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,~~September 30, 2023

-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 4,~~November 2, 2023, 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

~~Quarter Ended March 31,~~Form 10-Q for the Quarterly Period ended September 30, 2023


		Table of Contents	Page No.
~~Glossary of Terms~~GLOSSARY OF TERMS			65
~~Forward–Looking Statements~~FORWARD–LOOKING STATEMENTS			7
~~Part I Financial Information~~PART I: FINANCIAL INFORMATION
	~~Item~~ITEM 1	~~Financial Statements – DPL Inc. and AES Ohio (Unaudited)~~FINANCIAL STATEMENTS
		DPL Inc.
		Condensed Consolidated Statements of Operations	11
		Condensed Consolidated Statements of Comprehensive Income / (Loss)	12
		Condensed Consolidated Balance Sheets	13
		Condensed Consolidated Statements of Cash Flows	14
		Condensed Consolidated Statements of Shareholder's ~~Deficit~~Equity / (Deficit)	15
		Notes to Unaudited Condensed Consolidated Financial Statements	16
		Note ~~1 – OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~1. Overview and Summary of Significant Accounting Policies	16
		Note ~~2 – REGULATORY MATTERS~~2. Regulatory Matters	19
		Note ~~3 – FAIR VALUE~~3. Fair Value	20
		Note ~~4 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES~~4. Derivative Instruments and Hedging Activities	21
	~~Note 5 – DEBT~~	21
	Note ~~6 – INCOME TAXES~~5. Debt	22
		Note ~~7 – BENEFIT PLANS~~6. Income Taxes	23
		Note ~~8 – SHAREHOLDER'S DEFICIT~~7. Benefit Plans	23
	~~Note 9 – COMMITMENTS AND CONTINGENCIES~~	23
	Note ~~10 – BUSINESS SEGMENTS~~8. Equity	24
		Note ~~11 – REVENUES~~9. Commitments and Contingencies	24
		Note 10. Business Segments	25
		Note ~~12 – RISKS AND UNCERTAINTIES~~11. Revenue	26


		AES Ohio
		Condensed Statements of Operations	2830
		Condensed Statements of Comprehensive Income / (Loss)	2931
		Condensed Balance Sheets	3032
		Condensed Statements of Cash Flows	3133
		Condensed Statements of Shareholder's Equity	3234
		Notes to Unaudited Condensed Financial Statements	3335
		Note 1 ~~– OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~	33
	~~Note 2 – REGULATORY MATTERS~~. Overview and Summary of Significant Accounting Policies	35
	~~Note 3 – FAIR VALUE~~	36
	Note ~~4 – DEBT~~	37
	~~Note 5 – INCOME TAXES~~2 . Regulatory Matters	38
	~~Note 6 – BENEFIT PLANS~~	38
	Note ~~7 – SHAREHOLDER'S EQUITY~~3 . Fair Value	39
	~~Note 8 – COMMITMENTS AND CONTINGENCIES~~	39
	Note ~~9 – REVENUES~~	40
	~~Note 10 – RISKS AND UNCERTAINTIES~~4 . Debt	40


~~Item 2~~	~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~Note 5 . Income Taxes	41
		~~Executive Summary~~Note 6 . Benefit Plans	41
		Note 7 . Equity	42
		Note 8 . Commitments and Contingencies	42
		Note 9 . Revenue	43


	ITEM 2	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	44
		Executive Summary	44
		Results of Operations – DPL	4346
		Results of Operations by Segment – DPL	4751
		Results of Operations – AES Ohio	4852
		Key Trends and Uncertainties	5155
		Capital Resources and Liquidity	5357
		Critical Accounting Policies and Estimates	5762
	~~Item~~ITEM 3	~~Quantitative and Qualitative Disclosures about Market Risk~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	5762
	~~Item~~ITEM 4	~~Controls and Procedures~~CONTROLS AND PROCEDURES	5862

PART II: OTHER INFORMATION
	ITEM 1	LEGAL PROCEEDINGS	63
	ITEM 1A	RISK FACTORS	63
	ITEM 2	UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS	63
	ITEM 3	DEFAULTS UPON SENIOR SECURITIES	63
	ITEM 4	MINE SAFETY DISCLOSURES	63
	ITEM 5	OTHER INFORMATION	63
	ITEM 6	EXHIBITS	64
SIGNATURES			65

~~DPL Inc. and AES Ohio~~

~~Quarter Ended March 31, 2023~~


	~~Table of Contents~~	~~Page No.~~
~~Part II Other Information~~
~~Item 1~~	~~Legal Proceedings~~	59
~~Item 1A~~	~~Risk Factors~~	59
~~Item 2~~	~~Unregistered Sale of Equity Securities and Use of Proceeds~~	59
~~Item 3~~	~~Defaults Upon Senior Securities~~	59
~~Item 4~~	~~Mine Safety Disclosures~~	59
~~Item 5~~	~~Other Information~~	59
~~Item 6~~	~~Exhibits~~	60
	~~Signatures~~	61

Table of Contents

DPL Inc. and AES Ohio

Form 10-Q for the Quarterly Period ended September 30, 2023

GLOSSARY OF TERMS

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


Term			Definition
401(k) Plans			AES Ohio sponsors two defined contribution plans, The Dayton Power and Light Company Employee Savings Plan and The Dayton Power and Light Company Savings Plan for Collective Bargaining Employees
2017 ESP			DP&L's ESP - approved October 20, 2017, effective November 1, 2017
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 ~~June 19, 2019~~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
BIL			Bipartisan Infrastructure Law (Infrastructure Investment and Jobs Act) - the congressional act passed in November 2021
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
CCR			Coal Combustion Residuals
Conesville			AES Ohio Generation's interest in Unit 4 at the Conesville EGU. This was sold on June 5, 2020.

~~COVID-19~~CWA			~~The disease caused by the novel coronavirus that resulted in a global pandemic beginning in 2020.~~U.S. Clean Water Act

DPL			DPL Inc. and its consolidated subsidiaries
DPL Credit Agreement			~~$40.0 million~~ DPL Inc. Amended and Restated Credit Agreement, dated as of June 19, ~~2019~~2019.
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.
~~EBITDA~~			~~Earnings before interest, taxes, depreciation and amortization~~
~~EGU~~			~~Electric Generating Unit~~
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 1			ESP originally approved by PUCO order dated June 24, 2009. After DP&L withdrew its 2017 ESP Application, the PUCO approved DP&L's request to revert to rates based on its ESP 1 rate plan effective December 19, 2019. With the approval of DP~~&L is currently operating under this~~&L's ESP 4 on August 9, 2023, ESP 1 ~~plan.~~is no longer effective.
ESP 4			DP&L's ESP filed September 26, ~~2022. DP&L expects approval~~2022 which was approved by the PUCO in ~~2023.~~August 2023
FASB			Financial Accounting Standards Board
FASC			FASB Accounting Standards Codification
FERC			Federal Energy Regulatory Commission
Form 10-K			DPL’s and DP&L’s combined Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed on March 1, 2023
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
~~LIBOR~~			~~London Inter-Bank Offered Rate~~
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.
MRO			Market Rate Option - a market-based plan that a utility may file with PUCO to establish SSO rates pursuant to Ohio law
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

~~Table of Contents~~


~~Term~~			~~Definition~~
OCC			The Office of the Ohio Consumers’ Counsel (OCC) is the statewide legal representative for Ohio’s residential consumers in matters related to their investor-owned electric, natural gas, telephone, and water services.

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DPL Inc. and AES Ohio

Form 10-Q for the Quarterly Period ended September 30, 2023


Term			Definition
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
RSC			The Rate Stabilization Charge is a non-bypassable rider intended to compensate DP&L for providing stabilized rates to customers.
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
SEET			Significantly Excessive Earnings Test - a test used by the PUCO to determine whether a utility's ESP or MRO produces significantly excessive earnings for the utility
Service Company			AES US Services, LLC - the shared services affiliate providing accounting, finance, and other support services to AES’ U.S. businesses
SGF			Solar Generation Fund rider - a statewide program that collects monthly payments for all Ohio electric distribution utilities related to in-state solar and nuclear resources
~~SOFR~~			~~Secured Overnight Financing Rate~~
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
~~USD~~			~~U.S. dollar~~
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

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DPL Inc. and AES Ohio

Form 10-Q for the Quarterly Period ended September 30, 2023

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;

~~Table of Contents~~

•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, ~~including the outbreak of COVID-19,~~ 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

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DPL Inc. and AES Ohio

Form 10-Q for the Quarterly Period ended September 30, 2023

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 -~~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 in our Quarterly Reports on Form 10-Q for the quarters ended March 31, and June 30, 2023 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~~PART II, ~~Item~~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.

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DPL Inc. and AES Ohio

Form 10-Q for the Quarterly Period ended September 30, 2023


~~Part~~PART I – Financial Information

This report includes the combined filing of DPL and DP&L. Throughout this report, the terms “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~~

ITEM 1. FINANCIAL STATEMENTS

Table of Contents

FINANCIAL STATEMENTS

DPL INC.

Table of Contents


DPL Inc.	DPL Inc.		DPL Inc.
Condensed Consolidated Statements of Operations	Condensed Consolidated Statements of Operations		Condensed Consolidated Statements of Operations
(Unaudited)	(Unaudited)		(Unaudited)
		Three months ended						Three months ended				Nine months ended
		March 31,						September 30,				September 30,
$ in millions	$ in millions			2023		2022			$ in millions	2023		2022		2023		2022
Revenues				$	240.1	$	199.3
REVENUE									REVENUE	$	224.2	$	262.1	$	666.3	$	652.3

Operating costs and expenses
OPERATING COSTS AND EXPENSES:									OPERATING COSTS AND EXPENSES:

Net purchased power cost	Net purchased power cost			122.2		90.8			Net purchased power cost	67.2		180.2		276.9		361.6

Operation and maintenance	Operation and maintenance			54.0		40.8			Operation and maintenance	56.6		48.8		170.7		132.7
Depreciation and amortization	Depreciation and amortization			19.8		19.5			Depreciation and amortization	20.6		20.0		60.9		59.6
Taxes other than income taxes	Taxes other than income taxes			25.5		22.0			Taxes other than income taxes	25.2		20.4		77.4		63.6

Gain on disposal of business	Gain on disposal of business			—		(0.6)			Gain on disposal of business	—		—		—		(0.6)

Total operating costs and expenses	Total operating costs and expenses			221.5		172.5			Total operating costs and expenses	169.6		269.4		585.9		616.9

Operating income				18.6		26.8
OPERATING INCOME / (LOSS)									OPERATING INCOME / (LOSS)	54.6		(7.3)		80.4		35.4

Other expense, net:
Interest expense				(18.1)		(15.5)
OTHER INCOME / (EXPENSE), NET:									OTHER INCOME / (EXPENSE), NET:
Interest expense, net									Interest expense, net	(7.8)		(18.1)		(45.2)		(50.1)

Other income, net	Other income, net			1.8		0.4			Other income, net	1.4		1.6		4.7		2.0
Total other expense, net	Total other expense, net			(16.3)		(15.1)			Total other expense, net	(6.4)		(16.5)		(40.5)		(48.1)

Income before income tax				2.3		11.7
INCOME / (LOSS) BEFORE INCOME TAX									INCOME / (LOSS) BEFORE INCOME TAX	48.2		(23.8)		39.9		(12.7)

Income tax expense / (benefit)	Income tax expense / (benefit)			1.1		(3.7)			Income tax expense / (benefit)	9.6		(4.1)		5.3		(8.6)

Net income				$	1.2	$	15.4
NET INCOME / (LOSS)									NET INCOME / (LOSS)	$	38.6	$	(19.7)	$	34.6	$	(4.1)

See Notes to Condensed Consolidated Financial Statements.

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DPL Inc.	DPL Inc.		DPL Inc.
Condensed Consolidated Statements of Comprehensive Income
Condensed Consolidated Statements of Comprehensive Income / (Loss)									Condensed Consolidated Statements of Comprehensive Income / (Loss)
(Unaudited)	(Unaudited)		(Unaudited)
		Three months ended						Three months ended				Nine months ended
		March 31,						September 30,				September 30,
$ in millions	$ in millions			2023		2022			$ in millions	2023		2022		2023		2022
Net income				$	1.2	$	15.4
NET INCOME / (LOSS)									NET INCOME / (LOSS)	$	38.6	$	(19.7)	$	34.6	$	(4.1)
Derivative activity:	Derivative activity:								Derivative activity:

Reclassification to earnings, net of income tax effect of $0.0 and $0.1 for each respective period				(0.2)		(0.1)
Reclassification to earnings, net of income tax effect of $0.0, $0.1, $0.1 and $0.2 for each respective period									Reclassification to earnings, net of income tax effect of $0.0, $0.1, $0.1 and $0.2 for each respective period	(0.2)		(0.1)		(0.6)		(0.5)

Unfunded pension and other postretirement activity:	Unfunded pension and other postretirement activity:								Unfunded pension and other postretirement activity:
Reclassification to earnings, net of income tax effect of $0.0 and $(0.1) for each respective period				—		0.2
Reclassification to earnings, net of income tax effect of $0.0, $(0.1), $0.0 and $(0.2) for each respective period									Reclassification to earnings, net of income tax effect of $0.0, $(0.1), $0.0 and $(0.2) for each respective period	—		0.2		0.1		0.7

Other comprehensive income / (loss)	Other comprehensive income / (loss)			(0.2)		0.1			Other comprehensive income / (loss)	(0.2)		0.1		(0.5)		0.2

Net Comprehensive income				$	1.0	$	15.5
NET COMPREHENSIVE INCOME / (LOSS)									NET COMPREHENSIVE INCOME / (LOSS)	$	38.4	$	(19.6)	$	34.1	$	(3.9)

See Notes to Condensed Consolidated Financial Statements.

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DPL Inc.	DPL Inc.					DPL Inc.
Condensed Consolidated Balance Sheets	Condensed Consolidated Balance Sheets					Condensed Consolidated Balance Sheets
(Unaudited)	(Unaudited)					(Unaudited)
$ in millions	$ in millions	March 31, 2023		December 31, 2022		$ in millions	September 30, 2023		December 31, 2022
ASSETS	ASSETS					ASSETS
Current assets:
CURRENT ASSETS:						CURRENT ASSETS:
Cash and cash equivalents	Cash and cash equivalents	$	21.0	$	30.5	Cash and cash equivalents	$	49.3	$	30.5

Accounts receivable, net of allowance for credit losses of $0.6 and $0.5, respectively (Note 1)		96.7		91.9
Accounts receivable, net of allowance for credit losses of $1.0 and $0.5, respectively (Note 1)						Accounts receivable, net of allowance for credit losses of $1.0 and $0.5, respectively (Note 1)	85.1		91.9
Inventories	Inventories	29.4		26.8		Inventories	38.0		26.8
Taxes applicable to subsequent years	Taxes applicable to subsequent years	70.0		94.0		Taxes applicable to subsequent years	24.1		94.0
Regulatory assets, current	Regulatory assets, current	32.2		39.2		Regulatory assets, current	49.0		39.2
Taxes receivable	Taxes receivable	13.2		10.9		Taxes receivable	4.9		10.9
Prepayments and other current assets	Prepayments and other current assets	7.7		3.9		Prepayments and other current assets	9.4		3.9

Total current assets	Total current assets	270.2		297.2		Total current assets	259.8		297.2

NON-CURRENT ASSETS:						NON-CURRENT ASSETS:
Property, plant & equipment:	Property, plant & equipment:					Property, plant & equipment:
Property, plant & equipment	Property, plant & equipment	2,292.5		2,193.6		Property, plant & equipment	2,428.6		2,193.6
Less: Accumulated depreciation and amortization	Less: Accumulated depreciation and amortization	(512.6)		(505.7)		Less: Accumulated depreciation and amortization	(520.0)		(505.7)
		1,779.9		1,687.9			1,908.6		1,687.9
Construction work in process	Construction work in process	163.1		197.1		Construction work in process	175.8		197.1
Total net property, plant & equipment		1,943.0		1,885.0

Net property, plant & equipment						Net property, plant & equipment	2,084.4		1,885.0
Other non-current assets:	Other non-current assets:					Other non-current assets:
Regulatory assets, non-current	Regulatory assets, non-current	133.9		129.8		Regulatory assets, non-current	160.2		129.8
Intangible assets, net of amortization	Intangible assets, net of amortization	77.1		70.1		Intangible assets, net of amortization	100.3		70.1
Other non-current assets	Other non-current assets	42.9		40.3		Other non-current assets	51.0		40.3

Total other non-current assets	Total other non-current assets	253.9		240.2		Total other non-current assets	311.5		240.2

Total assets	Total assets	$	2,467.1	$	2,422.4	Total assets	$	2,655.7	$	2,422.4

LIABILITIES AND SHAREHOLDER'S DEFICIT
Current liabilities:
LIABILITIES AND SHAREHOLDER'S EQUITY / (DEFICIT)						LIABILITIES AND SHAREHOLDER'S EQUITY / (DEFICIT)
CURRENT LIABILITIES:						CURRENT LIABILITIES:
Short-term and current portion of long-term debt (Note 5)	Short-term and current portion of long-term debt (Note 5)	$	260.2	$	155.2	Short-term and current portion of long-term debt (Note 5)	$	120.2	$	155.2
Accounts payable	Accounts payable	110.5		129.5		Accounts payable	91.8		129.5
Accrued taxes	Accrued taxes	94.3		88.4		Accrued taxes	104.6		88.4
Accrued interest	Accrued interest	20.7		16.1		Accrued interest	22.9		16.1
Customer and supplier deposits	Customer and supplier deposits	23.7		16.7		Customer and supplier deposits	26.0		16.7
Regulatory liabilities, current	Regulatory liabilities, current	29.5		40.4		Regulatory liabilities, current	22.2		40.4

Accrued and other current liabilities	Accrued and other current liabilities	23.2		20.9		Accrued and other current liabilities	27.1		20.9

Total current liabilities	Total current liabilities	562.1		467.2		Total current liabilities	414.8		467.2

Non-current liabilities:
NON-CURRENT LIABILITIES:						NON-CURRENT LIABILITIES:
Long-term debt (Note 5)	Long-term debt (Note 5)	1,536.5		1,535.7		Long-term debt (Note 5)	1,637.3		1,535.7
Deferred income taxes	Deferred income taxes	204.1		199.0		Deferred income taxes	223.8		199.0
Taxes payable	Taxes payable	47.1		94.5		Taxes payable	0.4		94.5
Regulatory liabilities, non-current	Regulatory liabilities, non-current	196.4		198.7		Regulatory liabilities, non-current	186.8		198.7
Accrued pension and other postretirement obligations	Accrued pension and other postretirement obligations	34.7		41.8		Accrued pension and other postretirement obligations	34.7		41.8

Other non-current liabilities	Other non-current liabilities	8.9		9.2		Other non-current liabilities	8.4		9.2

Total non-current liabilities	Total non-current liabilities	2,027.7		2,078.9		Total non-current liabilities	2,091.4		2,078.9
Total liabilities						Total liabilities	2,506.2		2,546.1

Commitments and contingencies (Note 9)
COMMITMENTS AND CONTINGENCIES (Note 9)						COMMITMENTS AND CONTINGENCIES (Note 9)

Common shareholder's deficit:
SHAREHOLDER'S EQUITY / (DEFICIT):						SHAREHOLDER'S EQUITY / (DEFICIT):

Common stock:	Common stock:					Common stock:
1,500 shares authorized; 1 share issued and outstanding	1,500 shares authorized; 1 share issued and outstanding	—		—		1,500 shares authorized; 1 share issued and outstanding	—		—
Other paid-in capital	Other paid-in capital	2,601.3		2,601.3		Other paid-in capital	2,840.4		2,601.3
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(2.6)		(2.4)		Accumulated other comprehensive loss	(2.9)		(2.4)
Accumulated deficit	Accumulated deficit	(2,721.4)		(2,722.6)		Accumulated deficit	(2,688.0)		(2,722.6)
Total common shareholder's deficit		(122.7)		(123.7)
Total common shareholder's equity / (deficit)						Total common shareholder's equity / (deficit)	149.5		(123.7)

Total liabilities and shareholder's deficit		$	2,467.1	$	2,422.4
Total liabilities and shareholder's equity / (deficit)						Total liabilities and shareholder's equity / (deficit)	$	2,655.7	$	2,422.4

See Notes to Condensed Consolidated Financial Statements.

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DPL Inc.	DPL Inc.					DPL Inc.
Condensed Consolidated Statements of Cash Flows	Condensed Consolidated Statements of Cash Flows					Condensed Consolidated Statements of Cash Flows
(Unaudited)	(Unaudited)					(Unaudited)
		Three months ended March 31,					Nine months ended September 30,
$ in millions	$ in millions	2023		2022		$ in millions	2023		2022
Cash flows from operating activities:
Net income		$	1.2	$	15.4
Adjustments to reconcile net income to net cash from operating activities:
CASH FLOWS FROM OPERATING ACTIVITIES:						CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME / (LOSS)						NET INCOME / (LOSS)	$	34.6	$	(4.1)
Adjustments to reconcile net income / (loss) to Net cash provided by operating activities:						Adjustments to reconcile net income / (loss) to Net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	19.8		19.5		Depreciation and amortization	60.9		59.6

Deferred income taxes	Deferred income taxes	3.7		(0.4)		Deferred income taxes	20.9		(10.7)

Gain on disposal of business	Gain on disposal of business	—		(0.6)		Gain on disposal of business	—		(0.6)

Changes in certain assets and liabilities:	Changes in certain assets and liabilities:					Changes in certain assets and liabilities:
Accounts receivable, net	Accounts receivable, net	(4.8)		(2.3)		Accounts receivable, net	6.8		(18.0)
Inventories	Inventories	(2.5)		(3.0)		Inventories	(11.2)		(6.5)

Taxes applicable to subsequent years	Taxes applicable to subsequent years	24.0		22.3		Taxes applicable to subsequent years	69.9		62.9
Current and non-current regulatory assets and liabilities	Current and non-current regulatory assets and liabilities	(11.4)		10.4		Current and non-current regulatory assets and liabilities	(67.8)		55.4

Prepayments and other current assets						Prepayments and other current assets	(5.5)		(3.9)
Other non-current assets						Other non-current assets	3.7		5.9
Accounts payable	Accounts payable	(8.9)		(15.7)		Accounts payable	(36.4)		(5.7)
Accrued taxes payable / receivable	Accrued taxes payable / receivable	(43.8)		(43.3)		Accrued taxes payable / receivable	(71.9)		(77.8)
Accrued interest	Accrued interest	4.6		3.0		Accrued interest	6.8		5.1

Accrued pension and other post-retirement benefits		(7.1)		(8.0)
Accrued and other current liabilities						Accrued and other current liabilities	15.5		0.6
Accrued pension and other postretirement benefits						Accrued pension and other postretirement benefits	(7.1)		(9.2)
Other	Other	3.1		2.5		Other	(2.3)		(1.0)
Net cash used in operating activities		(22.1)		(0.2)
Cash flows from investing activities:
Net cash provided by operating activities						Net cash provided by operating activities	16.9		52.0
CASH FLOWS FROM INVESTING ACTIVITIES:						CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	Capital expenditures	(89.4)		(64.4)		Capital expenditures	(286.0)		(193.0)
Cost of removal payments	Cost of removal payments	(3.2)		(5.0)		Cost of removal payments	(16.0)		(14.7)

Other investing activities, net	Other investing activities, net	0.2		0.1		Other investing activities, net	0.2		(0.1)
Net cash used in investing activities	Net cash used in investing activities	(92.4)		(69.3)		Net cash used in investing activities	(301.8)		(207.8)
Cash flows from financing activities:

CASH FLOWS FROM FINANCING ACTIVITIES:						CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of deferred financing costs						Payments of deferred financing costs	(0.3)		(1.5)
Issuance of long-term debt						Issuance of long-term debt	100.0		140.0

Borrowings from revolving credit facilities	Borrowings from revolving credit facilities	115.0		95.0		Borrowings from revolving credit facilities	205.0		185.0
Repayment of borrowings from revolving credit facilities	Repayment of borrowings from revolving credit facilities	(10.0)		(20.0)		Repayment of borrowings from revolving credit facilities	(240.0)		(150.0)

Equity contributions from parent						Equity contributions from parent	239.0		—

Net cash provided by financing activities	Net cash provided by financing activities	105.0		75.0		Net cash provided by financing activities	303.7		173.5
Cash, cash equivalents, and restricted cash:	Cash, cash equivalents, and restricted cash:					Cash, cash equivalents, and restricted cash:
Net change		(9.5)		5.5
Balance at beginning of period		30.6		26.7
Net increase in cash, cash equivalents and restricted cash						Net increase in cash, cash equivalents and restricted cash	18.8		17.7
Cash, cash equivalents and restricted cash at beginning of year						Cash, cash equivalents and restricted cash at beginning of year	30.6		26.7
Cash, cash equivalents, and restricted cash at end of period	Cash, cash equivalents, and restricted cash at end of period	$	21.1	$	32.2	Cash, cash equivalents, and restricted cash at end of period	$	49.4	$	44.4
Supplemental cash flow information:	Supplemental cash flow information:					Supplemental cash flow information:
Interest paid, net of amounts capitalized	Interest paid, net of amounts capitalized	$	12.9	$	11.3	Interest paid, net of amounts capitalized	$	47.2	$	41.3

Non-cash investing activities:	Non-cash investing activities:					Non-cash investing activities:
Accruals for capital expenditures	Accruals for capital expenditures	$	36.4	$	23.7	Accruals for capital expenditures	$	46.2	$	31.4

See Notes to Condensed Consolidated Financial Statements.

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DPL Inc.	DPL Inc.												DPL Inc.
Condensed Consolidated Statements of Shareholder's Deficit
Condensed Consolidated Statements of Shareholder's Equity / (Deficit)													Condensed Consolidated Statements of Shareholder's Equity / (Deficit)
(Unaudited)	(Unaudited)												(Unaudited)
		Common Stock (a)												Common Stock
$ in millions	$ in millions	Outstanding Shares	Amount		Other Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total		$ in millions	Outstanding Shares	Amount		Other Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
Balance, January 1, 2023	Balance, January 1, 2023	1	$	—	$	2,601.3	$	(2.4)	$	(2,722.6)	$	(123.7)	Balance, January 1, 2023	1	$	—	$	2,601.3	$	(2.4)	$	(2,722.6)	$	(123.7)
Net income	Net income								1.2		1.2		Net income	—	—		—		—		1.2		1.2
Net comprehensive loss							(0.2)				(0.2)
Other comprehensive loss													Other comprehensive loss	—	—		—		(0.2)		—		(0.2)

Balance, March 31, 2023	Balance, March 31, 2023	1	$	—	$	2,601.3	$	(2.6)	$	(2,721.4)	$	(122.7)	Balance, March 31, 2023	1	—		2,601.3		(2.6)		(2,721.4)		(122.7)
Net loss													Net loss	—	—		—		—		(5.2)		(5.2)
Other comprehensive loss													Other comprehensive loss	—	—		—		(0.1)		—		(0.1)
Equity contribution from parent													Equity contribution from parent	—	—		112.0		—		—		112.0
Other													Other	—	—		0.1		—		—		0.1
Balance, June 30, 2023													Balance, June 30, 2023	1	—		2,713.4		(2.7)		(2,726.6)		(15.9)
Net income													Net income	—	—		—		—		38.6		38.6
Other comprehensive loss													Other comprehensive loss	—	—		—		(0.2)		—		(0.2)
Equity contribution from parent													Equity contribution from parent	—	—		127.0		—		—		127.0

Balance, September 30, 2023													Balance, September 30, 2023	1	$	—	$	2,840.4	$	(2.9)	$	(2,688.0)	$	149.5

Common Stock (a)
$ in millions Outstanding Shares Amount Other
Paid-in
Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total
Balance, January 1, 2022 1 $ — $ 2,601.3 $ (4.8) $ (2,717.9) $ (121.4)
Net income 15.4 15.4
Net comprehensive income 0.1 0.1
Balance, March 31, 2022 1 $ — $ 2,601.3 $ (4.7) $ (2,702.5) $ (105.9)

~~(a)1,500 shares authorized.~~


	Common Stock
$ in millions	Outstanding Shares	Amount		Other Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
Balance, January 1, 2022	1	$	—	$	2,601.3	$	(4.8)	$	(2,717.9)	$	(121.4)
Net income	—	—		—		—		15.4		15.4
Other comprehensive income	—	—		—		0.1		—		0.1


Balance, March 31, 2022	1	—		2,601.3		(4.7)		(2,702.5)		(105.9)
Net income	—	—		—		—		0.2		0.2
Other comprehensive income	—	—				—		—		—


Balance, June 30, 2022	1	—		2,601.3		(4.7)		(2,702.3)		(105.7)
Net loss	—	—		—		—		(19.7)		(19.7)
Other comprehensive income	—	—		—		0.1		—		0.1


Balance, September 30, 2022	1	$	—	$	2,601.3	$	(4.6)	$	(2,722.0)	$	(125.3)

See Notes to Condensed Consolidated Financial Statements.

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DPL Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

For the three and nine months ended ~~March 31,~~September 30, 2023 and 2022

1. OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DPL, an indirectly wholly-owned subsidiary of AES, is a ~~diversified regional energy~~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 ~~537,000~~538,000 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 ~~sells~~records revenue and expenses for its proportional share of energy and capacity from its investment in ~~OVEC into the wholesale market.~~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 is 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 FASB 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 ~~common~~ shareholder's ~~deficit,~~equity / (deficit), and cash flows. The results of operations for the three and nine months ended ~~March 31,~~September 30, 2023 are not necessarily indicative of expected results for the year ending December 31, 2023. The accompanying condensed consolidated financial statements are unaudited and should be read in conjunction with the 2022 audited consolidated financial statements and ~~notes~~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 ~~revenues~~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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~~property, plant and equipment; unbilled revenues; 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.

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	$ in millions	March 31, 2023		December 31, 2022		$ in millions	September 30, 2023		December 31, 2022
Cash and cash equivalents	Cash and cash equivalents	$	21.0	$	30.5	Cash and cash equivalents	$	49.3	$	30.5
Restricted cash (included in Prepayments and other current assets)	Restricted cash (included in Prepayments and other current assets)	0.1		0.1		Restricted cash (included in Prepayments and other current assets)	0.1		0.1
Cash, Cash Equivalents, and Restricted Cash, End of Period	Cash, Cash Equivalents, and Restricted Cash, End of Period	$	21.1	$	30.6	Cash, Cash Equivalents, and Restricted Cash, End of Period	$	49.4	$	30.6

Accounts Receivable and Allowance for Credit Losses

The following table summarizes accounts receivable as of ~~March 31,~~September 30, 2023 and December 31, 2022:


		March 31,		December 31,			September 30,		December 31,
$ in millions	$ in millions	2023		2022		$ in millions	2023		2022
Accounts receivable, net:	Accounts receivable, net:					Accounts receivable, net:
Customer receivables	Customer receivables	$	68.3	$	61.3	Customer receivables	$	60.4	$	61.3
Unbilled revenue	Unbilled revenue	18.2		24.0		Unbilled revenue	15.8		24.0
Amounts due from affiliates	Amounts due from affiliates	3.8		3.2		Amounts due from affiliates	1.0		3.2
Other	Other	7.0		3.9		Other	8.9		3.9
Allowance for credit losses	Allowance for credit losses	(0.6)		(0.5)		Allowance for credit losses	(1.0)		(0.5)
Total accounts receivable, net	Total accounts receivable, net	$	96.7	$	91.9	Total accounts receivable, net	$	85.1	$	91.9

The following table is a roll forward of our allowance for credit losses related to the accounts receivable balances for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022:

$ in millions Beginning Allowance Balance Current Period Provision Write-offs Charged Against Allowances Recoveries Collected Ending Allowance Balance
2023 $ 0.5 $ 0.9 $ (1.1) $ 0.3 $ 0.6
2022 $ 0.3 $ (0.1) $ (0.2) $ 0.2 $ 0.2

The allowance for credit losses primarily relates to utility customer receivables, including unbilled amounts. Expected credit loss estimates are developed by disaggregating customers into those with similar credit risk characteristics and using historical credit loss experience. In addition, we also consider how current and future economic conditions are expected to impact collectability. Amounts are written off when reasonable collections efforts have been exhausted.


	September 30,		September 30,
$ in millions	2023		2022
Allowance for credit losses:
Beginning balance	$	0.5	$	0.3
Current period provision	4.1		1.4
Write-offs charged against allowances	(4.4)		(2.1)
Recoveries collected	0.8		0.8
Ending balance	$	1.0	$	0.4

Inventories

Inventories consist of materials and supplies as of ~~March 31,~~September 30, 2023 and December 31, 2022.

Regulatory Accounting

As a regulated utility, AES Ohio applies the provisions of ASC 980 - Regulated Operations, which gives recognition to the ratemaking and accounting practices of the PUCO and the FERC. Regulatory assets generally represent incurred costs that have been deferred because such costs are probable of future recovery in customer rates. Regulatory assets can also represent performance incentives permitted by the regulator. Regulatory assets have been included as allowable costs for ratemaking purposes, as authorized by the PUCO or established regulatory practices. Regulatory liabilities generally represent obligations to make refunds or future rate reductions to customers for previous over collections or the deferral of ~~revenues~~revenue collected for costs that AES Ohio expects to incur in the future.

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practices, such as other utilities under the jurisdiction of the PUCO or the FERC being granted recovery of similar costs. It is probable, but not certain, that these regulatory assets will be recoverable, subject to approval by the PUCO or the FERC. Regulatory assets and liabilities are classified as current or non-current based on the term in

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which recovery is expected. See Note ~~2 – REGULATORY MATTERS~~2. Regulatory Matters in Item 8.—Financial Statements and Supplementary Data of our Form 10-K for more information.

~~Accumulated other comprehensive loss~~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 and nine months ended September 30, 2023 and 2022, AFUDC equity and AFUDC debt were as follows:


	Three months ended				Nine months ended
	September 30,				September 30,
$ in millions	2023		2022		2023		2022
AFUDC equity	$	1.3	$	2.0	$	3.8	$	4.0
AFUDC debt	$	1.6	$	(0.4)	$	4.5	$	0.8

AOCL

The amounts reclassified out of AOCL by component during the three and nine months ended ~~March 31,~~September 30, 2023 and 2022 are as follows:


Details about AOCL components	Details about AOCL components	Affected line item in the Condensed Consolidated Statements of Operations	Three months ended			Details about AOCL components			Affected line item in the Condensed Consolidated Statements of Operations		Three months ended			Nine months ended
			March 31,								September 30,			September 30,
$ in millions	$ in millions			2023			2022			$ in millions		2023		2022		2023		2022
Net gains on cash flow hedges (Note 4):	Net gains on cash flow hedges (Note 4):									Net gains on cash flow hedges (Note 4):
		Interest expense		$	(0.2)		$	(0.2)			Interest expense	$	(0.2)	$	(0.2)	$	(0.7)	$	(0.7)
		Income tax effect		—			0.1				Income tax effect	—		0.1		0.1		0.2
		Net of income taxes		(0.2)			(0.1)				Net of income taxes	(0.2)		(0.1)		(0.6)		(0.5)

Amortization of unfunded pension and other postretirement obligations (Note 7):	Amortization of unfunded pension and other postretirement obligations (Note 7):									Amortization of unfunded pension and other postretirement obligations (Note 7):
		Other expense		—			0.3				Other expense	—		0.3		0.1		0.9
		Income tax effect		—			(0.1)				Income tax effect	—		(0.1)		—		(0.2)
		Net of income taxes		—			0.2				Net of income taxes	—		0.2		0.1		0.7

Total reclassifications for the period, net of income taxes	Total reclassifications for the period, net of income taxes			$	(0.2)		$	0.1		Total reclassifications for the period, net of income taxes		$	(0.2)	$	0.1	$	(0.5)	$	0.2

The changes in the components of AOCL during the ~~three~~nine months ended ~~March 31,~~September 30, 2023 are as follows:


$ in millions	$ in millions	Change in cash flow hedges		Change in unfunded pension and other postretirement obligations		Total		$ in millions	Change in cash flow hedges		Change in unfunded pension and other postretirement obligations		Total
Balance as of January 1, 2023	Balance as of January 1, 2023	$	12.0	$	(14.4)	$	(2.4)	Balance as of January 1, 2023	$	12.0	$	(14.4)	$	(2.4)

Amounts reclassified from AOCL to earnings	Amounts reclassified from AOCL to earnings	(0.2)		—		(0.2)		Amounts reclassified from AOCL to earnings	(0.6)		0.1		(0.5)

Balance as of March 31, 2023		$	11.8	$	(14.4)	$	(2.6)
Balance as of September 30, 2023								Balance as of September 30, 2023	$	11.4	$	(14.3)	$	(2.9)

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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 and nine months ended ~~March 31,~~September 30, 2023 and 2022 were as follows:


		Three months ended					Three months ended				Nine months ended
		March 31,					September 30,				September 30,
$ in millions	$ in millions		2023		2022			$ in millions	2023		2022		2023		2022
Excise taxes collected	Excise taxes collected		$	12.0	$	13.1		Excise taxes collected	$	12.8	$	13.0	$	35.4	$	37.6

New Accounting Pronouncements Adopted in 2023

We have assessed and determined that the new accounting pronouncements adopted did not have a material impact on our consolidated financial statements.

New Accounting Pronouncements Issued But Not Yet Effective

WeThe following table provides a brief description of recent accounting pronouncements that could have a material impact on our consolidated financial statements. Accounting pronouncements not listed below were assessed and determined ~~that the new accounting pronouncements issued but~~to be either not ~~yet effective~~applicable or are ~~not~~ expected to have ano material impact on our consolidated financial statements.


ASU Number and Name	Description	Date of Adoption	Effect on the financial statements upon adoption
2023-06 Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative	In U.S. Securities and Exchange Commission (SEC) Release No. 33-10532, Disclosure Update and Simplification, issued August 17, 2018, the SEC referred certain of its disclosure requirements that overlap with, but require incremental information to, generally accepted accounting principles (GAAP) to the FASB for potential incorporation into the Codification. The amendments in this Update are the result of the Board’s decision to incorporate into the Codification 14 of the 27 disclosures referred by the SEC. The amendments in this Update represent changes to clarify or improve disclosure and presentation requirements of a variety of Topics. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations.	The effective date for each amendment will be the date on which the SEC's removal of that related disclosure becomes effective, with early adoption prohibited.	We are currently evaluating the impact of adopting the standard on our condensed consolidated financial statements.

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2. REGULATORY MATTERS

AES Ohio ESPs and Smart Grid Comprehensive Settlement

AES Ohio ESP – Ohio law requires utilities to file either an ESP or MRO plan to establish SSO rates. AES Ohio is currently operating pursuant to ESP 4, described in the paragraph below.From November 1, 2017 through December 18, 2019, AES Ohio operated pursuant to an approved ESP, which was initially approved on October 20, 2017 (ESP 3). On December 18, 2019, the PUCO approved AES Ohio's Notice of Withdrawal and reversion to its prior rate plan (ESP 1). Among other items, the PUCO Order approving the ESP 1 rate plan ~~includes~~included reinstating the non-bypassable RSC Rider, which ~~provides~~provided annual ~~revenues~~revenue of approximately $79.0 million. The OCC has appealed to the Ohio Supreme Court the PUCO's decision approving the reversion to ESP 1 as well as argued for a refund of the RSC ~~revenues~~revenue dating back to August 2021. ~~A decision~~Oral argument regarding this appeal, which has been consolidated with the appeal regarding the Smart Grid Comprehensive Settlement described in the paragraph below, is ~~pending.~~expected but not yet scheduled. We are unable to predict the outcome of this appeal, but if this results in terms that are more adverse than AES Ohio's current ESP rate plan, it could have a material adverse effect on our results of operations, financial condition and cash flows.

Smart Grid Comprehensive Settlement - On October 23, 2020, AES Ohio entered into a Stipulation and Recommendation with the staff of the PUCO, various customers and organizations representing customers of AES Ohio and certain other parties with respect to, among other matters, AES Ohio's applications pending at the PUCO for (i) approval of AES Ohio's plan to modernize its distribution grid (the Smart Grid Plan), (ii) findings that ~~DP&L~~AES Ohio passed the SEET for 2018 and 2019, and (iii) findings that AES Ohio's ~~current~~ ESP 1 satisfies the SEET prospectively and the more favorable in the aggregate (MFA) regulatory test. On June 16, 2021, the PUCO issued their opinion and order accepting the stipulation as filed. The OCC appealed the final PUCO order to the Ohio Supreme Court on December 6, 2021. Oral arguments regarding this appeal, which have been consolidated with the appeal regarding the reversion to ESP 1 described in the paragraph above, are expected but not yet scheduled.

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ESP 4 – ~~AES Ohio is currently operating pursuant to ESP 1.~~ On September 26, 2022, AES Ohio filed its latest ESP (ESP 4) with the PUCO. ESP 4 is a comprehensive plan to enhance and upgrade its network and improve service reliability, provide greater safeguards for price stability and continue investments in local economic development. As part of this plan, AES Ohio intends to increase investments in the distribution infrastructure and deploy a proactive vegetation management program. The plan also includes proposals for new customer programs, including renewable options, electric vehicle programs and energy efficiency programs for residential and low-income customers. ESP 4 also seeks to recover outstanding regulatory assets not currently in rates. AES Ohio did not propose that the RSC would continue as part of ESP 4.

On April 10, 2023, AES Ohio entered into a Stipulation and Recommendation with the PUCO Staff and seventeen parties (the “Settlement”) with respect to AES Ohio’s ESP 4 application, ~~pending at~~and, on August 9, 2023, the ~~PUCO.~~PUCO approved the Settlement without modification. The Settlement ~~is subject to, and conditioned upon, approval by the PUCO. The Settlement would provide~~provides for a three-year ESP without a rate stability charge, and, in addition to other items, provides for the following:

•A Distribution Investment Rider for the term of the ESP allowing for the timely recovery of distribution investments by AES Ohio based on a 9.999% return on equity, subject to revenue caps;

•The recovery of approximately $66.0 million related to past expenditures by AES Ohio plus future carrying costs and the recovery of incremental vegetation management expenses up to certain annual limits during the term of ESP 4;4. During the third quarter of 2023, AES Ohio deferred $28.3 million of previously recognized purchased power costs and an additional $10.7 million of carrying costs related to this recovery; and

•Funding of programs for assistance to low-income customers and for economic development.

~~Upon~~Additionally, with approval of this Settlement, the distribution rates that were approved by the PUCO inon December 14, 2022, and are described in the paragraph below, ~~will become effective. An evidentiary hearing began May 2, 2023, and AES Ohio expects an order by the PUCO in the third quarter of~~became effective on September 1, 2023.

Distribution Rate Case

On November 30, 2020, AES Ohio filed a ~~new~~ distribution rate case application with the PUCO to increase AES Ohio’s base rates for electric distribution service to address, in part, increased costs of materials and labor and substantial investments to improve distribution structures. On December 14, 2022, the PUCO issued an order on the application. Among other matters, the order:

•Establishes a revenue increase of $75.6 million for AES Ohio’s base rates for electric distribution ~~service~~service; and

•Provides for a return on equity of 9.999% and a cost of long-term debt of 4.4% on a distribution rate base of $783.5 million and based on a capital structure of 53.87% equity and 46.13% long-term debt.

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~~As noted above, these~~These rates ~~will go~~went into effect ~~when~~on September 1, 2023 with the ~~PUCO approves~~approval of AES Ohio's ~~Settlement regarding~~ ESP 4.

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 44. ~~– FAIR VALUE~~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. ~~We recorded net~~Net unrealized gains / (losses) related to equity investments still held as of ~~March 31,~~September 30, 2023 and 2022 ~~of $0.3 million and $(0.5) million during the three months ended March 31, 2023 and 2022, respectively.~~are as follows:


	Three months ended				Nine months ended
	September 30,				September 30,
$ in millions	2023		2022		2023		2022
Net unrealized gains / (losses) (a)	$	(0.2)	$	(0.4)	$	0.2	$	(1.8)

(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~~nine months ended ~~March 31,~~September 30, 2023 or 2022.

Recurring Fair Value Measurements

The fair value of assets and liabilities as of ~~March 31,~~September 30, 2023 and December 31, 2022 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, 2023								Fair value as of December 31, 2022									Fair value as of September 30, 2023								Fair value as of December 31, 2022
$ in millions	$ in millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total		$ in millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets	Assets																	Assets
Master Trust assets	Master Trust assets																	Master Trust assets
Money market funds	Money market funds	$	0.3	$	—	$	—	$	0.3	$	0.5	$	—	$	—	$	0.5	Money market funds	$	0.6	$	—	$	—	$	0.6	$	0.5	$	—	$	—	$	0.5
Mutual funds	Mutual funds	7.1		—		—		7.1		7.0		—		—		7.0		Mutual funds	6.7		—		—		6.7		7.0		—		—		7.0

Total assets	Total assets	$	7.4	$	—	$	—	$	7.4	$	7.5	$	—	$	—	$	7.5	Total assets	$	7.3	$	—	$	—	$	7.3	$	7.5	$	—	$	—	$	7.5

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 in the financial statements.~~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:


																																September 30, 2023														December 31, 2022
		Carrying Amount			Fair value as of March 31, 2023											Carrying Amount			Fair value as of December 31, 2022													Carrying Amount			Fair Value											Carrying Amount			Fair Value
$ in millions	$ in millions			Level 1			Level 2			Level 3			Total					Level 1			Level 2			Level 3			Total	$ in millions						Level 1			Level 2			Level 3			Total					Level 1			Level 2			Level 3			Total
Liabilities	Liabilities																														Liabilities
Long-term debt	Long-term debt	$	1,536.7		$	—		$	1,392.0		$	17.0		$	1,409.0	$	1,535.9		$	—		$	1,376.4		$	17.0		$	1,393.4	Long-term debt		$	1,637.5		$	—		$	1,414.5		$	16.9		$	1,431.4	$	1,535.9		$	—		$	1,376.4		$	17.0		$	1,393.4

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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~~1. Overview and Summary of Significant Accounting Policies – Financial Derivatives and Note ~~5 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES~~5. Derivative Instruments and Hedging Activities of Item ~~8 –~~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.

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The following tables provide information concerning gains or losses recognized in AOCL for the cash flow hedges for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022:


		Three months ended					Three months ended				Nine months ended
			March 31, 2023		March 31, 2022				September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
			Interest		Interest				Interest		Interest		Interest		Interest
$ in millions (net of tax)	$ in millions (net of tax)		Rate Hedge		Rate Hedge			$ in millions (net of tax)	Rate Hedge		Rate Hedge		Rate Hedge		Rate Hedge
Beginning accumulated derivative gains in AOCL	Beginning accumulated derivative gains in AOCL		$	12.0	$	12.8		Beginning accumulated derivative gains in AOCL	$	11.6	$	12.4	$	12.0	$	12.8

Net gains reclassified to earnings	Net gains reclassified to earnings							Net gains reclassified to earnings
Interest expense	Interest expense		(0.2)		(0.1)			Interest expense	(0.2)		(0.1)		(0.6)		(0.5)

Ending accumulated derivative gains in AOCL	Ending accumulated derivative gains in AOCL		$	11.8	$	12.7		Ending accumulated derivative gains in AOCL	$	11.4	$	12.3	$	11.4	$	12.3

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

5. DEBT

Long-term debt is as follows:


		Interest			March 31,		December 31,			Interest			September 30,		December 31,
$ in millions	$ in millions	Rate		Due	2023		2022		$ in millions	Rate		Due	2023		2022
AES Ohio debt	AES Ohio debt								AES Ohio debt
First Mortgage Bonds	First Mortgage Bonds	3.95	%	2049	$	425.0	$	425.0	First Mortgage Bonds	3.95	%	2049	$	425.0	$	425.0
First Mortgage Bonds	First Mortgage Bonds	3.20	%	2040	140.0		140.0		First Mortgage Bonds	3.20	%	2040	140.0		140.0
Tax-exempt First Mortgage Bonds (a)		4.25	%	2027	100.0		100.0
First Mortgage Bonds									First Mortgage Bonds	5.19	%	2033	100.0		—
Tax-exempt First Mortgage Bonds ~~(b)~~(a)	Tax-exempt First Mortgage Bonds ~~(b)~~(a)	4.00	%	2027	40.0		40.0		Tax-exempt First Mortgage Bonds ~~(b)~~(a)	4.25	%	2027	100.0		100.0
Tax-exempt First Mortgage Bonds (b)									Tax-exempt First Mortgage Bonds (b)	4.00	%	2027	40.0		40.0
U.S. Government note	U.S. Government note	4.20	%	2061	17.0		17.0		U.S. Government note	4.20	%	2061	16.9		17.0
Unamortized deferred financing costs	Unamortized deferred financing costs				(6.6)		(6.9)		Unamortized deferred financing costs				(6.7)		(6.9)
Unamortized debt discounts, net	Unamortized debt discounts, net				(2.4)		(2.4)		Unamortized debt discounts, net				(2.3)		(2.4)
Total long-term debt at AES Ohio	Total long-term debt at AES Ohio				713.0		712.7		Total long-term debt at AES Ohio				812.9		712.7

DPL Inc. debt	DPL Inc. debt								DPL Inc. debt
Senior unsecured bonds	Senior unsecured bonds	4.125	%	2025	415.0		415.0		Senior unsecured bonds	4.125	%	2025	415.0		415.0
Senior unsecured bonds	Senior unsecured bonds	4.35	%	2029	400.0		400.0		Senior unsecured bonds	4.35	%	2029	400.0		400.0
Note to DPL Capital Trust II (c)	Note to DPL Capital Trust II (c)	8.125	%	2031	15.6		15.6		Note to DPL Capital Trust II (c)	8.125	%	2031	15.6		15.6
Unamortized deferred financing costs	Unamortized deferred financing costs				(6.2)		(6.7)		Unamortized deferred financing costs				(5.3)		(6.7)
Unamortized debt discounts, net	Unamortized debt discounts, net				(0.7)		(0.7)		Unamortized debt discounts, net				(0.7)		(0.7)
Total DPL consolidated long-term debt	Total DPL consolidated long-term debt				1,536.7		1,535.9		Total DPL consolidated long-term debt				1,637.5		1,535.9
Less: current portion	Less: current portion				(0.2)		(0.2)		Less: current portion				(0.2)		(0.2)
DPL consolidated long-term debt, net of current portion	DPL consolidated long-term debt, net of current portion				$	1,536.5	$	1,535.7	DPL consolidated long-term debt, net of current portion				$	1,637.3	$	1,535.7

(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

21The DPL Credit Agreement was paid off and retired on June 14, 2023. The balance outstanding on this credit facility as of December 31, 2022 was $35.0 million.

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~~Revolving Credit Agreements~~

As of ~~March 31, 2023 and December 31, 2022, the DPL Credit Agreement had outstanding borrowings of $30.0 million and $35.0 million, respectively. As of March 31,~~September 30, 2023 and December 31, 2022, the AES Ohio Credit Agreement had outstanding borrowings of ~~$230.0~~$120.0 million and $120.0 million, respectively.

Significant transactions

On April 13, 2023, AES Ohio issued $100.0 million of First Mortgage Bonds and ~~intends to use~~used the proceeds from the offering to repay amounts outstanding under the AES Ohio Credit Agreement and for general corporate purposes. The new First Mortgage Bonds carry an interest rate of 5.19% and mature on April 13, 2033.

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Long-term debt covenants and restrictions

The DPL Credit Agreement has two financial covenants. The first financial covenant, a minimum EBITDA, calculated at the end of each fiscal quarter for the four prior fiscal quarters of $150.0 million. As of March 31, 2023, DPL was in compliance with this financial covenant.

The second financial covenant is an EBITDA to Interest Expense ratio that is calculated, at the end of each fiscal quarter, by dividing EBITDA for the four prior fiscal quarters by the consolidated interest charges for the same period. The ratio, per the agreement, is to be not less than 2.00 to 1.00. As of March 31, 2023, DPL was in compliance with this financial covenant.

~~The DPL Credit Agreement also restricts dividend payments from DPLto AES, such that DPLcannot make dividend payments unless at the time of, and/or as a result of the distribution, (i) DPL’sleverage ratio does not exceed 0.67 to 1.00 and DPL’sinterest coverage ratio is not less than 2.50 to 1.00 or, if such ratios are not within the parameters, (ii) DPL’s~~senior long-term debt rating from two of the three major credit rating agencies is at least investment grade. As a result, as of March 31, 2023, DPL was prohibited from making a distribution to its shareholder or making a loan to any of its affiliates (other than its subsidiaries).

Starting with the quarter ended September 30, 2021, the borrowing limit on the DPL Credit Agreement will be reduced by $5.0 million per quarter should the Total Debt to EBITDA ratio for the period of four consecutive quarters exceed 7.00 to 1.00. As of March 31, 2023, DPL exceeded this ratio, and the borrowing limit was reduced from $45.0 million to $40.0 million.

The AES Ohio Credit Agreement and Fifty-Third and Fifty-Fourth Supplemental Indentures to the First Mortgage, pursuant to which the 3.20% Bonds due 2040 and the 5.19% 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,~~September 30, 2023, 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,~~September 30, 2023, ~~DPL and~~ AES Ohio ~~were~~was in compliance with all debt covenants, including the financial ~~covenants~~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 ~~47.8%~~19.9% and 13.3% for the three and nine months ended ~~March 31,~~September 30, 2023, respectively, compared to ~~(31.6)%~~17.2% and 67.7% for the three and nine months ended ~~March 31,~~September 30, 2022, respectively. 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. As a result of the PUCO decision in AES Ohio's most recent distribution rate case in December of 2022, AES Ohio began to amortize a deferred tax shortage arising from net municipal apportioned tax rate increase. This new amortization, when combined with the ongoing amortization of the Tax Cut and Jobs Act (TCJA), results in a net tax benefit lowering the Company’s effective tax rate.

DPL's income tax expense for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 was calculated using the estimated annual effective income tax rate for 2023 of ~~47.5%~~13.2% on ordinary income. Management estimates the annual effective tax rate based on its forecast of annual pre-tax income or loss.

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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 ~~plan.~~plans.

The following table presents the net periodic benefit cost of the Pension Plans for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022:


		Three months ended					Three months ended				Nine months ended
		March 31,					September 30,				September 30,
$ in millions	$ in millions		2023		2022			$ in millions	2023		2022		2023		2022
Service cost	Service cost		$	0.7	$	1.3		Service cost	$	0.8	$	1.2	$	2.2	$	3.7
Interest cost	Interest cost		4.0		2.4			Interest cost	3.9		2.4		11.9		7.2
Expected return on plan assets	Expected return on plan assets		(4.4)		(4.0)			Expected return on plan assets	(4.4)		(4.0)		(13.2)		(11.9)
Amortization of unrecognized:	Amortization of unrecognized:							Amortization of unrecognized:
Prior service cost	Prior service cost		0.2		0.2			Prior service cost	0.3		0.3		0.8		0.8
Actuarial loss	Actuarial loss		0.2		1.4			Actuarial loss	0.2		1.4		0.5		4.1
Net periodic benefit cost	Net periodic benefit cost		$	0.7	$	1.3		Net periodic benefit cost	$	0.8	$	1.3	$	2.2	$	3.9

The components of net periodic ~~(benefit) /~~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~~nine months ended ~~March 31,~~September 30, 2023 and 2022.

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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 of ~~$7.1~~$6.6 million and $7.0 million as of ~~March 31,~~September 30, 2023 and December 31, 2022, respectively, were not material to the financial statements in the periods covered by this report.

8. ~~SHAREHOLDER'S DEFICIT~~EQUITY

~~In April~~During the nine months ended September 30, 2023, DPL received ~~a $50.0~~$260.0 million in cash ~~contribution~~contributions from ~~AES. Subsequently,~~AES, and DPL made ~~a $50.0~~$260.0 million ~~capital contribution~~in equity contributions to AES Ohio. The ~~contribution~~cash contributions at DPL ~~will be allocated partially to DPL's outstanding~~represented equity contributions of $239.0 million and payments of $21.0 million against the tax ~~receivable from AES, with the balance recorded as an equity contribution.~~ receivable.

The proceeds from ~~the~~these equity ~~contribution~~contributions allow AES Ohio to seek to improve its infrastructure and modernize its grid while maintaining liquidity.

9. 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 Consolidated 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 Consolidated Financial Statements. As such, costs, if any, that may be incurred in excess of those amounts provided as of ~~March 31,~~September 30, 2023, cannot be reasonably determined.

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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; 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 ~~the~~ 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,~~September 30, 2023.

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,~~September 30, 2023 and December 31, 2022.

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,~~September 30, 2023, AES Ohio could be responsible for the repayment of 4.9%, or ~~$53.2~~

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$53.0 million, of $1.1 billion OVEC debt obligations if they came due, comprised of both fixed and variable 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~~1. Overview and Summary of Significant Accounting Policies for further information on AES Ohio. The “Other” nonutility category primarily includes interest expense, net, 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, 2023
Revenues from external customers $ 237.7 $ 2.4 $ — $ 240.1
Intersegment revenues 0.1 0.9 (1.0) —
Total revenues $ 237.8 $ 3.3 $ (1.0) $ 240.1
Depreciation and amortization $ 19.4 $ 0.4 $ — $ 19.8
Interest expense $ 8.3 $ 9.8 $ — $ 18.1
Income / (loss) before income tax $ 10.9 $ (8.6) $ — $ 2.3
$ in millions Utility Other Adjustments and Eliminations DPL Consolidated
Three months ended March 31, 2022
Revenues from external customers $ 196.8 $ 2.5 $ — $ 199.3
Intersegment revenues 0.2 0.9 (1.1) —
Total revenues $ 197.0 $ 3.4 $ (1.1) $ 199.3
Depreciation and amortization $ 19.2 $ 0.3 $ — $ 19.5
Interest expense $ 5.9 $ 9.6 $ — $ 15.5
Income / (loss) before income tax $ 19.6 $ (7.9) $ — $ 11.7


$ in millions	Utility		Other		Adjustments and Eliminations		DPL Consolidated
Three months ended September 30, 2023
Revenue from external customers	$	221.8	$	2.4	$	—	$	224.2
Intersegment revenue	0.2		1.5		(1.7)		—
Total revenue	$	222.0	$	3.9	$	(1.7)	$	224.2

Depreciation and amortization	$	20.3	$	0.3	$	—	$	20.6

Interest expense, net	$	(1.3)	$	9.1	$	—	$	7.8

Income / (loss) before income tax	$	55.1	$	(6.9)	$	—	$	48.2

$ in millions	Utility		Other		Adjustments and Eliminations		DPL Consolidated
Three Months Ended September 30, 2022
Revenue from external customers	$	259.7	$	2.4	$	—	$	262.1
Intersegment revenue	0.2		0.8		(1.0)		—
Total revenue	$	259.9	$	3.2	$	(1.0)	$	262.1

Depreciation and amortization	$	19.8	$	0.2	$	—	$	20.0

Interest expense, net	$	8.4	$	9.7	$	—	$	18.1

Loss before income tax	$	(15.6)	$	(8.2)	$	—	$	(23.8)

$ in millions	Utility		Other		Adjustments and Eliminations		DPL Consolidated
Nine months ended September 30, 2023
Revenue from external customers	$	659.0	$	7.3	$	—	$	666.3
Intersegment revenue	0.5		3.2		(3.7)		—
Total revenue	$	659.5	$	10.5	$	(3.7)	$	666.3

Depreciation and amortization	$	59.9	$	1.0	$	—	$	60.9


Interest expense, net	$	16.7	$	28.5	$	—	$	45.2


Income / (loss) before income tax	$	64.1	$	(24.2)	$	—	$	39.9

$ in millions	Utility		Other		Adjustments and Eliminations		DPL Consolidated
Nine months ended September 30, 2022
Revenue from external customers	$	645.0	$	7.3	$	—	$	652.3
Intersegment revenue	0.6		2.6		(3.2)		—
Total revenue	$	645.6	$	9.9	$	(3.2)	$	652.3

Depreciation and amortization	$	58.7	$	0.9	$	—	$	59.6

Interest expense, net	$	21.1	$	29.0	$	—	$	50.1

Income / (loss) before income tax	$	11.3	$	(24.0)	$	—	$	(12.7)


Total Assets	Total Assets	March 31, 2023		December 31, 2022		Total Assets	September 30, 2023		December 31, 2022
Utility	Utility	$	2,446.5	$	2,405.9	Utility	$	2,638.0	$	2,405.9
All Other (a)	All Other (a)	20.6		16.5		All Other (a)	17.7		16.5
DPL Consolidated	DPL Consolidated	$	2,467.1	$	2,422.4	DPL Consolidated	$	2,655.7	$	2,422.4

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

11. ~~REVENUES~~REVENUE

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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 ~~revenues,~~revenue, see Note 1313. ~~– REVENUES~~Revenue in Item 8.– Financial Statements and Supplementary Data of our Form 10-K.

DPL's revenue from contracts with customers was ~~$239.2~~$225.8 million and ~~$197.7~~$259.6 million for the three months ended ~~March 31,~~September 30, 2023 and ~~2022.~~2022, respectively, and $668.7 million and $645.6 million for the nine months ended September 30, 2023 and 2022, respectively.

~~Table of Contents~~

The following table presents our revenue from contracts with customers and other revenue by segment for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022:


$ in millions	$ in millions	Utility		Other			Adjustments and Eliminations		Total		$ in millions	Utility		Other		Adjustments and Eliminations		Total
						Three Months Ended September 30, 2023

Retail revenue											Retail revenue
Retail revenue from contracts with customers											Retail revenue from contracts with customers
Residential revenue											Residential revenue	$	127.8	$	—	$	—	$	127.8
Commercial revenue											Commercial revenue	42.7		—		—		42.7
Industrial revenue											Industrial revenue	16.5		—		—		16.5
Governmental revenue											Governmental revenue	6.8		—		—		6.8
Other (a)											Other (a)	3.5		—		—		3.5
Total retail revenue from contracts with customers											Total retail revenue from contracts with customers	197.3		—		—		197.3
Other retail revenue (b)											Other retail revenue (b)	(0.2)		—		—		(0.2)
Wholesale revenue											Wholesale revenue
Wholesale revenue from contracts with customers											Wholesale revenue from contracts with customers	4.2		—		(0.2)		4.0
RTO ancillary revenue											RTO ancillary revenue	21.4		0.1		—		21.5
Capacity revenue											Capacity revenue	0.7		—		—		0.7
Miscellaneous revenue											Miscellaneous revenue
Miscellaneous revenue from contracts with customers (c)											Miscellaneous revenue from contracts with customers (c)	—		2.3		—		2.3
Other miscellaneous revenue											Other miscellaneous revenue	(1.4)		1.5		(1.5)		(1.4)
Total revenue											Total revenue	$	222.0	$	3.9	$	(1.7)	$	224.2

		Three months ended March 31, 2023										Three Months Ended September 30, 2022
Retail revenue	Retail revenue										Retail revenue
Retail revenue from contracts with customers	Retail revenue from contracts with customers										Retail revenue from contracts with customers
Residential revenue	Residential revenue	$	143.0	$	—		$	—	$	143.0	Residential revenue	$	147.0	$	—	$	—	$	147.0
Commercial revenue	Commercial revenue	42.9		—			—		42.9		Commercial revenue	50.5		—		—		50.5
Industrial revenue	Industrial revenue	17.7		—			—		17.7		Industrial revenue	20.6		—		—		20.6
Governmental revenue	Governmental revenue	6.1		—			—		6.1		Governmental revenue	6.2		—		—		6.2
Other (a)	Other (a)	3.2		—			—		3.2		Other (a)	3.0		—		—		3.0
Total retail revenue from contracts with customers	Total retail revenue from contracts with customers	212.9		—			—		212.9		Total retail revenue from contracts with customers	227.3		—		—		227.3

Wholesale revenue	Wholesale revenue										Wholesale revenue
Wholesale revenue from contracts with customers	Wholesale revenue from contracts with customers	3.8		—			(0.1)		3.7		Wholesale revenue from contracts with customers	13.4		—		(0.2)		13.2
RTO ancillary revenue	RTO ancillary revenue	19.7		—			—		19.7		RTO ancillary revenue	16.2		—		—		16.2
Capacity revenue	Capacity revenue	0.5		—			—		0.5		Capacity revenue	0.5		—		—		0.5
Miscellaneous revenue	Miscellaneous revenue										Miscellaneous revenue
Miscellaneous revenue from contracts with customers (b)		—		2.4			—		2.4
Miscellaneous revenue from contracts with customers (c)											Miscellaneous revenue from contracts with customers (c)	—		2.4		—		2.4
Other miscellaneous revenue	Other miscellaneous revenue	0.9		0.9			(0.9)		0.9		Other miscellaneous revenue	2.5		0.8		(0.8)		2.5
Total revenues		$	237.8	$	3.3		$	(1.0)	$	240.1
Total revenue											Total revenue	$	259.9	$	3.2	$	(1.0)	$	262.1

		Three months ended March 31, 2022
Retail revenue
Retail revenue from contracts with customers
Residential revenue		$	109.9	$	—		$	—	$	109.9
Commercial revenue		35.0		—			—		35.0
Industrial revenue		16.9		—			—		16.9
Governmental revenue		6.1		—			—		6.1
Other (a)		2.9		—			—		2.9
Total retail revenue from contracts with customers		170.8		—			—		170.8

Wholesale revenue
Wholesale revenue from contracts with customers		7.7		—			(0.2)		7.5
RTO ancillary revenue		15.1		—			—		15.1
Capacity revenue		1.8		—			—		1.8
Miscellaneous revenue
Miscellaneous revenue from contracts with customers (b)		—		2.5			—		2.5
Other miscellaneous revenue		1.6		0.9			(0.9)		1.6
Total revenues		$	197.0	$	3.4		$	(1.1)	$	199.3

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$ in millions	Utility		Other		Adjustments and Eliminations		Total
	Nine months ended September 30, 2023
Retail revenue
Retail revenue from contracts with customers
Residential revenue	$	377.9	$	—	$	—	$	377.9
Commercial revenue	124.8		—		—		124.8
Industrial revenue	50.4		—		—		50.4
Governmental revenue	18.7		—		—		18.7
Other (a)	9.9		—		—		9.9
Total retail revenue from contracts with customers	581.7		—		—		581.7
Other retail revenue (b)	(0.2)		—		—		(0.2)
Wholesale revenue
Wholesale revenue from contracts with customers	11.3		—		(0.5)		10.8
RTO ancillary revenue	65.7		0.1		—		65.8
Capacity revenue	3.2		—		—		3.2
Miscellaneous revenue
Miscellaneous revenue from contracts with customers (c)	—		7.2		—		7.2
Other miscellaneous revenue	(2.2)		3.2		(3.2)		(2.2)
Total revenue	$	659.5	$	10.5	$	(3.7)	$	666.3




	Nine months ended September 30, 2022
Retail revenue
Retail revenue from contracts with customers
Residential revenue	$	350.6	$	—	$	—	$	350.6
Commercial revenue	123.5		—		—		123.5
Industrial revenue	55.4		—		—		55.4
Governmental revenue	18.2		—		—		18.2
Other (a)	9.1		—		—		9.1
Total retail revenue from contracts with customers	556.8		—		—		556.8

Wholesale revenue
Wholesale revenue from contracts with customers	32.1		—		(0.6)		31.5
RTO ancillary revenue	46.2		0.1		—		46.3
Capacity revenue	3.8		—		—		3.8
Miscellaneous revenue
Miscellaneous revenue from contracts with customers (c)	—		7.2		—		7.2
Other miscellaneous revenue	6.7		2.6		(2.6)		6.7
Total revenue	$	645.6	$	9.9	$	(3.2)	$	652.3

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

(b) Other retail revenue primarily includes alternative revenue programs not accounted for under ASC 606 - Revenue Recognition ("ASC 606").

(c) Miscellaneous revenue from contracts with customers primarily includes ~~revenues~~revenue for various services provided by Miami Valley Lighting.

The balances of receivables from contracts with customers were ~~$86.5~~$76.2 million and $85.3 million as of ~~March 31,~~September 30, 2023 and December 31, 2022, respectively. Payment terms for all receivables from contracts with customers are typically within 30 days, unless a customer qualifies for payment extension.

12. ~~RISKS AND UNCERTAINTIES~~

~~COVID-19 Pandemic~~

The COVID-19 pandemic has impacted global economic activity, including electricity and energy consumption, and caused significant volatility and negative pressure in financial markets. The magnitude and duration of the COVID-19 pandemic is unknown at this time and may have material and adverse effects on our results of operations, financial condition and cash flows in future periods.

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FINANCIAL STATEMENTS

AES Ohio

~~Table of Contents~~

AES Ohio
Condensed Statements of Operations
(Unaudited)
Three months ended
March 31,
$ in millions 2023 2022
Revenues $ 237.8 $ 197.0
Operating costs and expenses
Net purchased power cost 122.0 90.5
Operation and maintenance 53.2 40.2
Depreciation and amortization 19.4 19.2
Taxes other than income taxes 25.5 21.9
Gain on disposal of business — (0.6)
Total operating costs and expenses 220.1 171.2
Operating income 17.7 25.8
Other expense, net:
Interest expense (8.3) (5.9)
Other income / (expense) 1.5 (0.3)
Total other expense, net (6.8) (6.2)
Income before income tax 10.9 19.6
Income tax expense 1.3 2.7
Net income $ 9.6 $ 16.9

~~See Notes to Condensed Financial Statements.~~

~~Table of Contents~~

AES Ohio
Condensed Statements of Comprehensive Income
(Unaudited)
Three months ended
March 31,
$ in millions 2023 2022
Net income $ 9.6 $ 16.9
Unfunded pension and other postretirement activity:
Reclassification to earnings, net of income tax effect of $(0.1) and $(0.2) for each respective period 0.1 0.7
Other comprehensive income 0.1 0.7
Net Comprehensive income $ 9.7 $ 17.6

~~See Notes to Condensed Financial Statements.~~

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AES Ohio
Condensed Balance Sheets
(Unaudited)
$ in millions March 31, 2023 December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents $ 9.4 $ 19.7
Accounts receivable, net of allowance for credit losses of $0.6 and $0.5, respectively (Note 1) 96.6 92.3
Inventories 29.4 26.8
Taxes applicable to subsequent years 69.9 93.9
Regulatory assets, current 32.2 39.2
Taxes receivable 29.4 29.6
Prepayments and other current assets 7.9 4.2
Total current assets 274.8 305.7
Property, plant & equipment:
Property, plant & equipment 2,845.9 2,752.7
Less: Accumulated depreciation and amortization (1,088.3) (1,086.5)
1,757.6 1,666.2
Construction work in process 161.6 195.3
Total net property, plant & equipment 1,919.2 1,861.5
Other non-current assets:
Regulatory assets, non-current 133.9 129.8
Intangible assets, net of amortization 75.4 68.5
Other non-current assets 43.2 40.4
Total other non-current assets 252.5 238.7
Total assets $ 2,446.5 $ 2,405.9
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Short-term and current portion of long-term debt (Note 4) $ 230.2 $ 120.2
Accounts payable 110.1 129.5
Accrued taxes 94.2 88.3
Accrued interest 8.3 3.4
Customer and supplier deposits 23.2 16.3
Regulatory liabilities, current 29.5 40.4
Accrued and other current liabilities 20.8 18.7
Total current liabilities 516.3 416.8
Non-current liabilities:
Long-term debt (Note 4) 712.8 712.5
Deferred income taxes 197.7 194.9
Taxes payable 47.1 94.3
Regulatory liabilities, non-current 196.4 198.7
Accrued pension and other postretirement obligations 34.7 41.8
Other non-current liabilities 4.9 5.1
Total non-current liabilities 1,193.6 1,247.3
Commitments and contingencies (Note 8)
Common 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 760.5 773.6
Accumulated other comprehensive loss (26.7) (26.8)
Retained earnings / (Accumulated deficit) 2.4 (5.4)
Total common shareholder's equity 736.6 741.8
Total liabilities and shareholder's equity $ 2,446.5 $ 2,405.9


AES Ohio
Condensed Statements of Operations
(Unaudited)
	Three months ended				Nine months ended
	September 30,				September 30,
$ in millions	2023		2022		2023		2022
REVENUE	$	222.0	$	259.9	$	659.5	$	645.6

OPERATING COSTS AND EXPENSES:

Net purchased power cost	67.2		179.8		276.4		360.6





Operation and maintenance	56.7		48.2		169.1		131.3
Depreciation and amortization	20.3		19.8		59.9		58.7
Taxes other than income taxes	25.2		20.4		77.3		63.4


Gain on disposal of business	—		—		—		(0.6)

Total operating costs and expenses	169.4		268.2		582.7		613.4

OPERATING INCOME / (LOSS)	52.6		(8.3)		76.8		32.2

OTHER INCOME / (EXPENSE), NET:
Interest expense, net	1.3		(8.4)		(16.7)		(21.1)

Other income, net	1.2		1.1		4.0		0.2
Total other income / (expense), net	2.5		(7.3)		(12.7)		(20.9)

INCOME / (LOSS) BEFORE INCOME TAX	55.1		(15.6)		64.1		11.3

Income tax expense / (benefit)	11.5		(5.5)		11.3		(2.8)








NET INCOME / (LOSS)	$	43.6	$	(10.1)	$	52.8	$	14.1

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 2023 2022
Cash flows from operating activities:
Net income $ 9.6 $ 16.9
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization 19.4 19.2
Deferred income taxes 1.3 2.0
Gain on disposal of business — (0.6)
Changes in certain assets and liabilities:
Accounts receivable, net (4.3) (1.7)
Inventories (2.5) (3.0)
Taxes applicable to subsequent years 24.0 22.3
Current and non-current regulatory assets and liabilities (11.4) 10.4
Accounts payable (9.4) (16.7)
Accrued taxes payable / receivable (41.2) (38.8)
Accrued interest 4.8 3.3
Accrued pension and other post-retirement benefits (7.1) (8.0)
Other 3.3 0.9
Net cash provided by / (used in) operating activities (13.5) 6.2
Cash flows from investing activities:
Capital expenditures (88.8) (64.2)
Cost of removal payments (3.2) (5.0)
Other investing activities, net 0.2 0.5
Net cash used in investing activities (91.8) (68.7)
Cash flows from financing activities:
Dividends and returns of capital paid to parent (15.0) (9.0)
Borrowings from revolving credit facilities 115.0 95.0
Repayment of borrowings from revolving credit facilities (5.0) (20.0)
Net cash provided by financing activities 95.0 66.0
Cash, cash equivalents, and restricted cash:
Net change (10.3) 3.5
Balance at beginning of period 19.8 14.5
Cash, cash equivalents, and restricted cash at end of period $ 9.5 $ 18.0
Supplemental cash flow information:
Interest paid, net of amounts capitalized $ 3.1 $ 1.8
Non-cash investing activities:
Accruals for capital expenditures $ 36.3 $ 23.6


AES Ohio
Condensed Statements of Comprehensive Income / (Loss)
(Unaudited)
	Three months ended				Nine months ended
	September 30,				September 30,
$ in millions	2023		2022		2023		2022
NET INCOME / (LOSS)	$	43.6	$	(10.1)	$	52.8	$	14.1
Unfunded pension and other postretirement activity:
Reclassification to earnings, net of income tax effect of $(0.1), $(0.2), $(0.2) and $(0.6) for each respective period	0.1		0.6		0.3		2.0


Other comprehensive income	0.1		0.6		0.3		2.0

NET COMPREHENSIVE INCOME / (LOSS)	$	43.7	$	(9.5)	$	53.1	$	16.1

See Notes to Condensed Financial Statements.

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AES Ohio
Condensed Statements of Shareholder's Equity
(Unaudited)
Common Stock (a)
$ in millions Outstanding Shares Amount Other Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings / (Accumulated Deficit) Total
Balance, January 1, 2023 41,172,173 $ 0.4 $ 773.6 $ (26.8) $ (5.4) $ 741.8
Net income 9.6 9.6
Net comprehensive income 0.1 0.1
Distributions to parent (b)
(13.1) (1.9) (15.0)
Other 0.1 0.1
Balance, March 31, 2023 41,172,173 $ 0.4 $ 760.5 $ (26.7) $ 2.4 $ 736.6


AES Ohio
Condensed Balance Sheets
(Unaudited)
$ in millions	September 30, 2023		December 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	33.0	$	19.7

Accounts receivable, net of allowance for credit losses of $1.0 and $0.5, respectively (Note 1)	84.5		92.3
Inventories	38.0		26.8
Taxes applicable to subsequent years	24.1		93.9
Regulatory assets, current	49.0		39.2
Taxes receivable	28.9		29.6
Prepayments and other current assets	11.3		4.2

Total current assets	268.8		305.7

NON-CURRENT ASSETS:
Property, plant & equipment:
Property, plant & equipment	2,972.9		2,752.7
Less: Accumulated depreciation and amortization	(1,086.1)		(1,086.5)
	1,886.8		1,666.2
Construction work in process	172.6		195.3
Total net property, plant & equipment	2,059.4		1,861.5

Other non-current assets:
Regulatory assets, non-current	160.2		129.8
Intangible assets, net of amortization	98.4		68.5
Other non-current assets	51.2		40.4
Total other non-current assets	309.8		238.7
Total assets	$	2,638.0	$	2,405.9

LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Short-term and current portion of long-term debt (Note 4)	$	120.2	$	120.2
Accounts payable	91.1		129.5
Accrued taxes	104.4		88.3
Accrued interest	10.5		3.4
Customer and supplier deposits	25.9		16.3
Regulatory liabilities, current	22.2		40.4
Accrued and other current liabilities	24.4		18.7

Total current liabilities	398.7		416.8

NON-CURRENT LIABILITIES:
Long-term debt (Note 4)	812.7		712.5
Deferred income taxes	210.3		194.9
Taxes payable	0.4		94.3
Regulatory liabilities, non-current	186.8		198.7
Accrued pension and other postretirement obligations	34.7		41.8


Other non-current liabilities	4.4		5.1
Total non-current liabilities	1,249.3		1,247.3
Total liabilities	1,648.0		1,664.1

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	977.4		773.6
Accumulated other comprehensive loss	(26.5)		(26.8)
Retained earnings / (Accumulated deficit)	38.7		(5.4)
Total common shareholder's equity	990.0		741.8
Total liabilities and shareholder's equity	$	2,638.0	$	2,405.9

See Notes to Condensed Financial Statements.

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AES Ohio
Condensed Statements of Cash Flows
(Unaudited)
	Nine months ended September 30,
$ in millions	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME	$	52.8	$	14.1
Adjustments to reconcile Net income to Net cash provided by operating activities:
Depreciation and amortization	59.9		58.7


Deferred income taxes	11.3		(6.9)
Gain on disposal of business	—		(0.6)

Changes in certain assets and liabilities:
Accounts receivable, net	7.9		(17.7)
Inventories	(11.2)		(6.5)

Taxes applicable to subsequent years	69.8		62.8
Current and non-current regulatory assets and liabilities	(67.8)		55.4
Prepayments and other current assets	(7.1)		(4.5)
Other non-current assets	4.1		5.7
Accounts payable	(37.3)		(6.8)
Accrued taxes payable / receivable	(77.1)		(75.9)
Accrued interest	7.1		5.3

Accrued and other current liabilities	15.3		0.2
Accrued pension and other postretirement benefits	(7.1)		(9.2)
Other	(2.8)		(0.8)
Net cash provided by operating activities	17.8		73.3
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(283.4)		(191.0)
Cost of removal payments	(16.0)		(14.5)





Other investing activities, net	0.2		0.4
Net cash used in investing activities	(299.2)		(205.1)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends and returns of capital paid to parent	(65.0)		(49.0)
Equity contributions from parent	260.0		—

Issuance of long-term debt	100.0		140.0
Payments of deferred financing costs	(0.3)		(1.0)

Borrowings from revolving credit facilities	205.0		185.0
Repayment of borrowings from revolving credit facilities	(205.0)		(130.0)



Net cash provided by financing activities	294.7		145.0
Cash, cash equivalents, and restricted cash:
Net increase in cash, cash equivalents and restricted cash	13.3		13.2
Cash, cash equivalents and restricted cash at beginning of year	19.8		14.5
Cash, cash equivalents, and restricted cash at end of period	$	33.1	$	27.7
Supplemental cash flow information:
Interest paid, net of amounts capitalized	$	19.2	$	12.9

Non-cash investing activities:
Accruals for capital expenditures	$	46.2	$	31.2

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 / (Accumulated Deficit)		Total
Balance, 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, March 31, 2023	41,172,173	0.4		760.5		(26.7)		2.4		736.6
Net loss	—	—		—		—		(0.4)		(0.4)
Other comprehensive income	—	—		—		0.1		—		0.1
Distributions to parent (a)	—	—		(37.8)		—		(2.2)		(40.0)
Equity contribution from parent	—	—		125.0		—		—		125.0
Other	—	—		0.1		—		—		0.1
Balance, June 30, 2023	41,172,173	0.4		847.8		(26.6)		(0.2)		821.4
Net income	—	—		—		—		43.6		43.6
Other comprehensive income	—	—		—		0.1		—		0.1
Distributions to parent (a)	—	—		(5.4)		—		(4.6)		(10.0)
Equity contribution from parent	—	—		135.0		—		—		135.0
Other	—	—		—		—		(0.1)		(0.1)
Balance, September 30, 2023	41,172,173	$	0.4	$	977.4	$	(26.5)	$	38.7	$	990.0


		Common Stock (a)												Common Stock
$ in millions	$ in millions	Outstanding Shares	Amount		Other Paid-in Capital		Accumulated Other Comprehensive Loss		Retained Earnings / (Accumulated Deficit)		Total		$ in millions	Outstanding Shares	Amount		Other Paid-in Capital		Accumulated Other Comprehensive Loss		Retained Earnings / (Accumulated Deficit)		Total
Balance, January 1, 2022	Balance, January 1, 2022	41,172,173	$	0.4	$	822.5	$	(31.8)	$	(8.9)	$	782.2	Balance, January 1, 2022	41,172,173	$	0.4	$	822.5	$	(31.8)	$	(8.9)	$	782.2
Net income	Net income								16.9		16.9		Net income	—	—		—		—		16.9		16.9
Net comprehensive income							0.7				0.7
Other comprehensive income													Other comprehensive income	—	—		—		0.7		—		0.7
Distributions to parent (b)	Distributions to parent (b)				(9.0)						(9.0)		Distributions to parent (b)	—	—		(9.0)		—		—		(9.0)

Other	Other								(0.3)		(0.3)		Other	—	—		—		—		(0.3)		(0.3)
Balance, March 31, 2022	Balance, March 31, 2022	41,172,173	$	0.4	$	813.5	$	(31.1)	$	7.7	$	790.5	Balance, March 31, 2022	41,172,173	0.4		813.5		(31.1)		7.7		790.5
Net income													Net income	—	—		—		—		7.3		7.3
Other comprehensive income													Other comprehensive income	—	—		—		0.7		—		0.7
Distributions to parent (b)													Distributions to parent (b)	—	—		(10.0)		—		(15.0)		(25.0)

Balance, June 30, 2022													Balance, June 30, 2022	41,172,173	0.4		803.5		(30.4)		—		773.5
Net loss													Net loss	—	—		—		—		(10.1)		(10.1)
Other comprehensive income													Other comprehensive income	—	—		—		0.6		—		0.6

Distributions to parent (b)													Distributions to parent (b)	—	—		(15.0)		—		—		(15.0)
Other													Other	—	—		0.1		—		(0.1)		—
Balance, September 30, 2022													Balance, September 30, 2022	41,172,173	$	0.4	$	788.6	$	(29.8)	$	(10.2)	$	749.0

(a)~~$0.01 par value, 50,000,000 shares authorized.~~

~~(b)~~AES Ohio made distributions of $65.0 million during the nine months ended September 30, 2023. Of this amount, $8.7 million were dividends and $56.3 million were return of capital payments ~~of $13.1 million and $9.0 million during the three months ended March 31, 2023 and 2022, respectively,~~ for the portion of current year distributions to ~~shareholders~~shareholder in excess of retained earnings at the time of distribution.

(b) AES Ohio made distributions of $49.0 million during the nine months ended September 30, 2022. Of this amount, $15.0 million were dividends and $34.0 million were return of capital payments for the portion of current year ~~net income~~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 and nine months ended ~~March 31,~~September 30, 2023 and 2022

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 ~~537,000~~538,000 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 ~~sells~~records revenue and expenses for its proportional share of energy and capacity from its investment in ~~OVEC into the wholesale market.~~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 ~~revenues~~revenue and ~~costs~~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 is issued.

Interim Financial Presentation

The accompanying unaudited condensed financial statements and footnotes have been prepared in accordance with GAAP, as contained in the FASB 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 ~~common~~ shareholder's equity, and cash flows. The results of operations for the three and nine months ended ~~March 31,~~September 30, 2023 are not necessarily indicative of expected results for the year ending December 31, 2023. The accompanying condensed ~~consolidated~~ financial statements are unaudited and should be read in conjunction with the ~~2021~~2022 audited consolidated financial statements and ~~notes~~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 ~~revenues~~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 ~~revenues;~~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.

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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	$ in millions	March 31, 2023		December 31, 2022		$ in millions	September 30, 2023		December 31, 2022
Cash and cash equivalents	Cash and cash equivalents	$	9.4	$	19.7	Cash and cash equivalents	$	33.0	$	19.7
Restricted cash (included in Prepayments and other current assets)	Restricted cash (included in Prepayments and other current assets)	0.1		0.1		Restricted cash (included in Prepayments and other current assets)	0.1		0.1
Cash, Cash Equivalents, and Restricted Cash, End of Period	Cash, Cash Equivalents, and Restricted Cash, End of Period	$	9.5	$	19.8	Cash, Cash Equivalents, and Restricted Cash, End of Period	$	33.1	$	19.8

Accounts Receivable and Allowance for Credit Losses

The following table summarizes accounts receivable as of ~~March 31,~~September 30, 2023 and December 31, 2022:


		March 31,		December 31,			September 30,		December 31,
$ in millions	$ in millions	2023		2022		$ in millions	2023		2022
Accounts receivable, net:	Accounts receivable, net:					Accounts receivable, net:
Customer receivables	Customer receivables	67.6		$	60.6	Customer receivables	$	59.2	$	60.6
Unbilled revenue	Unbilled revenue	18.2		24.0		Unbilled revenue	15.8		24.0
Amounts due from affiliates	Amounts due from affiliates	4.5		4.4		Amounts due from affiliates	1.5		4.4
Other	Other	6.9		3.8		Other	9.0		3.8
Allowance for credit losses	Allowance for credit losses	(0.6)		(0.5)		Allowance for credit losses	(1.0)		(0.5)
Total accounts receivable, net	Total accounts receivable, net	$	96.6	$	92.3	Total accounts receivable, net	$	84.5	$	92.3

The following table is a roll forward of our allowance for credit losses related to the accounts receivable balances for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022:


	September 30,		September 30,
$ in millions	2023		2022
Allowance for credit losses:
Beginning balance	$	0.5	$	0.3
Current period provision	4.1		1.4
Write-offs charged against allowances	(4.4)		(2.1)
Recoveries collected	0.8		0.8
Ending balance	$	1.0	$	0.4

Inventories

Inventories consist of materials and supplies as of ~~March 31,~~September 30, 2023 and December 31, 2022.

Regulatory Accounting

The deferral of costs (as regulatory assets) is appropriate only when the future recovery of such costs is probable. In assessing probability, we consider such factors as specific orders from the PUCO or the FERC, regulatory precedent and the current regulatory environment. To the extent recovery of costs is no longer deemed probable, related regulatory assets would be required to be expensed in current period earnings. Our regulatory assets and liabilities have been created pursuant to a specific order of the PUCO or the FERC or established regulatory practices, such as other utilities under the jurisdiction of the PUCO or the FERC being granted recovery of similar costs. It is probable, but not certain, that these regulatory assets will be recoverable, subject to approval by the PUCO or the FERC. Regulatory assets and liabilities are classified as current or non-current based on the term in which recovery is expected. See Note ~~2 – REGULATORY MATTERS~~2. Regulatory Matters in Item 8.—Financial Statements and Supplementary Data of our Form 10-K for more information.

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AFUDC


	Three months ended				Nine months ended
	September 30,				September 30,
$ in millions	2023		2022		2023		2022
AFUDC equity	$	1.3	$	2.0	$	3.8	$	4.0
AFUDC debt	$	1.6	$	(0.4)	$	4.5	$	0.8

AOCL

The amounts reclassified out of AOCL by component during the three and nine months ended ~~March 31,~~September 30, 2023 and 2022 are as follows:


Details about AOCL components	Details about AOCL components	Affected line item in the Condensed Statements of Operations	Three months ended			Details about AOCL components			Affected line item in the Condensed Statements of Operations		Three months ended			Nine months ended
			March 31,								September 30,			September 30,
$ in millions	$ in millions			2023			2022			$ in millions		2023		2022		2023		2022
Amortization of unfunded pension and other postretirement obligations (Note 6):	Amortization of unfunded pension and other postretirement obligations (Note 6):									Amortization of unfunded pension and other postretirement obligations (Note 6):
		Other expense		0.2			0.9				Other expense	$	0.2	$	0.8	$	0.5	$	2.6
		Income tax effect		(0.1)			(0.2)				Income tax effect	(0.1)		(0.2)		(0.2)		(0.6)
		Net of income taxes		0.1			0.7				Net of income taxes	0.1		0.6		0.3		2.0

Total reclassifications for the period, net of income taxes	Total reclassifications for the period, net of income taxes			$	0.1		$	0.7		Total reclassifications for the period, net of income taxes		$	0.1	$	0.6	$	0.3	$	2.0

The changes in the components of AOCL during the ~~three~~nine months ended ~~March 31,~~September 30, 2023 are as follows:

$ in millions

Change in Accumulated other comprehensive loss

Balance as of January 1, 2023

(26.8)

Amounts reclassified from AOCL to earnings

~~0.1~~0.3

Balance as of ~~March 31,~~September 30, 2023

~~(26.7)~~(26.5)

Accounting for Taxes Collected from Customers and Remitted to Governmental Authorities


		Three months ended					Three months ended				Nine months ended
		March 31,					September 30,				September 30,
$ in millions	$ in millions		2023		2022			$ in millions	2023		2022		2023		2022
Excise taxes collected	Excise taxes collected		$	12.0	$	13.1		Excise taxes collected	$	12.8	$	13.0	$	35.4	$	37.6

New Accounting Pronouncements Adopted in 2023

We have assessed and determined that the new accounting pronouncements adopted did not have a material impact on our ~~consolidated~~ financial statements.

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New Accounting Pronouncements Issued But Not Yet Effective

~~We have assessed and determined that the new~~The following table provides a brief description of recent accounting pronouncements ~~issued but not yet effective are not expected to~~that could have a material 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.


ASU Number and Name	Description	Date of Adoption	Effect on the financial statements upon adoption
2023-06 Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative	In U.S. Securities and Exchange Commission (SEC) Release No. 33-10532, Disclosure Update and Simplification, issued August 17, 2018, the SEC referred certain of its disclosure requirements that overlap with, but require incremental information to, generally accepted accounting principles (GAAP) to the FASB for potential incorporation into the Codification. The amendments in this Update are the result of the Board’s decision to incorporate into the Codification 14 of the 27 disclosures referred by the SEC. The amendments in this Update represent changes to clarify or improve disclosure and presentation requirements of a variety of Topics. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations.	The effective date for each amendment will be the date on which the SEC's removal of that related disclosure becomes effective, with early adoption prohibited.	We are currently evaluating the impact of adopting the standard on our condensed financial statements.

2. REGULATORY MATTERS

AES Ohio ESPs and Smart Grid Comprehensive Settlement

~~Table of Contents~~

parties with respect to, among other matters, AES Ohio's applications pending at the PUCO for (i) approval of AES Ohio's plan to modernize its distribution grid (the Smart Grid Plan), (ii) findings that ~~DP&L~~AES Ohio passed the SEET for 2018 and 2019, and (iii) findings that AES Ohio's ~~current~~ ESP 1 satisfies the SEET prospectively and the more favorable in the aggregate (MFA) regulatory test. On June 16, 2021, the PUCO issued their opinion and order accepting the stipulation as filed. The OCC appealed the final PUCO order to the Ohio Supreme Court on December 6, 2021. Oral arguments regarding this appeal, which have been consolidated with the appeal regarding the reversion to ESP 1 described in the paragraph above, are expected but not yet scheduled.

•A Distribution Investment Rider for the term of the ESP allowing for the timely recovery of distribution investments by AES Ohio based on a 9.999% return on equity, subject to revenue caps;

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the term of ESP 4;4. During the third quarter of 2023, AES Ohio deferred $28.3 million of previously recognized purchased power costs and an additional $10.7 million of carrying costs related to this recovery; and

•Funding of programs for assistance to low-income customers and for economic development.

Distribution Rate Case

•Establishes a revenue increase of $75.6 million for AES Ohio’s base rates for electric distribution ~~service~~service; and

~~As noted above, these~~These rates ~~will go~~went into effect ~~when~~on September 1, 2023 with the ~~PUCO approves~~approval of AES Ohio's ~~Settlement regarding~~ ESP 4.

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 44. Fair Value~~– FAIR VALUE~~ in Item 8. – Financial Statements and Supplementary Data of our Form 10-K.

Financial Assets

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equity investments. ~~We recorded net~~Net unrealized gains / (losses) related to equity investments still held as of ~~March 31,~~September 30, 2023 and 2022 ~~of $0.3 million and $(0.5) million during the three months ended March 31, 2023 and 2022, respectively.~~are as follows:


	Three months ended				Nine months ended
	September 30,				September 30,
$ in millions	2023		2022		2023		2022
Net unrealized gains / (losses) (a)	$	(0.2)	$	(0.4)	$	0.2	$	(1.8)

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

Recurring Fair Value Measurements

Fair value as of March 31, 2023 Fair value as of December 31, 2022
$ in millions Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Assets
Master Trust assets
Money market funds $ 0.3 $ — $ — $ 0.3 $ 0.5 $ — $ — $ 0.5
Mutual funds 7.1 — — 7.1 7.0 — — 7.0
Total assets $ 7.4 $ — $ — $ 7.4 $ 7.5 $ — $ — $ 7.5

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	Fair value as of September 30, 2023								Fair value as of December 31, 2022
$ in millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Master Trust assets
Money market funds	$	0.6	$	—	$	—	$	0.6	$	0.5	$	—	$	—	$	0.5
Mutual funds	6.7		—		—		6.7		7.0		—		—		7.0









Total assets	$	7.3	$	—	$	—	$	7.3	$	7.5	$	—	$	—	$	7.5

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:


																															September 30, 2023													December 31, 2022
		Carrying Amount			Fair value as of March 31, 2023										Carrying Amount			Fair value as of December 31, 2022													Carrying Amount			Fair Value										Carrying Amount			Fair Value
$ in millions	$ in millions			Level 1			Level 2			Level 3		Total					Level 1			Level 2			Level 3			Total	$ in millions						Level 1			Level 2			Level 3		Total					Level 1			Level 2			Level 3			Total
Liabilities	Liabilities																													Liabilities
Long-term debt	Long-term debt	$	713.0		$	—		$	623.3		17.0		$	640.3	$	712.7		$	—		$	610.9		$	17.0		$	627.9	Long-term debt		$	812.9		$	—		$	676.5		16.9		$	693.4	$	712.7		$	—		$	610.9		$	17.0		$	627.9

4. DEBT

Long-term debt is as follows:


		Interest			March 31,		December 31,			Interest			September 30,		December 31,
$ in millions	$ in millions	Rate		Due	2023		2022		$ in millions	Rate		Due	2023		2022
First Mortgage Bonds	First Mortgage Bonds	3.95	%	2049	$	425.0	$	425.0	First Mortgage Bonds	3.95	%	2049	$	425.0	$	425.0
First Mortgage Bonds	First Mortgage Bonds	3.20	%	2040	140.0		140.0		First Mortgage Bonds	3.20	%	2040	140.0		140.0
Tax-exempt First Mortgage Bonds (a)		4.25	%	2027	100.0		100.0
First Mortgage Bonds									First Mortgage Bonds	5.19	%	2033	100.0		—
Tax-exempt First Mortgage Bonds ~~(b)~~(a)	Tax-exempt First Mortgage Bonds ~~(b)~~(a)	4.00	%	2027	40.0		40.0		Tax-exempt First Mortgage Bonds ~~(b)~~(a)	4.25	%	2027	100.0		100.0
Tax-exempt First Mortgage Bonds (b)									Tax-exempt First Mortgage Bonds (b)	4.00	%	2027	40.0		40.0
U.S. Government note	U.S. Government note	4.20	%	2061	17.0		17.0		U.S. Government note	4.20	%	2061	16.9		17.0
Unamortized deferred financing costs	Unamortized deferred financing costs				(6.6)		(6.9)		Unamortized deferred financing costs				(6.7)		(6.9)
Unamortized debt discounts, net	Unamortized debt discounts, net				(2.4)		(2.4)		Unamortized debt discounts, net				(2.3)		(2.4)
Total long-term debt	Total long-term debt				713.0		712.7		Total long-term debt				812.9		712.7
Less: current portion	Less: current portion				(0.2)		(0.2)		Less: current portion				(0.2)		(0.2)
Long-term debt, net of current portion	Long-term debt, net of current portion				$	712.8	$	712.5	Long-term debt, net of current portion				$	812.7	$	712.5

~~Table of Contents~~

Revolving ~~Credit Agreements~~credit agreements

As of ~~March 31,~~September 30, 2023 and December 31, 2022, the AES Ohio Credit Agreement had outstanding borrowings of ~~$230.0~~$120.0 million and $120.0 million, respectively.

Significant transactions

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Long-term debt covenants and restrictions

As of ~~March 31,~~September 30, 2023, AES Ohio was in compliance with all debt covenants, including the financial ~~covenants~~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 ~~11.9%~~20.9% and 17.6% for the three and nine months ended ~~March 31,~~September 30, 2023, compared to ~~13.8%~~35.3% and (24.8)% for the three and nine months ended ~~March 31,~~September 30, 2022, respectively. 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. As a result of the PUCO decision in AES Ohio's most recent distribution rate case in December of 2022, AES Ohio began to amortize a deferred tax shortage arising from net municipal apportioned tax rate increase. This new amortization, when combined with the ongoing amortization of the Tax Cut and Jobs Act (TCJA), results in a net tax benefit lowering the Company’s effective tax rate.

AES files federal and state income tax returns, which ~~consolidates~~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.

6. 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 or for amounts billed to AES Ohio Generation for former employees that were employed by AES Ohio Generation that are still participants in the AES Ohio ~~plan.~~plans.

The following table presents the net periodic benefit cost of the Pension Plans for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022:
Three months ended
March 31,
$ in millions 2023 2022
Service cost $ 0.7 $ 1.3
Interest cost 4.0 2.4
Expected return on plan assets (4.4) (4.0)
Amortization of unrecognized:
Prior service cost 0.3 0.3
Actuarial loss 0.3 1.9
Net periodic benefit cost $ 0.9 $ 1.9


	Three months ended				Nine months ended
	September 30,				September 30,
$ in millions	2023		2022		2023		2022
Service cost	$	0.8	$	1.2	$	2.2	$	3.7
Interest cost	3.9		2.4		11.9		7.2
Expected return on plan assets	(4.4)		(4.0)		(13.2)		(11.9)
Amortization of unrecognized:
Prior service cost	0.2		0.3		0.8		0.9
Actuarial loss	0.3		2.0		0.9		5.8
Net periodic benefit cost	$	0.8	$	1.9	$	2.6	$	5.7

~~Table of Contents~~

The components of net periodic ~~(benefit) /~~benefit cost other than service cost are included in Other income, ~~/ (expense), net:~~net in the Condensed Statements of Operations.

There were $7.5 million in employer contributions during each of the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022.

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7. ~~SHAREHOLDER'S~~ EQUITY

~~In April~~During the nine months ended September 30, 2023, DPL made ~~a capital contribution~~equity contributions of ~~$50.0~~$260.0 million to AES Ohio.

The proceeds from these equity contributions 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,~~September 30, 2023, cannot be reasonably determined.

Environmental Matters

Accruals for legal loss and environmental contingencies were not material as of ~~March 31,~~September 30, 2023 and December 31, 2022.

Equity Ownership Interest

~~Table of Contents~~

~~$53.2~~ $53.0 million, of $1.1 billion OVEC debt obligations if they came due, comprised of both fixed and variable rate

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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.

9. ~~REVENUES~~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 ~~revenues,~~revenue, see Note 1111. ~~– REVENUES~~Revenue in Item 8.– Financial Statements and Supplementary Data of our Form 10-K.

AES Ohio's revenue from contracts with customers was ~~$236.9~~$223.6 million and ~~$195.4~~$257.4 million for the three months ended ~~March 31,~~September 30, 2023 and 2022, respectively, and $661.9 million and $638.9 million for the nine months ended September 30, 2023 and 2022, respectively.

The following table presents our revenue from contracts with customers and other revenue for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022:


		Three months ended					Three months ended				Nine months ended
		March 31,					September 30,				September 30,
$ in millions	$ in millions		2023		2022			$ in millions	2023		2022		2023		2022
Retail revenue	Retail revenue							Retail revenue
Retail revenue from contracts with customers	Retail revenue from contracts with customers							Retail revenue from contracts with customers
Residential revenue	Residential revenue		$	143.0	$	109.9		Residential revenue	$	127.8	$	147.0	$	377.9	$	350.6
Commercial revenue	Commercial revenue		42.9		35.0			Commercial revenue	42.7		50.5		124.8		123.5
Industrial revenue	Industrial revenue		17.7		16.9			Industrial revenue	16.5		20.6		50.4		55.4
Governmental revenue	Governmental revenue		6.1		6.1			Governmental revenue	6.8		6.2		18.7		18.2
Other (a)	Other (a)		3.2		2.9			Other (a)	3.5		3.0		9.9		9.1
Total retail revenue from contracts with customers	Total retail revenue from contracts with customers		212.9		170.8			Total retail revenue from contracts with customers	197.3		227.3		581.7		556.8

Other retail revenue (b)								Other retail revenue (b)	(0.2)		—		(0.2)		—
Wholesale revenue	Wholesale revenue							Wholesale revenue
Wholesale revenue from contracts with customers	Wholesale revenue from contracts with customers		3.8		7.7			Wholesale revenue from contracts with customers	4.2		13.4		11.3		32.1
RTO ancillary revenue	RTO ancillary revenue		19.7		15.1			RTO ancillary revenue	21.4		16.2		65.7		46.2
Capacity revenue	Capacity revenue		0.5		1.8			Capacity revenue	0.7		0.5		3.2		3.8

Miscellaneous revenue	Miscellaneous revenue		0.9		1.6			Miscellaneous revenue	(1.4)		2.5		(2.2)		6.7
Total revenues			$	237.8	$	197.0
Total revenue								Total revenue	$	222.0	$	259.9	$	659.5	$	645.6

(b) Other retail revenue primarily includes alternative revenue programs not accounted for under ASC 606 - Revenue Recognition ("ASC 606").

The balances of receivables from contracts with customers were ~~$85.8~~$75.0 million and $84.6 million as of ~~March 31,~~September 30, 2023 and December 31, 2022, respectively. Payment terms for all receivables from contracts with customers are typically within 30 days, unless a customer qualifies for payment extension.

~~10. RISKS AND UNCERTAINTIES~~

~~COVID-19 Pandemic~~

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~~Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations~~

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~~PART I, ~~Item 1~~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 ~~including our expectations regarding the impact of the COVID-19 pandemic on our business,~~ 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~~PART II, ~~Item~~ITEM 1A of this quarterly report and ~~Item 1A~~ITEM 1A. – Risk Factors and Item 77. – 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 drawn 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 ~~additional~~more information regarding our business, see Item 11. – Business of our Form 10-K.

EXECUTIVE SUMMARY

DPL

For the three months ended ~~March 31,~~September 30, 2023, DPL's income before income tax of ~~$2.3~~$48.2 million was ~~lower~~higher by ~~$9.4~~$72.0 million, or ~~80%~~303%, compared to the prior period loss before income tax of $23.8 million, and, for the nine months ended September 30, 2023, DPL's income before income tax of $39.9 million was higher by $52.6 million, or 414%, compared to the prior period loss before income tax of $12.7 million, primarily due to factors including, but not limited to:


	Three months ended		Nine months ended
	September 30,		September 30,
$ in millions	2023 vs. 2022		2023 vs. 2022
Increase due to deferral of purchased power costs in the current year, which were recognized in the prior year, and additional carrying costs associated with the approval of ESP 4	$	67.9	$	67.9
Increase due to higher transmission revenue driven by an increase in transmission rates	5.3		19.5
Decrease due to higher taxes other than income taxes driven by higher assessed values	(4.8)		(13.8)
Increase / (decrease) due to operation and maintenance expenses	1.4		(10.9)
Decrease in retail margin due to lower demand driven by weather	(0.1)		(8.5)
Other	2.3		(1.6)
Net change in Income / (loss) before income tax	$	72.0	$	52.6

AES Ohio

For the three months ended September 30, 2023, AES Ohio's income before income tax of $55.1 million was higher by $70.7 million, or 453%, compared to the prior period loss before income tax of $15.6 million, and, for the nine months ended September 30, 2023, AES Ohio's income before income tax of $64.1 million was higher by $52.8 million, or 467%, compared to the prior period income before income tax of ~~$11.7~~$11.3 million, primarily due to factors including, but not limited to:

~~Three months ended~~

~~March 31,~~

~~$ in millions~~

~~2023 vs. 2022~~

~~Decrease in retail margin due to lower demand driven by weather~~

~~(4.3)~~

~~Decrease due to higher operation and maintenance expenses~~

~~(4.2)~~

~~Decrease due to higher taxes other than income~~

~~(3.5)~~

~~Increase due to higher transmission revenues driven by an increase in transmission rates~~

~~4.6~~

~~Other~~

~~(2.0)~~

~~Net change in income before income tax~~

~~(9.4)~~


	Three months ended		Nine months ended
	September 30,		September 30,
$ in millions	2023 vs. 2022		2023 vs. 2022
Increase due to deferral of purchased power costs, which were recognized in the prior year, and additional carrying costs associated with the approval of ESP 4	$	67.9	$	67.9
Increase due to higher transmission revenue driven by an increase in transmission rates	5.2		19.5
Decrease due to higher taxes other than income taxes driven by higher assessed values	(4.8)		(13.9)
Increase / (decrease) due to operation and maintenance expenses	0.7		(10.7)
Decrease in retail margin due to lower demand driven by weather	(0.1)		(8.5)
Other	1.8		(1.5)
Net change in income / (loss) before income tax	$	70.7	$	52.8

~~Table of Contents~~

~~AES Ohio~~

For the three months ended March 31, 2023, AES Ohio's income before income tax of $10.9 million was lower by $8.7 million, or 44%, compared to the prior period income before income tax of $19.6 million, primarily due to factors including, but not limited to:

~~Three months ended~~

~~March 31,~~

~~$ in millions~~

~~2023 vs. 2022~~

~~Decrease in retail margin due to lower demand driven by weather~~

~~(4.3)~~

~~Decrease due to higher operation and maintenance expenses~~

~~(4.0)~~

~~Decrease due to higher taxes other than income~~

~~(3.6)~~

~~Increase due to higher transmission revenues driven by an increase in transmission rates~~

~~4.6~~

~~Other~~

~~(1.4)~~

~~Net change in income before income tax~~

~~(8.7)~~

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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					Three months ended								Nine months ended
		March 31,					September 30,								September 30,
$ in millions	$ in millions		2023		2022			$ change		% change		$ in millions	2023		2022		$ change		% change		2023		2022		$ change		% change
Revenues:
REVENUE:												REVENUE:
Retail	Retail		$	212.9	$	170.8		$	42.1	24.6	%	Retail	$	197.1	$	227.3	$	(30.2)	(13.3)	%	$	581.5	$	556.8	$	24.7	4.4	%
Wholesale	Wholesale		3.7		7.5			(3.8)		(50.7)	%	Wholesale	4.0		13.2		(9.2)		(69.7)	%	10.8		31.5		(20.7)		(65.7)	%
RTO ancillary	RTO ancillary		19.7		15.1			4.6		30.5	%	RTO ancillary	21.5		16.2		5.3		32.7	%	65.8		46.3		19.5		42.1	%
Capacity revenues			0.5		1.8			(1.3)		(72.2)	%
Miscellaneous revenues			3.3		4.1			(0.8)		(19.5)	%
Capacity revenue												Capacity revenue	0.7		0.5		0.2		40.0	%	3.2		3.8		(0.6)		(15.8)	%
Miscellaneous revenue												Miscellaneous revenue	0.9		4.9		(4.0)		(81.6)	%	5.0		13.9		(8.9)		(64.0)	%

Total revenues			240.1		199.3			40.8		20.5	%
Total revenue												Total revenue	224.2		262.1		(37.9)		(14.5)	%	666.3		652.3		14.0		2.1	%

Operating costs and expenses:
OPERATING COSTS AND EXPENSES:												OPERATING COSTS AND EXPENSES:

Purchased power:	Purchased power:											Purchased power:
Purchased power	Purchased power		105.8		66.1			39.7		60.1	%	Purchased power	47.8		161.8		(114.0)		(70.5)	%	225.7		299.5		(73.8)		(24.6)	%
RTO charges	RTO charges		16.4		24.7			(8.3)		(33.6)	%	RTO charges	19.4		18.4		1.0		5.4	%	51.2		62.1		(10.9)		(17.6)	%

Net purchased power cost	Net purchased power cost		122.2		90.8			31.4		34.6	%	Net purchased power cost	67.2		180.2		(113.0)		(62.7)	%	276.9		361.6		(84.7)		(23.4)	%

Operation and maintenance	Operation and maintenance		54.0		40.8			13.2		32.4	%	Operation and maintenance	56.6		48.8		7.8		16.0	%	170.7		132.7		38.0		28.6	%
Depreciation and amortization	Depreciation and amortization		19.8		19.5			0.3		1.5	%	Depreciation and amortization	20.6		20.0		0.6		3.0	%	60.9		59.6		1.3		2.2	%
Taxes other than income taxes	Taxes other than income taxes		25.5		22.0			3.5		15.9	%	Taxes other than income taxes	25.2		20.4		4.8		23.5	%	77.4		63.6		13.8		21.7	%

Gain on disposal of business	Gain on disposal of business		—		(0.6)			0.6		(100.0)	%	Gain on disposal of business	—		—		—		—	%	—		(0.6)		0.6		(100.0)	%

Total operating costs and expenses	Total operating costs and expenses		221.5		172.5			49.0		28.4	%	Total operating costs and expenses	169.6		269.4		(99.8)		(37.0)	%	585.9		616.9		(31.0)		(5.0)	%

Operating income			18.6		26.8			(8.2)		(30.6)	%
OPERATING INCOME / (LOSS)												OPERATING INCOME / (LOSS)	54.6		(7.3)		61.9		(847.9)	%	80.4		35.4		45.0		127.1	%

Other expense, net:
Interest expense			(18.1)		(15.5)			(2.6)		16.8	%
OTHER INCOME / (EXPENSE), NET:												OTHER INCOME / (EXPENSE), NET:
Interest expense, net												Interest expense, net	(7.8)		(18.1)		10.3		(56.9)	%	(45.2)		(50.1)		4.9		(9.8)	%

Other income			1.8		0.4			1.4		350.0	%
Other income, net												Other income, net	1.4		1.6		(0.2)		(12.5)	%	4.7		2.0		2.7		135.0	%
Total other expense, net	Total other expense, net		(16.3)		(15.1)			(1.2)		7.9	%	Total other expense, net	(6.4)		(16.5)		10.1		(61.2)	%	(40.5)		(48.1)		7.6		(15.8)	%

Income before income tax (a)			$	2.3	$	11.7		$	(9.4)	(80.3)	%
INCOME / (LOSS) BEFORE INCOME TAX (a)												INCOME / (LOSS) BEFORE INCOME TAX (a)	$	48.2	$	(23.8)	$	72.0	(302.5)	%	$	39.9	$	(12.7)	$	52.6	(414.2)	%

(a)For purposes of discussing operating results, we present and discuss Income / (loss) 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.

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DPL – ~~Revenues~~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 ~~revenues~~revenue are affected by regulated rates and riders including the changes to our ESP described in Note ~~2 - REGULATORY MATTERS~~2. Regulatory Matters of our Form 10-K and Note ~~2 – REGULATORY MATTERS~~2. Regulatory Matters of Notes to DPL's Condensed Consolidated Financial Statements.


HEATING AND COOLING DEGREE-DAYS (a)	HEATING AND COOLING DEGREE-DAYS (a)		HEATING AND COOLING DEGREE-DAYS (a)
		Three months ended				Three months ended						Nine months ended
		March 31,				September 30,						September 30,
				2023	2022		change	% change			2023	2022	change	% change		2023	2022	change	% change
Actual	Actual									Actual
Heating degree-days	Heating degree-days			2,223	2,756		(533)	(19.3)	%	Heating degree-days	17	66	(49)	(74)	%	2,733	3,339	(606)	(18.1)	%
Cooling degree-days	Cooling degree-days			—	—		—	—	%	Cooling degree-days	722	810	(88)	(11)	%	948	1,192	(244)	(20.5)	%

30-year average (b)	30-year average (b)									30-year average (b)
Heating degree-days	Heating degree-days			2,812	2,836					Heating degree-days	70	74				3,431	3,464
Cooling degree-days	Cooling degree-days			2	2					Cooling degree-days	684	684				992	993

(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)	ELECTRIC SALES AND CUSTOMERS (a)		ELECTRIC SALES AND CUSTOMERS (a)
		Three months ended				Three months ended						Nine months ended
		March 31,				September 30,						September 30,
				2023	2022		change	% change			2023	2022	change	% change		2023	2022	change	% change
Retail electric sales (b)	Retail electric sales (b)									Retail electric sales (b)
Residential	Residential			1,374	1,571		(197)	(12.5)	%	Residential	1,359	1,397	(38)	(2.7)	%	3,793	4,161	(368)	(8.8)	%
Commercial	Commercial			839	867		(28)	(3.2)	%	Commercial	996	998	(2)	(0.2)	%	2,687	2,752	(65)	(2.4)	%
Industrial	Industrial			855	894		(39)	(4.4)	%	Industrial	946	946	—	—	%	2,695	2,768	(73)	(2.6)	%
Governmental	Governmental			278	284		(6)	(2.1)	%	Governmental	323	322	1	0.3	%	881	898	(17)	(1.9)	%
Other	Other			12	5		7	140.0	%	Other	11	11	—	—	%	32	26	6	23.1	%
Total retail electric sales	Total retail electric sales			3,358	3,621		(263)	(7.3)	%	Total retail electric sales	3,635	3,674	(39)	(1.1)	%	10,088	10,605	(517)	(4.9)	%
Wholesale electric sales (c)	Wholesale electric sales (c)			111	139		(28)	(20.1)	%	Wholesale electric sales (c)	118	144	(26)	(18.1)	%	336	421	(85)	(20.2)	%
Total electric sales	Total electric sales			3,469	3,760		(291)	(7.7)	%	Total electric sales	3,753	3,818	(65)	(1.7)	%	10,424	11,026	(602)	(5.5)	%

Billed electric customers (end of period)	Billed electric customers (end of period)			537,108	535,112		1,996	0.4	%	Billed electric customers (end of period)						537,997	535,355	2,642	0.5	%

(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 ~~913~~659 kWh and ~~1,222~~2,211 kWh and 1,028 kWh and 3,248 kWh for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022, respectively.

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

4447

~~Table of Contents~~

The following ~~chart shows~~charts show the percentage changes in weather-normalized and actual retail electric sales volumes by customer class for the three and nine months ended ~~March 31,~~September 30, 2023 compared to the same ~~period~~periods in the prior year:

During the three months ended ~~March 31,~~September 30, 2023, ~~Revenues increased $40.8~~revenue decreased $37.9 million to ~~$240.1~~$224.2 million compared to ~~$199.3~~$262.1 million in the same period of the prior year, and, during the nine months ended September 30, 2023, revenue increased $14.0 million to $666.3 million compared to $652.3 million in the same period of the prior year. ~~This change was~~These changes were primarily the result of changes in the components of revenue shown below:

~~Three months ended~~


	Three months ended		Nine months ended
	September 30,		September 30,
$ in millions	2023 vs. 2022		2023 vs. 2022
Retail
Rate
Increase / (decrease) in Competitive Bid Revenue Rate Rider	$	(32.5)	$	47.4
Increase due to the USF Revenue Rate Rider	8.1		21.7

Increase in Infrastructure Investment Rider	1.5		3.7
Increase / (decrease) due to the Storm Rider	(0.3)		2.9
Increase due to the Distribution Investment Rider, which was effective with the approval of ESP 4	1.2		1.2
Increase / (decrease) due to the TCRR Rider	1.9		(9.5)

Other	4.9		3.2
Net change in retail rate	(15.2)		70.6

Volume
Net decrease in demand primarily driven by weather	(15.4)		(46.9)

Other miscellaneous	0.4		1.0
Total retail change	(30.2)		24.7




Wholesale revenue
Decrease primarily due to lower rates and volumes on power sales at OVEC	(9.2)		(20.7)


RTO ancillary and capacity revenue
Increase primarily due to higher transmission formula rates in the current year	5.5		18.9



Miscellaneous
Decrease due to the Legacy Generation Resource Rider	(4.0)		(8.9)
Net change in Revenue	$	(37.9)	$	14.0

~~March 31,~~

~~$ in millions~~

~~2023 vs. 2022~~

~~Retail~~

~~Rate~~

~~Increase in Competitive Bid Revenue Rate Rider~~

~~56.4~~

~~Increase due to the USF Revenue Rate Rider~~

~~7.0~~

~~Decrease due to the TCRR Rider~~

~~(7.7)~~

~~Other~~

~~3.0~~

~~Net change in retail rate~~

~~58.7~~

~~Volume~~

~~Net decrease in demand primarily driven by weather~~

~~(16.8)~~

~~Other miscellaneous~~

~~0.2~~

~~Total retail change~~

~~42.1~~

~~Wholesale~~

~~Decrease primarily due to lower rates and volumes on power sales at OVEC~~

~~(3.8)~~

~~RTO ancillary and capacity revenues~~

~~Increase primarily due to higher transmission formula rates in the current year~~

~~3.3~~

~~Other~~

~~Miscellaneous revenues~~

~~(0.8)~~

~~Net change in Revenues~~

~~40.8~~

4549

~~Table of Contents~~

DPL – Net Purchased Power

During the three months ended ~~March 31,~~September 30, 2023, ~~Net~~net purchased power ~~increased $31.4~~decreased $113.0 million to ~~$122.2~~$67.2 million compared to ~~$90.8~~$180.2 million in the same period of the prior year, and, during the nine months ended September 30, 2023, net purchased power decreased $84.7 million to $276.9 million compared to $361.6 million in the same period of the prior year. ~~This change was~~These changes were primarily the result of changes in the cost of purchased power shown below.

~~Three months ended~~

~~March 31,~~

~~$ in millions~~

~~2023 vs. 2022~~

~~Net purchased power~~

~~Purchased power~~

~~Rate~~

~~Increase primarily due to higher prices in the competitive bid auction~~

~~55.4~~

~~Volume~~

~~Decrease primarily due to lower retail SSO load served due to demand and decreased SSO customers~~

~~(15.7)~~

~~Total purchased power change~~

~~39.7~~

~~RTO charges~~

~~Decrease primarily due to lower TCRR rates~~

~~(8.3)~~

~~Net change in purchased power~~

~~31.4~~


	Three months ended		Nine months ended
	September 30,		September 30,
$ in millions	2023 vs. 2022		2023 vs. 2022
Net purchased power
Purchased power
Rate
For the three months ended, the decrease was primarily due to the deferral of purchased power costs, which were recognized in the prior year, associated with the approval of ESP 4 and lower prices in the competitive bid process. For the nine months ended, the increase was primarily due to higher prices in the competitive bid process, partially offset by the deferral of purchased power costs, which were recognized in the prior year, associated with the approval of ESP 4.	$	(67.5)	$	10.5


Volume
Decrease primarily due to lower retail SSO load served due to demand driven by weather and decreased SSO customers	(46.5)		(84.3)
Total purchased power change	(114.0)		(73.8)

RTO charges
Increase / (decrease) primarily due to changes in TCRR rates	1.0		(10.9)




Net change in purchased power	$	(113.0)	$	(84.7)

DPL – Operation and Maintenance

During the three and nine months ended ~~March 31,~~September 30, 2023, Operation and maintenance expense increased ~~$13.2~~$7.8 million and $38.0 million, respectively, compared to the same ~~period~~periods in the prior year. The main drivers of ~~this change~~these changes are as follows:

~~Three months ended~~

~~March 31,~~

~~$ in millions~~

~~2023 vs. 2022~~

~~Increase in uncollectible expenses, including the SGF and low-income payment program, which is funded by the USF Revenue Rate Rider~~ ~~(a)~~

~~7.0~~

~~Increase in deferred storm costs~~ ~~(a)~~

~~2.0~~

~~Increase in salaries and wages expense~~

~~1.9~~

~~Increase in charges from Service Company~~

~~1.8~~

~~Other, net~~

~~0.5~~

~~Net change in operation and maintenance expense~~

~~13.2~~


	Three months ended		Nine months ended
	September 30,		September 30,
$ in millions	2023 vs. 2022		2023 vs. 2022
Increase in uncollectible expenses, including the SGF and low-income payment program, which is funded by the USF Revenue Rate Rider (a)	$	8.1	$	21.7
Increase in charges from Service Company	1.3		5.0
Increase / (decrease) in contracted services expenses primarily due to overhead distribution line maintenance, including tree trimming	(2.6)		4.1
Increase / (decrease) in deferred storm costs (a)	(0.3)		2.9
Increase in Smart Grid O&M amortization (a)	1.4		2.5
Other, net	(0.1)		1.8
Net change in operation and maintenance expense	$	7.8	$	38.0

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

DPL – Taxes Other Than Income Taxes

During the three and nine months ended ~~March 31,~~September 30, 2023, Taxes other than income taxes increased ~~$3.5~~$4.8 million and $13.8 million, respectively, compared to the same periods 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 and nine months ended ~~March 31,~~September 30, 2023, Interest expense, ~~increased $2.6~~net decreased $10.3 million and $4.9 million, respectively, compared to the same ~~period~~periods in the prior year. The ~~increase~~decrease was primarily the result of the deferral of carrying costs with the approval of ESP 4, partially offset by the issuance of additional debt at AES Ohio in the second quarter of 2023 and 2022.

DPL – Other Income, Net

During the three months ended ~~March 31,~~September 30, 2023, Other income, ~~increased $1.4~~net decreased $0.2 million compared to the same period in the prior year. The ~~increase~~decrease was primarily ~~the result of higher gains on the~~driven by lower AFUDC, partially offset by Master Trust ~~assets~~asset performance.

During the nine months ended September 30, 2023, Other income, net increased $2.7 million compared to the same period in the ~~current year.~~prior year, driven by Master Trust asset performance.

DPL – Income Tax Expense / (Benefit)

Income tax expense was ~~$1.1~~$9.6 million during the three months ended ~~March 31,~~September 30, 2023 compared to ~~income tax~~a benefit of ~~$3.7~~$4.1 million during the three months ended ~~March 31,~~September 30, 2022. Income tax expense was $5.3 million during the nine months ended September 30, 2023 compared to a benefit of $8.6 million during the nine months ended September 30, 2022. The ~~change was~~changes were primarily due to ~~a higher estimated effective~~income before income tax ~~rate~~ in the current year versus a loss before income tax in the prior ~~year as a result of the reversal of excess deferred items as a percentage of pre-tax book income.~~

~~Table of Contents~~

year.

See Note ~~6 – INCOME TAXES~~6. Income Taxes in the Notes to 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 –~~ 1. Overview and Summary of Significant Accounting Policies of Notes to DPL's Condensed Consolidated Financial Statements for further information on AES Ohio. The “Other” nonutility category primarily includes interest expense, net, 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~~PART I, ~~Item 1,~~ITEM 1., Note ~~10 – BUSINESS SEGMENTS~~10. Business Segments of Notes to DPL's Condensed Consolidated Financial Statements for ~~additional~~more information regarding DPL’s reportable segment.

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


		Three months ended					Three months ended				Nine months ended
		March 31,					September 30,				September 30,
$ in millions	$ in millions		2023		2022			$ in millions	2023		2022		2023		2022
Utility	Utility		$	10.9	$	19.6		Utility	$	55.1	$	(15.6)	$	64.1	$	11.3

Other	Other		(8.6)		(7.9)			Other	(6.9)		(8.2)		(24.2)		(24.0)
Income before income tax (a)			$	2.3	$	11.7
Income / (loss) before income tax (a)								Income / (loss) before income tax (a)	$	48.2	$	(23.8)	$	39.9	$	(12.7)

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~~PART I, ~~Item 2,~~ITEM 2., Management's Discussion and Analysis of Financial Condition and Results of Operations (RESULTS OF OPERATIONS – AES Ohio) of this Form 10-Q.

4751

~~Table of Contents~~

RESULTS OF OPERATIONS – AES Ohio


		Three months ended					Three months ended								Nine months ended
		March 31,					September 30,								September 30,
$ in millions	$ in millions		2023		2022			$ change		% change		$ in millions	2023		2022		$ change		% change		2023		2022		$ change		% change
Revenues:
REVENUE:												REVENUE:
Retail	Retail		$	212.9	$	170.8		$	42.1	24.6	%	Retail	$	197.1	$	227.3	$	(30.2)	(13.3)	%	$	581.5	$	556.8	$	24.7	4.4	%
Wholesale	Wholesale		3.8		7.7			(3.9)		(50.6)	%	Wholesale	4.2		13.4		(9.2)		(68.7)	%	11.3		32.1		(20.8)		(64.8)	%
RTO ancillary	RTO ancillary		19.7		15.1			4.6		30.5	%	RTO ancillary	21.4		16.2		5.2		32.1	%	65.7		46.2		19.5		42.2	%
Capacity revenues			0.5		1.8			(1.3)		(72.2)	%
Miscellaneous revenues			0.9		1.6			(0.7)		(43.8)	%
Total revenues			237.8		197.0			40.8		20.7	%
Capacity revenue												Capacity revenue	0.7		0.5		0.2		40.0	%	3.2		3.8		(0.6)		(15.8)	%
Miscellaneous revenue												Miscellaneous revenue	(1.4)		2.5		(3.9)		(156.0)	%	(2.2)		6.7		(8.9)		(132.8)	%
Total revenue												Total revenue	222.0		259.9		(37.9)		(14.6)	%	659.5		645.6		13.9		2.2	%

Operating costs and expenses:
OPERATING COSTS AND EXPENSES:												OPERATING COSTS AND EXPENSES:

Purchased power:	Purchased power:											Purchased power:
Purchased power	Purchased power		105.8		66.1			39.7		60.1	%	Purchased power	47.9		161.8		(113.9)		(70.4)	%	225.7		299.4		(73.7)		(24.6)	%
RTO charges	RTO charges		16.2		24.4			(8.2)		(33.6)	%	RTO charges	19.3		18.0		1.3		7.2	%	50.7		61.2		(10.5)		(17.2)	%

Net purchased power cost	Net purchased power cost		122.0		90.5			31.5		34.8	%	Net purchased power cost	67.2		179.8		(112.6)		(62.6)	%	276.4		360.6		(84.2)		(23.3)	%

Operation and maintenance	Operation and maintenance		53.2		40.2			13.0		32.3	%	Operation and maintenance	56.7		48.2		8.5		17.6	%	169.1		131.3		37.8		28.8	%
Depreciation and amortization	Depreciation and amortization		19.4		19.2			0.2		1.0	%	Depreciation and amortization	20.3		19.8		0.5		2.5	%	59.9		58.7		1.2		2.0	%
Taxes other than income taxes	Taxes other than income taxes		25.5		21.9			3.6		16.4	%	Taxes other than income taxes	25.2		20.4		4.8		23.5	%	77.3		63.4		13.9		21.9	%

Gain on disposal of business	Gain on disposal of business		—		(0.6)			0.6		(100.0)	%	Gain on disposal of business	—		—		—		—	%	—		(0.6)		0.6		(100.0)	%

Total operating costs and expenses	Total operating costs and expenses		220.1		171.2			48.9		28.6	%	Total operating costs and expenses	169.4		268.2		(98.8)		(36.8)	%	582.7		613.4		(30.7)		(5.0)	%

Operating income			17.7		25.8			(8.1)		(31.4)	%
Operating income / (loss)												Operating income / (loss)	52.6		(8.3)		60.9		(733.7)	%	76.8		32.2		44.6		138.5	%

Other expense, net:
Interest expense			(8.3)		(5.9)			(2.4)		40.7	%
OTHER INCOME / (EXPENSE), NET:												OTHER INCOME / (EXPENSE), NET:
Interest expense, net												Interest expense, net	1.3		(8.4)		9.7		(115.5)	%	(16.7)		(21.1)		4.4		(20.9)	%

Other income / (expense)			1.5		(0.3)			1.8		(600.0)	%
Total other expense, net			(6.8)		(6.2)			(0.6)		9.7	%
Other income, net												Other income, net	1.2		1.1		0.1		9.1	%	4.0		0.2		3.8		1,900.0	%
Total other income / (expense), net												Total other income / (expense), net	2.5		(7.3)		9.8		(134.2)	%	(12.7)		(20.9)		8.2		(39.2)	%

Income before income tax (a)			$	10.9	$	19.6		$	(8.7)	(44.4)	%
INCOME / (LOSS) BEFORE INCOME TAX (a)												INCOME / (LOSS) BEFORE INCOME TAX (a)	$	55.1	$	(15.6)	$	70.7	(453.2)	%	$	64.1	$	11.3	$	52.8	467.3	%

(a)For purposes of discussing operating results, we present and discuss Income / (loss) 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 – ~~Revenues~~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 ~~revenues~~revenue are affected by regulated rates and riders including the changes to our ESP described in Note ~~2 - REGULATORY MATTERS~~2. Regulatory Matters of our Form 10-K and Note 2 – ~~REGULATORY MATTERS~~Regulatory Matters of Notes to AES Ohio's Condensed Financial Statements.

4852

~~Table of Contents~~

During the three months ended ~~March 31,~~September 30, 2023, ~~Revenues increased $40.8~~revenue decreased $37.9 million to ~~$237.8~~$222.0 million compared to ~~$197.0~~$259.9 million in the same period of the prior year, and, during the nine months ended September 30, 2023, revenue increased $13.9 million to $659.5 million compared to $645.6 million in the same period of the prior year. ~~This change was~~These changes were primarily the result of changes in the components of revenue shown below:

~~Three months ended~~

~~March 31,~~

~~$ in millions~~

~~2023 vs. 2022~~

~~Retail~~

~~Rate~~

~~Increase in Competitive Bid Revenue Rate Rider~~

~~56.4~~

~~Increase due to the USF Revenue Rate Rider~~

~~7.0~~

~~Decrease due to the TCRR Rider~~

~~(7.7)~~

~~Other~~

~~3.0~~

~~Net change in retail rate~~

~~58.7~~

~~Volume~~

~~Net decrease in demand primarily driven by weather~~

~~(16.8)~~

~~Other miscellaneous~~

~~0.2~~

~~Total retail change~~

~~42.1~~

~~Wholesale~~

~~Decrease primarily due to lower rates and volumes on power sales at OVEC~~

~~(3.9)~~

~~RTO ancillary and capacity revenues~~

~~Increase primarily due to higher transmission formula rates in the current year~~

~~3.3~~

~~Other~~

~~Miscellaneous revenues~~

~~(0.7)~~

~~Net change in revenues~~

~~40.8~~


	Three months ended		Nine months ended
	September 30,		September 30,
$ in millions	2023 vs. 2022		2023 vs. 2022
Retail
Rate
Increase / (decrease) in Competitive Bid Revenue Rate Rider	$	(32.5)	$	47.4
Increase due to the USF Revenue Rate Rider	8.1		21.7

Increase in Infrastructure Investment Rider	1.5		3.7
Increase / (decrease) due to the Storm Rider	(0.3)		2.9
Increase due to the Distribution Investment Rider, which was effective with the approval of ESP 4	1.2		1.2
Increase / (decrease) due to the TCRR Rider	1.9		(9.5)

Other	4.9		3.2
Net change in retail rate	(15.2)		70.6

Volume
Net decrease in demand primarily driven by weather	(15.4)		(46.9)

Other miscellaneous	0.4		1.0
Total retail change	(30.2)		24.7




Wholesale revenue
Decrease primarily due to lower rates and volumes on power sales at OVEC	(9.2)		(20.8)


RTO ancillary and capacity revenue
Increase primarily due to higher transmission formula rates in the current year	5.4		18.9



Miscellaneous
Decrease due to the Legacy Generation Resource Rider	(3.9)		(8.9)
Net change in revenue	$	(37.9)	$	13.9

AES Ohio – Net Purchased Power

During the three months ended ~~March 31,~~September 30, 2023, net purchased power ~~increased $31.5~~decreased $112.6 million to ~~$122.0~~$67.2 million compared to ~~$90.5~~$179.8 million in the same period of the prior year, and, during the nine months ended September 30, 2023, net purchased power decreased $84.2 million to $276.4 million compared to $360.6 million in the same period of the prior year. ~~This change was~~These changes were primarily the result of changes in the cost of purchased power shown below.

~~Three months ended~~

~~March 31,~~

~~$ in millions~~

~~2023 vs. 2022~~

~~Net purchased power~~

~~Purchased power~~

~~Rate~~

~~Increase primarily due to higher prices in the competitive bid auction~~

~~55.4~~

~~Volume~~

~~Decrease primarily due to lower retail SSO load served due to demand and decreased SSO customers~~

~~(15.7)~~

~~Total purchased power change~~

~~39.7~~

~~RTO charges~~

~~Decrease primarily due to lower TCRR rates~~

~~(8.2)~~

~~Net change in purchased power~~

~~31.5~~


	Three months ended		Nine months ended
	September 30,		September 30,
$ in millions	2023 vs. 2022		2023 vs. 2022
Net purchased power
Purchased power
Rate
For the three months ended, the decrease was primarily due to the deferral of purchased power costs, which were recognized in the prior year, associated with the approval of ESP 4 and lower prices in the competitive bid process. For the nine months ended, the increase was primarily due to higher prices in the competitive bid process, partially offset by the deferral of purchased power costs, which were recognized in the prior year, associated with the approval of ESP 4.	$	(67.5)	$	10.5


Volume
Decrease primarily due to lower retail SSO load served due to demand driven by weather and decreased SSO customers	(46.4)		(84.2)
Total purchased power change	(113.9)		(73.7)

RTO charges
Increase / (decrease) primarily due to changes in TCRR rates	1.3		(10.5)




Net change in purchased power	$	(112.6)	$	(84.2)

~~Table of Contents~~

AES Ohio – Operation and Maintenance

During the three and nine months ended ~~March 31,~~September 30, 2023, Operation and Maintenance expense increased ~~$13.0~~$8.5 million and $37.8 million, respectively, compared to the same ~~period~~periods in the prior year. The main drivers of ~~this change~~these changes are as follows:

~~Three months ended~~

~~March 31,~~

~~$ in millions~~

~~2023 vs. 2022~~

~~Increase in uncollectible expenses, including the SGF and low-income payment program, which is funded by the USF Revenue Rate Rider~~ ~~(a)~~

~~7.0~~

~~Increase in deferred storm costs~~ ~~(a)~~

~~2.0~~

~~Increase in salaries and wages expense~~

~~1.9~~

~~Increase in charges from Service Company~~

~~1.7~~

~~Other, net~~

~~0.4~~

~~Net change in operation and maintenance expense~~

~~13.0~~


	Three months ended		Nine months ended
	September 30,		September 30,
$ in millions	2023 vs. 2022		2023 vs. 2022
Increase in uncollectible expenses, including the SGF and low-income payment program, which is funded by the USF Revenue Rate Rider (a)	$	8.1	$	21.7
Increase in charges from Service Company	1.9		5.5
Increase / (decrease) in contracted services expenses primarily due to overhead distribution line maintenance, including tree trimming	(2.7)		3.8
Increase in deferred storm costs (a)	(0.3)		2.9
Increase / (decrease) in Smart Grid O&M amortization (a)	1.4		2.5
Other, net	0.1		1.4
Net change in operation and maintenance expense	$	8.5	$	37.8

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

AES Ohio – Taxes Other Than Income Taxes

During the three and nine months ended ~~March 31,~~September 30, 2023, Taxes other than income taxes increased ~~$3.6~~$4.8 million and $13.9 million, respectively, compared to the same periods in the prior year. The ~~increase was~~increases were primarily the result of higher property taxes due to higher assessed values in the current year.

AES Ohio – Interest Expense, Net

During the three and nine months ended ~~March 31,~~September 30, 2023, Interest expense, ~~increased $2.4~~net decreased $9.7 million and $4.4 million, respectively, compared to the same ~~period~~periods in the prior year. The ~~increase~~decrease was primarily the result of the deferral of carrying costs with the approval of ESP 4, partially offset by the issuance of additional debt in the second quarter of 2023 and 2022.

AES Ohio – Other Income, ~~/ (Expense)~~Net

During the three and nine months ended ~~March 31,~~September 30, 2023, Other income ~~/ (expense)~~ increased ~~$1.8~~$0.1 million and $3.8 million, respectively, compared to the same periods in the prior year. The ~~increase was primarily the result of higher gains on the~~increases were driven by lower defined benefit plan costs and Master Trust ~~assets in the current year.~~asset performance, partially offset by lower AFUDC.

AES Ohio – Income Tax Expense / (Benefit)

~~During~~Income tax expense was $11.5 million during the three months ended ~~March 31,~~September 30, 2023 compared to a benefit of $5.5 million during the three months ended September 30, 2022. Income tax expense ~~decreased $1.4~~was $11.3 million during the nine months ended September 30, 2023 compared to a benefit of $2.8 million during the ~~same period~~nine months ended September 30, 2022. The changes were primarily due to income before income tax in the current year versus a loss before income tax in the prior ~~year primarily due to the decrease in income before income tax.~~year.

See Note ~~5 – INCOME TAXES~~5. Income Taxes of Notes to AES Ohio's Condensed Financial Statements for further discussion.

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KEY TRENDS AND UNCERTAINTIES

During 2023 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 –~~1. Business and Item ~~1A –~~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~~PART I, ~~Item 2~~ –ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations – Capital Resources and Liquidity of this Form 10-Q.

~~COVID-19 Pandemic~~ – The COVID-19 pandemic has impacted global economic activity, including electricity and energy consumption, and caused significant volatility in financial markets intermittently in the last three years. Throughout the COVID-19 pandemic we have conducted our essential operations without significant disruption. We take a variety of measures to ensure our ability to transmit, distribute and sell electric energy, to ensure the health and safety of our employees, contractors, customers and communities and to provide essential services to the communities in which we operate.

While we continue to experience some COVID-19 impacts, such impacts have not been material nor do we expect they will be material. The magnitude and duration of the COVID-19 pandemic is unknown at this time. Also see Item 1A – ~~Risk Factors~~ ~~of our Form 10-K.~~

Macroeconomic and Political

U.S. Income Tax – The macroeconomic and political environments in the U.S. have changed during 2022 and 2023. This could result in significant impacts to tax law. On August 16, 2022, the Inflation Reduction Act of 2022 was signed into U.S. law. We are currently evaluating the applicability and effect of the new law.

Bipartisan Infrastructure Law (Infrastructure Investment and Jobs Act) – In November 2021, President Biden signed into law the Infrastructure Investment and Jobs Act, which provides for approximately $1.2 trillion of federal spending over the next five years across the United States. The BIL’s energy-related provisions include new federal funding for power grid infrastructure and resiliency investments, new and existing energy efficiency and weatherization programs, electric vehicle infrastructure for public chargers and additional Low Income Home Energy Assistance Program funding. AES Ohio has identified potential opportunities associated with the BIL and is actively submitting concept papers and grants for those that align with its strategy going forward.

Inflation – In the markets in which we operate, there have been higher rates of inflation recently. If inflation ~~continues to increase~~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.

~~Reference Rate Reform~~Interest Rates – ~~As discussed~~In the U.S. there has been a rise in ~~Item 7 -~~ ~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~,interest rates recently. From July 1 to September 30, 2023, the yield on 10-year U.S. Treasury Notes rose from 3.84% to 4.57%. Although all of our ~~Form 10-K,~~existing DPL and AES Ohio long-term debt is at fixed rates, an increase in ~~July 2017,~~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 United Kingdom Financial Conduct Authority announced that it intends to phase out LIBOR. In the U.S., the Alternative Reference Rate Committee at the Federal Reserve identified the SOFR as its preferred alternative rate for LIBOR; alternative reference rates in other key markets are under development. The ICE Benchmark Association ("IBA") has determined that it will cease publication of the one-month, three-month, six-month, and 12-month USD LIBOR rates by June 30, 2023. The AES Ohio Credit ~~Agreement has been transitioned off of LIBOR~~Agreement. For future debt financings, DPL manages a hedging program to help reduce uncertainty and ~~while the DPL Credit Agreement continues~~exposure to ~~use~~

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~~LIBOR as the~~future interest ~~rate benchmark, we expect that the DPL Credit Agreement will be retired on or before June 30, 2023.~~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 2022 Form 10-K and Forms 10-Q previously filed with the SEC during 2023 ~~describes~~describe other regulatory matters, which have not materially changed since ~~that filing.~~those filings.

Distribution Rate Case – On December 14, 2022, the PUCO issued an order on AES Ohio's pending distribution rate case application. Among other matters, the order ~~establishes~~established a revenue increase of $75.6 million for AES Ohio’s base rates for electric distribution ~~service, which is expected to go~~service. These rates went into effect ~~when~~on September 1, 2023 with the approval of AES ~~Ohio has a new electric security plan in place.~~Ohio's ESP 4.

ESP 4 – On April 10, 2023, AES Ohio entered into a Stipulation and Recommendation with the PUCO Staff and seventeen parties (the “Settlement”) with respect to AES Ohio’s ESP 4 application, ~~pending at~~and, on August 9, 2023, the ~~PUCO. The~~PUCO approved the Settlement ~~is subject to, and conditioned upon, approval by the PUCO.~~without modification. The Settlement provides for a three-year ~~ESP without a rate stability charge.~~ESP.

See ~~Part~~PART I, ~~Item 1,~~ITEM 1., Note ~~2 – REGULATORY MATTERS~~2. Regulatory Matters of Notes to DPL's Condensed Consolidated Financial Statements and ~~Part~~PART I, ~~Item 1,~~ITEM 1., Note ~~2 – REGULATORY MATTERS~~2. Regulatory Matters of Notes to 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’s retirement and subsequent sale of its Stuart and Killen~~DPL now not directly owning or operating any generating stations, ~~the sale of its ownership interest in the Miami Fort and Zimmer generating stations and the retirement and subsequent sale of Conesville,~~ 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.

Regulation of CCR - On October 19, 2015, an EPA rule regulating CCR under the Resource Conservation and Recovery Act as nonhazardous solid waste became effective ("CCR Rule"). The rule established nationally applicable minimum criteria for the disposal of CCR in new and currently operating landfills and surface impoundments, including location restrictions, design and operating criteria, groundwater monitoring, corrective action and closure requirements and post-closure care. The 2016 Water Infrastructure Improvements for the Nation Act ("WIIN Act"), includes provisions to implement the CCR Rule through a state permitting program, or if the state chooses not to participate, a possible federal permit program.

The EPA has indicated that they will implement a phased approach to amending the CCR ~~Rule.~~Rule, which is ongoing. On February 20, 2020, the EPA published a proposed rule to establish a federal CCR permit program that would operate in states without approved CCR permit programs. The EPA has indicated that they will implement a phased approach to amending the CCR rule, which is ongoing. With the sale of our coal-fired generating stations, we expect that the impact of these regulations would be limited to our interest in OVEC. The CCR Rule, current or proposed amendments to the CCR Rule, the results of groundwater monitoring data or the outcome of CCR-related litigation could have a material adverse effect on our results of operations, financial condition and cash flows.

On August 28, 2020, the EPA published the CCR Part A Rule that, among other amendments, required certain CCR units to cease waste receipt and initiate closure by April 11, 2021. The CCR Part A Rule also allowed for extensions of the April 11, 2021 deadline if the EPA determines certain criteria are met. Facilities seeking such an extension

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were required to submit a demonstration to the EPA by November 30, 2020. On January 11, 2022, the EPA released its first in a series of proposed determinations regarding nine CCR Part A Rule demonstrations, including for OVEC’s Clifty Creek, and four compliance-related letters notifying certain other facilities of their compliance obligations under the federal CCR regulations. On April 8, 2022, petitions for review were filed challenging these

EPA actions. The petitions are consolidated in Electric Energy, Inc. v. EPA. It is too early to determine the direct or indirect impact of these letters or any determinations that may be made.

On May 18, 2023, EPA published a proposed rule that would expand the scope of CCR units regulated by the CCR Rule to include inactive surface impoundments at inactive generating facilities as well as additional inactive and closed landfills and certain other accumulations of CCR. We are still reviewing the proposal and it is too early to determine the potential impact.

With the sale of our coal-fired generating stations, we expect that the impact of these regulations would be limited to our interest in OVEC. The CCR Rule, current or proposed amendments to the CCR Rule, the results of groundwater monitoring data or the outcome of CCR-related litigation could have a material adverse effect on our results of operations, financial condition and cash flows.

Clean Water Act – Regulation of Water Discharge -~~In June 2015, the EPA and the U.S. Army Corps~~ The concept of ~~Engineers (the "Agencies") published a rule defining federal jurisdiction over waters of the U.S., known as~~ the "Waters of the U.S." ("WOTUS") ~~rule. This rule, which initially became effective~~ in ~~August 2015, could expand~~the CWA and associated rules defines the geographic reach and authority of the U.S. Army Corps of Engineers and the EPA (together, the "Agencies") to regulate streams, wetlands, and other water bodies under the CWA. There have been multiple Supreme Court decisions and dueling regulatory definitions over the past several years concerning the proper standard for how to properly determine whether a wetland or ~~otherwise change~~stream that is not navigable is considered a WOTUS. On May 25, 2023, the ~~number and types~~U.S. Supreme Court rendered a decision (the "Decision") in the case of waters or features subject to CWA permitting. However, after repealing the 2015 WOTUS rule on October 22, 2019, the Agencies, on April 21, 2020, issued the final “Navigable Waters Protection” rule ("NWP Rule") which again revisedSackett v. Environmental Protection Agency, addressing the definition of ~~waters~~WOTUS with regards to the CWA. This Decision standard substantially restricts the Agencies' ability to regulate certain types of ~~the U.S. On August 30, 2021, the U.S. District Court for the District of Arizona issued an order vacating, on~~wetlands and streams. Specifically, under this decision, wetlands that do not have a ~~nationwide basis,~~continuous surface connection with traditional interstate navigable water are not considered a WOTUS and remanding the NWP Rule. The Agencies again interpreted water of the U.S. consistent with the pre-2015 regulatory regime. On January 18, 2023, the Agencies published a final rule restoring regulations such that the waters of the U.S. were defined as they were prior to 2015 but with updates intended to be consistent with relevant prior Supreme Court decisions. On April 12, 2023, the U.S. District Court for the District of North Dakota granted a motion which enjoined the agencies from implementing the 2023 final rule interpretation of the scope of waters of the U.S. As a result, the pre-2015 regulatory regime will apply in a group of states, including Ohio, until further action is taken.therefore are not federally jurisdictional.

~~A U.S. Supreme Court decision related~~On September 8, 2023, the Agencies issued final rule amendments in the Federal Register to ~~waters~~amend the final “Revised Definition of the U.S. also remains pending. On January 24, 2022, the U.S. Supreme Court granted certiorari on a wetlands case (Sackett v. EPA) on the limited question of: “whether the Ninth Circuit set forth the proper test for determining whether wetlands are ‘waters‘Waters of the United States’ ~~under~~” rule. This final rule conforms the ~~Clean Water Act.” The Ninth Circuit employed Justice Kennedy’s “significant nexus” test from his concurring opinion~~definition of WOTUS to the definition adopted in the ~~2006 Rapanos v. United States decision; the plurality opinion in Rapanos required a water body to~~Decision. The Agencies have ~~a “continuous surface connection” with a water~~amended key aspects of the ~~U.S. in order~~regulatory text to ~~be considered a wetland covered by~~conform the ~~CWA. In Sackett v. EPA,~~rule to the ~~Court may finally provide clarity on which of these two tests from the 2006 Rapanos decision controls.~~Decision.

It is too early to determine whether any outcome of litigation or current or future revisions to rules interpreting federal jurisdiction over the waters of the U.S. might have a material adverse effect on our results of operations, financial condition and cash flows.

CAPITAL RESOURCES AND LIQUIDITY

OVERVIEW

DPL and AES Ohio had unrestricted cash and cash equivalents of ~~$21.0~~$49.3 million and ~~$9.4~~$33.0 million, respectively, as of ~~March 31,~~September 30, 2023. 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 ~~$1,552.6~~$1,652.5 million and ~~$722.0~~$821.9 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.

During the nine months ended September 30, 2023, DPL received $260.0 million in cash contributions from AES, which DPL then made as $260.0 million in equity contributions to AES Ohio. The proceeds from these contributions allow AES Ohio to seek to improve its infrastructure and modernize its grid while maintaining liquidity.

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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,					Nine months ended September 30,
$ in millions	$ in millions	2023		2022		$ in millions	2023		2022
Net cash used in operating activities		$	(22.1)	$	(0.2)
Net cash provided by operating activities						Net cash provided by operating activities	$	16.9	$	52.0
Net cash used in investing activities	Net cash used in investing activities	(92.4)		(69.3)		Net cash used in investing activities	(301.8)		(207.8)
Net cash provided by financing activities	Net cash provided by financing activities	105.0		75.0		Net cash provided by financing activities	303.7		173.5
Net change		(9.5)		5.5
Net increase in cash, cash equivalents and restricted cash						Net increase in cash, cash equivalents and restricted cash	18.8		17.7
Balance at beginning of period	Balance at beginning of period	30.6		26.7		Balance at beginning of period	30.6		26.7
Cash, cash equivalents, and restricted cash at end of period	Cash, cash equivalents, and restricted cash at end of period	$	21.1	$	32.2	Cash, cash equivalents, and restricted cash at end of period	$	49.4	$	44.4

The following cash flow review compares the cash flows of DPL for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 to the cash flows for the ~~three~~nine months ended ~~March 31,~~September 30, 2022.

DPL – Net cash from operating activities


		Three months ended March 31,				$ change			Nine months ended September 30,				$ change
$ in millions	$ in millions	2023		2022		2023 vs. 2022		$ in millions	2023		2022		2023 vs. 2022
Net income		$	1.2	$	15.4	$	(14.2)
Net income / (loss)								Net income / (loss)	$	34.6	$	(4.1)	$	38.7
Depreciation and amortization	Depreciation and amortization	19.8		19.5		0.3		Depreciation and amortization	60.9		59.6		1.3
Deferred income taxes	Deferred income taxes	3.7		(0.4)		4.1		Deferred income taxes	20.9		(10.7)		31.6
Gain on disposal of business	Gain on disposal of business	—		(0.6)		0.6		Gain on disposal of business	—		(0.6)		0.6
Net income, adjusted for non-cash items	Net income, adjusted for non-cash items	24.7		33.9		(9.2)		Net income, adjusted for non-cash items	116.4		44.2		72.2
Net change in operating assets and liabilities	Net change in operating assets and liabilities	(46.8)		(34.1)		(12.7)		Net change in operating assets and liabilities	(99.5)		7.8		(107.3)
Net cash used in operating activities		$	(22.1)	$	(0.2)	$	(21.9)
Net cash provided by operating activities								Net cash provided by operating activities	$	16.9	$	52.0	$	(35.1)

The net change in operating assets and liabilities during the ~~three~~nine months ended ~~March 31,~~September 30, 2023, compared to the ~~three~~nine months ended ~~March 31,~~September 30, 2022 was driven by the following:


$ in millions		$ Change
Decrease from current and non-current regulatory assets and liabilities primarily due to the deferral of purchased power costs, which were recognized in the prior year, and additional carrying costs associated with the approval of ESP 4 as well as a decrease in regulatory liabilities as we return certain benefits to customers		$	~~(21.8)~~(123.2)


~~Increase~~Decrease from accounts payable primarily due to the timing of payments		~~6.8~~ (30.7)
Increase from accounts receivable primarily due to the timing of collections		24.8
Increase from accrued and other current liabilities primarily due to the timing of customer and supplier deposits




	14.9
Other		~~2.3~~6.9
Net decrease in cash from changes in operating assets and liabilities		$	~~(12.7)~~(107.3)

DPL – Net cash from investing activities

Net cash used in investing activities increased ~~$23.1~~$94.0 million during the ~~three~~nine months ended ~~March 31,~~September 30, 2023, compared to the ~~three~~nine months ended ~~March 31,~~September 30, 2022, primarily driven by the following:


$ in millions	$ Change
Higher capital expenditures due to increased spending on AES Ohio T&D projects	$	~~(25.0)~~(93.0)
Higher cost of removal payments	(1.3)
Other	~~1.9~~0.3

Net change in investing activities	$	~~(23.1)~~(94.0)

DPL – Net cash from financing activities

Net cash provided by financing activities increased ~~$30.0~~$130.2 million during the ~~three~~nine months ended ~~March 31,~~September 30, 2023, compared to the ~~three~~nine months ended ~~March 31,~~September 30, 2022, primarily driven by the following:


$ in millions		$ Change
Equity contributions from AES		$	239.0
Higher net ~~draws~~repayments on revolving credit facilities		~~30.0~~ (70.0)
Lower issuances of debt at AES Ohio		(40.0)

Other
	1.2
Net change in financing activities		$	~~30.0~~130.2

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Cash Flow Analysis - AES Ohio

The following table summarizes the cash flows of AES Ohio:


		Three months ended March 31,					Nine months ended September 30,
$ in millions	$ in millions	2023		2022		$ in millions	2023		2022
Net cash provided by / (used in) operating activities		$	(13.5)	$	6.2
Net cash provided by operating activities						Net cash provided by operating activities	$	17.8	$	73.3
Net cash used in investing activities	Net cash used in investing activities	(91.8)		(68.7)		Net cash used in investing activities	(299.2)		(205.1)
Net cash provided by financing activities	Net cash provided by financing activities	95.0		66.0		Net cash provided by financing activities	294.7		145.0
Net change		(10.3)		3.5
Net increase in cash, cash equivalents and restricted cash						Net increase in cash, cash equivalents and restricted cash	13.3		13.2
Balance at beginning of period	Balance at beginning of period	19.8		14.5		Balance at beginning of period	19.8		14.5
Cash, cash equivalents, and restricted cash at end of period	Cash, cash equivalents, and restricted cash at end of period	$	9.5	$	18.0	Cash, cash equivalents, and restricted cash at end of period	$	33.1	$	27.7

The following cash flow review compares the cash flows of AES Ohio for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 to the cash flows for the ~~three~~nine months ended ~~March 31,~~September 30, 2022.

AES Ohio – Net cash from operating activities


		Three months ended March 31,				$ change			Nine months ended September 30,				$ change
$ in millions	$ in millions	2023		2022		2023 vs. 2022		$ in millions	2023		2022		2023 vs. 2022
Net income	Net income	$	9.6	$	16.9	$	(7.3)	Net income	$	52.8	$	14.1	$	38.7
Depreciation and amortization	Depreciation and amortization	19.4		19.2		0.2		Depreciation and amortization	59.9		58.7		1.2
Deferred income taxes	Deferred income taxes	1.3		2.0		(0.7)		Deferred income taxes	11.3		(6.9)		18.2
Gain on disposal of business	Gain on disposal of business	—		(0.6)		0.6		Gain on disposal of business	—		(0.6)		0.6
Net income, adjusted for non-cash items	Net income, adjusted for non-cash items	30.3		37.5		(7.2)		Net income, adjusted for non-cash items	124.0		65.3		58.7
Net change in operating assets and liabilities	Net change in operating assets and liabilities	(43.8)		(31.3)		(12.5)		Net change in operating assets and liabilities	(106.2)		8.0		(114.2)
Net cash provided by (used in) operating activities		$	(13.5)	$	6.2	$	(19.7)
Net cash provided by operating activities								Net cash provided by operating activities	$	17.8	$	73.3	$	(55.5)


$ in millions	$ Change
Decrease from current and non-current regulatory assets and liabilities primarily due to the deferral of purchased power costs, which were recognized in the prior year, and additional carrying costs associated with the approval of ESP 4 as well as a decrease in regulatory liabilities as we return certain benefits to customers	$	~~(21.8)~~(123.2)


~~Increase~~Decrease from accounts payable primarily due to the timing of payments	~~7.3~~(30.5)
Increase from accounts receivable primarily due to the timing of collections	25.6
Increase from accrued and other current liabilities primarily due to the timing of customer and supplier deposits	15.1



Other	~~2.0~~ (1.2)
Net decrease in cash from changes in operating assets and liabilities	$	~~(12.5)~~(114.2)

AES Ohio – Net cash from investing activities

Net cash used in investing activities increased ~~$23.1~~$94.1 million during the ~~three~~nine months ended ~~March 31,~~September 30, 2023, compared to the ~~three~~nine months ended ~~March 31,~~September 30, 2022, primarily driven by the following:


$ in millions	$ Change
Higher capital expenditures due to increased spending on AES Ohio T&D projects	$	~~(24.6)~~(92.4)
Higher cost of removal payments	(1.5)
Other	~~1.5~~ (0.2)

Net change in investing activities	$	~~(23.1)~~(94.1)

AES Ohio – Net cash from financing activities

Net cash provided by financing activities increased ~~$29.0~~$149.7 million during the ~~three~~nine months ended ~~March 31,~~September 30, 2023, compared to the ~~three~~nine months ended ~~March 31,~~September 30, 2022, primarily driven by the following:


$ in millions	$ Change
Equity contributions from DPL	$	260.0
Higher net ~~draws~~repayments on revolving credit facilities	~~35.0~~ (55.0)
Lower issuances of debt at AES Ohio	(40.0)
Higher distributions to DPL	~~(6.0)~~(16.0)
Other	0.7
Net change in financing activities	$	~~29.0~~149.7

~~Liquidity~~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

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fund operating expenses, construction expenditures, scheduled debt maturities and carrying costs, taxes and any dividend payments. For 2023 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,~~September 30, 2023, ~~DPL and~~ AES Ohio ~~have~~has access to the following revolving credit facilities:


$ in millions	$ in millions	Type	Maturity	Commitment		Amounts available as of March 31, 2023		$ in millions	Type	Maturity	Commitment		Amounts available as of September 30, 2023
DPL Credit Agreement		Revolving	June 2023	$	40.0	$	10.0
AES Ohio Credit Agreement	AES Ohio Credit Agreement	Revolving	June 2024	250.0		20.0		AES Ohio Credit Agreement	Revolving	December 2027	$	250.0	$	130.0
				$	290.0	$	30.0

~~For~~On June 14, 2023, the DPL Credit Agreement ~~as of March 31, 2023, there were no letters of credit outstanding~~was paid off and ~~$30.0 million in borrowings, with the remaining $10.0 million available to DPL. For more information on the DPL Credit Agreement, see Note 6 – DEBT of our Form 10-K.~~retired.

For the AES Ohio Credit Agreement, as of ~~March 31,~~September 30, 2023, there were ~~$230.0~~$120.0 million in borrowings under the facility, with the remaining ~~$20.0~~$130.0 million available to AES Ohio. For more information on the AES Ohio Credit Agreement, see Note ~~5 – DEBT~~5. Debt of our Form 10-K.

CAPITAL ~~REQUIREMENTS~~EXPENDITURE PROGRAM

Our capital expenditure program, including development and permitting costs, for the three-year period from 2023 through 2025 is currently estimated to cost up to $1.3 billion, and includes estimates as follows:


$ in millions	$ in millions	2023		2024		2025		For the three-year period from 2023 through 2025		$ in millions	2023		2024		2025		For the three-year period from 2023 through 2025
Distribution-related additions, improvements and extensions (a)	Distribution-related additions, improvements and extensions (a)	$	146.0	$	192.0	$	201.0	$	539.0	Distribution-related additions, improvements and extensions (a)	$	146.0	$	192.0	$	201.0	$	539.0
Transmission-related additions and improvements	Transmission-related additions and improvements	156.0		192.0		140.0		488.0		Transmission-related additions and improvements	156.0		192.0		140.0		488.0
Smart Grid improvements and additions	Smart Grid improvements and additions	75.0		66.0		51.0		192.0		Smart Grid improvements and additions	75.0		66.0		51.0		192.0
Other	Other	20.0		6.0		4.0		30.0		Other	41.0		21.0		4.0		66.0
Total for AES Ohio	Total for AES Ohio	397.0		456.0		396.0		1,249.0		Total for AES Ohio	418.0		471.0		396.0		1,285.0

Other subsidiaries	Other subsidiaries	5.0		3.0		2.0		10.0		Other subsidiaries	5.0		3.0		2.0		10.0
Total for DPL	Total for DPL	$	402.0	$	459.0	$	398.0	$	1,259.0	Total for DPL	$	423.0	$	474.0	$	398.0	$	1,295.0

(a) AES Ohio's investments in distribution-related additions, improvements and extensions are dependent on favorable regulatory outcomes.

AES Ohio's projection includes expected spending under its Smart Grid Plan 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 outcomes in its regulatory proceedings. See ~~additional~~more information in Note ~~2 – REGULATORY MATTERS~~2. Regulatory Matters of Notes to DPL's Condensed Consolidated Financial Statements and Note ~~2 – REGULATORY MATTERS~~2. Regulatory Matters of Notes to 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. AES Ohio anticipates spending approximately $39.0 million within the next five years to reinforce its transmission system to comply with mandatory NERC and FERC Form 715 planning requirements. These anticipated costs are included in the overall capital projections above.

Long-term debt covenants

For information regarding our long-term debt covenants, see ~~Part~~PART I, ~~Item 1,~~ITEM 1., Note ~~5 – DEBT~~5. Debt of Notes to DPL's Condensed Consolidated Financial Statements and ~~Part~~PART I, ~~Item 1,~~ITEM 1., Note ~~4 – DEBT~~4. Debt of Notes to AES Ohio's Condensed Financial Statements.

~~Table of Contents~~

Debt and 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.

~~Ba1~~Ba2 (a)

A3Baa1 (b)

~~Negative~~Stable

Standard & Poor's Financial Services LLC

BB (a)

BBB (b)

~~Negative~~Stable

Credit ratings

DPL

AES Ohio

Outlook

Fitch Ratings

BBB-

Stable

Moody's Investors Service, Inc.

~~Ba1~~Ba2

~~Baa2~~Baa3

~~Negative~~Stable

Standard & Poor's Financial Services LLC

~~Negative~~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~~PART I, ~~Item 1,~~ITEM 1., Note ~~9 – COMMITMENTS AND CONTINGENCIES~~9. Commitments and Contingencies of Notes to DPL's Condensed Consolidated Financial Statements and ~~Part~~PART I, ~~Item 1,~~ITEM 1., Note ~~8 – COMMITMENTS AND CONTINGENCIES~~8. Commitments and Contingencies of Notes to AES Ohio's Condensed Financial Statements.

~~Critical Accounting Policies and Estimates~~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, ~~revenues,~~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 ~~revenues;~~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, 2022 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~~nine months ended ~~March 31,~~September 30, 2023.


~~Item 3 – Quantitative and Qualitative Disclosures about Market Risk~~

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.

~~Table of Contents~~


~~Item 4 – Controls and Procedures~~

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,~~September 30, 2023, 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.

5862

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Part II – Other Information


~~Item 1 – Legal Proceedings~~

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, 2022 and Forms 10-Q for the quarters ended March 31, and June 30, 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~~Forms 10-K and 10-Q, and should be read in conjunction with such ~~Form 10-K.~~Forms 10-K and 10-Q.

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


~~Item 1A – Risk Factors~~

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 Sale of Equity Securities and Use of Proceeds~~

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

None


~~Item 3 – Defaults Upon Senior Securities~~

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None


~~Item 4 – Mine Safety Disclosures~~

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.


~~Item 5 – Other Information~~

ITEM 5. OTHER INFORMATION

None

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~~Item 6 – Exhibits~~

ITEM 6. EXHIBITS

DPL

DP&L

Exhibit Number

Exhibit

Location

~~4.1~~

~~54th Supplemental Indenture, dated April 1, 2023, between The Dayton Power and Light Company d/b/a AES Ohio and The Bank of New York Mellon as Trustee~~

~~Exhibit 4.1 to Report on Form 8-K filed April 1~~4 ~~, 2023 (File No. 1-9052)~~

~~10.1~~

~~Stipulation and Recommendation dated April 10, 2023~~

~~Exhibit 10.1 to Report on Form 8-K filed April 10, 2023 (File No. 1-9052)~~

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.

6064

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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 4,~~November 2, 2023	/s/ Ahmed Pasha
		Ahmed Pasha
		Vice President and Chief Financial Officer
		(principal financial officer)

	~~May 4,~~November 2, 2023	/s/ Karin M. ~~Nyhuis~~Mehringer
		Karin M. ~~Nyhuis~~Mehringer
		Controller
		(principal accounting officer)

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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 4,~~November 2, 2023	/s/ Ahmed Pasha
		Ahmed Pasha
		Vice President and Chief Financial Officer
		(principal financial officer)

	~~May 4,~~November 2, 2023	/s/ Karin M. ~~Nyhuis~~Mehringer
		Karin M. ~~Nyhuis~~Mehringer
		Controller
		(principal accounting officer)

6266


$ in millions	Beginning Allowance Balance		Current Period Provision		Write-offs Charged Against Allowances		Recoveries Collected		Ending Allowance Balance
2023	$	0.5	$	0.9	$	(1.1)	$	0.3	$	0.6
2022	$	0.3	$	(0.1)	$	(0.2)	$	0.2	$	0.2