LLC - a wholly-owned subsidiary of DPL, which previously operated EGUs and made wholesale sales
AFUDC			Allowance for Funds Used During Construction

AOCI			Accumulated Other Comprehensive Income
AOCL			Accumulated Other Comprehensive Loss
ASU			Accounting Standards Update

CAA			U.S. Clean Air Act - the congressional act that directs the EPA’s regulation of stationary and mobile sources of air pollution to protect air quality and stratospheric ozone



DIR			Distribution Investment Rider - established in the ESP 4 to recover certain distribution capital investments placed in service beginning June 30, 2020, for three years, and subject to increasing annual revenue limits and other terms. The annual revenue limit for 2024 is $38.4 million.
DPL			DPL Inc. and its consolidated subsidiaries
DP&L			The Dayton Power and Light Company - the principal subsidiary of DPL and a public utility that delivers electricity to residential, commercial, industrial and governmental customers in a 6,000-square mile area of West Central Ohio. DP&L does business as AES Ohio.

EPA			U.S. Environmental Protection Agency

ESP			The Electric Security Plan - a plan that a utility must file with the PUCO to establish SSO rates pursuant to Ohio law
ESP 4			DP&L's ESP filed September 26, 2022 which was approved by the PUCO in August 2023
FASB			Financial Accounting Standards Board
FASC			FASB Accounting Standards Codification

Form 10-K			DPL’s and DP&L’s combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed on February 26, 2024
First and Refunding Mortgage			DP&L’s First and Refunding Mortgage, dated October 1, 1935, as amended, with the Bank of New York Mellon as Trustee
GAAP			Generally Accepted Accounting Principles in the United States of America

kWh			Kilowatt-hours - a measure of electrical energy equivalent to a power consumption of 1,000 watts for 1 hour
Master Trust			DP&L established a Master Trust to hold assets that could be used for the benefit of employees participating in employee benefit plans
MATS			Mercury and Air Toxics Standards - the EPA’s rules for existing and new power plants under Section 112 of the CAA

Miami Valley Lighting			Miami Valley Lighting, LLC is a wholly-owned subsidiary of DPL established in 1985 to provide street and outdoor lighting services to customers in the Dayton region. Miami Valley Lighting serves businesses, communities and neighborhoods in West Central Ohio with over 70,000 lighting solutions for more than 190 businesses and 180 local governments.

MVIC			Miami Valley Insurance Company is a wholly-owned insurance subsidiary of DPL that provides insurance services to DPL and its subsidiaries

NAAQS			National Ambient Air Quality Standards - the EPA’s health and environmental based standards for six specified pollutants, as found in the ambient air
NERC			North American Electric Reliability Corporation - a not-for-profit international regulatory authority whose mission is to assure the effective and efficient reduction of risks to the reliability and security of the electric grid

OAQDA			Ohio Air Quality Development Authority


OVEC			Ohio Valley Electric Corporation - an electric generating company in which DP&L holds a 4.9% equity interest
Pension Plans			AES Ohio sponsors two defined benefit plans, The Dayton Power and Light Company Retirement Income Plan and The Dayton Power and Light Company Supplemental Executive Retirement Plan
PJM			PJM Interconnection, LLC, an RTO
PUCO			Public Utilities Commission of Ohio

RTO			Regional Transmission Organization - an entity that is independent from all generation and power marketing interests and has exclusive responsibility for grid operations, short-term reliability, and transmission service within a region
SEC			U.S. Securities and Exchange Commission

Service Company			AES US Services, LLC - the shared services affiliate providing accounting, finance, and other support services to AES’ U.S. businesses

Smart Grid Phase 1			In June 2021, the PUCO approved the first phase of AES Ohio's grid modernization plan, covering four years of investment.

Table of Contents

DPL Inc. and AES Ohio

Form 10-Q for the Quarterly Period ended March 31, 2024


Term			Definition
Smart Grid Phase 2			In February 2024, AES Ohio applied for PUCO approval of the second phase of its grid modernization plan, covering ten years of investment following Smart Grid Phase 1.
SSO			Standard Service Offer represents the regulated rates, authorized by the PUCO, charged to DP&L retail customers that take retail generation service from DP&L within DP&L’s service territory
T&D			Transmission and distribution
TCRR			Transmission Cost Recovery Rider
U.S.			United States of America

USF			The Universal Service Fund is a statewide program which provides qualified low-income customers in Ohio with income-based bills and energy efficiency education programs
Utility segment			DPL's Utility segment is made up of DP&L’s electric transmission and distribution businesses, which transmit and distribute electricity to residential, commercial, industrial and governmental customers

Table of Contents

DPL Inc. and AES Ohio

Form 10-Q for the Quarterly Period ended March 31, 2024

FORWARD–LOOKING STATEMENTS

Certain statements contained in this report are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Matters discussed in this report that relate to events or developments that are expected to occur in the future, including management’s expectations, strategic objectives, business prospects, anticipated economic performance and financial condition and other similar matters constitute forward-looking statements. Forward-looking statements are based on management’s beliefs, assumptions and expectations of future economic performance, considering the information currently available to management. These statements are not statements of historical fact and are typically identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will” and similar expressions. Such forward-looking statements are subject to risks and uncertainties and investors are cautioned that outcomes and results may vary materially from those projected due to various factors beyond our control, including but not limited to:

•impacts of weather on retail sales;

•growth in our service territory and changes in demand and demographic patterns;

•weather-related damage to our electrical system;

•performance of our suppliers;

•transmission and distribution system reliability and capacity;

•regulatory actions and outcomes, including, but not limited to, the review and approval of our rates and charges by the PUCO;

•federal and state legislation and regulations;

•changes in our credit ratings or the credit ratings of AES;

•fluctuations in the value of pension plan assets, fluctuations in pension plan expenses and our ability to fund defined benefit pension plans;

•changes in financial or regulatory accounting policies;

•environmental matters, including costs of compliance with, and liabilities related to, current and future environmental and climate change laws and requirements;

•interest rates and the use of interest rate hedges, inflation rates and other costs of capital;

•the availability of capital;

•the ability of subsidiaries to pay dividends or distributions to DPL;

•level of creditworthiness of counterparties to contracts and transactions;

•labor strikes or other workforce factors, including the ability to attract and retain key personnel;

•facility or equipment maintenance, repairs and capital expenditures;

•significant delays or unanticipated cost increases associated with construction or other projects;

•the availability and cost of funds to finance working capital and capital needs, particularly during periods when the time lag between incurring costs and recovery is long and the costs are material;

•local economic conditions;

•costs and effects of legal and administrative proceedings, audits, settlements, investigations and claims and the ultimate disposition of litigation;

•industry restructuring, deregulation and competition;

•issues related to our participation in PJM, including the cost associated with membership, allocation of costs, costs associated with transmission expansion, the recovery of costs incurred and the risk of default of other PJM participants;

•changes in tax laws and the effects of our tax strategies;

•product development, technology changes and changes in prices of products and technologies;

•cyberattacks and information security breaches;

•the use of derivative contracts;

•catastrophic events such as fires, explosions, terrorist acts, acts of war, pandemic events, or natural disasters such as floods, earthquakes, tornadoes, severe winds, ice or snowstorms, droughts, or other similar occurrences, including as a result of climate change; and

•the risks and other factors discussed in this report and other DPL and DP&L filings with the SEC.

Forward-looking statements speak only as of the date of the document in which they are made. We disclaim any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in our expectations or any change in events, conditions or circumstances on which the forward-looking statement is

Table of Contents

DPL Inc. and AES Ohio

Form 10-Q for the Quarterly Period ended March 31, 2024

based. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements.

All of the above factors are difficult to predict, contain uncertainties that may materially affect actual results, and many are beyond our control. See ITEM 1A. Risk Factors to Part I in our Annual Report on Form 10-K and the Management's Discussion and Analysis of Financial Condition and Results of Operations section in our Form 10-K and this Quarterly Report on Form 10-Q for a more detailed discussion of the foregoing and certain other factors that could cause actual results to differ materially from those reflected in such forward-looking statements and that should be considered in evaluating our outlook. These risks may also be specifically described in our Quarterly Reports on Form 10-Q in PART II, ITEM 1A, Current Reports on Form 8-K and other documents that we may file from time to time with the SEC.

Our SEC filings are available to the public from the SEC’s website at www.sec.gov.

COMPANY WEBSITE

DP&L’s public internet site is www.aes-ohio.com. The information on this website is not incorporated by reference into this report.

Table of Contents

DPL Inc. and AES Ohio

Form 10-Q for the Quarterly Period ended March 31, 2024


Part I - Financial Information

This report includes the combined filing of DPL and DP&L. Throughout this report, the terms "the Company", “we,” “us,” “our” and “ours” are used to refer to both DPL and DP&L, respectively and altogether, unless the context indicates otherwise. Discussions or areas of this report that apply only to DPL or DP&L will be clearly noted in the applicable section.

ITEM 1. FINANCIAL STATEMENTS

Table of Contents

FINANCIAL STATEMENTS

DPL INC.

Table of Contents


DPL Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
	Three months ended
	March 31,
$ in millions		2024		2023
REVENUE		$	226.4	$	240.1

OPERATING COSTS AND EXPENSES:
Net purchased power cost		89.7		122.2
Operation and maintenance		60.9		54.0
Depreciation and amortization		22.6		19.8
Taxes other than income taxes		29.2		25.5



Loss on asset disposal		1.3		—
Total operating costs and expenses		203.7		221.5

OPERATING INCOME		22.7		18.6

OTHER INCOME / (EXPENSE), NET:
Interest expense, net		(20.3)		(18.1)

Other income, net		1.8		1.8
Total other expense, net		(18.5)		(16.3)

INCOME BEFORE INCOME TAX		4.2		2.3

Income tax expense		1.6		1.1








NET INCOME		$	2.6	$	1.2

See Notes to Condensed Consolidated Financial Statements.

Table of Contents


DPL Inc.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
	Three months ended
	March 31,
$ in millions		2024		2023
NET INCOME		$	2.6	$	1.2
Derivative activity:
Reclassification to earnings, net of income tax effect of $0.0 and $0.0 for each respective period		(0.2)		(0.2)
Unfunded pension and other postretirement activity:
Reclassification to earnings, net of income tax effect of $(0.1) and $0.0 for each respective period		—		—
Other comprehensive loss		(0.2)		(0.2)

NET COMPREHENSIVE INCOME		$	2.4	$	1.0

See Notes to Condensed Consolidated Financial Statements.

Table of Contents


DPL Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
$ in millions	March 31, 2024		December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	24.2	$	41.0

Accounts receivable, net of allowance for credit losses of $0.9 and $0.9, respectively (Note 1)	99.8		92.5
Inventories	52.0		44.5
Taxes applicable to subsequent years	83.4		113.0
Regulatory assets, current	63.9		56.6
Taxes receivable	13.0		8.9
Prepayments and other current assets	7.4		6.6

Total current assets	343.7		363.1
NON-CURRENT ASSETS:
Property, plant & equipment:
Property, plant & equipment	2,562.4		2,521.9
Less: Accumulated depreciation and amortization	(548.7)		(535.1)
	2,013.7		1,986.8
Construction work in process	298.7		234.2
Total net property, plant & equipment	2,312.4		2,221.0
Other non-current assets:
Regulatory assets, non-current	146.0		155.7
Intangible assets, net of amortization	130.9		114.0
Other non-current assets	54.7		52.4

Total other non-current assets	331.6		322.1

Total assets	$	2,987.7	$	2,906.2

LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Short-term and current portion of long-term debt (Note 5)	$	170.2	$	15.2
Accounts payable	124.3		163.9
Accrued taxes	109.9		101.6
Accrued interest	25.8		16.9
Customer deposits	20.4		12.7
Regulatory liabilities, current	16.8		18.0
Accrued and other current liabilities	21.8		22.6

Total current liabilities	489.2		350.9
NON-CURRENT LIABILITIES:
Long-term debt (Note 5)	1,838.0		1,837.4
Deferred income taxes	233.3		227.3
Taxes payable	56.0		113.4
Regulatory liabilities, non-current	180.6		182.1
Accrued pension and other postretirement obligations	30.7		37.7
Other non-current liabilities	8.6		8.5

Total non-current liabilities	2,347.2		2,406.4
Total liabilities	2,836.4		2,757.3

COMMITMENTS AND CONTINGENCIES (Note 9)

SHAREHOLDER'S EQUITY:

Common stock:
1,500 shares authorized; 1 share issued and outstanding	—		—
Other paid-in capital	2,840.4		2,840.4
Accumulated other comprehensive loss	(4.8)		(4.6)
Accumulated deficit	(2,684.3)		(2,686.9)
Total common shareholder's equity	151.3		148.9

Total liabilities and shareholder's equity	$	2,987.7	$	2,906.2

See Notes to Condensed Consolidated Financial Statements.

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DPL Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
	Three months ended March 31,
$ in millions	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME	$	2.6	$	1.2
Adjustments to reconcile net income to net cash provided by / (used in) operating activities:
Depreciation and amortization	22.6		19.8
Amortization of deferred financing costs and debt discounts	0.9		1.0

Deferred income taxes	5.7		3.7

Loss on asset disposal	1.3		—
Allowance for equity funds used during construction	(1.8)		(1.4)
Changes in certain assets and liabilities:
Accounts receivable, net	(7.3)		(4.8)
Inventories	(7.5)		(2.5)

Taxes applicable to subsequent years	29.6		24.0
Current and non-current regulatory assets and liabilities	(0.2)		(11.4)
Prepayments and other current assets	(0.7)		(3.9)
Other non-current assets	2.3		(1.6)
Accounts payable	6.6		(8.9)
Accrued taxes payable / receivable	(53.2)		(43.8)
Accrued interest	8.9		4.6


Accrued and other current liabilities	6.9		9.3
Accrued pension and other postretirement obligations	(7.0)		(7.1)
Other	(0.2)		(0.3)
Net cash provided by / (used in) operating activities	9.5		(22.1)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(174.6)		(89.4)
Cost of removal payments	(6.0)		(3.2)





Other investing activities, net	(0.7)		0.2
Net cash used in investing activities	(181.3)		(92.4)
CASH FLOWS FROM FINANCING ACTIVITIES:



Borrowings from revolving credit facilities	185.0		115.0
Repayment of borrowings from revolving credit facilities	(30.0)		(10.0)


Net cash provided by financing activities	155.0		105.0
Cash, cash equivalents, and restricted cash:
Net decrease in cash, cash equivalents and restricted cash	(16.8)		(9.5)
Cash, cash equivalents and restricted cash at beginning of year	41.1		30.6
Cash, cash equivalents, and restricted cash at end of period	$	24.3	$	21.1
Supplemental cash flow information:
Interest paid, net of amounts capitalized	$	11.1	$	12.9

Non-cash investing activities:
Accruals for capital expenditures	$	55.2	$	36.4

See Notes to Condensed Consolidated Financial Statements.

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DPL Inc.
Condensed Consolidated Statements of Shareholder's Equity / (Deficit)
(Unaudited)
	Common Stock
$ in millions	Outstanding Shares	Amount		Other Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
Balance at January 1, 2024	1	$	—	$	2,840.4	$	(4.6)	$	(2,686.9)	$	148.9
Net income	—	—		—		—		2.6		2.6
Other comprehensive loss	—	—		—		(0.2)		—		(0.2)



Balance at March 31, 2024	1	$	—	$	2,840.4	$	(4.8)	$	(2,684.3)	$	151.3


	Common Stock
$ in millions	Outstanding Shares	Amount		Other Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
Balance at January 1, 2023	1	$	—	$	2,601.3	$	(2.4)	$	(2,722.6)	$	(123.7)
Net income	—	—		—		—		1.2		1.2
Other comprehensive loss	—	—		—		(0.2)		—		(0.2)


Balance at March 31, 2023	1	$	—	$	2,601.3	$	(2.6)	$	(2,721.4)	$	(122.7)

See Notes to Condensed Consolidated Financial Statements.

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DPL Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

For the three months ended March 31, 2024 and 2023

1. OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DPL, an indirectly wholly-owned subsidiary of AES, is a holding company organized in 1985 under the laws of Ohio. DPL owns all of the outstanding common stock of DP&L, which does business as AES Ohio. Substantially all of DPL’s business consists of transmitting, distributing and selling of electric energy conducted through its principal subsidiary, AES Ohio. The terms “we,” “us,” “our” and “ours” are used to refer to DPL and its subsidiaries.

AES Ohio is a public utility incorporated in 1911 under the laws of Ohio. Beginning in 2001, Ohio law gave Ohio consumers the right to choose the electric generation supplier from whom they purchase retail generation service; however, retail transmission and distribution services are still regulated. AES Ohio has the exclusive right to provide such transmission and distribution services to approximately 540,000 customers located in West Central Ohio. Principal industries located in AES Ohio’s service territory include automotive, food processing, paper, plastic, manufacturing and defense. AES Ohio also provides retail SSO electric service to residential, commercial, industrial and governmental customers in a 6,000-square mile area of West Central Ohio. AES Ohio sources all of the generation for its SSO customers through a competitive bid process. AES Ohio's sales reflect the general economic conditions, seasonal weather patterns of the area, the market price of electricity and customer energy efficiency initiatives. AES Ohio owns numerous transmission facilities. AES Ohio records revenue and expenses for its proportional share of energy and capacity from its investment in OVEC.

DPL’s other primary subsidiaries are MVIC and Miami Valley Lighting. MVIC is our captive insurance company that provides insurance services to AES Ohio and our other subsidiaries, and Miami Valley Lighting provides street and outdoor lighting services to customers in the Dayton region. DPL's subsidiaries are all wholly-owned. DPL also has a wholly-owned business trust, DPL Capital Trust II, formed for the purpose of issuing trust capital securities to investors.

AES Ohio’s electric transmission and distribution businesses are subject to rate regulation by federal and state regulators. Accordingly, AES Ohio 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 or overcollections of riders.

Consolidation

DPL’s Condensed Consolidated Financial Statements include the accounts of DPL and its wholly-owned subsidiaries except for DPL Capital Trust II, which is not consolidated consistent with the provisions of GAAP. We have evaluated subsequent events through the date this report was issued. All material intercompany accounts and transactions are eliminated in consolidation.

Interim Financial Presentation

The accompanying unaudited condensed consolidated financial statements and footnotes have been prepared in accordance with GAAP, as contained in the FASC, for interim financial information and Article 10 of Regulation S-X issued by the SEC. Accordingly, they do not include all the information and footnotes required by GAAP for annual fiscal reporting periods. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, comprehensive income or loss, changes in shareholder's equity, and cash flows. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of expected results for the year ending December 31, 2024. The accompanying condensed consolidated financial statements are unaudited and should be read in conjunction with the 2023 audited consolidated financial statements and footnotes thereto, which are included in our Form 10-K.

Use of Management Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the revenue and expenses of the periods reported. Actual results could differ from these estimates and assumptions. Significant items subject to such estimates and assumptions include: the carrying value of property, plant and equipment; unbilled revenue; the valuation of allowances for credit losses and deferred income taxes;

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regulatory assets and liabilities; reserves recorded for income tax exposures; litigation; contingencies; and assets and liabilities related to employee benefits.

Reclassifications

Certain amounts from prior periods have been reclassified to conform to the current period presentation.

Cash, Cash Equivalents and Restricted Cash

The following table summarizes cash, cash equivalents, and restricted cash amounts reported on the Condensed Consolidated Balance Sheets that reconcile to the total of such amounts as shown on the Condensed Consolidated Statements of Cash Flows:


$ in millions	March 31, 2024		December 31, 2023
Cash and cash equivalents	$	24.2	$	41.0
Restricted cash (included in Prepayments and other current assets)	0.1		0.1
Total cash, cash equivalents and restricted cash	$	24.3	$	41.1

Accounts Receivable and Allowance for Credit Losses

The following table summarizes accounts receivable as of March 31, 2024 and December 31, 2023:


$ in millions	March 31, 2024		December 31, 2023
Accounts receivable, net:
Customer receivables	$	76.7	$	71.0
Unbilled revenue	16.5		19.4
Amounts due from affiliates	1.6		0.8
Other	5.9		2.2
Allowance for credit losses	(0.9)		(0.9)
Total accounts receivable, net	$	99.8	$	92.5

The following table is a roll forward of our allowance for credit losses related to the accounts receivable balances for the three months ended March 31, 2024 and 2023:


	Three months ended
	March 31,
$ in millions	2024		2023
Allowance for credit losses:
Beginning balance	$	0.9	$	0.5
Current period provision	0.8		0.9
Write-offs charged against allowance	(1.0)		(1.1)
Recoveries collected	0.2		0.3
Ending balance	$	0.9	$	0.6

Inventories

Inventories consist of materials and supplies as of March 31, 2024 and December 31, 2023.

AFUDC

AES Ohio capitalizes an allowance for the net cost of funds (interest on borrowed funds and a reasonable rate of return on equity funds) used for construction purposes during the period of construction with a corresponding credit to income. During the three months ended March 31, 2024 and 2023, AFUDC equity and AFUDC debt were as follows:


	Three months ended
	March 31,
$ in millions		2024		2023
AFUDC equity		$	1.8	$	1.4
AFUDC debt		$	2.1	$	1.6

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AOCL

The amounts reclassified out of AOCL by component during the three months ended March 31, 2024 and 2023 are as follows:


Details about AOCL components	Affected line item in the Condensed Consolidated Statements of Operations	Three months ended
		March 31,
$ in millions			2024		2023
Net gains on cash flow hedges (Note 4):
	Interest expense		$	(0.2)	$	(0.2)
	Income tax effect		—		—
	Net of income taxes		(0.2)		(0.2)
Amortization of unfunded pension and other postretirement obligations (Note 7):
	Other expense		0.1		—
	Income tax effect		(0.1)		—
	Net of income taxes		—		—

Total reclassifications for the period, net of income taxes			$	(0.2)	$	(0.2)

The changes in the components of AOCL during the three months ended March 31, 2024 are as follows:


$ in millions	Change in cash flow hedges		Change in unfunded pension and other postretirement obligations		Total
Balance as of January 1, 2024	$	11.2	$	(15.8)	$	(4.6)


Amounts reclassified from AOCL to earnings	(0.2)		—		(0.2)


Balance as of March 31, 2024	$	11.0	$	(15.8)	$	(4.8)

Accounting for Taxes Collected from Customers and Remitted to Governmental Authorities

AES Ohio collects certain excise taxes levied by state or local governments from its customers. These taxes are accounted for on a net basis and not included in revenue. The amounts of such taxes collected for the three months ended March 31, 2024 and 2023 were as follows:


	Three months ended
	March 31,
$ in millions		2024		2023
Excise taxes collected		$	12.3	$	12.0

New Accounting Pronouncements Issued But Not Yet Effective

The following table provides a brief description of recent accounting pronouncements that could have an impact on our consolidated financial statements. Accounting pronouncements not listed below were assessed and determined to be either not applicable or are expected to have no material impact on our consolidated financial statements.

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ASU Number and Name	Description	Date of Adoption	Effect on the financial statements upon adoption
2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures	The amendments in this section are designed to improve the disclosures related to segment reporting on an interim and annual basis. Public companies must disclose significant segment expenses and an amount for other segment items. This will also require that a company disclose its annual disclosures under Topic 280 in each interim period. Furthermore, companies will need to disclose the Chief Operating Decision Maker (“CODM”) and how the CODM assesses the performance of a segment. Lastly, public companies that have a single reportable segment must report the required disclosures under Topic 280.	The amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted.	This ASU only affects disclosures, which will be provided when the amendment becomes effective.
2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures	The amendments in this Update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. Furthermore, companies are required to disclose a disaggregated amount of income taxes paid at a federal, state, and foreign level as well as a break down of income taxes paid in an jurisdiction that comprises 5% of a company's total income taxes paid. Lastly, this ASU requires that companies disclose income (loss) from continuing operations before income tax at a domestic and foreign level and that companies disclose income tax expense from continuing operations on a federal, state, and foreign level.	The amendments in this Update are effective for fiscal years beginning after December 15, 2024.	This ASU only affects disclosures, which will be provided when the amendment becomes effective.

2. REGULATORY MATTERS

Smart Grid Phase 2 Plan

In February 2024, AES Ohio filed a Smart Grid Phase 2 with the PUCO proposing to invest approximately $683 million in capital projects over a 10-year period following the Smart Grid Phase 1, which ends June 2025. There are three principal components of AES Ohio’s Smart Grid Phase 2: 1) Distribution Operations, 2) Advanced Intelligence 3) Telecommunications and Cybersecurity. These initiatives will also allow AES Ohio to be ready to leverage and integrate Distributed Energy Resources into its grid. If approved, AES Ohio will implement a comprehensive grid modernization project that will deliver benefits to customers, society as a whole and to AES Ohio. A procedural schedule has been set with a hearing to begin in September 2024. We expect an order from the PUCO by the second quarter of 2025, prior to the end of Smart Grid Phase 1.

3. FAIR VALUE

The fair value of our financial assets and liabilities approximates their reported carrying amounts. The estimated fair values of our assets and liabilities have been determined using available market information. Because these amounts are estimates and based on hypothetical transactions to sell assets or transfer liabilities, the use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. For further information on our valuation techniques and policies, see Note 3. Fair Value in Item 8. Financial Statements and Supplementary Data of our Form 10-K.

Financial Assets

AES Ohio established a Master Trust to hold assets that could be used for the benefit of employees participating in employee benefit plans. These assets are not used for general operating purposes. These assets are primarily comprised of open-ended mutual funds, which are valued using the net asset value per unit. These assets are recorded at fair value within Other non-current assets on the Condensed Consolidated Balance Sheets and are classified as equity investments. Net unrealized gains related to equity investments still held as of March 31, 2024 and 2023 are as follows:


	Three months ended
	March 31,
$ in millions		2024		2023
Net unrealized gains (a)		$	0.3	$	0.3

(a) These amounts are included in Other income, net in our Condensed Consolidated Statements of Operations.

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We did not have any transfers of the fair values of our financial instruments between Level 1, Level 2 or Level 3 of the fair value hierarchy during the three months ended March 31, 2024 or 2023.

Recurring Fair Value Measurements

The fair value of assets and liabilities as of March 31, 2024 and December 31, 2023 measured on a recurring basis and the respective category within the fair value hierarchy for DPL is as follows:


	Fair value as of March 31, 2024								Fair value as of December 31, 2023
$ in millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Master Trust assets
Money market funds	$	0.2	$	—	$	—	$	0.2	$	0.6	$	—	$	—	$	0.6
Mutual funds	7.4		—		—		7.4		7.2		—		—		7.2










Total assets	$	7.6	$	—	$	—	$	7.6	$	7.8	$	—	$	—	$	7.8

Financial Instruments not Measured at Fair Value in the Condensed Consolidated Balance Sheets

The fair value of long-term debt is based on current public market prices for disclosure purposes only. These fair value inputs are considered Level 2 in the fair value hierarchy. As the Wright-Patterson Air Force Base note is not publicly traded, the fair value inputs are considered Level 3 in the fair value hierarchy as there are no observable inputs. Unrealized gains or losses are not recognized in the financial statements as long-term debt is presented at carrying value, net of unamortized premium or discount and unamortized deferred financing costs. The long-term debt amounts include the current portion payable in the next twelve months and have maturities that range from 2025 to 2061.

The following table presents the carrying amount, fair value, and fair value hierarchy of our financial liabilities that are not measured at fair value in the Condensed Consolidated Balance Sheets as of the periods indicated, but for which fair value is disclosed:


	March 31, 2024										December 31, 2023
	Carrying Amount		Fair Value								Carrying Amount		Fair Value
$ in millions			Level 1		Level 2		Level 3		Total				Level 1		Level 2		Level 3		Total
Liabilities
Long-term debt	$	1,838.2	$	—	$	1,689.4	$	16.8	$	1,706.2	$	1,837.6	$	—	$	1,706.2	$	16.8	$	1,723.0

4. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

For further information on our derivative and hedge accounting policies, see Note 1. Overview and Summary of Significant Accounting Policies – Financial Derivatives and Note 5. Derivative Instruments and Hedging Activities of Item 8. Financial Statements and Supplementary Data in our Form 10-K.

Cash Flow Hedges

DPL previously used derivative financial instruments primarily to manage the interest rate risk associated with our long-term debt. These interest rate derivative contracts were settled in 2013, and we continue to amortize amounts out of AOCL into interest expense.

The following tables provide information concerning gains recognized in AOCL for the cash flow hedges for the three months ended March 31, 2024 and 2023:


	Three months ended
		March 31,
		2024		2023
		Interest		Interest
$ in millions (net of tax)		Rate Hedge		Rate Hedge
Beginning accumulated derivative gains in AOCL		$	11.2	$	12.0

Net gains reclassified to earnings
Interest expense		(0.2)		(0.2)
Ending accumulated derivative gains in AOCL		$	11.0	$	11.8

Portion expected to be reclassified to earnings in the next twelve months		$	(0.8)

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5. DEBT

Long-term debt is as follows:


	Interest			March 31,		December 31,
$ in millions	Rate		Due	2024		2023
AES Ohio debt
First Mortgage Bonds	3.95	%	2049	$	425.0	$	425.0
First Mortgage Bonds	3.20	%	2040	140.0		140.0
First Mortgage Bonds	5.70	%	2033	107.5		107.5
First Mortgage Bonds	5.19	%	2033	100.0		100.0
First Mortgage Bonds	5.49	%	2028	92.5		92.5
Tax-exempt First Mortgage Bonds (a)	4.25	%	2027	100.0		100.0
Tax-exempt First Mortgage Bonds (b)	4.00	%	2027	40.0		40.0
U.S. Government note	4.20	%	2061	16.8		16.8
Unamortized deferred financing costs				(6.9)		(7.1)
Unamortized debt discounts				(2.3)		(2.2)
Total long-term debt at AES Ohio				1,012.6		1,012.5

DPL Inc. debt
Senior unsecured bonds	4.125	%	2025	415.0		415.0
Senior unsecured bonds	4.35	%	2029	400.0		400.0
Note to DPL Capital Trust II (c)	8.125	%	2031	15.6		15.6
Unamortized deferred financing costs				(4.4)		(4.9)
Unamortized debt discounts				(0.6)		(0.6)
Total DPL consolidated long-term debt				1,838.2		1,837.6
Less: current portion				(0.2)		(0.2)
DPL consolidated long-term debt, net of current portion				$	1,838.0	$	1,837.4

(a)First mortgage bonds issued to the OAQDA, to secure the loan of proceeds from tax-exempt bonds issued by the OAQDA. The bonds have a final maturity date of November 1, 2040 but are subject to a mandatory put in June 2027.

(b)First mortgage bonds issued to the OAQDA, to secure the loan of proceeds from tax-exempt bonds issued by the OAQDA. The bonds have a final maturity date of January 1, 2034 but are subject to a mandatory put in June 2027.

(c)Note payable to related party.

Revolving credit agreements

As of March 31, 2024 and December 31, 2023, the AES Ohio Credit Agreement had outstanding borrowings of $170.0 million and $15.0 million, respectively.

Long-term debt covenants and restrictions

The AES Ohio Credit Agreement and Fifty-Third, Fifty-Fourth and Fifty-Fifth Supplemental Indentures to the First Mortgage, pursuant to which the 3.20% Bonds due 2040, the 5.19% Bonds due 2033, the 5.49% Bonds due 2028 and the 5.70% Bonds due 2033 were issued, respectively, each contain one financial covenant. The covenant measures Total Debt to Total Capitalization and is calculated, at the end of each fiscal quarter, by dividing total debt at the end of the quarter by total capitalization at the end of the quarter. AES Ohio’s Total Debt to Total Capitalization ratio shall not be greater than 0.67 to 1.00. As of March 31, 2024, AES Ohio was in compliance with this financial covenant.

AES Ohio does not have any meaningful restrictions in its debt financing documents prohibiting dividends and return of capital payments to its parent, DPL. As of March 31, 2024, AES Ohio was in compliance with all debt covenants, including the financial covenant described above.

Substantially all property, plant & equipment of AES Ohio is subject to the lien of the mortgage securing AES Ohio’s First and Refunding Mortgage.

6. INCOME TAXES

DPL’s provision for income taxes is based on the estimated annual effective tax rate, plus discrete items. The effective combined state and federal income tax rates were 38.1% for the three months ended March 31, 2024

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compared to 47.8% for the three months ended March 31, 2023. The year-to-date rate is different from the combined federal and state statutory rate of 22.4% primarily due to the flowthrough of the net tax benefit related to the reversal of excess deferred taxes of AES Ohio as a percentage of pre-tax book income or loss. AES Ohio began amortizing a deferred municipal tax shortage in September 2023, which partially offsets the ongoing amortization of the Tax Cut and Jobs Act (TCJA) benefit.

DPL's income tax expense for the three months ended March 31, 2024 was calculated using the estimated annual effective income tax rate for 2023 of 34.6% on ordinary income. Management estimates the annual effective tax rate based on its forecast of annual pre-tax income or loss.

AES files federal and state income tax returns, which consolidate DPL and its subsidiaries. Under a tax sharing agreement with AES, DPL is responsible for the income taxes associated with its own taxable income and records the provision for income taxes using a separate return method.

7. BENEFIT PLANS

The amounts presented in the following tables for pension include both of the Pension Plans. The pension costs below have not been adjusted for amounts billed to the Service Company for former AES Ohio employees who are now employed by the Service Company or other AES affiliates that are still participants in the AES Ohio plans.

The following table presents the net periodic benefit cost of the Pension Plans for the three months ended March 31, 2024 and 2023:


	Three months ended
	March 31,
$ in millions		2024		2023
Service cost		$	0.6	$	0.7
Interest cost		3.7		4.0
Expected return on plan assets		(3.7)		(4.4)
Amortization of unrecognized:
Prior service cost		0.3		0.2
Actuarial loss		0.5		0.2
Net periodic benefit cost		$	1.4	$	0.7

The components of net periodic benefit cost other than service cost are included in Other income, net in the Condensed Consolidated Statements of Operations.

There were $7.5 million in employer contributions during each of the three months ended March 31, 2024 and 2023.

In addition, AES Ohio provides postretirement health care and life insurance benefits to certain retired employees, their spouses and eligible dependents. We have funded a portion of the union-eligible benefits using a Voluntary Employee Beneficiary Association Trust. These postretirement health care benefits and the related unfunded obligation were not material to the financial statements in the periods covered by this report.

8. SHAREHOLDER'S EQUITY

In April 2024, DPL received a $30.0 million capital contribution from AES. DPL then made the same investment in AES Ohio. The proceeds from the equity contribution allow AES Ohio to seek to improve its infrastructure and modernize its grid while maintaining liquidity.

9. COMMITMENTS AND CONTINGENCIES

Contingencies

Legal Matters

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legal proceedings, claims, tax examinations and other matters discussed below, and to comply with applicable laws and regulations, will not exceed the amounts reflected in our Condensed Consolidated Financial Statements. As such, costs, if any, that may be incurred in excess of those amounts provided as of March 31, 2024, cannot be reasonably determined.

Environmental Matters

We are subject to various federal, state, regional and local environmental protection and health and safety laws and regulations governing, among other things, the generation, storage, handling, use, disposal and transportation of regulated materials, including ash and CCR; the use and discharge of water used in generation boilers and for cooling purposes; the emission and discharge of hazardous and other materials, including GHGs, into the environment; climate change; species and habitat protections; and the health and safety of our employees. These laws and regulations often require a lengthy and complex process of obtaining and renewing permits and other governmental authorizations from federal, state and local agencies. Violation of these laws, regulations or permits can result in substantial fines, other sanctions, permit revocation and/or facility shutdowns. We cannot assure that we have been or will be at all times in full compliance with such laws, regulations and permits.

Where no accrued liability has been recognized, it is reasonably possible that some matters could be decided unfavorably to us and could require us to pay damages or make expenditures in amounts that could be material but could not be estimated as of March 31, 2024.

We have taken steps to limit our exposure to environmental claims that could be raised with respect to our previously-owned and operated coal-fired generation units, but we cannot predict whether any such claims will be raised and, if they are, the extent to which they may have a material adverse effect on our results of operations, financial condition and cash flows.

Accruals for legal loss and environmental contingencies were not material as of March 31, 2024 and December 31, 2023.

Equity Ownership Interest

AES Ohio has a 4.9% equity ownership interest in OVEC, which is recorded using the cost method of accounting under GAAP. AES Ohio, along with several non-affiliated energy companies party to an OVEC arrangement, receive and pay for OVEC capacity and energy and are responsible for OVEC debt obligations and other fixed costs in proportion to their power participation ratios under the arrangement, which, for AES Ohio, is the same as its equity ownership interest. As of March 31, 2024, AES Ohio could be responsible for the repayment of 4.9%, or $51.7 million, of $1.1 billion OVEC debt obligations if they came due, comprised of fixed rate securities with maturities from 2026 to 2040. OVEC could also seek additional contributions from AES Ohio to avoid a default in the event that other OVEC members defaulted on their respective OVEC obligations.

10. BUSINESS SEGMENTS

DPL manages its business through one reportable operating segment, the Utility segment. The primary segment performance measure is income / (loss) 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 segment. The Utility segment is comprised of AES Ohio, a public electric transmission and distribution utility, with all other nonutility business activities aggregated separately. See Note 1. Overview and Summary of Significant Accounting Policies for further information on AES Ohio. The “Other” nonutility category primarily includes interest expense, cash and other immaterial balances. The accounting policies of the identified segment are consistent with those policies and procedures described in the summary of significant accounting policies.

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The following tables present financial information for DPL’s reportable business segment:


























$ in millions	Utility		Other		Adjustments and Eliminations		DPL Consolidated
Three months ended March 31, 2024
Revenue from external customers	$	224.1	$	2.3	$	—	$	226.4
Intersegment revenue	0.2		1.2		(1.4)		—
Total revenue	$	224.3	$	3.5	$	(1.4)	$	226.4

Depreciation and amortization	$	22.1	$	0.5	$	—	$	22.6


Interest expense, net	$	11.2	$	9.1	$	—	$	20.3


Income / (loss) before income tax	$	11.7	$	(7.5)	$	—	$	4.2

$ in millions	Utility		Other		Adjustments and Eliminations		DPL Consolidated
Three months ended March 31, 2023
Revenue from external customers	$	237.7	$	2.4	$	—	$	240.1
Intersegment revenue	0.1		0.9		(1.0)		—
Total revenue	$	237.8	$	3.3	$	(1.0)	$	240.1

Depreciation and amortization	$	19.4	$	0.4	$	—	$	19.8

Interest expense, net	$	8.3	$	9.8	$	—	$	18.1

Income / (loss) before income tax	$	10.9	$	(8.6)	$	—	$	2.3


Total Assets	March 31, 2024		December 31, 2023
Utility	$	2,955.9	$	2,871.0
All Other (a)	31.8		35.2
DPL Consolidated	$	2,987.7	$	2,906.2

(a) "All Other" includes Eliminations for all periods presented.

11. REVENUE

Revenue is primarily earned from retail and wholesale electricity sales and electricity transmission and distribution delivery services. Revenue is recognized upon transfer of control to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Revenue is recorded net of any taxes assessed on and collected from customers, which are remitted to the governmental authorities. For further discussion of our Retail, Wholesale, RTO ancillary, and Capacity revenue, see Note 13. Revenue in Item 8. Financial Statements and Supplementary Data of our Form 10-K.

DPL's revenue from contracts with customers was $224.0 million and $239.2 million for the three months ended March 31, 2024 and 2023, respectively.

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The following table presents our revenue from contracts with customers and other revenue by segment for the three months ended March 31, 2024 and 2023:


$ in millions	Utility		Other		Adjustments and Eliminations		Total












































	Three months ended March 31, 2024
Retail revenue
Retail revenue from contracts with customers
Residential revenue	$	124.3	$	—	$	—	$	124.3
Commercial revenue	39.2		—		—		39.2
Industrial revenue	16.7		—		—		16.7
Governmental revenue	5.8		—		—		5.8
Other (a)	3.0		—		—		3.0
Total retail revenue from contracts with customers	189.0		—		—		189.0

Wholesale revenue
Wholesale revenue from contracts with customers	5.0		—		(0.2)		4.8
RTO ancillary revenue	27.8		—		—		27.8
Capacity revenue	0.1		—		—		0.1
Miscellaneous revenue
Miscellaneous revenue from contracts with customers (b)	—		2.3		—		2.3
Other miscellaneous revenue	2.4		1.2		(1.2)		2.4
Total revenue	$	224.3	$	3.5	$	(1.4)	$	226.4




	Three months ended March 31, 2023
Retail revenue
Retail revenue from contracts with customers
Residential revenue	$	143.0	$	—	$	—	$	143.0
Commercial revenue	42.9		—		—		42.9
Industrial revenue	17.7		—		—		17.7
Governmental revenue	6.1		—		—		6.1
Other (a)	3.2		—		—		3.2
Total retail revenue from contracts with customers	212.9		—		—		212.9

Wholesale revenue
Wholesale revenue from contracts with customers	3.8		—		(0.1)		3.7
RTO ancillary revenue	19.7		—		—		19.7
Capacity revenue	0.5		—		—		0.5
Miscellaneous revenue
Miscellaneous revenue from contracts with customers (b)	—		2.4		—		2.4
Other miscellaneous revenue	0.9		0.9		(0.9)		0.9
Total revenue	$	237.8	$	3.3	$	(1.0)	$	240.1

(a) "Other" primarily includes operation and maintenance service revenue, billing service fees from CRES providers and other miscellaneous retail revenue from contracts with customers.

(b Miscellaneous revenue from contracts with customers primarily includes revenue for various services provided by Miami Valley Lighting.

The balances of receivables from contracts with customers were $93.2 million and $90.4 million as of March 31, 2024 and December 31, 2023, respectively. Payment terms for all receivables from contracts with customers are typically within 30 days unless a customer qualifies for payment extension.

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FINANCIAL STATEMENTS

AES Ohio

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AES Ohio
Condensed Statements of Operations
(Unaudited)
	Three months ended
	March 31,
$ in millions		2024		2023
REVENUE		$	224.3	$	237.8

OPERATING COSTS AND EXPENSES:
Net purchased power cost		89.5		122.0
Operation and maintenance		60.7		53.2
Depreciation and amortization		22.1		19.4
Taxes other than income taxes		29.2		25.5



Loss on asset disposal		1.1		—
Total operating costs and expenses		202.6		220.1

OPERATING INCOME		21.7		17.7

OTHER INCOME / (EXPENSE), NET:
Interest expense, net		(11.2)		(8.3)

Other income, net		1.2		1.5
Total other expense, net		(10.0)		(6.8)

INCOME BEFORE INCOME TAX		11.7		10.9

Income tax expense		2.3		1.3

NET INCOME		$	9.4	$	9.6

See Notes to Condensed Financial Statements.

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AES Ohio
Condensed Statements of Comprehensive Income
(Unaudited)
	Three months ended
	March 31,
$ in millions		2024		2023
NET INCOME		$	9.4	$	9.6
Unfunded pension and other postretirement activity:
Reclassification to earnings, net of income tax effect of $(0.1) and $(0.1) for each respective period		0.4		0.1

Other comprehensive income		0.4		0.1

NET COMPREHENSIVE INCOME		$	9.8	$	9.7

See Notes to Condensed Financial Statements.

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AES Ohio
Condensed Balance Sheets
(Unaudited)
$ in millions	March 31, 2024		December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	7.6	$	15.5

Accounts receivable, net of allowance for credit losses of $0.9 and $0.9, respectively (Note 1)	100.7		93.1
Inventories	51.4		44.5
Taxes applicable to subsequent years	83.4		112.9
Regulatory assets, current	63.9		56.6
Taxes receivable	24.4		24.4
Prepayments and other current assets	7.5		8.1
Total current assets	338.9		355.1

NON-CURRENT ASSETS:
Property, plant & equipment:
Property, plant & equipment	3,099.7		3,063.2
Less: Accumulated depreciation and amortization	(1,107.8)		(1,098.1)
	1,991.9		1,965.1
Construction work in process	295.4		230.8
Total net property, plant & equipment	2,287.3		2,195.9

Other non-current assets:
Regulatory assets, non-current	146.0		155.7
Intangible assets, net of amortization	128.7		111.4
Other non-current assets	55.0		52.9
Total other non-current assets	329.7		320.0
Total assets	$	2,955.9	$	2,871.0

LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Short-term and current portion of long-term debt (Note 4)	$	170.2	$	15.2
Accounts payable	123.3		163.8
Accrued taxes	109.8		101.4
Accrued interest	13.4		4.2
Customer deposits	20.4		12.7
Regulatory liabilities, current	16.8		18.0
Accrued and other current liabilities	19.4		20.2
Total current liabilities	473.3		335.5

NON-CURRENT LIABILITIES:
Long-term debt (Note 4)	1,012.4		1,012.3
Deferred income taxes	209.0		206.1
Taxes payable	56.0		113.4
Regulatory liabilities, non-current	180.6		182.1
Accrued pension and other postretirement obligations	30.7		37.7
Other non-current liabilities	4.8		4.7
Total non-current liabilities	1,493.5		1,556.3
Total liabilities	1,966.8		1,891.8

COMMITMENTS AND CONTINGENCIES (Note 8)

SHAREHOLDER'S EQUITY:

Common stock, at par value of $0.01 per share	0.4		0.4
50,000,000 shares authorized, 41,172,173 shares issued and outstanding
Other paid-in capital	977.5		977.4
Accumulated other comprehensive loss	(27.5)		(27.9)
Retained earnings	38.7		29.3
Total common shareholder's equity	989.1		979.2
Total liabilities and shareholder's equity	$	2,955.9	$	2,871.0

See Notes to Condensed Financial Statements.

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AES Ohio
Condensed Statements of Cash Flows
(Unaudited)
	Three months ended March 31,
$ in millions	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME	$	9.4	$	9.6
Adjustments to reconcile net income to net cash provided by / (used in) operating activities:
Depreciation and amortization	22.1		19.4
Amortization of deferred financing costs and debt discounts	0.4		0.4

Deferred income taxes	2.3		1.3
Loss on asset disposal	1.1		—
Allowance for equity funds used during construction	(1.8)		(1.4)


Changes in certain assets and liabilities:
Accounts receivable, net	(7.6)		(4.3)
Inventories	(7.0)		(2.5)

Taxes applicable to subsequent years	29.5		24.0
Current and non-current regulatory assets and liabilities	(0.2)		(11.4)
Prepayments and other current assets	0.6		(3.8)
Other non-current assets	2.3		(1.5)
Accounts payable	4.9		(9.4)
Accrued taxes payable / receivable	(49.0)		(41.2)
Accrued interest	9.2		4.8

Accrued and other current liabilities	7.0		9.2
Accrued pension and other postretirement benefits	(7.0)		(7.1)
Other	0.7		0.4
Net cash provided by / (used in) operating activities	16.9		(13.5)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(173.1)		(88.8)
Cost of removal payments	(6.0)		(3.2)




Other investing activities, net	(0.7)		0.2
Net cash used in investing activities	(179.8)		(91.8)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends and returns of capital paid to parent	—		(15.0)




Borrowings from revolving credit facilities	185.0		115.0
Repayment of borrowings from revolving credit facilities	(30.0)		(5.0)



Net cash provided by financing activities	155.0		95.0
Cash, cash equivalents, and restricted cash:
Net increase in cash, cash equivalents and restricted cash	(7.9)		(10.3)
Cash, cash equivalents and restricted cash at beginning of year	15.6		19.8
Cash, cash equivalents, and restricted cash at end of period	$	7.7	$	9.5
Supplemental cash flow information:
Interest paid, net of amounts capitalized	$	1.9	$	3.1

Non-cash investing activities:
Accruals for capital expenditures	$	56.2	$	36.3

See Notes to Condensed Financial Statements.

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AES Ohio
Condensed Statements of Shareholder's Equity
(Unaudited)
	Common Stock
$ in millions	Outstanding Shares	Amount		Other Paid-in Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total
Balance at January 1, 2024	41,172,173	$	0.4	$	977.4	$	(27.9)	$	29.3	$	979.2
Net income	—	—		—		—		9.4		9.4
Other comprehensive income	—	—		—		0.4		—		0.4

Other	—	—		0.1		—		—		0.1
Balance at March 31, 2024	41,172,173	$	0.4	$	977.5	$	(27.5)	$	38.7	$	989.1


	Common Stock
$ in millions	Outstanding Shares	Amount		Other Paid-in Capital		Accumulated Other Comprehensive Loss		Retained Earnings / (Accumulated Deficit)		Total
Balance at January 1, 2023	41,172,173	$	0.4	$	773.6	$	(26.8)	$	(5.4)	$	741.8
Net income	—	—		—		—		9.6		9.6
Other comprehensive income	—	—		—		0.1		—		0.1
Distributions to parent (a)	—	—		(13.1)		—		(1.9)		(15.0)

Other	—	—		—		—		0.1		0.1
Balance at March 31, 2023	41,172,173	$	0.4	$	760.5	$	(26.7)	$	2.4	$	736.6

(a) AES Ohio made distributions of $15.0 million during the three months ended March 31, 2023. Of this amount, $1.9 million were dividends and $13.1 million were return of capital payments for the portion of current year distributions to shareholder in excess of retained earnings at the time of distribution.

See Notes to Condensed Financial Statements.

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AES Ohio

Notes to Unaudited Condensed Financial Statements

For the three months ended March 31, 2024 and 2023

1. OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DP&L, which does business as AES Ohio, is a public utility incorporated in 1911 under the laws of Ohio. Beginning in 2001, Ohio law gave Ohio consumers the right to choose the electric generation supplier from whom they purchase retail generation service; however, retail transmission and distribution services are still regulated. AES Ohio has the exclusive right to provide such transmission and distribution services to approximately 540,000 customers located in West Central Ohio. Principal industries located in AES Ohio’s service territory include automotive, food processing, paper, plastic, manufacturing and defense. AES Ohio also provides retail SSO electric service to residential, commercial, industrial and governmental customers in a 6,000-square mile area of West Central Ohio. AES Ohio sources all of the generation for its SSO customers through a competitive bid process. AES Ohio's sales reflect the general economic conditions, seasonal weather patterns of the area, the market price of electricity and customer energy efficiency initiatives. AES Ohio owns numerous transmission facilities. AES Ohio records revenue and expenses for its proportional share of energy and capacity from its investment in OVEC. AES Ohio has one reportable segment, the Utility segment. In addition to AES Ohio's electric transmission and distribution businesses, the Utility segment includes revenue and expenses associated with AES Ohio's investment in OVEC. AES Ohio is a subsidiary of DPL. The terms “we,” “us,” “our” and “ours” are used to refer to AES Ohio.

Financial Statement Presentation

AES Ohio does not have any subsidiaries. We have evaluated subsequent events through the date this report was issued.

Interim Financial Presentation

The accompanying unaudited condensed financial statements and footnotes have been prepared in accordance with GAAP, as contained in the FASC, for interim financial information and Article 10 of Regulation S-X issued by the SEC. Accordingly, they do not include all the information and footnotes required by GAAP for annual fiscal reporting periods. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, comprehensive income or loss, changes in shareholder's equity, and cash flows. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of expected results for the year ending December 31, 2024. The accompanying condensed financial statements are unaudited and should be read in conjunction with the 2023 audited consolidated financial statements and footnotes thereto, which are included in our Form 10-K.

Use of Management Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the revenue and expenses of the periods reported. Actual results could differ from these estimates and assumptions. Significant items subject to such estimates and assumptions include: the carrying value of property, plant and equipment; unbilled revenue; the valuation of allowances for credit losses and deferred income taxes; regulatory assets and liabilities; reserves recorded for income tax exposures; litigation; contingencies; and assets and liabilities related to employee benefits.

Reclassifications

Certain amounts from prior periods have been reclassified to conform to the current period presentation.

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Cash, Cash Equivalents and Restricted Cash

The following table summarizes cash, cash equivalents, and restricted cash amounts reported on the Condensed Balance Sheets that reconcile to the total of such amounts as shown on the Condensed Statements of Cash Flows:


$ in millions	March 31, 2024		December 31, 2023
Cash and cash equivalents	$	7.6	$	15.5
Restricted cash (included in Prepayments and other current assets)	0.1		0.1
Total cash, cash equivalents and restricted cash	$	7.7	$	15.6

Accounts Receivable and Allowance for Credit Losses

The following table summarizes accounts receivable as of March 31, 2024 and December 31, 2023:


$ in millions	March 31, 2024		December 31, 2023
Accounts receivable, net:
Customer receivables	$	75.6	$	70.0
Unbilled revenue	16.5		19.4
Amounts due from affiliates	3.7		2.4
Other	5.8		2.2
Allowance for credit losses	(0.9)		(0.9)
Total accounts receivable, net	$	100.7	$	93.1

The following table is a roll forward of our allowance for credit losses related to the accounts receivable balances for the three months ended March 31, 2024 and 2023:


	Three months ended
	March 31,
$ in millions	2024		2023
Allowance for credit losses:
Beginning balance	$	0.9	$	0.5
Current period provision	0.8		0.9
Write-offs charged against allowance	(1.0)		(1.1)
Recoveries collected	0.2		0.3
Ending balance	$	0.9	$	0.6

Inventories

Inventories consist of materials and supplies as of March 31, 2024 and December 31, 2023.

AFUDC


	Three months ended
	March 31,
$ in millions		2024		2023
AFUDC equity		$	1.8	$	1.4
AFUDC debt		$	2.1	$	1.6

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AOCL

The amounts reclassified out of AOCL by component during the three months ended March 31, 2024 and 2023 are as follows:


Details about AOCL components	Affected line item in the Condensed Statements of Operations	Three months ended
		March 31,
$ in millions			2024		2023
Amortization of unfunded pension and other postretirement obligations (Note 6):
	Other expense		$	0.5	$	0.2
	Income tax effect		(0.1)		(0.1)
	Net of income taxes		0.4		0.1

Total reclassifications for the period, net of income taxes			$	0.4	$	0.1

The changes in the components of AOCL during the three months ended March 31, 2024 are as follows:


$ in millions	Change in Accumulated other comprehensive loss
Balance as of January 1, 2024	$	(27.9)

Amounts reclassified from AOCL to earnings	0.4

Balance as of March 31, 2024	$	(27.5)

Accounting for Taxes Collected from Customers and Remitted to Governmental Authorities


	Three months ended
	March 31,
$ in millions		2024		2023
Excise taxes collected		$	12.3	$	12.0

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New Accounting Pronouncements Issued But Not Yet Effective

The following table provides a brief description of recent accounting pronouncements that could have an impact on our financial statements. Accounting pronouncements not listed below were assessed and determined to be either not applicable or are expected to have no material impact on our consolidated financial statements.


ASU Number and Name	Description	Date of Adoption	Effect on the financial statements upon adoption
2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures	The amendments in this section are designed to improve the disclosures related to segment reporting on an interim and annual basis. Public companies must disclose significant segment expenses and an amount for other segment items. This will also require that a company disclose its annual disclosures under Topic 280 in each interim period. Furthermore, companies will need to disclose the Chief Operating Decision Maker (“CODM”) and how the CODM assesses the performance of a segment. Lastly, public companies that have a single reportable segment must report the required disclosures under Topic 280.	The amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted.	This ASU only affects disclosures, which will be provided when the amendment becomes effective.
2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures	The amendments in this Update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. Furthermore, companies are required to disclose a disaggregated amount of income taxes paid at a federal, state, and foreign level as well as a break down of income taxes paid in an jurisdiction that comprises 5% of a company's total income taxes paid. Lastly, this ASU requires that companies disclose income (loss) from continuing operations before income tax at a domestic and foreign level and that companies disclose income tax expense from continuing operations on a federal, state, and foreign level.	The amendments in this Update are effective for fiscal years beginning after December 15, 2024.	This ASU only affects disclosures, which will be provided when the amendment becomes effective.

2. REGULATORY MATTERS

Smart Grid Phase 2 Plan

3. FAIR VALUE

The fair value of our financial assets and liabilities approximates their reported carrying amounts. The estimated fair values of our assets and liabilities have been determined using available market information. Because these amounts are estimates and based on hypothetical transactions to sell assets or transfer liabilities, the use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. For further information on our valuation techniques and policies, see Note 4. Fair Value in Item 8. – Financial Statements and Supplementary Data of our Form 10-K.

Financial Assets

AES Ohio established a Master Trust to hold assets that could be used for the benefit of employees participating in employee benefit plans. These assets are not used for general operating purposes. These assets are primarily comprised of open-ended mutual funds, which are valued using the net asset value per unit. These assets are recorded at fair value within Other non-current assets on the Condensed Balance Sheets and are classified as equity investments. Net unrealized gains related to equity investments still held as of March 31, 2024 and 2023 are as follows:

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	Three months ended
	March 31,
$ in millions		2024		2023
Net unrealized gains (a)		$	0.3	$	0.3

(a) These amounts are included in Other income, net in our Condensed Statements of Operations.

We did not have any transfers of the fair values of our financial instruments between Level 1, Level 2 or Level 3 of the fair value hierarchy during the three months ended March 31, 2024 or 2023.

Recurring Fair Value Measurements

The fair value of assets and liabilities as of March 31, 2024 and December 31, 2023 measured on a recurring basis and the respective category within the fair value hierarchy for AES Ohio is as follows:


	Fair value as of March 31, 2024								Fair value as of December 31, 2023
$ in millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Master Trust assets
Money market funds	$	0.2	$	—	$	—	$	0.2	$	0.6	$	—	$	—	$	0.6
Mutual funds	7.4		—		—		7.4		7.2		—		—		7.2








Total assets	$	7.6	$	—	$	—	$	7.6	$	7.8	$	—	$	—	$	7.8

Financial Instruments not Measured at Fair Value in the Condensed Balance Sheets

The following table presents the carrying amount, fair value, and fair value hierarchy of our financial liabilities that are not measured at fair value in the Condensed Balance Sheets as of the periods indicated, but for which fair value is disclosed:


	March 31, 2024									December 31, 2023
	Carrying Amount		Fair Value							Carrying Amount		Fair Value
$ in millions			Level 1		Level 2		Level 3	Total				Level 1		Level 2		Level 3		Total
Liabilities
Long-term debt	$	1,012.6	$	—	$	902.2	16.8	$	919.0	$	1,012.5	$	—	$	909.9	$	16.8	$	926.7

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4. DEBT

Long-term debt is as follows:


	Interest			March 31,		December 31,
$ in millions	Rate		Due	2024		2023
First Mortgage Bonds	3.95	%	2049	$	425.0	$	425.0
First Mortgage Bonds	3.20	%	2040	140.0		140.0
First Mortgage Bonds	5.70	%	2033	107.5		107.5
First Mortgage Bonds	5.19	%	2033	100.0		100.0
First Mortgage Bonds	5.49	%	2028	92.5		92.5
Tax-exempt First Mortgage Bonds (a)	4.25	%	2027	100.0		100.0
Tax-exempt First Mortgage Bonds (b)	4.00	%	2027	40.0		40.0
U.S. Government note	4.20	%	2061	16.8		16.8
Unamortized deferred financing costs				(6.9)		(7.1)
Unamortized debt discounts				(2.3)		(2.2)
Total long-term debt				1,012.6		1,012.5
Less: current portion				(0.2)		(0.2)
Long-term debt, net of current portion				$	1,012.4	$	1,012.3

Revolving credit agreements

As of March 31, 2024 and December 31, 2023, the AES Ohio Credit Agreement had outstanding borrowings of $170.0 million and $15.0 million, respectively.

Long-term debt covenants and restrictions

As of March 31, 2024, AES Ohio was in compliance with all debt covenants, including the financial covenant described above.

AES Ohio does not have any meaningful restrictions in its debt financing documents prohibiting dividends and return of capital payments to its parent, DPL.

Substantially all property, plant & equipment of AES Ohio is subject to the lien of the mortgage securing AES Ohio’s First and Refunding Mortgage.

5. INCOME TAXES

AES Ohio's provision for income taxes is based on the estimated annual effective tax rate, plus discrete items. The effective combined state and federal income tax rates were 19.7% for the three months ended March 31, 2024, compared to 11.9% for the three months ended March 31, 2023. The year-to-date rate is different from the combined federal and state statutory rate of 22.4% primarily due to the flowthrough of the net tax benefit related to the reversal of excess deferred taxes of AES Ohio as a percentage of pre-tax book income or loss. AES Ohio began amortizing a deferred municipal tax shortage in September 2023, which partially offsets the ongoing amortization of the Tax Cut and Jobs Act (TCJA) benefit.

AES files federal and state income tax returns, which consolidate AES Ohio. Under a tax sharing agreement with DPL, AES Ohio is responsible for the income taxes associated with its own taxable income and records the provision for income taxes using a separate return method.

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6. BENEFIT PLANS

The following table presents the net periodic benefit cost of the Pension Plans for the three months ended March 31, 2024 and 2023:


	Three months ended
	March 31,
$ in millions		2024		2023
Service cost		$	0.6	$	0.7
Interest cost		3.7		4.0
Expected return on plan assets		(3.7)		(4.4)
Amortization of unrecognized:
Prior service cost		0.2		0.3
Actuarial loss		1.0		0.3
Net periodic benefit cost		$	1.8	$	0.9

The components of net periodic benefit cost other than service cost are included in Other income, net in the Condensed Statements of Operations.

There were $7.5 million in employer contributions during each of the three months ended March 31, 2024 and 2023.

7. SHAREHOLDER'S EQUITY

In April 2024, DPL made an equity contribution to AES Ohio of $30.0 million. The proceeds allow AES Ohio to seek to improve its infrastructure and modernize its grid while maintaining liquidity.

8. COMMITMENTS AND CONTINGENCIES

Contingencies

Legal Matters

In the normal course of business, we are subject to various lawsuits, actions, proceedings, claims and other matters asserted under various laws and regulations. We believe the amounts provided in our Condensed Financial Statements, as prescribed by GAAP, are adequate considering the probable and estimable contingencies. However, there can be no assurances that the actual amounts required to satisfy alleged liabilities from various legal proceedings, claims, tax examinations and other matters discussed below, and to comply with applicable laws and regulations, will not exceed the amounts reflected in our Condensed Financial Statements. As such, costs, if any, that may be incurred in excess of those amounts provided as of March 31, 2024, cannot be reasonably determined.

Environmental Matters

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can result in substantial fines, other sanctions, permit revocation and/or facility shutdowns. We cannot assure that we have been or will be at all times in full compliance with such laws, regulations and permits.

Accruals for legal loss and environmental contingencies were not material as of March 31, 2024 and December 31, 2023.

Equity Ownership Interest

9. REVENUE

Revenue is primarily earned from retail and wholesale electricity sales and electricity transmission and distribution delivery services. Revenue is recognized upon transfer of control to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Revenue is recorded net of any taxes assessed on and collected from customers, which are remitted to the governmental authorities. For further discussion of our Retail, Wholesale, RTO ancillary, and Capacity revenue, see Note 11. Revenue in Item 8. Financial Statements and Supplementary Data of our Form 10-K.

AES Ohio's revenue from contracts with customers was $221.9 million and $236.9 million for the three months ended March 31, 2024 and 2023, respectively.

The following table presents our revenue from contracts with customers and other revenue for the three months ended March 31, 2024 and 2023:


	Three months ended
	March 31,
$ in millions		2024		2023
Retail revenue
Retail revenue from contracts with customers
Residential revenue		$	124.3	$	143.0
Commercial revenue		39.2		42.9
Industrial revenue		16.7		17.7
Governmental revenue		5.8		6.1
Other (a)		3.0		3.2
Total retail revenue from contracts with customers		189.0		212.9

Wholesale revenue
Wholesale revenue from contracts with customers		5.0		3.8
RTO ancillary revenue		27.8		19.7
Capacity revenue		0.1		0.5

Miscellaneous revenue		2.4		0.9
Total revenue		$	224.3	$	237.8

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(a) "Other" primarily includes operation and maintenance service revenue, billing service fees from CRES providers and other miscellaneous retail revenue from contracts with customers.

The balances of receivables from contracts with customers were $92.1 million and $89.4 million as of March 31, 2024 and December 31, 2023, respectively. Payment terms for all receivables from contracts with customers are typically within 30 days unless a customer qualifies for payment extension.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report includes the combined filing of DPL and AES Ohio. AES Ohio is a wholly-owned subsidiary of DPL and is a public utility incorporated in 1911 under the laws of Ohio. On November 28, 2011, DPL became an indirectly wholly-owned subsidiary of AES, a global power company. Throughout this report, the terms “we,” “us,” “our” and “ours” are used to refer to both DPL and AES Ohio, respectively and together, unless the context indicates otherwise. Discussions or areas of this report that apply only to DPL or AES Ohio will clearly be noted in the section.

The condensed consolidated financial statements included in PART I, ITEM 1. – Financial Statements of this Form 10-Q and the discussions contained herein should be read in conjunction with our Form 10-K.

FORWARD–LOOKING STATEMENTS

The following discussion may contain forward-looking statements regarding us, our business, prospects and our results of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause our actual business, prospects and results of operations to differ materially from those that may be anticipated by such forward-looking statements. These statements include, but are not limited to, statements regarding management’s intents, beliefs, and current expectations and typically contain, but are not limited to, the terms “anticipate,” “potential,” “expect,” “forecast,” “target,” “will,” “would,” “intend,” “believe,” “project,” “estimate,” “plan,” and similar words. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute current expectations based on reasonable assumptions. Factors that could cause or contribute to such differences include, but are not limited to, those described in PART II, ITEM 1A of this quarterly report and ITEM 1A. Risk Factors and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Form 10-K and subsequent filings with the SEC.

Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date of this report. We undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the SEC that advise of the risks and factors that may affect our business.

OVERVIEW OF OUR BUSINESS

DPL, an indirectly wholly-owned subsidiary of AES, is a holding company incorporated under the laws of the state of Ohio. DPL's principal subsidiary is AES Ohio, a regulated electric utility operating in the state of Ohio. Substantially all of our business consists of the transmission, distribution and sale of electric energy conducted through AES Ohio. Our business segments are “utility” and “all other.” For more information regarding our business, see Item 1. Business of our Form 10-K.

EXECUTIVE SUMMARY

DPL

For the three months ended March 31, 2024, DPL's income before income tax of $4.2 million was higher by $1.9 million, or 83%, compared to the prior period income before income tax of $2.3 million, primarily due to factors including, but not limited to:


	Three months ended
	March 31,
$ in millions	2024 vs. 2023
Increase due to higher transmission revenue driven by an increase in transmission rates	$	8.1
Increase in the DIR, with the approval of ESP 4	7.1
Increase in retail margin due to higher demand driven by weather	6.0
Decrease due to higher operation and maintenance expenses	(11.8)
Decrease due to higher taxes other than income taxes driven by higher assessed values	(3.7)
Decrease due to higher depreciation and amortization driven by assets placed in service	(2.8)
Other	(1.0)
Net change in Income before income tax	$	1.9

AES Ohio

For the three months ended March 31, 2024, AES Ohio's income before income tax of $11.7 million was higher by $0.8 million, or 7%, compared to the prior period income before income tax of $10.9 million, primarily due to factors including, but not limited to:


	Three months ended
	March 31,
$ in millions	2024 vs. 2023
Increase due to higher transmission revenue driven by an increase in transmission rates	$	8.1
Increase in the DIR, with the approval of ESP 4	7.1
Net increase in demand primarily due to favorable weather	6.0
Decrease due to higher operation and maintenance expenses	(12.4)
Decrease due to higher taxes other than income taxes driven by higher assessed values	(3.7)
Decrease due to higher depreciation and amortization driven by assets placed in service	(2.7)
Other	(1.6)
Net change in Income before income tax	$	0.8

RESULTS OF OPERATIONS – DPL

DPL’s results of operations include the results of its subsidiaries, including its principal subsidiary, AES Ohio. All material intercompany accounts and transactions have been eliminated in consolidation. A separate discussion of the results of operations for AES Ohio is presented elsewhere in this report.


	Three months ended
	March 31,
$ in millions		2024		2023		$ change		% change
REVENUE:
Retail		$	189.0	$	212.9	$	(23.9)	(11.2)	%
Wholesale		4.8		3.7		1.1		29.7	%
RTO ancillary		27.8		19.7		8.1		41.1	%
Capacity revenue		0.1		0.5		(0.4)		(80.0)	%
Miscellaneous revenue		4.7		3.3		1.4		42.4	%

Total revenue		226.4		240.1		(13.7)		(5.7)	%

OPERATING COSTS AND EXPENSES:
Purchased power:
Purchased power		70.3		105.8		(35.5)		(33.6)	%
RTO charges		19.4		16.4		3.0		18.3	%


Net purchased power cost		89.7		122.2		(32.5)		(26.6)	%
Operation and maintenance		60.9		54.0		6.9		12.8	%
Depreciation and amortization		22.6		19.8		2.8		14.1	%
Taxes other than income taxes		29.2		25.5		3.7		14.5	%



Loss on asset disposal		1.3		—		1.3		100.0	%
Total operating costs and expenses		203.7		221.5		(17.8)		(8.0)	%

OPERATING INCOME		22.7		18.6		4.1		22.0	%

OTHER INCOME / (EXPENSE), NET:
Interest expense, net		(20.3)		(18.1)		(2.2)		12.2	%

Other income, net		1.8		1.8		—		—	%
Total other expense, net		(18.5)		(16.3)		(2.2)		13.5	%

INCOME BEFORE INCOME TAX (a)		$	4.2	$	2.3	$	1.9	82.6	%

(a)For purposes of discussing operating results, we present and discuss Income before income tax. This format is useful to investors because it allows analysis and comparability of operating trends and includes the same information that is used by management to make decisions regarding our financial performance.

DPL – Revenue

Retail customers, especially residential and commercial customers, consume more electricity on warmer and colder days. Therefore, our retail sales demand is affected by the number of heating and cooling degree-days occurring during a year. Cooling degree-days typically have a more significant effect than heating degree-days since some residential customers do not use electricity to heat their homes. Additionally, our retail revenue is affected by regulated rates and riders including the changes to our ESP described in Note 2. Regulatory Matters of our Form 10-K and Note 2. Regulatory Matters of DPL's Condensed Consolidated Financial Statements.


HEATING AND COOLING DEGREE-DAYS (a)
	Three months ended
	March 31,
		2024	2023	change	% change
Actual
Heating degree-days		2,298	2,223	75	3.4	%
Cooling degree-days		—	—	—	—	%

30-year average (b)
Heating degree-days		2,782	2,812
Cooling degree-days		2	2

(a)Heating and cooling degree-days are a measure of the relative heating or cooling required for a home or business. The heating degrees in a day are calculated as the degrees that the average actual daily temperature is below 65 degrees Fahrenheit. For example, if the average temperature on March 20th was 40 degrees Fahrenheit, the heating degrees for that day would be the 25-degree difference between 65 degrees and 40 degrees. Similarly, cooling degrees in a day are calculated as the degrees that the average actual daily temperature is above 65 degrees Fahrenheit.

(b)30-year average is computed from observed degree-days in the Dayton area on a trailing 30-year basis.

DPL's and AES Ohio's electric sales and billed customers were as follows:


ELECTRIC SALES AND CUSTOMERS (a)
	Three months ended
	March 31,
		2024	2023	change	% change
Retail electric sales (b)
Residential		1,424	1,374	50	3.6	%
Commercial		867	839	28	3.3	%
Industrial		871	855	16	1.9	%
Governmental		284	278	6	2.2	%
Other		10	12	(2)	(16.7)	%
Total retail electric sales		3,456	3,358	98	2.9	%
Wholesale electric sales (c)		142	111	31	27.9	%
Total electric sales		3,598	3,469	129	3.7	%

Billed electric customers (end of period)		540,475	537,108	3,367	0.6	%

(a)Electric sales are presented in millions of kWh.

(b)DPL and AES Ohio retail electric sales represent the total transmission and distribution retail sales for the periods presented. SSO sales were 571 kWh and 913 kWh for the three months ended March 31, 2024 and 2023, respectively.

(c)Wholesale electric sales are AES Ohio's 4.9% share of the generation output of OVEC.

The following charts show the percentage changes in weather-normalized and actual retail electric sales volumes by customer class for the three months ended March 31, 2024 compared to the same period in the prior year:

During the three months ended March 31, 2024, revenue decreased $13.7 million to $226.4 million compared to $240.1 million in the same period of the prior year. This change was primarily the result of changes in the components of revenue shown below:


	Three months ended
	March 31,
$ in millions	2024 vs. 2023
Retail
Rate
Decrease in Competitive Bid Revenue Rate Rider	$	(49.2)
Decrease in USF Revenue Rate Rider	(4.9)
Increase in DIR	7.1
Increase in Legacy Generation Resource Rider	5.7
Increase in TCRR Rider	2.6
Increase in Regulatory Compliance Rider	2.6
Increase in Infrastructure Investment Rider	2.2



Other	3.2
Net change in retail rate	(30.7)

Volume
Net increase in demand primarily due to favorable weather	6.9

Other miscellaneous	(0.1)
Total retail change	(23.9)

Wholesale


Increase primarily due to higher rates and volumes on power sales at OVEC	1.1



RTO ancillary and capacity revenue
Increase due to higher transmission revenue driven by an increase in transmission rates	7.7

Other
Miscellaneous revenue	1.4
Net change in revenue	$	(13.7)

DPL – Net Purchased Power

During the three months ended March 31, 2024, net purchased power decreased $32.5 million to $89.7 million compared to $122.2 million in the same period of the prior year. This change was primarily the result of changes in the cost of purchased power shown below.

Three months ended

March 31,

$ in millions

2024 vs. 2023

Net purchased power

Purchased power

Rate

Increase primarily due to higher prices in the competitive bid process

6.1

Volume

Decrease primarily due to fewer SSO customers

(41.6)

Total purchased power change

(35.5)

RTO charges

Increase primarily due to increase in TCRR rates

3.0

Net change in purchased power

(32.5)

DPL – Operation and Maintenance

During the three months ended March 31, 2024, Operation and maintenance expense increased $6.9 million compared to the same period in the prior year. The main drivers of this change are as follows:


	Three months ended
	March 31,
$ in millions	2024 vs. 2023
Increase in contracted services, primarily due to overhead distribution line maintenance, including tree trimming	$	6.3
Increase in charges from Service Company	4.6
Decrease in USF rider (a)	(4.9)







Other	0.9
Net change in operation and maintenance expense	$	6.9

(a) There is a corresponding offset in Revenue associated with these costs.

DPL – Depreciation and Amortization

During the three months ended March 31, 2024, Depreciation and amortization increased $2.8 million compared to the same period in the prior year, primarily due to additional assets placed in service.

DPL – Taxes Other Than Income Taxes

During the three months ended March 31, 2024, Taxes other than income taxes increased $3.7 million compared to the same period in the prior year. The increase was primarily the result of higher property taxes due to higher assessed values in the current year.

DPL – Interest Expense, Net

During the three months ended March 31, 2024, Interest expense, net increased $2.2 million compared to the same period in the prior year. The increase was primarily the result of the issuance of debt at AES Ohio in the second and fourth quarters of 2023, partially offset by higher AFUDC debt.

DPL – Income Tax Expense

Income tax expense was $1.6 million during the three months ended March 31, 2024 compared to expense of $1.1 million during the three months ended March 31, 2023. The increase was primarily due to higher income before income tax during the three months ended March 31, 2024, compared to the same period in the prior year, partially offset by a lower estimated annual effective income tax rate in the current year versus the prior year.

See Note 6. Income Taxes in the DPL's Condensed Consolidated Financial Statements for further discussion.

RESULTS OF OPERATIONS BY SEGMENT - DPL

DPL manages its business through one reportable operating segment, the Utility segment. The primary segment performance measure is income / (loss) 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 segment. The Utility segment is comprised of AES Ohio, a public electric transmission and distribution utility, with all other nonutility business activities aggregated separately. See Note 1. Overview and Summary of Significant Accounting Policies of DPL's Condensed Consolidated Financial Statements for further information on AES Ohio. The “Other” nonutility category primarily includes interest expense, cash and other immaterial balances. The accounting policies of the identified segment are consistent with those policies and procedures described in the summary of significant accounting policies.

See PART I, ITEM 1., Note 10. Business Segments of DPL's Condensed Consolidated Financial Statements for more information regarding DPL’s reportable segment.

The following table presents DPL’s Income / (loss) before income tax by business segment:


	Three months ended
	March 31,
$ in millions		2024		2023
Utility		$	11.7	$	10.9

Other		(7.5)		(8.6)
Income before income tax (a)		$	4.2	$	2.3

RESULTS OF OPERATIONS BY SEGMENT – DPL – Utility Segment

The results of operations of the Utility segment for DPL are identical in all material respects and for all periods presented to those of AES Ohio, which are included in PART I, ITEM 2., Management's Discussion and Analysis of Financial Condition and Results of Operations (RESULTS OF OPERATIONS – AES Ohio) of this Form 10-Q.

RESULTS OF OPERATIONS – AES Ohio


	Three months ended
	March 31,
$ in millions		2024		2023		$ change		% change
REVENUE:
Retail		$	189.0	$	212.9	$	(23.9)	(11.2)	%
Wholesale		5.0		3.8		1.2		31.6	%
RTO ancillary		27.8		19.7		8.1		41.1	%
Capacity revenue		0.1		0.5		(0.4)		(80.0)	%
Miscellaneous revenue		2.4		0.9		1.5		166.7	%
Total revenue		224.3		237.8		(13.5)		(5.7)	%

OPERATING COSTS AND EXPENSES:
Purchased power:
Purchased power		70.3		105.8		(35.5)		(33.6)	%
RTO charges		19.2		16.2		3.0		18.5	%


Net purchased power cost		89.5		122.0		(32.5)		(26.6)	%
Operation and maintenance		60.7		53.2		7.5		14.1	%
Depreciation and amortization		22.1		19.4		2.7		13.9	%
Taxes other than income taxes		29.2		25.5		3.7		14.5	%



Loss on asset disposal		1.1		—		1.1		100.0	%
Total operating costs and expenses		202.6		220.1		(17.5)		(8.0)	%

Operating income		21.7		17.7		4.0		22.6	%

OTHER INCOME / (EXPENSE), NET:
Interest expense, net		(11.2)		(8.3)		(2.9)		34.9	%

Other income, net		1.2		1.5		(0.3)		(20.0)	%
Total other expense, net		(10.0)		(6.8)		(3.2)		47.1	%

INCOME BEFORE INCOME TAX (a)		$	11.7	$	10.9	$	0.8	7.3	%

(a)For purposes of discussing operating results, we present and discuss Income before income tax. This format is useful to investors because it allows analysis and comparability of operating trends and includes the same information used by management to make decisions regarding our financial performance.

AES Ohio – Revenue

Retail customers, especially residential and commercial customers, consume more electricity on warmer and colder days. Therefore, our retail sales demand is affected by the number of heating and cooling degree-days occurring during a year. Cooling degree-days typically have a more significant effect than heating degree-days since some residential customers do not use electricity to heat their homes. Additionally, our retail revenue is affected by regulated rates and riders including the changes to our ESP described in Note 2. Regulatory Matters of our Form 10-K and Note 2 – Regulatory Matters of AES Ohio's Condensed Financial Statements.

During the three months ended March 31, 2024, revenue decreased $13.5 million to $224.3 million compared to $237.8 million in the same period of the prior year. This change was primarily the result of changes in the components of revenue shown below:


	Three months ended
	March 31,
$ in millions	2024 vs. 2023
Retail
Rate
Decrease in Competitive Bid Revenue Rate Rider	$	(49.2)
Decrease due to the USF Revenue Rate Rider	(4.9)
Increase due to DIR	7.1
Increase due to Legacy Generation Resource Rider	5.7
Increase due to the TCRR Rider	2.6
Increase due to Regulatory Compliance Rider	2.6
Increase due to Infrastructure Investment Rider	2.2



Other	3.2
Net change in retail rate	(30.7)

Volume
Net increase in demand primarily due to favorable weather	6.9

Other miscellaneous	(0.1)
Total retail change	(23.9)

Wholesale
Increase primarily due to higher rates and volumes on power sales at OVEC	1.2

RTO ancillary and capacity revenue
Increase due to higher transmission revenue driven by an increase in transmission rates	7.7

Other
Miscellaneous revenue	1.5
Net change in revenue	$	(13.5)

AES Ohio – Net Purchased Power

During the three months ended March 31, 2024, net purchased power decreased $32.5 million to $89.5 million compared to $122.0 million in the same period of the prior year. This change was primarily the result of changes in the cost of purchased power shown below.

Three months ended

March 31,

$ in millions

2024 vs. 2023

Net purchased power

Purchased power

Rate

Increase primarily due to higher prices in the competitive bid process

6.1

Volume

Decrease primarily due to fewer SSO customers

(41.6)

Total purchased power change

(35.5)

RTO charges

Increase primarily due to increase in TCRR rates

3.0

Net change in purchased power

(32.5)

AES Ohio – Operation and Maintenance

During the three months ended March 31, 2024, Operation and Maintenance expense increased $7.5 million compared to the same period in the prior year. The main drivers of this change are as follows:


	Three months ended
	March 31,
$ in millions	2024 vs. 2023
Increase in contracted services, primarily due to overhead distribution line maintenance, including tree trimming	$	6.3
Increase in charges from Service Company	5.0
Decrease in USF rider (a)	(4.9)







Other	1.1
Net change in operation and maintenance expense	$	7.5

(a) There is a corresponding offset in Revenue associated with these costs.

AES Ohio – Depreciation and Amortization

During the three months ended March 31, 2024, Depreciation and amortization increased $2.7 million compared to the same period in the prior year, primarily due to additional assets placed in service.

AES Ohio – Taxes Other Than Income Taxes

AES Ohio – Interest Expense, Net

During the three months ended March 31, 2024, Interest expense, net increased $2.9 million compared to the same period in the prior year. The increase was primarily the result of the issuance of debt at AES Ohio in the second and fourth quarters of 2023, partially offset by higher AFUDC debt.

AES Ohio – Income Tax Expense

Income tax expense was $2.3 million during the three months ended March 31, 2024 compared to expense of $1.3 million during the three months ended March 31, 2023. The increase was primarily due to the amortization of a deferred tax shortage arising from a net municipal apportioned tax rate increase, which began in September 2023.

See Note 5. Income Taxes of AES Ohio's Condensed Financial Statements for further discussion.

KEY TRENDS AND UNCERTAINTIES

During 2024 and beyond, we expect our financial results will be primarily impacted by retail demand and weather. In addition, DPL's and AES Ohio's financial results are likely to be driven by other factors including, but not limited to:

•regulatory outcomes;

•the passage of new legislation, implementation of regulations or other changes in regulation; and

•the timely recovery of transmission and distribution expenditures.

If favorable outcomes related to these factors do not occur, or if the challenges described below and elsewhere in this Quarterly Report impact us more significantly than we currently anticipate, then these factors, or other factors unknown to us, may impact our operating income, net income and cash flows. We continue to monitor our operations and address challenges as they arise. For a discussion of the risks related to our business, see Item 1. Business and Item 1A. Risk Factors in our Form 10-K.

Operational

Capital Projects – Our construction projects have experienced some indications of delays and price increases due to supply chain disruptions; however, they are currently proceeding without material delays. For further discussion of our capital requirements, see PART I, ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations – Capital Resources and Liquidity of this Form 10-Q.

Macroeconomic and Political

U.S. Income Tax – The macroeconomic and political environments in the U.S. have changed in recent years. This could result in significant impacts to tax law.

Inflation – In the markets in which we operate, there have been higher rates of inflation recently. If inflation increases in our market, it may increase our expenses that we may not be able to pass through to customers. AES Ohio may have the ability to recover operations and maintenance costs through the regulatory process; however, timing impacts on recovery may vary. In addition, the standard service offer auction process has reflected current macroeconomic conditions in terms of pricing.

Interest Rates – In the U.S. there has been a rise in interest rates since 2021, and interest rates are expected to remain volatile in the near term. Although all of our existing DPL and AES Ohio long-term debt is at fixed rates, an increase in interest rates can have several impacts on our business. For our existing short-term debt under floating rate structures and any future debt refinancings or future new money financings, rising interest rates will increase future financing costs. Our floating rate debt is currently limited to short-term borrowings under the AES Ohio Credit Agreement. For future debt financings, DPL manages a hedging program to help reduce uncertainty and exposure to future interest rates.

Regulatory

DPL’s, AES Ohio’s and our other subsidiaries’ facilities and operations are subject to a wide range of regulations and laws by federal, state and local authorities. As well as imposing continuing compliance obligations, these laws and regulations authorize the imposition of substantial penalties for noncompliance, including fines, injunctive relief and other sanctions. In the normal course of business, we have investigatory and remedial activities underway at these facilities and operations in an effort to comply, or to determine compliance, with such regulations. We record liabilities for losses that are probable and can be reasonably estimated. In addition to matters discussed or updated herein, our Form 10-K previously filed with the SEC during 2024 describes other regulatory matters, which have not materially changed since that filing.

Smart Grid Phase 2 Plan - In February 2024, AES Ohio filed a Smart Grid Phase 2 with the PUCO proposing to invest approximately $683 million in capital projects over a 10-year period following the Smart Grid Phase 1, which ends June 2025. There are three principal components of AES Ohio’s Smart Grid Phase 2: 1) Distribution Operations, 2) Advanced Intelligence 3) Telecommunications and Cybersecurity. These initiatives will also allow AES Ohio to be ready to leverage and integrate Distributed Energy Resources into its grid. If approved, AES Ohio will implement a comprehensive grid modernization project that will deliver benefits to customers, society as a whole and to AES Ohio. A procedural schedule has been set with a hearing to begin in September 2024. We expect an order from the PUCO by the second quarter of 2025, prior to the end of Smart Grid Phase 1.

See PART I, ITEM 1., Note 2. Regulatory Matters of DPL's Condensed Consolidated Financial Statements and PART I, ITEM 1., Note 2. Regulatory Matters of AES Ohio's Condensed Financial Statements for further information regarding these and other regulatory matters.

Environmental

We have several pending environmental matters associated with our previously-owned stations. Some of these matters could have a material adverse effect on our results of operations, financial condition and cash flows.

As a result of DPL now not directly owning or operating any generating stations, the following environmental matters, regulations and requirements are now not expected to have a material impact on DPL:

•MATS and any associated regulatory or judicial processes;

•NAAQS; and

•potential CAA Section 111(d) regulations for greenhouse gases from existing electric generating units.

CAPITAL RESOURCES AND LIQUIDITY

OVERVIEW

DPL and AES Ohio had unrestricted cash and cash equivalents of $24.2 million and $7.6 million, respectively, as of March 31, 2024. At that date, neither DPL nor AES Ohio had short-term investments. DPL and AES Ohio had aggregate principal amounts of long-term debt outstanding of $1,852.4 million and $1,021.8 million, respectively.

From time to time, we may elect to repurchase our outstanding debt through cash purchases, privately negotiated transactions or otherwise when management believes such repurchases are favorable to make. The amounts involved in any such repurchases may be material.

We depend on timely and continued access to capital markets to manage our liquidity needs. The inability to raise capital on favorable terms, to refinance existing indebtedness or to fund operations and other commitments during times of political or economic uncertainty could have a material adverse effect on our results of operations, financial condition and cash flows. In addition, changes in the timing of tariff increases or delays in regulatory determinations could affect the cash flows and results of operations of our businesses.

In April 2024, DPL received a $30.0 million capital contribution from AES. DPL then made the same investment in AES Ohio. The proceeds from this contribution will allow AES Ohio to seek to improve its infrastructure and modernize its grid while maintaining liquidity.

CASH FLOWS

DPL’s financial condition, liquidity and capital requirements include the consolidated results of its principal subsidiary AES Ohio. All material intercompany accounts and transactions have been eliminated in consolidation.

Cash Flow Analysis - DPL

The following table summarizes the cash flows of DPL:


	Three months ended March 31,
$ in millions	2024		2023
Net cash provided by / (used in) operating activities	$	9.5	$	(22.1)
Net cash used in investing activities	(181.3)		(92.4)
Net cash provided by financing activities	155.0		105.0
Net decrease in cash, cash equivalents and restricted cash	(16.8)		(9.5)
Balance at beginning of period	41.1		30.6
Cash, cash equivalents, and restricted cash at end of period	$	24.3	$	21.1

The following cash flow review compares the cash flows of DPL for the three months ended March 31, 2024 to the cash flows for the three months ended March 31, 2023.

DPL – Operating activities


	Three months ended March 31,				$ change
$ in millions	2024		2023		2024 vs. 2023
Net income	$	2.6	$	1.2	$	1.4
Depreciation and amortization	22.6		19.8		2.8
Deferred income taxes	5.7		3.7		2.0
Other adjustments to net income	0.4		(0.4)		0.8
Net income, adjusted for non-cash items	31.3		24.3		7.0
Net change in operating assets and liabilities and other	(21.8)		(46.4)		24.6
Net cash provided by operating activities	$	9.5	$	(22.1)	$	31.6

The net change in operating assets and liabilities during the three months ended March 31, 2024, compared to the three months ended March 31, 2023 was driven by the following:


$ in millions	$ Change
Increase from accounts payable primarily due to the timing of payments	$	15.5
Increase from current and non-current regulatory assets and liabilities primarily due an increase in collections from customers	11.2


Other	(2.1)
Net change in operating assets and liabilities and other	$	24.6

DPL – Investing activities

Net cash used in investing activities increased $88.9 million during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily driven by the following:


$ in millions	$ Change
Higher capital expenditures due to increased spending on AES Ohio T&D projects	$	(85.2)
Higher cost of removal payments	(2.8)
Other	(0.9)

Net change in investing activities	$	(88.9)

DPL – Financing activities

Net cash provided by financing activities increased $50.0 million during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily driven by the following:


$ in millions	$ Change

Higher net borrowings on revolving credit facilities	$	50.0



Net change in financing activities	$	50.0

Cash Flow Analysis - AES Ohio

The following table summarizes the cash flows of AES Ohio:


	Three months ended March 31,
$ in millions	2024		2023
Net cash provided by / (used in) operating activities	$	16.9	$	(13.5)
Net cash used in investing activities	(179.8)		(91.8)
Net cash provided by financing activities	155.0		95.0
Net increase in cash, cash equivalents and restricted cash	(7.9)		(10.3)
Balance at beginning of period	15.6		19.8
Cash, cash equivalents, and restricted cash at end of period	$	7.7	$	9.5

The following cash flow review compares the cash flows of AES Ohio for the three months ended March 31, 2024 to the cash flows for the three months ended March 31, 2023.

AES Ohio – Operating activities


	Three months ended March 31,				$ change
$ in millions	2024		2023		2024 vs. 2023
Net income	$	9.4	$	9.6	$	(0.2)
Depreciation and amortization	22.1		19.4		2.7
Deferred income taxes	2.3		1.3		1.0
Other adjustments to net income	(0.3)		(1.0)		0.7
Net income, adjusted for non-cash items	33.5		29.3		4.2
Net change in operating assets and liabilities and other	(16.6)		(42.8)		26.2
Net cash provided by / (used in) operating activities	$	16.9	$	(13.5)	$	30.4

The net change in operating assets and liabilities during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, was driven by the following:


$ in millions	$ Change
Increase from accounts payable primarily due to the timing of payments	$	14.3
Increase from current and non-current regulatory assets and liabilities primarily due an increase in collections from customers	11.2





Other	0.7
Net change in operating assets and liabilities and other	$	26.2

AES Ohio – Investing activities

Net cash used in investing activities increased $88.0 million during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily driven by the following:


$ in millions	$ Change
Higher capital expenditures due to increased spending on AES Ohio T&D projects	$	(84.3)
Higher cost of removal payments	(2.8)
Other	(0.9)

Net change in investing activities	$	(88.0)

AES Ohio – Financing activities

Net cash provided by financing activities increased $60.0 million during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily driven by the following:


$ in millions	$ Change

Higher net borrowings on revolving credit facilities	$	45.0

Distributions to DPL in prior year	15.0

Net change in financing activities	$	60.0

LIQUIDITY

We expect our existing cash balances, cash generated from operating activities and borrowing capacity on our existing credit facilities will be adequate to meet our anticipated operating needs, including interest expense on our debt and any dividends to our equity owners. Our business is capital intensive, requiring significant resources to fund operating expenses, construction expenditures, scheduled debt maturities and carrying costs, taxes and any dividend payments. For 2024 and subsequent years, we expect to satisfy these requirements with a combination of cash from operations, funds from debt financing and funds from equity capital contributions as our internal liquidity needs and market conditions warrant. We also expect that the borrowing capacity under the AES Ohio Credit Agreement will continue to be available to manage working capital requirements during those periods. The absence of adequate liquidity could adversely affect our ability to operate our business and have a material adverse effect on our results of operations, financial condition and cash flows.

At March 31, 2024, AES Ohio has access to the following revolving credit facility:

$ in millions

Type

Maturity

Commitment

Amounts available as of March 31, 2024

AES Ohio Credit Agreement

Revolving

December 2027

250.0

80.0

For the AES Ohio Credit Agreement, as of March 31, 2024, there were $170.0 million in borrowings under the facility, with the remaining $80.0 million available to AES Ohio. For more information on the AES Ohio Credit Agreement, see Note 5. Debt of our Form 10-K.

CAPITAL EXPENDITURE PROGRAM

Our capital expenditure program, including development and permitting costs, for the three-year period from 2024 through 2026 is currently estimated to cost up to $1.2 billion, and includes estimates as follows:


$ in millions	2024		2025		2026		For the three-year period from 2024 through 2026
Distribution-related additions, improvements and extensions	$	166.0	$	217.0	$	185.0	$	568.0
Transmission-related additions and improvements	203.0		158.0		151.0		512.0
Smart Grid Phase 1 improvements and additions	89.0		14.0		—		103.0
Other	26.0		10.0		9.0		45.0
Total for AES Ohio	484.0		399.0		345.0		1,228.0

Other subsidiaries	3.0		6.0		5.0		14.0
Total for DPL	$	487.0	$	405.0	$	350.0	$	1,242.0

AES Ohio's projection includes expected spending under its Smart Grid Phase 1 included in the comprehensive settlement approved by the PUCO on June 16, 2021, as well as new transmission and distribution projects. AES Ohio’s spending programs are contingent on, among other events, successful regulatory outcomes in pending proceedings. See more information in Note 2. Regulatory Matters of DPL's Condensed Consolidated Financial Statements and AES Ohio's Condensed Financial Statements.

AES Ohio is subject to the mandatory reliability standards of NERC and ReliabilityFirst Corporation, one of the six NERC regions, of which AES Ohio is a member. Anticipated costs related to these standards are included in the overall capital projections above.

Debt Covenants

For information regarding our long-term debt covenants, see Note 6. Debt of our Form 10-K.

Credit Ratings

The following table presents, as of the filing of this report, the debt ratings and credit ratings (issuer/corporate rating) and outlook for DPL and AES Ohio.

Debt ratings

DPL

AES Ohio

Outlook

Fitch Ratings

BB (a)

BBB+ (b)

Stable

Moody's Investors Service, Inc.

Ba2 (a)

Baa1 (b)

Stable

Standard & Poor's Financial Services LLC

BB (a)

BBB (b)

Stable

Credit ratings

DPL

AES Ohio

Outlook

Fitch Ratings

BBB-

Stable

Moody's Investors Service, Inc.

Ba2

Baa3

Stable

Standard & Poor's Financial Services LLC

Stable

(a) Rating relates to DPL's senior unsecured debt.

(b) Rating relates to AES Ohio’s senior secured debt.

We cannot predict whether the current debt and credit ratings of DPL or the debt and credit ratings of AES Ohio will remain in effect for any given period of time or that one or more of these ratings will not be lowered or withdrawn entirely by a rating agency. A security rating is not a recommendation to buy, sell or hold securities. Such ratings may be subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating. If the rating agencies were to reduce our debt or credit ratings, our borrowing costs may increase, our potential pool of investors and funding resources may be reduced, and we may be required to post additional collateral under selected contracts. These events could have an adverse effect on our results of operations, financial condition and cash flows. In addition, any such reduction in our debt or credit ratings may adversely affect the trading price of our outstanding debt securities.

Off-Balance Sheet Arrangements

For information on guarantees, commercial commitments, and contractual obligations, see PART I, ITEM 1., Note 9. Commitments and Contingencies of DPL's Condensed Consolidated Financial Statements and PART I, ITEM 1., Note 8. Commitments and Contingencies of AES Ohio's Condensed Financial Statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

DPL’s Condensed Consolidated Financial Statements and AES Ohio’s Condensed Financial Statements are prepared in accordance with GAAP. In connection with the preparation of these financial statements, our management is required to make assumptions, estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosure of contingent liabilities. These assumptions, estimates and judgments are based on our historical experience and assumptions that we believe to be reasonable at the time. However, because future events and their effects cannot be determined with certainty, the determination of estimates requires the exercise of judgment. Our critical accounting estimates are those which require assumptions to be made about matters that are highly uncertain.

Different estimates could have a material effect on our financial results. Judgments and uncertainties affecting the application of these policies and estimates may result in materially different amounts being reported under different conditions or circumstances. Historically, however, recorded estimates have not differed materially from actual results. Significant items subject to such judgments include: the carrying value of property, plant and equipment; unbilled revenue; the valuation of insurance and claims liabilities; the valuation of allowances for credit losses and deferred income taxes; regulatory assets and liabilities; liabilities recorded for income tax exposures; litigation; contingencies; assets and liabilities related to employee benefits and intangible assets. Refer to our Form 10-K for the year ended December 31, 2023 for a complete listing of our critical accounting policies and estimates. We have reviewed and determined that these remain as critical accounting policies as of and for the three months ended March 31, 2024.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes to our quantitative and qualitative disclosure about market risk as previously disclosed in our Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

DPL and AES Ohio, under the supervision and with the participation of its management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), evaluated the effectiveness of our “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of March 31, 2024, to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures.

Changes in Internal Controls over Financial Reporting

There were no changes that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II – Other Information

ITEM 1. LEGAL PROCEEDINGS

In the normal course of business, we are subject to various lawsuits, actions, claims, and other proceedings. We are also, from time to time, involved in other reviews, investigations and proceedings by governmental and regulatory agencies regarding our business, certain of which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief. We have accrued in our Financial Statements for litigation and claims where it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. We believe the amounts provided in our Financial Statements, as prescribed by GAAP, for these matters are adequate considering the probable and estimable contingencies. However, there can be no assurances that the actual amounts required to satisfy alleged liabilities from various legal proceedings, claims and other matters (including those matters noted below), and to comply with applicable laws and regulations will not exceed the amounts reflected in our Financial Statements. As such, costs, if any, that may be incurred in excess of those amounts provided for in our Financial Statements, cannot be reasonably determined, but could be material.

Our Form 10-K for the fiscal year ended December 31, 2023, and the Notes to DPL’s Consolidated Financial Statements and AES Ohio’s Financial Statements included therein, contain descriptions of certain legal proceedings in which we are or were involved. The information in or incorporated by reference into this Item 1 to Part II is limited to certain recent developments concerning our legal proceedings and new legal proceedings, since the filing of such Form 10-K, and should be read in conjunction with such Form 10-K.

The following information is incorporated by reference into this Item: information about the legal proceedings contained in PART I, ITEM 2. – Management's Discussion and Analysis of Financial Condition and Results of Operations and PART I, ITEM 1., Note 2. Regulatory Matters and Note 9. Commitments and Contingencies of DPL's Condensed Consolidated Financial Statements and PART I, ITEM 1., Note 2. Regulatory Matters and Note 8. Commitments and Contingencies of AES Ohio's Condensed Financial Statements of this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors disclosed in Item 1A. – Risk Factors of our Form 10-K. Additional risks and uncertainties also may adversely affect our business and operations, including those discussed in Item 2. – Management's Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-Q.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

DPL

DP&L

Exhibit Number

Exhibit

Location

31(a)

Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Filed herewith as Exhibit 31(a)

31(b)

Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Filed herewith as Exhibit 31(b)

31(c)

Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Filed herewith as Exhibit 31(c)

31(d)

Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Filed herewith as Exhibit 31(d)

32(a)

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Filed herewith as Exhibit 32(a)

32(b)

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Filed herewith as Exhibit 32(b)

32(c)

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Filed herewith as Exhibit 32(c)

32(d)

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Filed herewith as Exhibit 32(d)

101.INS

XBRL Instance

Filed herewith as Exhibit 101.INS

101.SCH

XBRL Taxonomy Extension Schema

Filed herewith as Exhibit 101.SCH

101.CAL

XBRL Taxonomy Extension Calculation Linkbase

Filed herewith as Exhibit 101.CAL

101.DEF

XBRL Taxonomy Extension Definition Linkbase

Filed herewith as Exhibit 101.DEF

101.LAB

XBRL Taxonomy Extension Label Linkbase

Filed herewith as Exhibit 101.LAB

101.PRE

XBRL Taxonomy Extension Presentation Linkbase

Filed herewith as Exhibit 101.PRE

Exhibits referencing File No. 1-9052 have been filed by DPL Inc. and those referencing File No. 1-2385 have been filed by The Dayton Power and Light Company.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, DPL Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		DPL Inc.
		(Registrant)

Date:	May 2, 2024	/s/ Gustavo Garavaglia
		Gustavo Garavaglia
		Vice President and Chief Financial Officer
		(principal financial officer)

	May 2, 2024	/s/ Karin M. Mehringer
		Karin M. Mehringer
		Controller
		(principal accounting officer)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, The Dayton Power and Light Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		The Dayton Power and Light Company
		(Registrant)

Date:	May 2, 2024	/s/ Gustavo Garavaglia
		Gustavo Garavaglia
		Vice President and Chief Financial Officer
		(principal financial officer)

	May 2, 2024	/s/ Karin M. Mehringer
		Karin M. Mehringer
		Controller
		(principal accounting officer)