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 ~~June~~September 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

DPL Inc.

(an Ohio corporation)

Commission File Number 1-9052

1065 Woodman Drive

Dayton, Ohio 45432

937-259-7215

IRS Employer Identification No. 31-1163136

THE DAYTON POWER AND LIGHT COMPANY

d/b/a AES Ohio

(an Ohio corporation)

Commission File Number 1-2385

1065 Woodman Drive

Dayton, Ohio 45432

937-259-7215

IRS Employer Identification No. 31-0258470


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

☐

☑

The Dayton Power and Light Company is a voluntary filer. DPL Inc. was a voluntary filer until its Registration Statement on Form S-4 filed with the Securities and Exchange Commission on March 15, 2021 was declared effective on March 31, 2021. 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 ~~August 4,~~November 3, 2021, 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 ~~June~~September 30, 2021


	Table of Contents	Page No.
Glossary of Terms		5
Forward-Looking Statements		6
Part I Financial Information
Item 1	Financial Statements – DPL Inc. and ~~The Dayton Power and Light Company~~AES Ohio (Unaudited)
	DPL Inc.
	Condensed Consolidated Statements of Operations	10
	Condensed Consolidated Statements of Comprehensive Income / (Loss)	11
	Condensed Consolidated Balance Sheets	12
	Condensed Consolidated Statements of Cash Flows	13
	Condensed Consolidated Statements of Shareholder's Deficit	14
	Notes to Unaudited Condensed Consolidated Financial Statements	15
	Note 1 – Overview and Summary of Significant Accounting Policies	15
	Note 2 – Regulatory Matters	18
	Note 3 – Fair Value	18
	Note 4 – Derivative Instruments and Hedging Activities	20
	Note 5 – Long-term Debt	21
	Note 6 – Income Taxes	22
	Note 7 – Benefit Plans	2223
	Note 8 – Shareholder's Deficit	23
	Note 9 – Contractual Obligations, Commercial Commitments and Contingencies	23
	Note 10 – Business Segments	24
	Note 11 – Revenue	26
	Note 12 – Discontinued Operations	28
	Note 13 – Risks and Uncertainties	28


	AES Ohio
	Condensed Statements of Operations	31
	Condensed Statements of Comprehensive Income	32
	Condensed Balance Sheets	33
	Condensed Statements of Cash Flows	34
	Condensed Statements of Shareholder's Equity	35
	Notes to Unaudited Condensed Financial Statements	36
	Note 1 – Overview and Summary of Significant Accounting Policies	36
	Note 2 – Regulatory Matters	38
	Note 3 – Fair Value	39
	Note 4 – Derivative Instruments and Hedging Activities	4140
	Note 5 – Long-term Debt	41
	Note 6 – Income Taxes	42
	Note 7 – Benefit Plans	42
	Note 8 – Shareholder's Equity	43
	Note 9 – Contractual Obligations, Commercial Commitments and Contingencies	44
	Note 10 – Revenue	44
	Note 11 – Risks and Uncertainties


Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	46
Item 3	Quantitative and Qualitative Disclosures about Market Risk	6466
Item 4	Controls and Procedures	6466

Part II Other Information
Item 1	Legal Proceedings	6667
Item 1A	Risk Factors	6667
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	6667
Item 3	Defaults Upon Senior Securities	6667
Item 4	Mine Safety Disclosures	6667
Item 5	Other Information	6667
Item 6	Exhibits	6768
	Signatures	6869

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GLOSSARY OF TERMS

The following terms are used in this Form 10-Q:


Term			Definition
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			$175.0 million AES Ohio Amended and Restated Credit Agreement, dated as of June 19, 2019
AES Ohio Generation			AES Ohio Generation, LLC - a wholly-owned subsidiary of DPL, which previously operated EGUs and made wholesale sales
~~AOCI~~			~~Accumulated Other Comprehensive Income~~
AOCL			Accumulated Other Comprehensive Loss
~~ARO~~			~~Asset Retirement Obligation~~
ASU			Accounting Standards Update
CAA			U.S. Clean Air Act - the congressional act that directs the USEPA’s regulation of stationary and mobile sources of air pollution to protect air quality and stratospheric ozone

Conesville			AES Ohio Generation's interest in Unit 4 at the Conesville EGU. This was sold on June 5, 2020.
COVID-19			The disease caused by the novel coronavirus that resulted in a global pandemic beginning in 2020.
CSAPR			Cross-State Air Pollution Rule - the USEPA's rule to address interstate air pollution transport to decrease emissions to downwind states
DPL			DPL Inc.
DPL Credit Agreement			$105.0 million DPL Inc. Amended and Restated Credit Agreement, dated as of June 19, 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
ERISA			The Employee Retirement Income Security Act of 1974
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. DP&L is currently operating under this ESP 1 plan.
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, 2020, which was filed on February 24, 2021
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 Offering 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 USEPA’s rules for existing and new power plants under Section 112 of the CAA
Merger			The merger of DPL and Dolphin Sub, Inc., a wholly-owned subsidiary of AES. On November 28, 2011, DPL became a wholly-owned subsidiary of AES.
Miami Valley Lighting			Miami Valley Lighting, LLC is a wholly-owned subsidiary of DPL established in 1985 to provide street and outdoor lighting services to customers in the Dayton region. Miami Valley Lighting serves businesses, communities and neighborhoods in West Central Ohio with over 70,000 lighting solutions for more than 190 businesses and 180 local governments.
MVIC			Miami Valley Insurance Company is a wholly-owned insurance subsidiary of DPL that provides insurance services to DPL and its subsidiaries
MW			Megawatt, a unit of power equal to one million watts
NAAQS			National Ambient Air Quality Standards - the USEPA’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
NOx			Nitrogen Oxide - an air pollutant regulated by the NAAQS under the CAA

Table of Contents


GLOSSARY OF TERMS (cont.)

Term			Definition
Ohio EPA			Ohio Environmental Protection Agency
OVEC			Ohio Valley Electric Corporation - an electric generating company in which DP&L holds a 4.9% equity interest
Peaker assets			The generation and related assets for the 586.0 MW Tait combustion turbine and diesel generation facility, the 236.0 MW Montpelier combustion turbine generation facility, the 101.5 MW Yankee combustion turbine generation and solar facility, the 25.0 MW Hutchings combustion turbine generation facility, the 12.0 MW Monument diesel generation facility, and the 12.0 MW Sidney diesel generation facility that were sold on March 27, 2018
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
SERP			Supplemental Executive Retirement Plan
Service Company			AES US Services, LLC - the shared services affiliate providing accounting, finance, and other support services to AES’ U.S. SBU businesses
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
TCJA			The Tax Cuts and Jobs Act of 2017, signed on December 22, 2017
U.S.			United States of America
USEPA			U.S. Environmental Protection Agency
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
U.S. SBU			U.S. and Utilities Strategic Business Unit, AES’ reporting unit covering the businesses in the United States, including DPL
Utility segment			DPL's Utility segment is made up of DP&L’s electric transmission and distribution businesses, which distribute electricity to residential, commercial, industrial and governmental customers

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 laws and requirements;

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

Table of Contents

•the availability of capital;

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

•level of creditworthiness of counterparties to contracts and transactions;

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

•facility or equipment maintenance, repairs and capital expenditures;

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

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

•local economic conditions;

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

•industry restructuring, deregulation and competition;

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

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

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

•cyberattacks and information security breaches;

•the use of derivative contracts;

•catastrophic events such as fires, explosions, terrorist acts, acts of war, pandemic events, including the outbreak of COVID-19, or natural disasters such as floods, earthquakes, tornadoes, severe winds, ice or snowstorms, droughts or other similar occurrences; 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 based. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements.

All of the above factors are difficult to predict, contain uncertainties that may materially affect actual results, and many are beyond our control. See Item 1A - Risk Factors to Part I in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and the “Management's Discussion and Analysis of Financial Condition and Results of Operations” section in such report and in our Quarterly ~~Report~~Reports on Form 10-Q for the ~~quarter~~quarters ended March 31, and June 30, 2021 and this Quarterly Report on Form 10-Q for a more detailed discussion of the foregoing and certain other factors that could cause actual results to differ materially from those reflected in such forward-looking statements and that should be considered in evaluating our outlook. These risks may also be specifically described in our Quarterly Reports on Form 10-Q in Part II - Item 1A, Current Reports on Form 8-K and other documents that we may file from time to time with the SEC.

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

COMPANY WEBSITE

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

Table of Contents


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

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				Six months ended					Three months ended				Nine months ended
		June 30,				June 30,					September 30,				September 30,
$ in millions	$ in millions	2021		2020		2021		2020		$ in millions	2021		2020		2021		2020
Revenues	Revenues	$	148.1	$	155.1	$	323.3	$	326.3	Revenues	$	188.2	$	178.8	$	511.5	$	505.1

Operating costs and expenses	Operating costs and expenses									Operating costs and expenses
Net fuel cost	Net fuel cost	0.1		0.3		0.5		0.9		Net fuel cost	—		0.4		0.5		1.3
Net purchased power cost	Net purchased power cost	53.9		49.2		125.4		112.0		Net purchased power cost	83.9		66.0		209.3		178.0

Operation and maintenance	Operation and maintenance	38.0		43.8		72.8		90.8		Operation and maintenance	40.1		48.0		112.9		138.8
Depreciation and amortization	Depreciation and amortization	18.9		18.5		38.0		36.2		Depreciation and amortization	18.9		18.6		56.9		54.8
Taxes other than income taxes	Taxes other than income taxes	20.7		21.0		41.1		41.9		Taxes other than income taxes	21.0		17.7		62.1		59.6

Total operating costs and expenses	Total operating costs and expenses	131.6		132.8		277.8		281.8		Total operating costs and expenses	163.9		150.7		441.7		432.5

Operating income	Operating income	16.5		22.3		45.5		44.5		Operating income	24.3		28.1		69.8		72.6

Other expense, net:	Other expense, net:									Other expense, net:
Interest expense	Interest expense	(15.6)		(19.4)		(31.2)		(38.3)		Interest expense	(15.8)		(17.1)		(47.0)		(55.4)

Loss on early extinguishment of debt										Loss on early extinguishment of debt	—		(31.7)		—		(31.7)
Other income / (expense)	Other income / (expense)	0.6		0.8		1.1		(0.1)		Other income / (expense)	(0.8)		1.0		0.3		0.9
Total other expense, net	Total other expense, net	(15.0)		(18.6)		(30.1)		(38.4)		Total other expense, net	(16.6)		(47.8)		(46.7)		(86.2)

Income from continuing operations before income tax		1.5		3.7		15.4		6.1
Income / (loss) from continuing operations before income tax										Income / (loss) from continuing operations before income tax	7.7		(19.7)		23.1		(13.6)

Income tax expense from continuing operations		0.9		2.8		0.6		2.7
Income tax benefit from continuing operations										Income tax benefit from continuing operations	(0.8)		(10.4)		(0.2)		(7.7)

Net income from continuing operations		0.6		0.9		14.8		3.4
Net income / (loss) from continuing operations										Net income / (loss) from continuing operations	8.5		(9.3)		23.3		(5.9)

Discontinued operations (Note 12):	Discontinued operations (Note 12):									Discontinued operations (Note 12):
Loss from discontinued operations before income tax		(0.2)		(1.2)		(1.0)		(2.0)
Income / (loss) from discontinued operations before income tax										Income / (loss) from discontinued operations before income tax	—		1.4		(1.0)		(0.6)
Gain from disposal of discontinued operations	Gain from disposal of discontinued operations	0		4.5		0		4.5		Gain from disposal of discontinued operations	—		—		—		4.5
Income tax expense / (benefit) from discontinued operations	Income tax expense / (benefit) from discontinued operations	0		0.7		(0.2)		0.5		Income tax expense / (benefit) from discontinued operations	—		0.3		(0.2)		0.8
Net income / (loss) from discontinued operations	Net income / (loss) from discontinued operations	(0.2)		2.6		(0.8)		2.0		Net income / (loss) from discontinued operations	—		1.1		(0.8)		3.1

Net income		$	0.4	$	3.5	$	14.0	$	5.4
Net income / (loss)										Net income / (loss)	$	8.5	$	(8.2)	$	22.5	$	(2.8)

See Notes to Condensed Consolidated Financial Statements.

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DPL INC.
Condensed Consolidated Statements of Comprehensive Income
DPL Inc.										DPL Inc.
Condensed Consolidated Statements of Comprehensive Income / (Loss)										Condensed Consolidated Statements of Comprehensive Income / (Loss)
(Unaudited)	(Unaudited)									(Unaudited)
		Three months ended				Six months ended					Three months ended				Nine months ended
		June 30,				June 30,					September 30,				September 30,
$ in millions	$ in millions	2021		2020		2021		2020		$ in millions	2021		2020		2021		2020
Net income		$	0.4	$	3.5	$	14.0	$	5.4
Net income / (loss)										Net income / (loss)	$	8.5	$	(8.2)	$	22.5	$	(2.8)
Derivative activity:	Derivative activity:									Derivative activity:
Change in derivative fair value, net of income tax expense of $0.0, $0.0, $0.0 and $0.0 for each respective period	Change in derivative fair value, net of income tax expense of $0.0, $0.0, $0.0 and $0.0 for each respective period	0		0.2		0		(0.1)		Change in derivative fair value, net of income tax expense of $0.0, $0.0, $0.0 and $0.0 for each respective period	—		0.1		—		—
Reclassification to earnings, net of income tax expense of $0.1, $0.0, $0.1 and $0.1 for each respective period		(0.2)		(0.2)		(0.4)		(0.5)
Reclassification to earnings, net of income tax expense of $0.0, $0.0, $0.1 and $0.1 for each respective period										Reclassification to earnings, net of income tax expense of $0.0, $0.0, $0.1 and $0.1 for each respective period	(0.2)		(0.3)		(0.6)		(0.8)

Total derivative activity	Total derivative activity	(0.2)		0		(0.4)		(0.6)		Total derivative activity	(0.2)		(0.2)		(0.6)		(0.8)
Pension and postretirement activity:	Pension and postretirement activity:									Pension and postretirement activity:
Reclassification to earnings, net of income tax benefit of $(0.2), $(0.1), $(0.3) and $(0.1) for each respective period		0.5		0.2		1.0		0.5
Reclassification to earnings, net of income tax benefit of $(0.1), $0.0, $(0.4) and $(0.1) for each respective period										Reclassification to earnings, net of income tax benefit of $(0.1), $0.0, $(0.4) and $(0.1) for each respective period	0.5		0.3		1.5		0.8
Total change in unfunded pension and postretirement obligations	Total change in unfunded pension and postretirement obligations	0.5		0.2		1.0		0.5		Total change in unfunded pension and postretirement obligations	0.5		0.3		1.5		0.8

Other comprehensive income / (loss)		0.3		0.2		0.6		(0.1)
Other comprehensive income										Other comprehensive income	0.3		0.1		0.9		—

Net comprehensive income		$	0.7	$	3.7	$	14.6	$	5.3
Net comprehensive income / (loss)										Net comprehensive income / (loss)	$	8.8	$	(8.1)	$	23.4	$	(2.8)

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	June 30, 2021		December 31, 2020		$ in millions	September 30, 2021		December 31, 2020
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	16.7	$	25.4	Cash and cash equivalents	$	41.5	$	25.4
Restricted cash	Restricted cash	0.1		0.1		Restricted cash	0.1		0.1
Accounts receivable, net of allowance for credit losses of $1.7 and $2.8, respectively (Note 1)		65.4		69.7
Accounts receivable, net of allowance for credit losses of $0.9 and $2.8, respectively (Note 1)						Accounts receivable, net of allowance for credit losses of $0.9 and $2.8, respectively (Note 1)	68.3		69.7
Inventories	Inventories	9.5		8.8		Inventories	12.4		8.8
Taxes applicable to subsequent years	Taxes applicable to subsequent years	38.8		78.0		Taxes applicable to subsequent years	19.4		78.0
Regulatory assets, current	Regulatory assets, current	34.9		27.5		Regulatory assets, current	24.5		27.5
Taxes receivable	Taxes receivable	20.3		17.9		Taxes receivable	18.4		17.9
Prepayments and other current assets	Prepayments and other current assets	9.2		5.8		Prepayments and other current assets	10.1		5.8

Total current assets	Total current assets	194.9		233.2		Total current assets	194.7		233.2

Property, plant & equipment:	Property, plant & equipment:					Property, plant & equipment:
Property, plant & equipment	Property, plant & equipment	1,903.2		1,839.3		Property, plant & equipment	1,952.4		1,839.3
Less: Accumulated depreciation and amortization	Less: Accumulated depreciation and amortization	(442.8)		(415.7)		Less: Accumulated depreciation and amortization	(455.2)		(415.7)
		1,460.4		1,423.6			1,497.2		1,423.6
Construction work in process	Construction work in process	156.1		141.7		Construction work in process	153.3		141.7
Total net property, plant & equipment	Total net property, plant & equipment	1,616.5		1,565.3		Total net property, plant & equipment	1,650.5		1,565.3

Other non-current assets:	Other non-current assets:					Other non-current assets:
Regulatory assets, non-current	Regulatory assets, non-current	191.6		193.6		Regulatory assets, non-current	191.7		193.6
Intangible assets, net of amortization	Intangible assets, net of amortization	18.9		19.3		Intangible assets, net of amortization	21.9		19.3
Other non-current assets	Other non-current assets	27.0		24.6		Other non-current assets	29.9		24.6

Total other non-current assets	Total other non-current assets	237.5		237.5		Total other non-current assets	243.5		237.5

Total assets	Total assets	$	2,048.9	$	2,036.0	Total assets	$	2,088.7	$	2,036.0

LIABILITIES AND SHAREHOLDER'S DEFICIT	LIABILITIES AND SHAREHOLDER'S DEFICIT					LIABILITIES AND SHAREHOLDER'S DEFICIT
Current liabilities:	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)	$	180.2	$	100.2	Short-term and current portion of long-term debt (Note 5)	$	220.2	$	100.2
Accounts payable	Accounts payable	73.2		84.5		Accounts payable	76.5		84.5
Accrued taxes	Accrued taxes	67.0		83.0		Accrued taxes	86.0		83.0
Accrued interest	Accrued interest	15.6		16.0		Accrued interest	18.4		16.0
Customer deposits	Customer deposits	18.0		19.4		Customer deposits	17.8		19.4
Regulatory liabilities, current	Regulatory liabilities, current	14.9		18.0		Regulatory liabilities, current	18.9		18.0

Accrued and other current liabilities	Accrued and other current liabilities	17.9		21.0		Accrued and other current liabilities	19.8		21.0

Total current liabilities	Total current liabilities	386.8		342.1		Total current liabilities	457.6		342.1

Non-current liabilities:	Non-current liabilities:					Non-current liabilities:
Long-term debt (Note 5)	Long-term debt (Note 5)	1,394.2		1,393.4		Long-term debt (Note 5)	1,394.9		1,393.4
Deferred income taxes	Deferred income taxes	185.9		177.2		Deferred income taxes	184.9		177.2
Taxes payable	Taxes payable	41.4		80.4		Taxes payable	2.4		80.4
Regulatory liabilities, non-current	Regulatory liabilities, non-current	214.5		218.3		Regulatory liabilities, non-current	214.8		218.3
Accrued pension and other post-retirement benefits	Accrued pension and other post-retirement benefits	82.5		93.9		Accrued pension and other post-retirement benefits	81.7		93.9

Other non-current liabilities	Other non-current liabilities	12.5		14.2		Other non-current liabilities	12.5		14.2

Total non-current liabilities	Total non-current liabilities	1,931.0		1,977.4		Total non-current liabilities	1,891.2		1,977.4

Commitments and contingencies (Note 9)	Commitments and contingencies (Note 9)	0		0		Commitments and contingencies (Note 9)	0		0

Common shareholder's deficit	Common shareholder's deficit					Common shareholder's 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	0		0		1,500 shares authorized; 1 share issued and outstanding	—		—
Other paid-in capital	Other paid-in capital	2,468.8		2,468.8		Other paid-in capital	2,468.8		2,468.8
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(11.7)		(12.3)		Accumulated other comprehensive loss	(11.4)		(12.3)
Accumulated deficit	Accumulated deficit	(2,726.0)		(2,740.0)		Accumulated deficit	(2,717.5)		(2,740.0)
Total common shareholder's deficit	Total common shareholder's deficit	(268.9)		(283.5)		Total common shareholder's deficit	(260.1)		(283.5)

Total liabilities and shareholder's deficit	Total liabilities and shareholder's deficit	$	2,048.9	$	2,036.0	Total liabilities and shareholder's deficit	$	2,088.7	$	2,036.0

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)
		Six months ended June 30,					Nine months ended September 30,
$ in millions	$ in millions	2021		2020		$ in millions	2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income		$	14.0	$	5.4
Adjustments to reconcile net income to net cash from operating activities:
Net income / (loss)						Net income / (loss)	$	22.5	$	(2.8)
Adjustments to reconcile net income / (loss) to net cash from operating activities:						Adjustments to reconcile net income / (loss) to net cash from operating activities:
Depreciation and amortization	Depreciation and amortization	38.0		36.4		Depreciation and amortization	56.9		55.1

Loss on early extinguishment of debt						Loss on early extinguishment of debt	—		31.7
Deferred income taxes	Deferred income taxes	4.6		33.5		Deferred income taxes	2.3		32.3

Gain on disposal and sale of business, net		0		(4.5)
Gain on disposal and sale of business interests, net						Gain on disposal and sale of business interests, net	—		(4.5)

Changes in certain assets and liabilities:	Changes in certain assets and liabilities:					Changes in certain assets and liabilities:
Accounts receivable, net	Accounts receivable, net	4.4		19.1		Accounts receivable, net	1.5		12.7
Inventories	Inventories	(0.6)		4.7		Inventories	(3.6)		5.5

Taxes applicable to subsequent years	Taxes applicable to subsequent years	39.2		36.8		Taxes applicable to subsequent years	58.6		57.8
Deferred regulatory costs, net	Deferred regulatory costs, net	(9.8)		(19.5)		Deferred regulatory costs, net	5.1		(17.1)
Prepayments and other current assets	Prepayments and other current assets	(5.7)		2.0		Prepayments and other current assets	(4.4)		2.5
Other non-current assets						Other non-current assets	(4.8)		2.7
Accounts payable	Accounts payable	4.1		(10.1)		Accounts payable	7.1		(24.6)
Accrued taxes payable / receivable	Accrued taxes payable / receivable	(57.5)		(13.0)		Accrued taxes payable / receivable	(75.5)		(63.0)
Accrued interest	Accrued interest	(0.4)		0.3		Accrued interest	2.4		7.4

Accrued and other current liabilities	Accrued and other current liabilities	(3.7)		(3.0)		Accrued and other current liabilities	(1.6)		(4.5)
Accrued pension and other post-retirement benefits	Accrued pension and other post-retirement benefits	(11.4)		(9.3)		Accrued pension and other post-retirement benefits	(12.2)		(10.8)
Other	Other	1.5		4.0		Other	2.2		1.3
Net cash provided by operating activities	Net cash provided by operating activities	16.7		82.8		Net cash provided by operating activities	56.5		81.7
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Capital expenditures	Capital expenditures	(94.9)		(66.9)		Capital expenditures	(144.5)		(107.5)
Cost of removal payments	Cost of removal payments	(9.2)		(17.1)		Cost of removal payments	(13.8)		(21.2)

Payments on disposal and sale of business interests	Payments on disposal and sale of business interests	(0.8)		(0.6)		Payments on disposal and sale of business interests	(1.2)		(1.0)
Proceeds from sale of property (a)	Proceeds from sale of property (a)	0		5.1		Proceeds from sale of property (a)	—		5.1

Other investing activities, net	Other investing activities, net	(0.1)		(0.8)		Other investing activities, net	(0.7)		(0.8)
Net cash used in investing activities	Net cash used in investing activities	(105.0)		(80.3)		Net cash used in investing activities	(160.2)		(125.4)
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	(0.4)		(6.1)		Payments of deferred financing costs	(0.2)		(7.8)
Issuance of long-term debt	Issuance of long-term debt	0		415.0		Issuance of long-term debt	—		555.0

Retirement of long-term debt						Retirement of long-term debt	—		(550.8)
Borrowings from revolving credit facilities	Borrowings from revolving credit facilities	80.0		75.0		Borrowings from revolving credit facilities	120.0		165.0
Repayment of borrowings from revolving credit facilities	Repayment of borrowings from revolving credit facilities	0		(219.0)		Repayment of borrowings from revolving credit facilities	—		(219.0)
Equity contribution from parent	Equity contribution from parent	0		98.0		Equity contribution from parent	—		98.0
Other financing activities, net	Other financing activities, net	0		(0.1)		Other financing activities, net	—		(0.1)
Net cash provided by financing activities	Net cash provided by financing activities	79.6		362.8		Net cash provided by financing activities	119.8		40.3

Cash, cash equivalents, and restricted cash:	Cash, cash equivalents, and restricted cash:					Cash, cash equivalents, and restricted cash:
Net change	Net change	(8.7)		365.3		Net change	16.1		(3.4)
Balance at beginning of period	Balance at beginning of period	25.5		47.0		Balance at beginning of period	25.5		47.0
Cash, cash equivalents, and restricted cash at end of period	Cash, cash equivalents, and restricted cash at end of period	$	16.8	$	412.3	Cash, cash equivalents, and restricted cash at end of period	$	41.6	$	43.6
Supplemental cash flow information:	Supplemental cash flow information:					Supplemental cash flow information:
Interest paid, net of amounts capitalized	Interest paid, net of amounts capitalized	$	29.6	$	41.1	Interest paid, net of amounts capitalized	$	41.5	$	49.7
Income taxes paid / (refunded), net	Income taxes paid / (refunded), net	$	0	$	(52.0)	Income taxes paid / (refunded), net	$	—	$	(51.9)
Non-cash financing and investing activities:	Non-cash financing and investing activities:					Non-cash financing and investing activities:
Accruals for capital expenditures	Accruals for capital expenditures	$	15.8	$	10.1	Accruals for capital expenditures	$	15.1	$	16.5
Accruals from sale of business	Accruals from sale of business	$	0	$	3.4	Accruals from sale of business	$	—	$	3.0

(a) Proceeds from sale of property include $5.1 million of proceeds received from AES during the ~~six~~nine months ended ~~June~~September 30, 2020 related to the 2019 sale of software previously recorded on AES Ohio Generation. There was no gain or loss recorded on the transaction.

See Notes to Condensed Consolidated Financial Statements.

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~~DPL INC.~~

~~Condensed Consolidated Statements of Shareholder's Deficit~~

~~(Unaudited)~~


DPL Inc.
Condensed Consolidated Statements of Shareholder's Deficit
(Unaudited)
	Common Stock (a)
$ in millions	Outstanding Shares	Amount		Other Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
Balance, January 1, 2021	1	$	—	$	2,468.8	$	(12.3)	$	(2,740.0)	$	(283.5)
Net comprehensive income						0.3		13.6		13.9


Balance, March 31, 2021	1	—		2,468.8		(12.0)		(2,726.4)		(269.6)
Net comprehensive income						0.3		0.4		0.7


Balance, June 30, 2021	1	—		2,468.8		(11.7)		(2,726.0)		(268.9)
Net comprehensive income						0.3		8.5		8.8


Balance, September 30, 2021	1	$	—	$	2,468.8	$	(11.4)	$	(2,717.5)	$	(260.1)

Common Stock (a)
$ in millions Outstanding Shares Amount Other
Paid-in
Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total
Balance, January 1, 2021 1 $ 0 $ 2,468.8 $ (12.3) $ (2,740.0) $ (283.5)
Net comprehensive income 0.3 13.6 13.9
Balance, March 31, 2021 1 0 2,468.8 (12.0) (2,726.4) (269.6)
Net comprehensive income 0.3 0.4 0.7
Balance, June 30, 2021 1 $ 0 $ 2,468.8 $ (11.7) $ (2,726.0) $ (268.9)

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


		Common Stock (a)												Common Stock (a)
$ 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, 2020	Balance, January 1, 2020	1	$	0	$	2,370.7	$	(3.6)	$	(2,739.0)	$	(371.9)	Balance, January 1, 2020	1	$	—	$	2,370.7	$	(3.6)	$	(2,739.0)	$	(371.9)
Net comprehensive income	Net comprehensive income						(0.3)		1.9		1.6		Net comprehensive income						(0.3)		1.9		1.6

Balance, March 31, 2020	Balance, March 31, 2020	1	0		2,370.7		(3.9)		(2,737.1)		(370.3)		Balance, March 31, 2020	1	—		2,370.7		(3.9)		(2,737.1)		(370.3)
Net comprehensive loss							0.2		3.5		3.7
Net comprehensive income													Net comprehensive income						0.2		3.5		3.7
Capital contributions ~~(b)~~	Capital contributions ~~(b)~~				98.0						98.0		Capital contributions ~~(b)~~				98.0						98.0

Balance, June 30, 2020	Balance, June 30, 2020	1	$	0	$	2,468.7	$	(3.7)	$	(2,733.6)	$	(268.6)	Balance, June 30, 2020	1	—		2,468.7		(3.7)		(2,733.6)		(268.6)
Net comprehensive loss													Net comprehensive loss						0.1		(8.2)		(8.1)

Other													Other				0.1						0.1
Balance, September 30, 2020													Balance, September 30, 2020	1	$	—	$	2,468.8	$	(3.6)	$	(2,741.8)	$	(276.6)

(a)1,500 shares authorized.

See Notes to Condensed Consolidated Financial Statements.

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DPL Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

For the ~~six~~nine months ended ~~June~~September 30, 2021

Note 1 – Overview and Summary of Significant Accounting Policies

Description of Business

DPL is a regional energy company organized in 1985 under the laws of Ohio. DPL has 1 reportable ~~segment:~~segment, the Utility segment. See Note 10 – Business Segments for more information relating to this reportable segment. The terms “we,” “us,” “our” and “ours” are used to refer to DPL and its subsidiaries.

DPL is an indirectly wholly-owned subsidiary of AES.

DP&L, a wholly-owned subsidiary of DPL that 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 ~~532,000~~533,000 customers located in West Central Ohio. Additionally, AES Ohio 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. Principal industries located in AES Ohio’s service territory include automotive, food processing, paper, plastic, manufacturing and defense. AES Ohio's sales reflect the general economic conditions, seasonal weather patterns of the area, ~~and~~ the market price of ~~electricity.~~electricity and customer energy efficiency initiatives. AES Ohio owned interests in the retired Hutchings Coal Station until its transfer in 2020 and currently owns numerous transmission facilities. AES Ohio sells its proportional share of energy and capacity from its investment in OVEC into the wholesale market.

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. In prior periods, AES Ohio Generation was also a primary subsidiary and sold all of its energy and capacity into the wholesale market. ~~In 2020,~~ AES Ohio ~~Generation's~~Generation retired its only remaining operating asset ~~was an undivided interest in Conesville, which closed~~ in May 2020 and ~~was~~ sold it in June 2020. See Note 12 – Discontinued Operations for more information. 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.

Financial Statement Presentation

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.

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

All material intercompany accounts and transactions are eliminated in consolidation. We have evaluated subsequent events through the date this report is issued.

These financial statements have been prepared in accordance with GAAP, as contained in the FASB ASC, for interim financial statements 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. Therefore, our interim financial statements in this report should be read along with the annual financial statements included in our Form 10-K for the fiscal year ended December 31, 2020.

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In the opinion of our management, the Condensed Consolidated Financial Statements presented in this report contain all adjustments necessary to fairly state our financial position as of ~~June~~September 30, 2021; our results of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, our cash flows for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020 and the changes in our equity for the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020. Unless otherwise noted, all adjustments are normal and recurring in nature. Due to various factors, interim results for the three and ~~six~~nine months ended ~~June~~September 30, 2021 may not be indicative of our results that will be realized for the full year ending December 31, 2021.

The preparation of financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the revenues and expenses of the periods reported. Actual results could differ from these estimates. Significant items subject to such estimates and judgments include: recognition of revenue including unbilled revenues, the carrying value of property, plant and equipment; 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; and assets and liabilities related to employee benefits.

Cash, Cash Equivalents and Restricted Cash

The following table provides a summary of 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	June 30, 2021		December 31, 2020		$ in millions	September 30, 2021		December 31, 2020
Cash and cash equivalents	Cash and cash equivalents	$	16.7	$	25.4	Cash and cash equivalents	$	41.5	$	25.4
Restricted cash	Restricted cash	0.1		0.1		Restricted cash	0.1		0.1
Cash, Cash Equivalents, and Restricted Cash, End of Period	Cash, Cash Equivalents, and Restricted Cash, End of Period	$	16.8	$	25.5	Cash, Cash Equivalents, and Restricted Cash, End of Period	$	41.6	$	25.5

Accounts Receivable and Allowance for Credit Losses

Accounts receivable were as follows ~~at June~~as of September 30, 2021 and December 31, 2020:


		June 30,		December 31,			September 30,		December 31,
$ in millions	$ in millions	2021		2020		$ in millions	2021		2020
Accounts receivable, net:	Accounts receivable, net:					Accounts receivable, net:
Customer receivables	Customer receivables	$	41.5	$	48.5	Customer receivables	$	47.3	$	48.5
Unbilled revenue	Unbilled revenue	19.3		21.6		Unbilled revenue	15.6		21.6
Amounts due from affiliates	Amounts due from affiliates	0.8		0.2		Amounts due from affiliates	1.5		0.2
Due from PJM transmission enhancement settlement	Due from PJM transmission enhancement settlement	1.7		1.7		Due from PJM transmission enhancement settlement	1.7		1.7
Other	Other	3.8		0.5		Other	3.1		0.5
Allowance for credit losses	Allowance for credit losses	(1.7)		(2.8)		Allowance for credit losses	(0.9)		(2.8)
Total accounts receivable, net	Total accounts receivable, net	$	65.4	$	69.7	Total accounts receivable, net	$	68.3	$	69.7

The following table is a ~~rollforward~~roll forward of our allowance for credit losses related to the accounts receivable balances for the ~~six~~nine months ended ~~June~~September 30, 2021 and ~~2020 :~~2020:


$ in millions	$ in millions	Beginning Allowance Balance		Current Period Provision		Write-offs Charged Against Allowances		Recoveries Collected		Ending Allowance Balance		$ in millions	Beginning Allowance Balance		Current Period Provision		Write-offs Charged Against Allowances		Recoveries Collected		Ending Allowance Balance
2021	2021	$	2.8	$	(0.2)	$	(1.6)	$	0.7	$	1.7	2021	$	2.8	$	(0.4)	$	(2.6)	$	1.1	$	0.9
2020	2020	$	0.4	$	2.6	$	(0.9)	$	0.9	$	3.0	2020	$	0.4	$	2.8	$	(1.4)	$	1.4	$	3.2

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, as applicable, including the economic impacts of the COVID-19 pandemic on our receivable balance as of ~~June~~September 30, 2021. Amounts are written off when reasonable collections efforts have been exhausted. During 2021, the current period provision and allowance for credit losses have decreased due to lower past due customer receivable balances. See Note 13 – Risks and Uncertainties for additional discussion of the COVID-19 pandemic.

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Inventories

Inventories consist of materials and supplies ~~at June~~as of September 30, 2021 and December 31, 2020.

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 ~~six~~nine months ended ~~June~~September 30, 2021 and 2020 were as follows:

Three months ended Six months ended
June 30, June 30,
2021 2020 2021 2020
Excise taxes collected $ 11.3 $ 10.9 $ 24.2 $ 23.3


	Three months ended				Nine months ended
	September 30,				September 30,
$ in millions	2021		2020		2021		2020
Excise taxes collected	$	13.5	$	13.4	$	37.7	$	36.7

Accumulated other comprehensive loss

The amounts reclassified out of Accumulated other comprehensive loss by component during the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020 are as follows:


Details about Accumulated Other Comprehensive Loss components	Details about Accumulated Other Comprehensive Loss components	Affected line item in the Condensed Consolidated Statements of Operations	Three months ended				Six months ended				Details about Accumulated Other Comprehensive Loss components	Affected line item in the Condensed Consolidated Statements of Operations	Three months ended				Nine months ended
			June 30,				June 30,						September 30,				September 30,
$ in millions	$ in millions		2021		2020		2021		2020		$ in millions		2021		2020		2021		2020
Gains and losses on cash flow hedges (Note 4):	Gains and losses on cash flow hedges (Note 4):										Gains and losses on cash flow hedges (Note 4):
		Interest expense	$	(0.3)	$	(0.2)	$	(0.5)	$	(0.6)		Interest expense	$	(0.2)	$	(0.3)	$	(0.7)	$	(0.9)
		Income tax expense	0.1		0		0.1		0.1			Income tax expense	—		—		0.1		0.1
		Net of income taxes	(0.2)		(0.2)		(0.4)		(0.5)			Net of income taxes	(0.2)		(0.3)		(0.6)		(0.8)

Amortization of defined benefit pension items (Note 7):	Amortization of defined benefit pension items (Note 7):										Amortization of defined benefit pension items (Note 7):
		Other expense	0.7		0.3		1.3		0.6			Other expense	0.6		0.3		1.9		0.9
		Income tax benefit	(0.2)		(0.1)		(0.3)		(0.1)			Income tax benefit	(0.1)		—		(0.4)		(0.1)
		Net of income taxes	0.5		0.2		1.0		0.5			Net of income taxes	0.5		0.3		1.5		0.8

Total reclassifications for the period, net of income taxes	Total reclassifications for the period, net of income taxes		$	0.3	$	0	$	0.6	$	0	Total reclassifications for the period, net of income taxes		$	0.3	$	—	$	0.9	$	—

The changes in the components of Accumulated other comprehensive loss during the ~~six~~nine months ended ~~June~~September 30, 2021 are as follows:


$ in millions	$ in millions	Gains / (losses) on cash flow hedges		Change in unfunded pension and postretirement benefit obligations		Total		$ in millions	Gains / (losses) on cash flow hedges		Change in unfunded pension and postretirement benefit obligations		Total
Balance at January 1, 2021		$	13.6	$	(25.9)	$	(12.3)
Balance as of January 1, 2021								Balance as of January 1, 2021	$	13.6	$	(25.9)	$	(12.3)

Amounts reclassified from AOCL to earnings	Amounts reclassified from AOCL to earnings	(0.4)		1.0		0.6		Amounts reclassified from AOCL to earnings	(0.6)		1.5		0.9
Net current period other comprehensive income / (loss)	Net current period other comprehensive income / (loss)	(0.4)		1.0		0.6		Net current period other comprehensive income / (loss)	(0.6)		1.5		0.9

Balance at June 30, 2021		$	13.2	$	(24.9)	$	(11.7)
Balance as of September 30, 2021								Balance as of September 30, 2021	$	13.0	$	(24.4)	$	(11.4)

New Accounting Pronouncements Adopted in 2021 – 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 – The 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 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
2020-04, Reference Rate Form (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting	The standard provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference to LIBOR or another reference rate expected to be discontinued by reference rate reform. This standard is effective for a limited period of time (March 12, 2020 - December 21, 2022).	Effective for all entities March 12, 2020 - December 31, 2022	We are currently evaluating the impact of adopting the standard on our condensed consolidated financial statements.

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Note 2 – Regulatory Matters

Smart Grid and Comprehensive Settlement

On October 23, 2020, AES Ohio entered into a Stipulation and Recommendation (settlement) with the staff of the PUCO and 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 AES Ohio passed the SEET for 2018 and 2019, and (iii) findings that AES Ohio's current ESP 1 satisfies the SEET and the more favorable in the aggregate (MFA) regulatory test. A hearing was held in January 2021 for consideration of this settlement and on June 16, 2021, the PUCO issued their opinion and order accepting the stipulation as filed. Applications for rehearing of the PUCO's orders relating to the comprehensive settlement were filed on July 16, 2021 and remain pending. Consistent with AES’ earlier statement of intent and based on recent discussions with AES, with the PUCO’s issuance of their opinion and order, DPL and AES Ohio expect that AES will make cash contributions of $150.0 million in 2021 to enable Smart Grid investment.

Decoupling

On January 23, 2020 AES Ohio filed with the PUCO requesting approval to defer its decoupling costs consistent with the methodology approved in its Distribution Rate Case. If approved, deferral would be effective December 18, 2019 and going forward would reduce impacts of weather, energy efficiency programs and economic changes in customer demand. An evidentiary hearing was held on this matter on May 4, 2021.

Distribution Rate Case

On November 30, 2020, AES Ohio filed a new Distribution Rate Case with the PUCO. This rate case proposes a revenue increase of $120.8 million per year and incorporates the DIR investments that were planned and approved in the last rate case but not yet included in distribution rates, other distribution investments since September 2015 and investments necessitated by the tornados that occurred on Memorial Day in 2019. The rate case also includes a proposal for increased tree-trimming expenses and certain customer demand-side management programs and recovery of prior-approved regulatory assets for tree trimming, uncollectible expenses and rate case expense. This case is pending a commission order. On July 26, 2021, the PUCO staff filed its Staff Report of Investigation in the distribution rate case. ~~AES Ohio~~Settlement negotiations are currently ongoing, and the hearing is ~~preparing its response to this report. A hearing before the PUCO in this case has been~~ set to begin on ~~October 4,~~December 7, 2021.

FERC Proceedings

On November 15, 2018 the FERC issued a Notice of Proposed Rulemaking (NOPR) to address amortization of excess accumulated deferred income taxes resulting from the TCJA and their impact on transmission rates. Such notice requires all public utility transmission providers with stated transmission rates under an Open Access Transmission Tariff (OATT) to determine the amount of excess deferred income taxes caused by the TCJA. On March 3, 2020, AES Ohio filed an application before the FERC to change its transmission rate from a stated rate to a formula rate, which was accepted by the FERC and made effective as of May 3, 2020, subject to further ~~proceeding~~proceedings and potential refunds. An uncontested settlement was filed December 10, 2020 ~~which would increase the rates that were in effect prior to the filing but are a reduction from the rate that became effective subject to refund on May 3, 2020.~~and approved April 15, 2021. Among other things, the settlement ~~establishes~~established new depreciation rates for our transmission assets and an authorized return on equity ~~(ROE)~~ of 9.85%, ~~which would rise~~and started an amortization process to ~~9.99% if the FERC were to approve in a separate ongoing proceeding a~~ return on equity “adder” to recognize our continued membership in PJM. The 9.85% ROE (base) and 9.99% ROE (base + incentive) levels are subject to a four-year moratorium on other proposed ROE changes. Proposals to raise or lower the ROE could be filed with an effective date after the moratorium expires on April 14, 2025. The required flowback of excess deferred taxes ~~under~~created by the ~~NOPR was also addressed and resolved as part of this formula transmission rate settlement. On April 15, 2021,~~TCJA. Because the ~~FERC~~ approved settlement rates were lower than the ~~transmission rate settlement. On July 15, 2021, in the separate proceeding, the FERC denied approval of the return on equity “adder” and ordered~~proposed rates that went into effect, AES Ohio has accrued and/or paid refunds of approximately $4.5 million to ~~modify its rates within 30 days to eliminate the "adder".~~ ~~AES Ohio~~ ~~intends to request rehearing~~users of the ~~order; however, if~~transmission system in the ~~Commission ultimately denies~~ ~~AES Ohio’s~~ ~~request in a final order,~~ ~~AES Ohio~~ ~~will also be required to refund amounts collected pursuant to the “adder” effective October 3, 2020 with interest. This amount is not expected to be material to the financial statements.~~second quarter and third quarters of 2021 through credits on PJM bills.

Note 3 – Fair Value

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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 5—Fair Value in Item 8. — Financial Statements and Supplementary Data of our Form 10-K.

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The following table presents the fair value, carrying value and cost of our non-derivative instruments ~~at June~~as of September 30, 2021 and December 31, 2020. Further information about the fair value of our derivative instruments can be found in Note 4 – Derivative Instruments and Hedging Activities.


		June 30, 2021				December 31, 2020					September 30, 2021				December 31, 2020
$ in millions	$ in millions	Cost		Fair Value		Cost		Fair Value		$ in millions	Cost		Fair Value		Cost		Fair Value
Assets	Assets									Assets
Money market funds	Money market funds	$	0.3	$	0.3	$	0.3	$	0.3	Money market funds	$	0.4	$	0.4	$	0.3	$	0.3
Equity securities	Equity securities	2.0		5.0		2.1		4.5		Equity securities	2.0		4.9		2.1		4.5
Debt securities	Debt securities	3.8		3.9		4.0		4.1		Debt securities	3.8		3.8		4.0		4.1

Total	Total	$	6.1	$	9.2	$	6.4	$	8.9	Total	$	6.2	$	9.1	$	6.4	$	8.9

		Carrying Value		Fair Value		Carrying Value		Fair Value			Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities	Liabilities									Liabilities
Long-term debt	Long-term debt	$	1,394.4	$	1,530.1	$	1,393.6	$	1,571.6	Long-term debt	$	1,395.1	$	1,534.0	$	1,393.6	$	1,571.6

These financial instruments are not subject to master netting agreements or collateral requirements and as such are presented in the Condensed Consolidated Balance Sheets at their gross fair value, except for Long-term debt, which is presented at amortized carrying value.

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 ~~six~~nine months ended ~~June~~September 30, 2021 or 2020.

Master Trust Assets

AES Ohio established a Master Trust to hold assets that could be used for the benefit of employees participating in employee benefit plans and 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 investments are recorded at fair value within Other non-current assets on the Condensed Consolidated Balance Sheets and classified as equity investments. We recorded net unrealized gains / (losses) of ~~$0.3~~$(0.1) million and ~~$0.8~~$0.3 million during the during the three months ended ~~June~~September 30, 2021 and 2020, respectively, and ~~$0.5~~$0.4 million and ~~$(0.3)~~$0.0 million during the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively. These amounts are included in "Other income / (expense)" in our Condensed Consolidated Statements of Operations.

Long-term debt

The fair value of debt is based on current public market prices for disclosure purposes only. 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. The long-term debt amounts include the current portion payable in the next twelve months and have maturities that range from 2025 to 2061.

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The fair value of assets and liabilities ~~at June~~as of September 30, 2021 and December 31, 2020 and the respective category within the fair value hierarchy for DPL is as follows:


$ in millions	$ in millions	Fair value at June 30, 2021 (a)								Fair value at December 31, 2020 (a)								$ in millions	Fair value as of September 30, 2021 (a)								Fair value as of December 31, 2020 (a)
		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total			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	$	0	$	0.3	$	0.3	$	0	$	0	$	0.3	Money market funds	$	0.4	$	—	$	—	$	0.4	$	0.3	$	—	$	—	$	0.3
Equity securities	Equity securities	0		5.0		0		5.0		0		4.5		0		4.5		Equity securities	—		4.9		—		4.9		—		4.5		—		4.5
Debt securities	Debt securities	0		3.9		0		3.9		0		4.1		0		4.1		Debt securities	—		3.8		—		3.8		—		4.1		—		4.1

Total Master Trust assets	Total Master Trust assets	0.3		8.9		0		9.2		0.3		8.6		0		8.9		Total Master Trust assets	0.4		8.7		—		9.1		0.3		8.6		—		8.9

Total	Total	$	0.3	$	8.9	$	0	$	9.2	$	0.3	$	8.6	$	0	$	8.9	Total	$	0.4	$	8.7	$	—	$	9.1	$	0.3	$	8.6	$	—	$	8.9

Liabilities	Liabilities																	Liabilities

Long-term debt	Long-term debt	$	0	$	1,512.8	$	17.3	$	1,530.1	$	0	$	1,554.2	$	17.4	$	1,571.6	Long-term debt	$	—	$	1,516.8	$	17.2	$	1,534.0	$	—	$	1,554.2	$	17.4	$	1,571.6

Total Liabilities	Total Liabilities	$	0	$	1,512.8	$	17.3	$	1,530.1	$	0	$	1,554.2	$	17.4	$	1,571.6	Total Liabilities	$	—	$	1,516.8	$	17.2	$	1,534.0	$	—	$	1,554.2	$	17.4	$	1,571.6

(a) Includes credit valuation adjustment

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Our long-term debt is fair valued for disclosure purposes only and most of the fair values are determined using quoted market prices in inactive markets. 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.

Note 4 – Derivative Instruments and Hedging Activities

For further information on our derivative and hedge accounting policies, See Note 1 – Overview and Summary of Significant Accounting Policies – Financial Derivatives and Note 6 - Derivative Instruments and Hedging Activities of Item 8 – Financial Statements and Supplementary Data in our Form 10-K.

Cash Flow Hedges

In August 2020, the 2 interest rate swaps to hedge the variable interest on the $140.0 million variable interest rate tax-exempt First Mortgage Bonds expired, as the associated debt reached maturity. The interest rate swaps had a combined notional amount of $140.0 million and settled monthly based on a one-month LIBOR. The AOCL associated with the swaps was amortized out of AOCL into interest expense over the life of the underlying debt.

We also had previously entered into interest rate derivative contracts to manage interest rate exposure related to anticipated borrowings of fixed-rate debt. These interest rate derivative contracts were settled in 2013 and we continue to amortize amounts out of AOCL into interest expense.

The following tables provide information concerning gains or losses recognized in AOCL for the cash flow hedges for the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020:


		Three months ended				Six months ended					Three months ended				Nine months ended
		June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020			September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
		Interest		Interest		Interest		Interest			Interest		Interest		Interest		Interest
$ in millions (net of tax)	$ in millions (net of tax)	Rate Hedge		Rate Hedge		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	$	13.4	$	13.9	$	13.6	$	14.5	Beginning accumulated derivative gains in AOCL	$	13.2	$	13.9	$	13.6	$	14.5
Net gains / (losses) associated with current period hedging transactions		0		0.2		0		(0.1)
Net gains associated with current period hedging transactions										Net gains associated with current period hedging transactions	—		0.1		—		—
Net gains reclassified to earnings	Net gains reclassified to earnings									Net gains reclassified to earnings
Interest expense	Interest expense	(0.2)		(0.2)		(0.4)		(0.5)		Interest expense	(0.2)		(0.3)		(0.6)		(0.8)

Ending accumulated derivative gains in AOCL	Ending accumulated derivative gains in AOCL	$	13.2	$	13.9	$	13.2	$	13.9	Ending accumulated derivative gains in AOCL	$	13.0	$	13.7	$	13.0	$	13.7

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)

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Note 5 – Long-term Debt

Long-term debt is as follows:


		Interest		June 30,		December 31,			Interest		September 30,		December 31,
$ in millions	$ in millions	Rate	Maturity	2021		2020		$ in millions	Rate	Maturity	2021		2020
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
U.S. Government note	U.S. Government note	4.20%	2061	17.3		17.4		U.S. Government note	4.20%	2061	17.2		17.4
Unamortized deferred financing costs	Unamortized deferred financing costs			(5.7)		(5.7)		Unamortized deferred financing costs			(5.5)		(5.7)
Unamortized debt discounts, net	Unamortized debt discounts, net			(2.6)		(2.6)		Unamortized debt discounts, net			(2.5)		(2.6)
Total long-term debt at AES Ohio	Total long-term debt at AES Ohio			574.0		574.1		Total long-term debt at AES Ohio			574.2		574.1

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 (a)	Note to DPL Capital Trust II (a)	8.125%	2031	15.6		15.6		Note to DPL Capital Trust II (a)	8.125%	2031	15.6		15.6
Unamortized deferred financing costs	Unamortized deferred financing costs			(9.3)		(10.2)		Unamortized deferred financing costs			(8.8)		(10.2)
Unamortized debt discounts, net	Unamortized debt discounts, net			(0.9)		(0.9)		Unamortized debt discounts, net			(0.9)		(0.9)
Total long-term debt	Total long-term debt			1,394.4		1,393.6		Total long-term debt			1,395.1		1,393.6
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			$	1,394.2	$	1,393.4	Long-term debt, net of current portion			$	1,394.9	$	1,393.4

(a)Note payable to related party.

Lines of credit

~~At June~~As of September 30, 2021 and December 31, 2020, the DPL ~~revolving credit facility~~Credit Agreement had outstanding borrowings of $80.0 million and $80.0 million, respectively. ~~At June~~As of September 30, 2021 and December 31, 2020, the AES Ohio ~~revolving credit facility~~Credit Agreement had outstanding borrowings of ~~$100.0~~$140.0 million and $20.0 million, respectively.

Significant transactions

On July 31, 2020, AES Ohio issued $140.0 million of taxable First Mortgage Bonds and on August 3, 2020 used the proceeds to purchase at par value the $140.0 million of outstanding tax-exempt Ohio Air Quality Development Authority (OAQDA) Collateralized Pollution Control Revenue Refunding Bonds that had been issued in 2015. The new taxable First Mortgage Bonds carry an interest rate of 3.20% and mature on July 31, 2040. The OAQDA Revenue bonds have not been legally cancelled and can be re-issued at the discretion of AES Ohio at any time. These bonds will be held in trust while we continue to evaluate market conditions and explore suitable long-term financing alternatives. Accordingly, as of September 30, 2021 and December 31, 2020, the $140.0 million variable rate OAQDA Revenue bonds are not treated as being outstanding in the Condensed Consolidated Balance Sheet.

On June 19, 2020, DPL closed a $415.0 million issuance of senior unsecured notes. These notes carry an interest rate of 4.125% and mature on July 1, 2025. Proceeds from the issuance and cash on hand were used to redeem in-full the remaining balance of $380.0 million of DPL's 7.25% senior unsecured notes. These bonds were redeemed at par plus accrued interest and a make-whole premium of $30.8 million on July 20, 2020.

DPL agreed to register the 2025 DPL Senior Unsecured Bonds under the Securities Act by filing an exchange offer registration statement or, under specified circumstances, a shelf registration statement with the SEC pursuant to a Registration Rights Agreement dated June 19, 2020. DPL filed a registration statement on Form S-4 with respect to the 2025 DPL Senior Unsecured Bonds with the SEC on March 15, 2021, and this registration statement was declared effective on March 31, 2021. The exchange offer closed on May 5, 2021.

On June 1, 2020, the DPL ~~amended its secured revolving credit facility.~~Credit Agreement was amended. As a result of the amendment, the borrowing limit was reduced from $125.0 million to $110.0 million, the Total Debt to EBITDA covenant was eliminated, the EBITDA to Interest Expense covenant was reduced from 2.25 to 1.00 to 1.70 to 1.00, increasing to 1.75 to 1.00 as of September 30, 2022 and 2.00 to 1.00 as of December 31, 2022, and a trailing-twelve months minimum EBITDA covenant of $125.0 million was added, increasing to $130.0 million as of September 30, 2022 and $150.0 million as of December 31, 2022. Starting with the quarter ended September 30, 2021, the borrowing limit will be reduced by $5.0 million per quarter should DPL’s Total Debt to EBITDA ratio calculated for the period of four consecutive quarters exceed 7.00 to 1.00.

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Long-term debt covenants and restrictions

~~DPL’s~~The ~~revolving credit agreement~~DPL Credit Agreement has 2 financial covenants. The first financial covenant, a minimum EBITDA, calculated at the end of each fiscal quarter for the four prior fiscal quarters, of $125.0 million is required, stepping up to $130.0 million on September 30, 2022 and $150.0 million on December 31, 2022. As of ~~June~~September 30, 2021, 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 4 prior fiscal quarters by the consolidated interest charges for the same period. The ratio, per the agreement, is to be not less than 1.70 to 1.00, and steps up to 1.75 to 1.00 on September

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30, 2022 and 2.00 to 1.00 as of December 31, 2022. As of ~~June~~September 30, 2021, DPL was in compliance with this financial covenant.

~~DPL’s~~The ~~secured revolving credit agreement~~DPL Credit Agreement also restricts dividend payments from DPL to AES, such that DPL cannot make dividend payments unless at the time of, and/or as a result of the distribution, (i) DPL’s leverage ratio does not exceed 0.67 to 1.00 and DPL’s interest 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 ~~June~~September 30, 2021, DPL was prohibited from making a distribution to its shareholder or making a loan to any of its affiliates (other than its subsidiaries).

~~AES Ohio's~~Starting with the quarter ended September 30, 2021, the borrowing limit on the DPL ~~unsecured revolving credit facility~~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 September 30, 2021, DPL exceeded this ratio and the borrowing limit was reduced from $110.0 million to $105.0 million.

The AES Ohio Credit Agreement and Bond Purchase Agreement (financing document entered into in connection with the issuance of AES Ohio's First Mortgage Bonds, on July 31, 2020) has 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 ~~June~~September 30, 2021, AES Ohio was in compliance with this financial covenant.

As of ~~June~~September 30, 2021, DPL and AES Ohio were in compliance with all debt covenants, including the financial covenants 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.

Note 6 – Income Taxes

DPL's provision for income taxes is based on the estimated annual effective tax rate, plus discrete items. The effective tax rates for the three and ~~six~~nine months ended ~~June~~September 30, 2021 were ~~69.2%~~(10.4)% and ~~2.8%~~(1.8)%, respectively, and ~~50.0%~~55.2% and ~~37.2%~~71.1% for the three and ~~six~~nine months ended ~~June~~September 30, 2020, respectively. The year-to-date rate is different from the combined federal and state statutory rate of 22.5% 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.

DPL's income tax expense for the ~~six~~nine months ended ~~June~~September 30, 2021 was calculated using the estimated annual effective income tax rates for 2021 of ~~2.6%~~(1.8)%. Management estimates the annual effective tax rate based on its forecast of annual pre-tax income or loss.

DPL has unrecognized tax benefits of $1.4 million as of September 30, 2021 and December 31, 2020. The total amount of unrecognized tax benefits anticipated to result in a net decrease to unrecognized tax benefits within twelve months of September 30, 2021 is estimated to be $1.4 million, primarily relating to effective settlements of tax exams. Of the $1.4 million, $0.5 million would result in a decrease in the effective tax rate in the period that the position is released.

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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.

Note 7 – Benefit Plans

AES Ohio sponsors a defined benefit pension plan for the majority of its employees.

We generally fund pension plan benefits as accrued in accordance with the minimum funding requirements of ERISA and, in addition, make voluntary contributions from time to time. There were $9.8 million and $7.5 million in employer contributions during the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively.

The amounts presented in the following tables for pension include the collective bargaining plan formula, the traditional management plan formula, the cash balance plan formula and the SERP, in the aggregate. 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. The components of net periodic benefit costs other than service costs are included in Other income / (expense) in the Condensed Consolidated Statements of Operations.

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The net periodic benefit cost of the pension benefit plans for the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020 was:


		Three months ended				Six months ended					Three months ended				Nine months ended
		June 30,				June 30,					September 30,				September 30,
$ in millions	$ in millions	2021		2020		2021		2020		$ in millions	2021		2020		2021		2020
Service cost	Service cost	$	1.1	$	1.0	$	2.2	$	1.9	Service cost	$	1.2	$	0.9	$	3.4	$	2.8
Interest cost	Interest cost	2.0		2.9		4.0		5.9		Interest cost	2.1		2.9		6.1		8.8
Expected return on plan assets	Expected return on plan assets	(3.7)		(4.7)		(7.4)		(9.4)		Expected return on plan assets	(3.8)		(4.6)		(11.2)		(14.0)
Amortization of unrecognized:	Amortization of unrecognized:									Amortization of unrecognized:
Prior service cost	Prior service cost	0.2		0.2		0.4		0.5		Prior service cost	0.2		0.3		0.6		0.8
Actuarial loss	Actuarial loss	2.3		1.6		4.6		3.1		Actuarial loss	2.2		1.5		6.8		4.6
Net periodic benefit cost	Net periodic benefit cost	$	1.9	$	1.0	$	3.8	$	2.0	Net periodic benefit cost	$	1.9	$	1.0	$	5.7	$	3.0

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 ~~$8.5~~$8.3 million ~~at June~~as of September 30, 2021 and $9.0 million atas of December 31, 2020 were not material to the financial statements in the periods covered by this report.

Note 8 – Shareholder's Deficit

Capital Contributions from AES

There were no capital contributions during the ~~six~~nine months ended ~~June~~September 30, 2021.

During the ~~six~~nine months ended ~~June~~September 30, 2020, DPL received $150.0 million in a cash contribution from AES, which DPL then used to make a $150.0 million capital contribution to AES Ohio. The contribution at DPL represented an equity capital contribution of $98.0 million and a payment of $52.0 million against its tax receivable. The proceeds from the capital contribution at AES Ohio will primarily be used for funding needs to support AES Ohio's capital expenditure program, mainly new investments in and upgrades to AES Ohio’s transmission and distribution system.

Note 9 – Contractual Obligations, Commercial Commitments and Contingencies

~~Guarantees~~

~~Previously,~~ ~~DPL~~ entered into various agreements with its wholly-owned subsidiary, AES Ohio Generation, providing financial or performance assurance to third parties. These agreements were entered into primarily to support or enhance the creditworthiness otherwise attributed to the subsidiary on a stand-alone basis, thereby facilitating the extension of sufficient credit to accomplish this subsidiary's intended commercial purposes. During the six months ended June 30, 2021, ~~DPL~~ ~~did not incur any losses related to the guarantees of these obligations, and we believe it is unlikely that~~ ~~DPL~~ ~~would be required to perform or incur any losses in the future associated with any of the above guarantees. At June 30, 2021,~~ ~~DPL~~ had $1.9 million of such guarantees on behalf of AES Ohio Generation. There were no outstanding balances for commercial transactions covered by these guarantees at June 30, 2021 or December 31, 2020.

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. ~~At June~~As of September 30, 2021, AES Ohio could be responsible for the repayment of 4.9%, or ~~$58.6~~$55.9 million, of ~~$1,196.3~~$1,140.5 million OVEC debt obligations if they came due, comprised of both fixed and variable rate

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securities with maturities from 2022 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.

Contingencies

~~Table of Contents~~

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 ~~June~~September 30, 2021, cannot be reasonably determined.

Environmental Matters

DPL’s and AES Ohio’s current and previously-owned facilities and operations are subject to a wide range of federal, state and local environmental regulations and laws. The environmental issues that may affect us include:

•The federal CAA and state laws and regulations (including State Implementation Plans) which require compliance, obtaining permits and reporting as to air emissions;

•Litigation with federal and certain state governments and certain special interest groups regarding whether modifications to or maintenance of certain coal-fired generating stations require additional permitting or pollution control technology, or whether emissions from coal-fired generating stations cause or contribute to global climate changes;

•Rules and future rules issued by the USEPA, the Ohio EPA or other authorities that require or will require substantial reductions in SO2, particulates, mercury, acid gases, NOx and other air emissions;

•Rules and future rules issued by the USEPA, the Ohio EPA or other authorities that require or will require reporting and reductions of GHGs;

•Rules and future rules issued by the USEPA, the Ohio EPA or other authorities associated with the federal Clean Water Act, which prohibits the discharge of pollutants into waters of the United States except pursuant to appropriate permits; and

•Solid and hazardous waste laws and regulations, which govern the management and disposal of certain waste. The majority of solid waste created from the combustion of coal and fossil fuels consists of fly ash and other coal combustion by-products.

In addition to imposing continuing compliance obligations, ~~these~~federal, state and local environmental 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 our facilities to comply, or to determine compliance, with such regulations. We record liabilities for loss contingencies related to environmental matters when a loss is probable of occurring and can be reasonably estimated in accordance with the provisions of GAAP. Accordingly, we have immaterial accruals for loss contingencies for environmental matters. We also have several environmental matters for which we have not accrued loss contingencies because the risk of loss is not probable, or a loss cannot be reasonably estimated. We evaluate the potential liability related to environmental matters quarterly and may revise our estimates. Such revisions in the estimates of the potential liabilities could have a material adverse effect on our results of operations, financial condition and cash flows.

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

Note 10 – Business Segments

DPL manages its business through 1 reportable operating segment, the Utility segment. The primary segment performance measure is income / (loss) from continuing operations before income tax as management has concluded that this measure best reflects the underlying business performance of DPL and is the most relevant

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measure considered in DPL’s internal evaluation of the financial performance of its segment. The Utility segment is discussed further below.

Utility Segment

~~Table of Contents~~

customer rates and regulatory liabilities when current cost recoveries in customer rates relate to expected future costs. The Utility segment includes revenues and costs associated with our investment in OVEC and the historical results of AES Ohio’s Hutchings Coal Station, which was closed in 2013 and transferred to a third party in the fourth quarter of 2020.

Included within the “Other” column are other businesses that do not meet the GAAP requirements for disclosure as reportable segments as well as certain corporate costs, which include interest expense on DPL's long-term debt as well as adjustments related to purchase accounting from the Merger. The accounting policies of the reportable segment are the same as those described in Note 1 – Overview and Summary of Significant Accounting Policies of our 10-K. Intersegment sales, costs of sales and expenses are eliminated in consolidation. Certain shared and corporate costs are allocated between "Other" and the Utility reporting segment.

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


$ in millions	$ in millions	Utility		Other		Adjustments and Eliminations		DPL Consolidated		$ in millions	Utility		Other		Adjustments and Eliminations		DPL Consolidated
Three months ended June 30, 2021
Three months ended September 30, 2021										Three months ended September 30, 2021
Revenues from external customers	Revenues from external customers	$	145.7	$	2.4	$	0	$	148.1	Revenues from external customers	$	185.9	$	2.3	$	—	$	188.2
Intersegment revenues	Intersegment revenues	0.2		0.9		(1.1)		0		Intersegment revenues	0.2		0.8		(1.0)		—
Total revenues	Total revenues	$	145.9	$	3.3	$	(1.1)	$	148.1	Total revenues	$	186.1	$	3.1	$	(1.0)	$	188.2

Depreciation and amortization	Depreciation and amortization	$	18.5	$	0.4	$	0	$	18.9	Depreciation and amortization	$	18.6	$	0.3	$	—	$	18.9

Interest expense	Interest expense	$	6.0	$	9.6	$	0	$	15.6	Interest expense	$	6.1	$	9.7	$	—	$	15.8

Income / (loss) from continuing operations before income tax	Income / (loss) from continuing operations before income tax	$	9.1	$	(7.6)	$	0	$	1.5	Income / (loss) from continuing operations before income tax	$	16.1	$	(8.4)	$	—	$	7.7

Capital expenditures		$	42.4	$	0.6	$	0	$	43.0

$ in millions	$ in millions	Utility		Other		Adjustments and Eliminations		DPL Consolidated		$ in millions	Utility		Other		Adjustments and Eliminations		DPL Consolidated
Three Months Ended June 30, 2020
Three Months Ended September 30, 2020										Three Months Ended September 30, 2020
Revenues from external customers	Revenues from external customers	$	152.8	$	2.3	$	0	$	155.1	Revenues from external customers	$	176.8	$	2.0	$	—	$	178.8
Intersegment revenues	Intersegment revenues	0.3		0.9		(1.2)		0		Intersegment revenues	0.2		1.0		(1.2)		—
Total revenues	Total revenues	$	153.1	$	3.2	$	(1.2)	$	155.1	Total revenues	$	177.0	$	3.0	$	(1.2)	$	178.8

Depreciation and amortization	Depreciation and amortization	$	18.2	$	0.3	$	0	$	18.5	Depreciation and amortization	$	18.2	$	0.4	$	—	$	18.6

Interest expense	Interest expense	$	6.4	$	13.0	$	0	$	19.4	Interest expense	$	5.9	$	11.2	$	—	$	17.1

Loss on early extinguishment of debt										Loss on early extinguishment of debt	$	—	$	31.7	$	—	$	31.7
Income / (loss) from continuing operations before income tax	Income / (loss) from continuing operations before income tax	$	15.5	$	(11.8)	$	0	$	3.7	Income / (loss) from continuing operations before income tax	$	21.3	$	(41.0)	$	—	$	(19.7)

Capital expenditures		$	24.1	$	2.6	$	0	$	26.7

$ in millions	$ in millions	Utility		Other		Adjustments and Eliminations		DPL Consolidated		$ in millions	Utility		Other		Adjustments and Eliminations		DPL Consolidated
Six months ended June 30, 2021
Nine months ended September 30, 2021										Nine months ended September 30, 2021
Revenues from external customers	Revenues from external customers	$	318.3	$	5.0	0		$	323.3	Revenues from external customers	$	504.2	$	7.3	0		$	511.5
Intersegment revenues	Intersegment revenues	0.4		1.8		(2.2)		0		Intersegment revenues	0.6		2.6		(3.2)		—
Total revenues	Total revenues	$	318.7	$	6.8	$	(2.2)	$	323.3	Total revenues	$	504.8	$	9.9	$	(3.2)	$	511.5

Depreciation and amortization	Depreciation and amortization	$	37.2	$	0.8	$	0	$	38.0	Depreciation and amortization	$	55.8	$	1.1	$	—	$	56.9

Interest expense	Interest expense	$	12.0	$	19.2	$	0	$	31.2	Interest expense	$	18.1	$	28.9	$	—	$	47.0

Income / (loss) from continuing operations before income tax	Income / (loss) from continuing operations before income tax	$	30.6	$	(15.2)	$	0	$	15.4	Income / (loss) from continuing operations before income tax	$	46.7	$	(23.6)	$	—	$	23.1

Capital expenditures		$	94.0	$	0.9	$	0	$	94.9

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$ in millions	$ in millions	Utility		Other		Adjustments and Eliminations		DPL Consolidated		$ in millions	Utility		Other		Adjustments and Eliminations		DPL Consolidated
Six months ended June 30, 2020
Nine months ended September 30, 2020										Nine months ended September 30, 2020
Revenues from external customers	Revenues from external customers	$	321.6	$	4.7	$	0	$	326.3	Revenues from external customers	$	498.4	$	6.7	$	—	$	505.1
Intersegment revenues	Intersegment revenues	0.5		1.7		(2.2)		0		Intersegment revenues	0.7		2.7		(3.4)		—
Total revenues	Total revenues	$	322.1	$	6.4	$	(2.2)	$	326.3	Total revenues	$	499.1	$	9.4	$	(3.4)	$	505.1

Depreciation and amortization	Depreciation and amortization	$	35.5	$	0.7	$	0	$	36.2	Depreciation and amortization	$	53.7	$	1.1	$	—	$	54.8

Interest expense	Interest expense	$	12.6	$	25.7	$	0	$	38.3	Interest expense	$	18.5	$	36.9	$	—	$	55.4

Loss on early extinguishment of debt										Loss on early extinguishment of debt	$	—	$	31.7	$	—	$	31.7
Income / (loss) from continuing operations before income tax	Income / (loss) from continuing operations before income tax	$	28.4	$	(22.3)	$	0	$	6.1	Income / (loss) from continuing operations before income tax	$	49.7	$	(63.3)	$	—	$	(13.6)

Capital expenditures		$	63.4	$	3.5	$	0	$	66.9


Total Assets	Total Assets	June 30, 2021		December 31, 2020		Total Assets	September 30, 2021		December 31, 2020
Utility	Utility	$	2,025.5	$	2,014.7	Utility	$	2,067.6	$	2,014.7
All Other (a)	All Other (a)	23.4		21.3		All Other (a)	21.1		21.3
DPL Consolidated	DPL Consolidated	$	2,048.9	$	2,036.0	DPL Consolidated	$	2,088.7	$	2,036.0

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

Note 11 – Revenue

Revenue is primarily earned from retail and wholesale electricity sales and electricity transmission and distribution delivery services. Revenue is recognized upon transfer of control to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Revenue is recorded net of any taxes assessed on and collected from customers, which are remitted to the governmental authorities. For further discussion of our Retail, Wholesale, RTO ancillary, and Capacity revenues, see Note 14 — Revenue in Item 8.—Financial Statements and Supplementary Data of our Form 10-K.

DPL's revenue from contracts with customers was ~~$147.4~~$187.5 million and ~~$148.3~~$177.0 million for the three months ended ~~June~~September 30, 2021 and 2020, respectively; and ~~$319.5~~$507.0 million and ~~$315.3~~$492.3 million for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively.

The following table presents our revenue from contracts with customers and other revenue by segment for the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020:


$ in millions	$ in millions	Utility		Other		Adjustments and Eliminations		Total		$ in millions	Utility		Other		Adjustments and Eliminations		Total
		Three Months Ended June 30, 2021									Three Months Ended September 30, 2021
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	$	77.7	$	0	$	0	$	77.7	Residential revenue	$	103.3	$	—	$	—	$	103.3
Commercial revenue	Commercial revenue	28.2		0		0		28.2		Commercial revenue	35.0		—		—		35.0
Industrial revenue	Industrial revenue	14.1		0		0		14.1		Industrial revenue	16.0		—		—		16.0
Governmental revenue	Governmental revenue	5.5		0		0		5.5		Governmental revenue	7.0		—		—		7.0
Other (a)	Other (a)	2.8		0		0		2.8		Other (a)	2.9		—		—		2.9
Total retail revenue from contracts with customers	Total retail revenue from contracts with customers	128.3		0		0		128.3		Total retail revenue from contracts with customers	164.2		—		—		164.2

Wholesale revenue	Wholesale revenue									Wholesale revenue
Wholesale revenue from contracts with customers	Wholesale revenue from contracts with customers	3.6		0		(0.2)		3.4		Wholesale revenue from contracts with customers	6.8		—		(0.2)		6.6
RTO ancillary revenue	RTO ancillary revenue	12.1		0		0		12.1		RTO ancillary revenue	12.5		—		—		12.5
Capacity revenue	Capacity revenue	1.3		0		0		1.3		Capacity revenue	1.8		—		—		1.8
Miscellaneous revenue	Miscellaneous revenue									Miscellaneous revenue
Miscellaneous revenue from contracts with customers (c)	Miscellaneous revenue from contracts with customers (c)	0		2.3		0		2.3		Miscellaneous revenue from contracts with customers (c)	—		2.4		—		2.4
Other miscellaneous revenue	Other miscellaneous revenue	0.6		1.0		(0.9)		0.7		Other miscellaneous revenue	0.8		0.7		(0.8)		0.7
Total revenues	Total revenues	$	145.9	$	3.3	$	(1.1)	$	148.1	Total revenues	$	186.1	$	3.1	$	(1.0)	$	188.2

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$ in millions	$ in millions	Utility		Other		Adjustments and Eliminations		Total		$ in millions	Utility		Other		Adjustments and Eliminations		Total
		Three Months Ended June 30, 2020									Three Months Ended September 30, 2020
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	$	83.7	$	0	$	0	$	83.7	Residential revenue	$	99.3	$	—	$	—	$	99.3
Commercial revenue	Commercial revenue	26.5		0		0		26.5		Commercial revenue	32.2		—		—		32.2
Industrial revenue	Industrial revenue	11.9		0		0		11.9		Industrial revenue	14.5		—		—		14.5
Governmental revenue	Governmental revenue	8.6		0		0		8.6		Governmental revenue	9.9		—		—		9.9
Other (a)	Other (a)	2.6		0		0		2.6		Other (a)	3.7		—		—		3.7
Total retail revenue from contracts with customers	Total retail revenue from contracts with customers	133.3		0		0		133.3		Total retail revenue from contracts with customers	159.6		—		—		159.6
Other retail revenue (b)	Other retail revenue (b)	5.4		0		0		5.4		Other retail revenue (b)	0.1		—		—		0.1
Wholesale revenue	Wholesale revenue									Wholesale revenue
Wholesale revenue from contracts with customers	Wholesale revenue from contracts with customers	1.8		0		(0.3)		1.5		Wholesale revenue from contracts with customers	3.2		—		(0.2)		3.0
RTO ancillary revenue	RTO ancillary revenue	10.1		0.1		0		10.2		RTO ancillary revenue	11.5		(0.1)		—		11.4
Capacity revenue	Capacity revenue	1.1		0		0		1.1		Capacity revenue	0.9		—		—		0.9
Miscellaneous revenue	Miscellaneous revenue									Miscellaneous revenue
Miscellaneous revenue from contracts with customers (c)	Miscellaneous revenue from contracts with customers (c)	0		2.2		0		2.2		Miscellaneous revenue from contracts with customers (c)	—		2.1		—		2.1
Other miscellaneous revenue	Other miscellaneous revenue	1.4		0.9		(0.9)		1.4		Other miscellaneous revenue	1.7		1.0		(1.0)		1.7
Total revenues	Total revenues	$	153.1	$	3.2	$	(1.2)	$	155.1	Total revenues	$	177.0	$	3.0	$	(1.2)	$	178.8

		Six months ended June 30, 2021									Nine months ended September 30, 2021
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	$	176.0	$	0	$	0	$	176.0	Residential revenue	$	279.3	$	—	$	—	$	279.3
Commercial revenue	Commercial revenue	55.5		0		0		55.5		Commercial revenue	90.5		—		—		90.5
Industrial revenue	Industrial revenue	26.4		0		0		26.4		Industrial revenue	42.4		—		—		42.4
Governmental revenue	Governmental revenue	12.9		0		0		12.9		Governmental revenue	19.9		—		—		19.9
Other (a)	Other (a)	6.5		0		0		6.5		Other (a)	9.4		—		—		9.4
Total retail revenue from contracts with customers	Total retail revenue from contracts with customers	277.3		0		0		277.3		Total retail revenue from contracts with customers	441.5		—		—		441.5

Wholesale revenue	Wholesale revenue									Wholesale revenue
Wholesale revenue from contracts with customers	Wholesale revenue from contracts with customers	8.6		0		(0.4)		8.2		Wholesale revenue from contracts with customers	15.4		—		(0.6)		14.8
RTO ancillary revenue	RTO ancillary revenue	26.9		0.1		0		27.0		RTO ancillary revenue	39.4		0.1		—		39.5
Capacity revenue	Capacity revenue	2.2		0		0		2.2		Capacity revenue	4.0		—		—		4.0
Miscellaneous revenue	Miscellaneous revenue									Miscellaneous revenue
Miscellaneous revenue from contracts with customers (c)	Miscellaneous revenue from contracts with customers (c)	0		4.8		0		4.8		Miscellaneous revenue from contracts with customers (c)	—		7.2		—		7.2
Other miscellaneous revenue	Other miscellaneous revenue	3.7		1.9		(1.8)		3.8		Other miscellaneous revenue	4.5		2.6		(2.6)		4.5
Total revenues	Total revenues	$	318.7	$	6.8	$	(2.2)	$	323.3	Total revenues	$	504.8	$	9.9	$	(3.2)	$	511.5

		Six months ended June 30, 2020									Nine months ended September 30, 2020
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	$	180.6	$	0	$	0	$	180.6	Residential revenue	$	279.9	$	—	$	—	$	279.9
Commercial revenue	Commercial revenue	55.4		0		0		55.4		Commercial revenue	87.6		—		—		87.6
Industrial revenue	Industrial revenue	23.7		0		0		23.7		Industrial revenue	38.2		—		—		38.2
Governmental revenue	Governmental revenue	17.8		0		0		17.8		Governmental revenue	27.7		—		—		27.7
Other (a)	Other (a)	6.0		0		0		6.0		Other (a)	9.7		—		—		9.7
Total retail revenue from contracts with customers	Total retail revenue from contracts with customers	283.5		0		0		283.5		Total retail revenue from contracts with customers	443.1		—		—		443.1
Other retail revenue (b)	Other retail revenue (b)	8.7		0		0		8.7		Other retail revenue (b)	8.8		—		—		8.8
Wholesale revenue	Wholesale revenue									Wholesale revenue
Wholesale revenue from contracts with customers	Wholesale revenue from contracts with customers	4.5		0		(0.5)		4.0		Wholesale revenue from contracts with customers	7.7		—		(0.7)		7.0
RTO ancillary revenue	RTO ancillary revenue	20.8		0.1		0		20.9		RTO ancillary revenue	32.3		—		—		32.3
Capacity revenue	Capacity revenue	2.3		0		0		2.3		Capacity revenue	3.2		—		—		3.2
Miscellaneous revenue	Miscellaneous revenue									Miscellaneous revenue
Miscellaneous revenue from contracts with customers (c)	Miscellaneous revenue from contracts with customers (c)	0		4.6		0		4.6		Miscellaneous revenue from contracts with customers (c)	—		6.7		—		6.7
Other miscellaneous revenue	Other miscellaneous revenue	2.3		1.7		(1.7)		2.3		Other miscellaneous revenue	4.0		2.7		(2.7)		4.0
Total revenues	Total revenues	$	322.1	$	6.4	$	(2.2)	$	326.3	Total revenues	$	499.1	$	9.4	$	(3.4)	$	505.1

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(a) "Other" primarily includes Wright-Patterson Air Force Base revenues, billing service fees from CRES providers and other miscellaneous retail revenues from contracts with customers.

(b) Other retail revenue ~~primarily~~ includes alternative revenue programs not accounted for under FASC 606.

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

The balances of receivables from contracts with customers were ~~$60.8~~$62.9 million and $70.1 million as of ~~June~~September 30, 2021 and December 31, 2020, respectively. Payment terms for all receivables from contracts with customers are typically within 30 days.

Note 12 – Discontinued Operations

Conesville - In May 2020, AEP, the operator of the formerly co-owned Conesville EGU, retired Conesville Unit 4 as planned. On June 5, 2020, DPL and AES Ohio Generation, together with AEP, completed the transfer of their interests in the retired Unit 4, including the associated environmental liabilities, to an unaffiliated third-party purchaser. For the transaction, DPL will make quarterly cash expenditures, totaling $4.0 million, through July 2022, of which ~~$2.6~~$3.0 million has been paid through ~~June~~September 30, 2021. The transfer of Conesville Unit 4 was the last step in DPL's plan to exit its AES Ohio Generation business operations.

DPL determined that the transfer of Conesville ~~along with the transfers of Stuart and Killen in 2019~~ and the previous transfers and sales of ~~the Peaker Assets in 2018 and Miami Fort and Zimmer in 2017~~other AES Ohio Generation assets constitute the disposal of a group of components, which, as a whole, represent a strategic shift to exit its AES Ohio Generation business. As such, the disposal of this group of components qualifies to be presented as discontinued operations. Therefore, the results of operations of this group of components have been reported as such in the Condensed Consolidated Statements of Operations for all periods presented.

The following table summarizes the revenues, operating costs, other expenses and income tax of discontinued operations for the periods indicated:


		Three months ended				Six months ended					Three months ended				Nine months ended
		June 30,				June 30,					September 30,				September 30,
$ in millions	$ in millions	2021		2020		2021		2020		$ in millions	2021		2020		2021		2020
Revenues	Revenues	$	0.5	$	8.8	$	1.4	$	22.4	Revenues	$	—	$	0.9	$	1.4	$	23.3

Operating costs and other expenses	Operating costs and other expenses	(0.7)		(10.0)		(2.4)		(24.4)		Operating costs and other expenses	—		0.5		(2.4)		(23.9)

Loss from discontinued operations before income tax	Loss from discontinued operations before income tax	(0.2)		(1.2)		(1.0)		(2.0)		Loss from discontinued operations before income tax	—		1.4		(1.0)		(0.6)
Gain from disposal of discontinued operations	Gain from disposal of discontinued operations	0		4.5		0		4.5		Gain from disposal of discontinued operations	—		—		—		4.5
Income tax expense / (benefit) from discontinued operations	Income tax expense / (benefit) from discontinued operations	0		0.7		(0.2)		0.5		Income tax expense / (benefit) from discontinued operations	—		0.3		(0.2)		0.8
Net income / (loss) from discontinued operations	Net income / (loss) from discontinued operations	$	(0.2)	$	2.6	$	(0.8)	$	2.0	Net income / (loss) from discontinued operations	$	—	$	1.1	$	(0.8)	$	3.1

Cash flows related to discontinued operations are included in our Condensed Consolidated Statements of Cash Flows. Cash flows from operating activities for discontinued operations were ~~$0.2~~$0.4 million and ~~$(2.7)~~$1.5 million for the three months ended ~~June~~September 30, 2021 and 2020, respectively, and ~~$0.0~~$0.4 million and ~~$3.6~~$5.1 million for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively. Cash flows from investing activities for discontinued operations were $(0.4) million and ~~$(0.6)~~$(0.4) million for the three months ended ~~June~~September 30, 2021 and 2020, respectively, and ~~$(0.8)~~$(1.2) million and ~~$4.4~~$4.0 million for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively.

Note – 13 Risks and Uncertainties

COVID-19 Pandemic

The COVID-19 pandemic has impacted global economic activity, including electricity and energy consumption, and caused significant volatility in financial markets. Many countries, including the U.S., reacted to the pandemic by instituting quarantines and mandating business and school closures or limitations and other social distancing measures. Responses to the COVID-19 pandemic by the State of Ohio and its residents and businesses continue to evolve as vaccine availability and usage continues and the State and businesses review and adjust the scope and requirements of social distancing measures. Social distancing measures designed to slow the spread of the virus, such as business closures and operations limitations, impact energy demand within our service territory. We continue to take a variety of measures in response to the spread of COVID-19 to ensure our ability to transmit, distribute and sell electric energy, ensure the health and safety of our employees, contractors, customers and

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communities and provide essential services to the communities in which we operate. In addition to the impacts to demand within our service territory, we also have incurred and ~~may~~expect to continue to incur expenses relating to COVID-19, including those that relate to events outside of our control. 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

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AES Ohio	AES Ohio									AES Ohio
Condensed Statements of Operations	Condensed Statements of Operations									Condensed Statements of Operations
(Unaudited)	(Unaudited)									(Unaudited)
		Three months ended				Six months ended					Three months ended				Nine months ended
		June 30,				June 30,					September 30,				September 30,
$ in millions	$ in millions	2021		2020		2021		2020		$ in millions	2021		2020		2021		2020
Revenues	Revenues	$	145.9	$	153.1	$	318.7	$	322.1	Revenues	$	186.1	$	177.0	$	504.8	$	499.1

Operating costs and expenses	Operating costs and expenses									Operating costs and expenses
Net fuel cost	Net fuel cost	0.1		0.3		0.5		0.9		Net fuel cost	—		0.4		0.5		1.3
Net purchased power cost	Net purchased power cost	53.6		49.0		124.8		111.4		Net purchased power cost	83.7		65.7		208.5		177.1

Operation and maintenance	Operation and maintenance	37.7		42.9		72.3		89.9		Operation and maintenance	39.3		47.9		111.6		137.8
Depreciation and amortization	Depreciation and amortization	18.5		18.2		37.2		35.5		Depreciation and amortization	18.6		18.2		55.8		53.7
Taxes other than income taxes	Taxes other than income taxes	20.7		21.0		41.0		41.8		Taxes other than income taxes	21.0		17.8		62.0		59.6

Total operating costs and expenses	Total operating costs and expenses	130.6		131.4		275.8		279.5		Total operating costs and expenses	162.6		150.0		438.4		429.5

Operating income	Operating income	15.3		21.7		42.9		42.6		Operating income	23.5		27.0		66.4		69.6

Other income / (expense), net:	Other income / (expense), net:									Other income / (expense), net:
Interest expense	Interest expense	(6.0)		(6.4)		(12.0)		(12.6)		Interest expense	(6.1)		(5.9)		(18.1)		(18.5)

Other income / (expense)	Other income / (expense)	(0.2)		0.2		(0.3)		(1.6)		Other income / (expense)	(1.3)		0.2		(1.6)		(1.4)
Total other expense, net	Total other expense, net	(6.2)		(6.2)		(12.3)		(14.2)		Total other expense, net	(7.4)		(5.7)		(19.7)		(19.9)

Income before income tax	Income before income tax	9.1		15.5		30.6		28.4		Income before income tax	16.1		21.3		46.7		49.7

Income tax expense / (benefit)		0.5		(2.3)		3.7		(1.1)
Income tax expense										Income tax expense	2.7		3.5		6.4		2.4

Net income	Net income	$	8.6	$	17.8	$	26.9	$	29.5	Net income	$	13.4	$	17.8	$	40.3	$	47.3

See Notes to Condensed Financial Statements.

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AES Ohio	AES Ohio									AES Ohio
Condensed Statements of Comprehensive Income	Condensed Statements of Comprehensive Income									Condensed Statements of Comprehensive Income
(Unaudited)	(Unaudited)									(Unaudited)
		Three months ended				Six months ended					Three months ended				Nine months ended
		June 30,				June 30,					September 30,				September 30,
$ in millions	$ in millions	2021		2020		2021		2020		$ in millions	2021		2020		2021		2020
Net income	Net income	$	8.6	$	17.8	$	26.9	$	29.5	Net income	$	13.4	$	17.8	$	40.3	$	47.3
Derivative activity:	Derivative activity:									Derivative activity:
Change in derivative fair value, net of income tax expense of $0.0, $0.0, $0.0 and $0.0 for each respective period	Change in derivative fair value, net of income tax expense of $0.0, $0.0, $0.0 and $0.0 for each respective period	0		0.2		0		(0.1)		Change in derivative fair value, net of income tax expense of $0.0, $0.0, $0.0 and $0.0 for each respective period	—		0.2		—		0.1
Reclassification to earnings, net of income tax benefit of $0.0, $0.0, $0.0 and $0.0 for each respective period		0		(0.1)		0		(0.2)
Reclassification to earnings, net of income tax benefit of $0.0, $(0.1), $0.0 and $(0.1) for each respective period										Reclassification to earnings, net of income tax benefit of $0.0, $(0.1), $0.0 and $(0.1) for each respective period	—		(0.1)		—		(0.3)

Total derivative activity	Total derivative activity	0		0.1		0		(0.3)		Total derivative activity	—		0.1		—		(0.2)

Pension and postretirement activity:	Pension and postretirement activity:									Pension and postretirement activity:
Reclassification to earnings, net of income tax benefit of $(0.3), $(0.2), $(0.6) and $(0.4) for each respective period		0.9		0.8		1.9		1.6
Reclassification to earnings, net of income tax benefit of $(0.3), $(0.2), $(0.9) and $(0.6) for each respective period										Reclassification to earnings, net of income tax benefit of $(0.3), $(0.2), $(0.9) and $(0.6) for each respective period	1.0		0.8		2.9		2.4
Total change in unfunded pension and postretirement obligations	Total change in unfunded pension and postretirement obligations	0.9		0.8		1.9		1.6		Total change in unfunded pension and postretirement obligations	1.0		0.8		2.9		2.4

Other comprehensive income	Other comprehensive income	0.9		0.9		1.9		1.3		Other comprehensive income	1.0		0.9		2.9		2.2

Net comprehensive income	Net comprehensive income	$	9.5	$	18.7	$	28.8	$	30.8	Net comprehensive income	$	14.4	$	18.7	$	43.2	$	49.5

See Notes to Condensed Financial Statements.

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AES Ohio	AES Ohio					AES Ohio
Condensed Balance Sheets	Condensed Balance Sheets					Condensed Balance Sheets
(Unaudited)	(Unaudited)					(Unaudited)
$ in millions	$ in millions	June 30, 2021		December 31, 2020		$ in millions	September 30, 2021		December 31, 2020
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	4.8	$	11.7	Cash and cash equivalents	$	29.8	$	11.7
Restricted cash	Restricted cash	0.1		0.1		Restricted cash	0.1		0.1
Accounts receivable, net of allowance for credit losses of $1.7 and $2.8, respectively (Note 1)		64.9		70.2
Accounts receivable, net of allowance for credit losses of $0.9 and $2.8, respectively (Note 1)						Accounts receivable, net of allowance for credit losses of $0.9 and $2.8, respectively (Note 1)	68.5		70.2
Inventories	Inventories	9.5		8.8		Inventories	12.4		8.8
Taxes applicable to subsequent years	Taxes applicable to subsequent years	38.7		77.6		Taxes applicable to subsequent years	19.4		77.6
Regulatory assets, current	Regulatory assets, current	34.9		27.5		Regulatory assets, current	24.5		27.5
Taxes receivable	Taxes receivable	30.7		32.5		Taxes receivable	30.3		32.5
Prepayments and other current assets	Prepayments and other current assets	10.7		6.4		Prepayments and other current assets	11.4		6.4

Total current assets	Total current assets	194.3		234.8		Total current assets	196.4		234.8

Property, plant & equipment:	Property, plant & equipment:					Property, plant & equipment:
Property, plant & equipment	Property, plant & equipment	2,490.3		2,437.3		Property, plant & equipment	2,535.8		2,437.3
Less: Accumulated depreciation and amortization	Less: Accumulated depreciation and amortization	(1,047.8)		(1,032.1)		Less: Accumulated depreciation and amortization	(1,056.4)		(1,032.1)
		1,442.5		1,405.2			1,479.4		1,405.2
Construction work in process	Construction work in process	152.6		138.8		Construction work in process	149.6		138.8
Total net property, plant & equipment	Total net property, plant & equipment	1,595.1		1,544.0		Total net property, plant & equipment	1,629.0		1,544.0

Other non-current assets:	Other non-current assets:					Other non-current assets:
Regulatory assets, non-current	Regulatory assets, non-current	191.6		193.6		Regulatory assets, non-current	191.7		193.6
Intangible assets, net of amortization	Intangible assets, net of amortization	17.9		18.3		Intangible assets, net of amortization	20.8		18.3
Other non-current assets	Other non-current assets	26.6		24.0		Other non-current assets	29.7		24.0
Total other non-current assets	Total other non-current assets	236.1		235.9		Total other non-current assets	242.2		235.9
Total assets	Total assets	$	2,025.5	$	2,014.7	Total assets	$	2,067.6	$	2,014.7

LIABILITIES AND SHAREHOLDER'S EQUITY	LIABILITIES AND SHAREHOLDER'S EQUITY					LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:	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)	$	100.2	$	20.2	Short-term and current portion of long-term debt (Note 5)	$	140.2	$	20.2
Accounts payable	Accounts payable	72.3		85.5		Accounts payable	76.3		85.5
Accrued taxes	Accrued taxes	67.9		82.7		Accrued taxes	87.3		82.7
Accrued interest	Accrued interest	2.9		2.6		Accrued interest	6.0		2.6
Customer deposits	Customer deposits	17.8		19.1		Customer deposits	17.6		19.1
Regulatory liabilities, current	Regulatory liabilities, current	14.9		18.0		Regulatory liabilities, current	18.9		18.0
Accrued and other current liabilities	Accrued and other current liabilities	12.5		25.0		Accrued and other current liabilities	14.9		25.0

Total current liabilities	Total current liabilities	288.5		253.1		Total current liabilities	361.2		253.1

Non-current liabilities:	Non-current liabilities:					Non-current liabilities:
Long-term debt (Note 5)	Long-term debt (Note 5)	573.8		573.9		Long-term debt (Note 5)	574.0		573.9
Deferred income taxes	Deferred income taxes	180.4		172.1		Deferred income taxes	184.5		172.1
Taxes payable	Taxes payable	41.3		80.3		Taxes payable	2.4		80.3
Regulatory liabilities, non-current	Regulatory liabilities, non-current	214.5		218.3		Regulatory liabilities, non-current	214.8		218.3
Accrued pension and other post-retirement benefits	Accrued pension and other post-retirement benefits	82.5		93.9		Accrued pension and other post-retirement benefits	81.7		93.9

Other non-current liabilities	Other non-current liabilities	6.0		6.4		Other non-current liabilities	6.0		6.4
Total non-current liabilities	Total non-current liabilities	1,098.5		1,144.9		Total non-current liabilities	1,063.4		1,144.9

Commitments and contingencies (Note 8)	Commitments and contingencies (Note 8)	0		0		Commitments and contingencies (Note 8)	0		0

Common shareholder's equity:	Common shareholder's equity:					Common shareholder's equity:
Common stock, at par value of $0.01 per share	Common stock, at par value of $0.01 per share	0.4		0.4		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	50,000,000 shares authorized, 41,172,173 shares issued and outstanding					50,000,000 shares authorized, 41,172,173 shares issued and outstanding
Other paid-in capital	Other paid-in capital	707.4		714.4		Other paid-in capital	697.5		714.4
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(40.2)		(42.1)		Accumulated other comprehensive loss	(39.2)		(42.1)
Accumulated deficit	Accumulated deficit	(29.1)		(56.0)		Accumulated deficit	(15.7)		(56.0)
Total common shareholder's equity	Total common shareholder's equity	638.5		616.7		Total common shareholder's equity	643.0		616.7
Total liabilities and shareholder's equity	Total liabilities and shareholder's equity	$	2,025.5	$	2,014.7	Total liabilities and shareholder's equity	$	2,067.6	$	2,014.7

See Notes to Condensed Financial Statements.

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AES Ohio	AES Ohio					AES Ohio
Condensed Statements of Cash Flows	Condensed Statements of Cash Flows					Condensed Statements of Cash Flows
(Unaudited)	(Unaudited)					(Unaudited)
		Six months ended June 30,					Nine months ended September 30,
$ in millions	$ in millions	2021		2020		$ in millions	2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	26.9	$	29.5	Net income	$	40.3	$	47.3
Adjustments to reconcile net income to net cash from operating activities:	Adjustments to reconcile net income to net cash from operating activities:					Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	Depreciation and amortization	37.2		35.5		Depreciation and amortization	55.8		53.7

Deferred income taxes	Deferred income taxes	3.7		1.2		Deferred income taxes	6.4		(0.1)

Changes in certain assets and liabilities:	Changes in certain assets and liabilities:					Changes in certain assets and liabilities:
Accounts receivable, net	Accounts receivable, net	5.3		4.9		Accounts receivable, net	1.6		1.7
Inventories	Inventories	(0.6)		1.3		Inventories	(3.6)		2.1

Taxes applicable to subsequent years	Taxes applicable to subsequent years	38.9		36.8		Taxes applicable to subsequent years	58.3		57.7
Deferred regulatory costs, net	Deferred regulatory costs, net	(9.8)		(19.5)		Deferred regulatory costs, net	5.1		(17.1)
Prepayments and other current assets	Prepayments and other current assets	(6.7)		3.4		Prepayments and other current assets	(5.2)		4.1
Other non-current assets						Other non-current assets	(5.7)		1.0
Accounts payable	Accounts payable	2.6		(8.7)		Accounts payable	6.0		(20.6)
Accrued taxes payable / receivable	Accrued taxes payable / receivable	(52.0)		(36.1)		Accrued taxes payable / receivable	(71.0)		(71.6)
Accrued interest	Accrued interest	0.3		(0.1)		Accrued interest	3.3		4.6

Accrued and other current liabilities	Accrued and other current liabilities	(3.8)		(4.0)		Accrued and other current liabilities	(1.5)		(4.8)
Accrued pension and other post-retirement benefits	Accrued pension and other post-retirement benefits	(11.4)		(9.3)		Accrued pension and other post-retirement benefits	(12.2)		(10.8)
Other	Other	2.0		3.8		Other	3.7		2.5
Net cash provided by operating activities	Net cash provided by operating activities	32.6		38.7		Net cash provided by operating activities	81.3		49.7
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Capital expenditures	Capital expenditures	(94.0)		(63.4)		Capital expenditures	(143.3)		(103.9)
Cost of removal payments	Cost of removal payments	(9.2)		(17.1)		Cost of removal payments	(13.8)		(21.2)
Insurance proceeds		1.0		0

Other investing activities, net	Other investing activities, net	(0.1)		(0.7)		Other investing activities, net	0.9		(0.7)
Net cash used in investing activities	Net cash used in investing activities	(102.3)		(81.2)		Net cash used in investing activities	(156.2)		(125.8)
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	(0.2)		(0.3)		Payments of deferred financing costs	—		(1.2)
Dividends and returns of capital paid to parent		(17.0)		(14.2)
Returns of capital paid to parent						Returns of capital paid to parent	(27.0)		(27.7)
Equity contribution from parent	Equity contribution from parent	0		150.0		Equity contribution from parent	—		150.0
Borrowings from revolving credit facilities	Borrowings from revolving credit facilities	80.0		75.0		Borrowings from revolving credit facilities	120.0		75.0
Repayment of borrowings from revolving credit facilities	Repayment of borrowings from revolving credit facilities	0		(115.0)		Repayment of borrowings from revolving credit facilities	—		(115.0)

Issuance of long-term debt						Issuance of long-term debt	—		140.0
Retirement of long-term debt						Retirement of long-term debt	—		(140.0)

Other financing activities, net	Other financing activities, net	0		(0.1)		Other financing activities, net	—		(0.1)
Net cash provided by financing activities	Net cash provided by financing activities	62.8		95.4		Net cash provided by financing activities	93.0		81.0

Cash, cash equivalents, and restricted cash:	Cash, cash equivalents, and restricted cash:					Cash, cash equivalents, and restricted cash:
Net change	Net change	(6.9)		52.9		Net change	18.1		4.9
Balance at beginning of period	Balance at beginning of period	11.8		21.3		Balance at beginning of period	11.8		21.3
Cash, cash equivalents, and restricted cash at end of period	Cash, cash equivalents, and restricted cash at end of period	$	4.9	$	74.2	Cash, cash equivalents, and restricted cash at end of period	$	29.9	$	26.2
Supplemental cash flow information:	Supplemental cash flow information:					Supplemental cash flow information:
Interest paid, net of amounts capitalized	Interest paid, net of amounts capitalized	$	10.2	$	10.2	Interest paid, net of amounts capitalized	$	12.6	$	10.5

Income taxes paid, net						Income taxes paid, net	$	—	$	0.1
Non-cash financing and investing activities:	Non-cash financing and investing activities:					Non-cash financing and investing activities:
Accruals for capital expenditures	Accruals for capital expenditures	$	15.7	$	10.0	Accruals for capital expenditures	$	15.1	$	16.4

See Notes to Condensed Financial Statements.

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~~AES Ohio~~

~~Condensed Statements of Shareholder's Equity~~

~~(Unaudited)~~


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		Accumulated Deficit		Total
Balance, January 1, 2021	41,172,173	$	0.4	$	714.4	$	(42.1)	$	(56.0)	$	616.7
Net comprehensive income						1.0		18.3		19.3


Balance, March 31, 2021	41,172,173	0.4		714.4		(41.1)		(37.7)		636.0
Net comprehensive income						0.9		8.6		9.5
Return of capital				(7.0)						(7.0)


Balance, June 30, 2021	41,172,173	0.4		707.4		(40.2)		(29.1)		638.5
Net comprehensive income						1.0		13.4		14.4

Return of capital				(10.0)						(10.0)

Other				0.1				0		0.1
Balance, September 30, 2021	41,172,173	$	0.4	$	697.5	$	(39.2)	$	(15.7)	$	643.0

Common Stock (a)
$ in millions Outstanding Shares Amount Other Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total
Balance, January 1, 2021 41,172,173 $ 0.4 $ 714.4 $ (42.1) $ (56.0) $ 616.7
Net comprehensive income 1.0 18.3 19.3
Balance, March 31, 2021 41,172,173 0.4 714.4 (41.1) (37.7) 636.0
Net comprehensive income 0.9 8.6 9.5
Return of capital (7.0) (7.0)
Balance, June 30, 2021 41,172,173 $ 0.4 $ 707.4 $ (40.2) $ (29.1) $ 638.5

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


		Common Stock (a)												Common Stock (a)
$ 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, 2020	Balance, January 1, 2020	41,172,173	$	0.4	$	617.0	$	(36.9)	$	(107.1)	$	473.4	Balance, January 1, 2020	41,172,173	$	0.4	$	617.0	$	(36.9)	$	(107.1)	$	473.4
Net comprehensive income	Net comprehensive income						0.4		11.7		12.1		Net comprehensive income						0.4		11.7		12.1

Balance, March 31, 2020	Balance, March 31, 2020	41,172,173	0.4		617.0		(36.5)		(95.4)		485.5		Balance, March 31, 2020	41,172,173	0.4		617.0		(36.5)		(95.4)		485.5
Net comprehensive income	Net comprehensive income						0.9		17.8		18.7		Net comprehensive income						0.9		17.8		18.7
Return of capital	Return of capital				(14.2)						(14.2)		Return of capital				(14.2)						(14.2)
Capital contribution from parent	Capital contribution from parent				150.0						150.0		Capital contribution from parent				150.0						150.0
Other	Other				0.1				0		0.1		Other				0.1				0		0.1
Balance, June 30, 2020	Balance, June 30, 2020	41,172,173	$	0.4	$	752.9	$	(35.6)	$	(77.6)	$	640.1	Balance, June 30, 2020	41,172,173	0.4		752.9		(35.6)		(77.6)		640.1
Net comprehensive income													Net comprehensive income						0.9		17.8		18.7

Return of capital													Return of capital				(28.5)						(28.5)

Balance, September 30, 2020													Balance, September 30, 2020	41,172,173	$	0.4	$	724.4	$	(34.7)	$	(59.8)	$	630.3

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

See Notes to Condensed Financial Statements.

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AES Ohio

Notes to Unaudited Condensed Financial Statements

Note 1 – Overview and Summary of Significant Accounting Policies

Description of Business

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 ~~532,000~~533,000 customers located in West Central Ohio. Additionally, AES Ohio 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. Principal industries located in AES Ohio’s service territory include automotive, food processing, paper, plastic, manufacturing and defense. AES Ohio's sales reflect the general economic conditions, seasonal weather patterns of the area, ~~and~~ the market price of ~~electricity.~~electricity and customer energy efficiency initiatives. AES Ohio owned interests in the retired Hutchings Coal Station until its transfer in 2020 and currently owns numerous transmission facilities. AES Ohio sells its proportional share of energy and capacity from its investment in OVEC into the wholesale market. AES Ohio has 1 reportable segment, the Utility segment. In addition to AES Ohio's electric transmission and distribution businesses, the Utility segment includes revenues and costs associated with AES Ohio's investment in OVEC and the historical results of AES Ohio’s Hutchings Coal Station. 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.

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

In the opinion of our management, the Condensed Financial Statements presented in this report contain all adjustments necessary to fairly state our financial position as of ~~June~~September 30, 2021; our results of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, our cash flows for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020 and the changes in our equity for the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020. Unless otherwise noted, all adjustments are normal and recurring in nature. Due to various factors, interim results for the three and ~~six~~nine months ended ~~June~~September 30, 2021 may not be indicative of our results that will be realized for the full year ending December 31, 2021.

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Cash, Cash Equivalents and Restricted Cash

The following table provides a summary of 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	June 30, 2021		December 31, 2020		$ in millions	September 30, 2021		December 31, 2020
Cash and cash equivalents	Cash and cash equivalents	$	4.8	$	11.7	Cash and cash equivalents	$	29.8	$	11.7
Restricted cash	Restricted cash	0.1		0.1		Restricted cash	0.1		0.1
Cash, Cash Equivalents, and Restricted Cash, End of Period	Cash, Cash Equivalents, and Restricted Cash, End of Period	$	4.9	$	11.8	Cash, Cash Equivalents, and Restricted Cash, End of Period	$	29.9	$	11.8

Accounts Receivable and Allowance for Credit Losses

Accounts receivable were as follows ~~at June~~as of September 30, 2021 and December 31, 2020:


		June 30,		December 31,			September 30,		December 31,
$ in millions	$ in millions	2021		2020		$ in millions	2021		2020
Accounts receivable, net:	Accounts receivable, net:					Accounts receivable, net:
Customer receivables	Customer receivables	40.5		$	47.6	Customer receivables	46.6		$	47.6
Unbilled revenue	Unbilled revenue	19.3		21.6		Unbilled revenue	15.6		21.6
Amounts due from affiliates	Amounts due from affiliates	1.6		1.9		Amounts due from affiliates	2.3		1.9
Due from PJM transmission enhancement settlement	Due from PJM transmission enhancement settlement	1.7		1.7		Due from PJM transmission enhancement settlement	1.7		1.7
Other	Other	3.5		0.2		Other	3.2		0.2
Allowance for credit losses	Allowance for credit losses	(1.7)		(2.8)		Allowance for credit losses	(0.9)		(2.8)
Total accounts receivable, net	Total accounts receivable, net	$	64.9	$	70.2	Total accounts receivable, net	$	68.5	$	70.2


$ in millions	$ in millions	Beginning Allowance Balance		Current Period Provision		Write-offs Charged Against Allowances		Recoveries Collected		Ending Allowance Balance		$ in millions	Beginning Allowance Balance		Current Period Provision		Write-offs Charged Against Allowances		Recoveries Collected		Ending Allowance Balance
2021	2021	$	2.8	$	(0.2)	$	(1.6)	$	0.7	$	1.7	2021	$	2.8	$	(0.4)	$	(2.6)	$	1.1	$	0.9
2020	2020	$	0.4	$	2.6	$	(0.9)	$	0.9	$	3.0	2020	$	0.4	$	2.8	$	(1.4)	$	1.4	$	3.2

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, as applicable, including the economic impacts of the COVID-19 pandemic on our receivable balance as of ~~June~~September 30, 2021. Amounts are written off when reasonable collections efforts have been exhausted. During 2021, the current period provision and allowance for credit losses have decreased due to lower past due customer receivable balances. See Note 11 – Risks and Uncertainties for additional discussion of the COVID-19 pandemic.

Inventories

Inventories consist of materials and supplies ~~at June~~as of September 30, 2021 and December 31, 2020.

Accounting for Taxes Collected from Customers and Remitted to Governmental Authorities

Three months ended Six months ended
June 30, June 30,
2021 2020 2021 2020
Excise taxes collected $ 11.3 $ 10.9 $ 24.2 $ 23.3


	Three months ended				Nine months ended
	September 30,				September 30,
$ in millions	2021		2020		2021		2020
Excise taxes collected	$	13.5	$	13.4	$	37.7	$	36.7

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Accumulated other comprehensive loss

The amounts reclassified out of Accumulated other comprehensive loss by component during the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020 are as follows:


Details about Accumulated Other Comprehensive Loss components	Details about Accumulated Other Comprehensive Loss components	Affected line item in the Condensed Consolidated Statements of Operations	Three months ended				Six months ended				Details about Accumulated Other Comprehensive Loss components	Affected line item in the Condensed Consolidated Statements of Operations	Three months ended				Nine months ended
			June 30,				June 30,						September 30,				September 30,
$ in millions	$ in millions		2021		2020		2021		2020		$ in millions		2021		2020		2021		2020
Gains and losses on cash flow hedges (Note 4):	Gains and losses on cash flow hedges (Note 4):										Gains and losses on cash flow hedges (Note 4):
		Interest expense	$	0	$	(0.1)	$	0	$	(0.2)		Interest expense	$	—	$	—	$	—	$	(0.2)
		Income tax benefit	0		0		0		0			Income tax benefit	—		(0.1)		—		(0.1)
		Net of income taxes	0		(0.1)		0		(0.2)			Net of income taxes	—		(0.1)		—		(0.3)

Amortization of defined benefit pension items (Note 7):	Amortization of defined benefit pension items (Note 7):										Amortization of defined benefit pension items (Note 7):
		Other expense	1.2		1.0		2.5		2.0			Other expense	1.3		1.0		3.8		3.0
		Income tax benefit	(0.3)		(0.2)		(0.6)		(0.4)			Income tax benefit	(0.3)		(0.2)		(0.9)		(0.6)
		Net of income taxes	0.9		0.8		1.9		1.6			Net of income taxes	1.0		0.8		2.9		2.4

Total reclassifications for the period, net of income taxes	Total reclassifications for the period, net of income taxes		$	0.9	$	0.7	$	1.9	$	1.4	Total reclassifications for the period, net of income taxes		$	1.0	$	0.7	$	2.9	$	2.1

The changes in the components of Accumulated other comprehensive loss during the ~~six~~nine months ended ~~June~~September 30, 2021 are as follows:

$ in millions

Change in Accumulated other comprehensive loss

Balance atas of January 1, 2021

(42.1)

Amounts reclassified from AOCL to earnings

~~1.9~~2.9

Net current period other comprehensive income

~~1.9~~2.9

Balance ~~at June~~as of September 30, 2021

~~(40.2)~~(39.2)

New Accounting Pronouncements Adopted in 2021 – We have assessed and determined that the new accounting pronouncements adopted did not have a material impact on our financial statements.

New Accounting Pronouncements Issued But Not Yet Effective – The following table provides a brief description of recent accounting pronouncements that could have a material impact on our financial statements. Accounting pronouncements not listed below were assessed and determined to be either not applicable or are expected to have no material impact on our financial statements.


ASU Number and Name	Description	Date of Adoption	Effect on the financial statements upon adoption
2020-04, Reference Rate Form (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting	The standard provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference to LIBOR or another reference rate expected to be discontinued by reference rate reform. This standard is effective for a limited period of time (March 12, 2020 - December 21, 2022).	Effective for all entities March 12, 2020 - December 31, 2022	We are currently evaluating the impact of adopting the standard on our condensed financial statements.

Note 2 – Regulatory Matters

Smart Grid and Comprehensive Settlement

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issuance of their opinion and order, DPL and AES Ohio expect that AES will make cash contributions of $150.0 million in 2021 to enable Smart Grid investment.

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Decoupling

Distribution Rate Case

FERC Proceedings

Note 3 – Fair Value

The fair value of current financial assets and liabilities, debt service reserves and other deposits approximate their reported carrying amounts. The estimated fair values of our assets and liabilities have been determined using available market information. By virtue of these amounts being 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 5—Fair Value in Item 8. — Financial Statements and Supplementary Data of our Form 10-K.

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		June 30, 2021				December 31, 2020					September 30, 2021				December 31, 2020
$ in millions	$ in millions	Cost		Fair Value		Cost		Fair Value		$ in millions	Cost		Fair Value		Cost		Fair Value
Assets	Assets									Assets
Money market funds	Money market funds	$	0.3	$	0.3	$	0.3	$	0.3	Money market funds	$	0.4	$	0.4	$	0.3	$	0.3
Equity securities	Equity securities	2.0		5.0		2.1		4.5		Equity securities	2.0		4.9		2.1		4.5
Debt securities	Debt securities	3.8		3.9		4.0		4.1		Debt securities	3.8		3.8		4.0		4.1

Total	Total	$	6.1	$	9.2	$	6.4	$	8.9	Total	$	6.2	$	9.1	$	6.4	$	8.9

		Carrying Value		Fair Value		Carrying Value		Fair Value			Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities	Liabilities									Liabilities
Long-term debt	Long-term debt	$	574.0	$	632.5	$	574.1	$	656.0	Long-term debt	$	574.2	$	635.5	$	574.1	$	656.0

These financial instruments are not subject to master netting agreements or collateral requirements and as such are presented in the Condensed Balance Sheets at their gross fair value, except for Long-term debt, which is presented at amortized carrying value.

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Master Trust Assets

AES Ohio established a Master Trust to hold assets that could be used for the benefit of employees participating in employee benefit plans and 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 investments are recorded at fair value within Other non-current assets on the Condensed Balance Sheets and classified as equity investments. We recorded net unrealized gains / (losses) of ~~$0.3~~$(0.1) million and ~~$0.8~~$0.3 million during the during the three months ended ~~June~~September 30, 2021 and 2020, respectively, and ~~$0.5~~$0.4 million and ~~$(0.3)~~$0.0 million during the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively. These amounts are included in "Other ~~expense, net"~~income / (expense)" in our Condensed Statements of Operations.

Long-term debt

The fair value of assets and liabilities ~~at June~~as of September 30, 2021 and December 31, 2020 and the respective category within the fair value hierarchy for AES Ohio is as follows:


$ in millions	$ in millions	Fair value at June 30, 2021 (a)								Fair value at December 31, 2020 (a)								$ in millions	Fair value as of September 30, 2021 (a)								Fair value as of December 31, 2020 (a)
		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total			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	$	0	$	0.3	$	0.3	$	0	$	0	$	0.3	Money market funds	$	0.4	$	—	$	—	$	0.4	$	0.3	$	—	$	—	$	0.3
Equity securities	Equity securities	0		5.0		0		5.0		0		4.5		0		4.5		Equity securities	—		4.9		—		4.9		—		4.5		—		4.5
Debt securities	Debt securities	0		3.9		0		3.9		0		4.1		0		4.1		Debt securities	—		3.8		—		3.8		—		4.1		—		4.1

Total	Total	$	0.3	$	8.9	$	0	$	9.2	$	0.3	$	8.6	$	0	$	8.9	Total	$	0.4	$	8.7	$	—	$	9.1	$	0.3	$	8.6	$	—	$	8.9

Liabilities	Liabilities																	Liabilities

Long-term debt	Long-term debt	$	0	$	615.2	$	17.3	$	632.5	$	0	$	638.6	$	17.4	$	656.0	Long-term debt	$	—	$	618.3	$	17.2	$	635.5	$	—	$	638.6	$	17.4	$	656.0

Total Liabilities	Total Liabilities	$	0	$	615.2	$	17.3	$	632.5	$	0	$	638.6	$	17.4	$	656.0	Total Liabilities	$	—	$	618.3	$	17.2	$	635.5	$	—	$	638.6	$	17.4	$	656.0

(a) Includes credit valuation adjustment

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Note 4 – Derivative Instruments and Hedging Activities

Cash Flow Hedges

In August 2020, the two interest rate swaps to hedge the variable interest on the $140.0 million variable interest rate tax-exempt First Mortgage Bonds expired, as the associated debt reached maturity. The interest rate swaps had a combined notional amount of $140.0 million and settled monthly based on a one-month LIBOR. The AOCL associated with the swaps was amortized out of AOCL into interest expense over the life of the underlying debt.

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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 ~~six~~nine months ended ~~June~~September 30, 2020:


		Three months ended		Six months ended			Three months ended		Nine months ended
		June 30, 2020		June 30, 2020			September 30, 2020		September 30, 2020
		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
Beginning accumulated derivative losses in AOCL	Beginning accumulated derivative losses in AOCL	$	(0.8)	$	(0.4)	Beginning accumulated derivative losses in AOCL	$	(0.7)	$	(0.4)
Net gains / (losses) associated with current period hedging transactions		0.2		(0.1)
Net gains associated with current period hedging transactions						Net gains associated with current period hedging transactions	0.2		0.1
Net gains reclassified to earnings	Net gains reclassified to earnings					Net gains reclassified to earnings
Interest expense	Interest expense	(0.1)		(0.2)		Interest expense	(0.1)		(0.3)

Ending accumulated derivative losses in AOCL	Ending accumulated derivative losses in AOCL	$	(0.7)	$	(0.7)	Ending accumulated derivative losses in AOCL	$	(0.6)	$	(0.6)

Note 5 – Long-term Debt

Long-term debt is as follows:


		Interest			June 30,		December 31,			Interest			September 30,		December 31,
$ in millions	$ in millions	Rate		Maturity	2021		2020		$ in millions	Rate		Maturity	2021		2020
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
U.S. Government note	U.S. Government note	4.20	%	2061	17.3		17.4		U.S. Government note	4.20	%	2061	17.2		17.4
Unamortized deferred financing costs	Unamortized deferred financing costs				(5.7)		(5.7)		Unamortized deferred financing costs				(5.5)		(5.7)
Unamortized debt discounts, net	Unamortized debt discounts, net				(2.6)		(2.6)		Unamortized debt discounts, net				(2.5)		(2.6)
Total long-term debt	Total long-term debt				574.0		574.1		Total long-term debt				574.2		574.1
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				$	573.8	$	573.9	Long-term debt, net of current portion				$	574.0	$	573.9

Line of credit

~~At June~~As of September 30, 2021 and December 31, 2020, the AES Ohio Credit Agreement had outstanding borrowings on its line of credit of ~~$100.0~~$140.0 million and $20.0 million, respectively.

Significant transactions

Long-term debt covenants and restrictions

The AES ~~Ohio's~~Ohio ~~unsecured revolving credit facility~~Credit Agreement and Bond Purchase Agreement (financing document entered into in connection with the issuance of AES Ohio's First Mortgage Bonds, on July 31, 2020) has 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 ~~June~~September 30, 2021, AES Ohio was in compliance with this financial covenant.

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As of ~~June~~September 30, 2021, AES Ohio was in compliance with all debt covenants, including the financial covenants 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.

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Note 6 – Income Taxes

AES Ohio's provision for income taxes is based on the estimated annual effective tax rate, plus discrete items. The effective tax rates for the three and ~~six~~nine months ended ~~June~~September 30, 2021 were ~~5.5%~~16.8% and ~~12.1%~~13.7%, respectively, and ~~(14.8)%~~16.4% and ~~(3.9)%~~4.8% for the three and ~~six~~nine months ended ~~June~~September 30, 2020, respectively. The year-to-date rate is different from the combined federal and state statutory rate of 22.5% 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.

AES Ohio has unrecognized tax benefits of $1.4 million as of September 30, 2021 and December 31, 2020. The total amount of unrecognized tax benefits anticipated to result in a net decrease to unrecognized tax benefits within twelve months of September 30, 2021 is estimated to be $1.4 million, primarily relating to effective settlements of tax exams. Of the $1.4 million, $0.5 million would result in a decrease in the effective tax rate in the period that the position is released.

Note 7 – Benefit Plans

AES Ohio sponsors a defined benefit pension plan for the majority of its employees.

The amounts presented in the following tables for pension include the collective bargaining plan formula, the traditional management plan formula, the cash balance plan formula and the SERP, in the aggregate. 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. The components of net periodic benefit costs other than service costs are included in Other income / (expense) in the Condensed Statements of Operations.

The net periodic benefit cost of the pension benefit plans for the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020 was:


		Three months ended				Six months ended					Three months ended				Nine months ended
		June 30,				June 30,					September 30,				September 30,
$ in millions	$ in millions	2021		2020		2021		2020		$ in millions	2021		2020		2021		2020
Service cost	Service cost	$	1.1	$	1.0	$	2.2	$	1.9	Service cost	$	1.2	$	0.9	$	3.4	$	2.8
Interest cost	Interest cost	2.0		2.9		4.0		5.9		Interest cost	2.1		2.9		6.1		8.8
Expected return on plan assets	Expected return on plan assets	(3.7)		(4.7)		(7.4)		(9.4)		Expected return on plan assets	(3.8)		(4.6)		(11.2)		(14.0)
Amortization of unrecognized:	Amortization of unrecognized:									Amortization of unrecognized:
Prior service cost	Prior service cost	0.3		0.4		0.6		0.7		Prior service cost	0.2		0.3		0.8		1.0
Actuarial loss	Actuarial loss	2.8		2.1		5.6		4.3		Actuarial loss	2.9		2.2		8.5		6.5
Net periodic benefit cost	Net periodic benefit cost	$	2.5	$	1.7	$	5.0	$	3.4	Net periodic benefit cost	$	2.6	$	1.7	$	7.6	$	5.1

Note 8 – Shareholder's Equity

Capital Contribution and Returns of Capital

During the ~~six~~nine months ended ~~June~~September 30, 2021, AES Ohio made return of capital payments of ~~$17.0~~$27.0 million to DPL, of which $~~7.0~~17.0 million was declared in 2021.

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During the ~~six~~nine months ended ~~June~~September 30, 2020, DPL made a capital contribution of $150.0 million to AES Ohio. The proceeds are primarily being used to support AES Ohio's capital expenditure program, consisting primarily of investments in and upgrades to AES Ohio’s transmission and distribution system. Additionally, AES

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Ohio ~~made returns~~declared return of capital payments of ~~$14.2~~up to $42.7 million to DPL., of which $27.7 million was paid during the period.

Note 9 – Contractual Obligations, Commercial Commitments and Contingencies

Equity Ownership Interest

Contingencies

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 ~~June~~September 30, 2021, cannot be reasonably determined.

Environmental Matters

AES Ohio’s current and previously-owned facilities and operations are subject to a wide range of federal, state and local environmental regulations and laws. The environmental issues that may affect us include:

•The federal CAA and state laws and regulations (including State Implementation Plans) which require compliance, obtaining permits and reporting as to air emissions;

•Rules and future rules issued by the USEPA, the Ohio EPA or other authorities that require or will require reporting and reductions of GHGs;

•Solid and hazardous waste laws and regulations, which govern the management and disposal of certain waste.

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and may revise our estimates. Such revisions in the estimates of the potential liabilities could have a material adverse effect on our results of operations, financial condition and cash flows.

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Note 10 – 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, see Note 13 — Revenue in Item 8.—Financial Statements and Supplementary Data of our Form 10-K.

AES Ohio's revenue from contracts with customers was ~~$145.3~~$185.3 million and ~~$146.3~~$175.2 million for the three months ended ~~June~~September 30, 2021 and 2020, respectively; and ~~$315.0~~$500.3 million and ~~$311.1~~$486.3 million for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively.

The following table presents our revenue from contracts with customers and other revenue for the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020:


		Three months ended				Six months ended					Three months ended				Nine months ended
		June 30,				June 30,					September 30,				September 30,
$ in millions	$ in millions	2021		2020		2021		2020		$ in millions	2021		2020		2021		2020
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	$	77.7	$	83.7	$	176.0	$	180.6	Residential revenue	$	103.3	$	99.3	$	279.3	$	279.9
Commercial revenue	Commercial revenue	28.2		26.5		55.5		55.4		Commercial revenue	35.0		32.2		90.5		87.6
Industrial revenue	Industrial revenue	14.1		11.9		26.4		23.7		Industrial revenue	16.0		14.5		42.4		38.2
Governmental revenue	Governmental revenue	5.5		8.6		12.9		17.8		Governmental revenue	7.0		9.9		19.9		27.7
Other (a)	Other (a)	2.8		2.6		6.5		6.0		Other (a)	2.9		3.7		9.4		9.7
Total retail revenue from contracts with customers	Total retail revenue from contracts with customers	128.3		133.3		277.3		283.5		Total retail revenue from contracts with customers	164.2		159.6		441.5		443.1
Other retail revenue (b)	Other retail revenue (b)	0		5.4		0		8.7		Other retail revenue (b)	—		0.1		—		8.8
Wholesale revenue	Wholesale revenue									Wholesale revenue
Wholesale revenue from contracts with customers	Wholesale revenue from contracts with customers	3.6		1.8		8.6		4.5		Wholesale revenue from contracts with customers	6.8		3.2		15.4		7.7
RTO ancillary revenue	RTO ancillary revenue	12.1		10.1		26.9		20.8		RTO ancillary revenue	12.5		11.5		39.4		32.3
Capacity revenue	Capacity revenue	1.3		1.1		2.2		2.3		Capacity revenue	1.8		0.9		4.0		3.2

Miscellaneous revenue	Miscellaneous revenue	0.6		1.4		3.7		2.3		Miscellaneous revenue	0.8		1.7		4.5		4.0
Total revenues	Total revenues	$	145.9	$	153.1	$	318.7	$	322.1	Total revenues	$	186.1	$	177.0	$	504.8	$	499.1

(a) "Other" primarily includes Wright-Patterson Air Force Base revenues, billing service fees from CRES providers and other miscellaneous retail revenues from contracts with customers.

(b) Other retail revenue ~~primarily~~ includes alternative revenue programs not accounted for under FASC 606.

The balances of receivables from contracts with customers were ~~$59.8~~$62.2 million and $69.2 million as of ~~June~~September 30, 2021 and December 31, 2020, respectively. Payment terms for all receivables from contracts with customers are typically within 30 days.

Note – 11 Risks and Uncertainties

COVID-19 Pandemic

~~Table of Contents~~

demand within our service territory, we also have incurred and ~~may~~expect to continue to incur expenses relating to COVID-19, including those that relate to events outside of our control. The magnitude and duration of the COVID-19

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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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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 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 INFORMATION

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 Item 1A.—Risk Factors of this Form 10-Q, Item 1A.—Risk Factors and Item 7.—Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2020 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 is an indirectly wholly-owned subsidiary of AES.

As an electric public utility in Ohio, AES Ohio provides regulated transmission and distribution services to its customers as well as retail SSO electric service. AES Ohio's sales reflect the general economic conditions, seasonal weather patterns of the area, the market price of electricity and ~~the growth of~~customer energy efficiency initiatives.

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EXECUTIVE SUMMARY

DPL

Compared with the prior year, DPL's net income from continuing operations before income taxes was ~~lower~~higher by ~~$2.2~~$27.4 million, or ~~59%~~139%, for the three months ended ~~June~~September 30, 2021, and higher by ~~$9.3~~$36.7 million, or ~~152%~~270%, for the ~~six~~nine months ended ~~June~~September 30, 2021, primarily due to factors including, but not limited to:


		Three months ended		Six months ended			Three months ended		Nine months ended
		June 30,		June 30,			September 30,		September 30,
$ in millions	$ in millions	2021 vs. 2020		2021 vs. 2020		$ in millions	2021 vs. 2020		2021 vs. 2020
Increase due to loss on early extinguishment of debt recorded in the prior year (see Part I, Item 1, Note 5 - Long-term Debt in the Notes to DPL's Condensed Consolidated Financial Statements for further discussion)						Increase due to loss on early extinguishment of debt recorded in the prior year (see Part I, Item 1, Note 5 - Long-term Debt in the Notes to DPL's Condensed Consolidated Financial Statements for further discussion)	$	31.7	$	31.7
Higher transmission revenues due to increase in transmission rates						Higher transmission revenues due to increase in transmission rates	1.0		7.0
Increase due to lower interest expense from debt refinancings in the prior year	Increase due to lower interest expense from debt refinancings in the prior year	$	3.8	$	7.1	Increase due to lower interest expense from debt refinancings in the prior year	1.3		8.4
Higher transmission revenues due to increase in transmission rates		2.0		6.0
Net increase in regulated retail margin primarily due to increased volume of retail kWh sold primarily driven by weather for the six months ended June 30, 2021		—		5.0

Decrease due to Energy Efficiency shared savings in the prior year	Decrease due to Energy Efficiency shared savings in the prior year	(5.3)		(8.7)		Decrease due to Energy Efficiency shared savings in the prior year	(0.2)		(8.9)
Decrease due to higher taxes other than income taxes						Decrease due to higher taxes other than income taxes	(3.3)		(2.5)
Other	Other	(2.7)		(0.1)		Other	(3.1)		1.0
Net change in income from continuing operations before income tax		$	(2.2)	$	9.3
Net change in income / (loss) from continuing operations before income tax						Net change in income / (loss) from continuing operations before income tax	$	27.4	$	36.7

AES Ohio

Compared with the prior year, AES Ohio's net income from continuing operations before income taxes was lower by ~~$6.4~~$5.2 million, or ~~41%~~24%, for the three months ended ~~June~~September 30, 2021, and ~~higher~~lower by ~~$2.2~~$3.0 million, or 8%6%, for the ~~six~~nine months ended ~~June~~September 30, 2021, primarily due to factors including, but not limited to:


		Three months ended		Six months ended			Three months ended		Nine months ended
		June 30,		June 30,			September 30,		September 30,
$ in millions	$ in millions	2021 vs. 2020		2021 vs. 2020		$ in millions	2021 vs. 2020		2021 vs. 2020
Decrease due to Energy Efficiency shared savings in the prior year						Decrease due to Energy Efficiency shared savings in the prior year	$	(0.2)	$	(8.9)
Decrease due to higher taxes other than income taxes						Decrease due to higher taxes other than income taxes	(3.2)		(2.4)
Higher transmission revenues due to increase in transmission rates	Higher transmission revenues due to increase in transmission rates	$	2.0	$	6.0	Higher transmission revenues due to increase in transmission rates	1.0		7.0
Net increase in regulated retail margin primarily due to increased volume of retail kWh sold primarily driven by weather for the six months ended June 30, 2021		—		5.0
Decrease due to Energy Efficiency shared savings in the prior year		(5.3)		(8.7)
Other	Other	(3.1)		(0.1)		Other	(2.8)		1.3
Net change in income before income tax	Net change in income before income tax	$	(6.4)	$	2.2	Net change in income before income tax	$	(5.2)	$	(3.0)

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RESULTS OF OPERATIONS HIGHLIGHTS – 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							Six months ended								Three months ended							Nine months ended
		June 30,							June 30,								September 30,							September 30,
$ in millions	$ in millions	2021		2020		$ change		% change	2021		2020		$ change		% change	$ in millions	2021		2020		$ change		% change	2021		2020		$ change		% change
Revenues:	Revenues:															Revenues:
Retail	Retail	$	128.3	$	138.7	$	(10.4)	(7)%	$	277.3	$	292.2	$	(14.9)	(5)%	Retail	$	164.2	$	159.7	$	4.5	3%	$	441.5	$	451.9	$	(10.4)	(2)%
Wholesale	Wholesale	3.4		1.5		1.9		127%	8.2		4.0		4.2		105%	Wholesale	6.6		3.0		3.6		120%	14.8		7.0		7.8		111%
RTO ancillary	RTO ancillary	12.1		10.2		1.9		19%	27.0		20.9		6.1		29%	RTO ancillary	12.5		11.4		1.1		10%	39.5		32.3		7.2		22%
Capacity revenues	Capacity revenues	1.3		1.1		0.2		18%	2.2		2.3		(0.1)		(4)%	Capacity revenues	1.8		0.9		0.9		100%	4.0		3.2		0.8		25%
Miscellaneous revenues	Miscellaneous revenues	3.0		3.6		(0.6)		(17)%	8.6		6.9		1.7		25%	Miscellaneous revenues	3.1		3.8		(0.7)		(18)%	11.7		10.7		1.0		9%

Total revenues	Total revenues	148.1		155.1		(7.0)		(5)%	323.3		326.3		(3.0)		(1)%	Total revenues	188.2		178.8		9.4		5%	511.5		505.1		6.4		1%

Operating costs and expenses	Operating costs and expenses															Operating costs and expenses

Net fuel cost	Net fuel cost	0.1		0.3		(0.2)		(67)%	0.5		0.9		(0.4)		(44)%	Net fuel cost	—		0.4		(0.4)		(100)%	0.5		1.3		(0.8)		(62)%
Purchased power:	Purchased power:															Purchased power:
Purchased power	Purchased power	41.6		43.2		(1.6)		(4)%	102.6		100.6		2.0		2%	Purchased power	59.4		55.7		3.7		7%	162.0		156.3		5.7		4%
RTO charges	RTO charges	12.3		6.0		6.3		105%	22.8		11.4		11.4		100%	RTO charges	24.5		10.3		14.2		138%	47.3		21.7		25.6		118%

Net purchased power cost	Net purchased power cost	53.9		49.2		4.7		10%	125.4		112.0		13.4		12%	Net purchased power cost	83.9		66.0		17.9		27%	209.3		178.0		31.3		18%

Operation and maintenance	Operation and maintenance	38.0		43.8		(5.8)		(13)%	72.8		90.8		(18.0)		(20)%	Operation and maintenance	40.1		48.0		(7.9)		(16)%	112.9		138.8		(25.9)		(19)%
Depreciation and amortization	Depreciation and amortization	18.9		18.5		0.4		2%	38.0		36.2		1.8		5%	Depreciation and amortization	18.9		18.6		0.3		2%	56.9		54.8		2.1		4%
Taxes other than income taxes	Taxes other than income taxes	20.7		21.0		(0.3)		(1)%	41.1		41.9		(0.8)		(2)%	Taxes other than income taxes	21.0		17.7		3.3		19%	62.1		59.6		2.5		4%

Total operating costs and expenses	Total operating costs and expenses	131.6		132.8		(1.2)		(1)%	277.8		281.8		(4.0)		(1)%	Total operating costs and expenses	163.9		150.7		13.2		9%	441.7		432.5		9.2		2%

Operating income	Operating income	16.5		22.3		(5.8)		(26)%	45.5		44.5		1.0		2%	Operating income	24.3		28.1		(3.8)		(14)%	69.8		72.6		(2.8)		(4)%

Other income / (expense), net:	Other income / (expense), net:															Other income / (expense), net:
Interest expense	Interest expense	(15.6)		(19.4)		3.8		(20)%	(31.2)		(38.3)		7.1		(19)%	Interest expense	(15.8)		(17.1)		1.3		(8)%	(47.0)		(55.4)		8.4		(15)%

Loss on early extinguishment of debt																Loss on early extinguishment of debt	—		(31.7)		31.7		(100)%	—		(31.7)		31.7		(100)%
Other income / (expense)	Other income / (expense)	0.6		0.8		(0.2)		(25)%	1.1		(0.1)		1.2		(1,200)%	Other income / (expense)	(0.8)		1.0		(1.8)		(180)%	0.3		0.9		(0.6)		(67)%
Total other expense, net	Total other expense, net	(15.0)		(18.6)		3.6		(19)%	(30.1)		(38.4)		8.3		(22)%	Total other expense, net	(16.6)		(47.8)		31.2		(65)%	(46.7)		(86.2)		39.5		(46)%

Income from continuing operations before income tax (a)		$	1.5	$	3.7	$	(2.2)	(59)%	$	15.4	$	6.1	$	9.3	152%
Income / (loss) from continuing operations before income tax (a)																Income / (loss) from continuing operations before income tax (a)	$	7.7	$	(19.7)	$	27.4	(139)%	$	23.1	$	(13.6)	$	36.7	(270)%

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

DPL – Revenues

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regulated rates and riders including the changes to our ESP described in Note 3 - Regulatory Matters of our Form 10-K and Note 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					Six months ended						Three months ended					Nine months ended
		June 30,					June 30,						September 30,					September 30,
		2021	2020	change	% change		2021	2020	change	% change			2021	2020	change	% change		2021	2020	change	% change
Actual	Actual											Actual
Heating degree-days	Heating degree-days	577	642	(65)	(10)	%	3,254	2,979	275	9	%	Heating degree-days	25	61	(36)	(59)	%	3,279	3,040	239	8	%
Cooling degree-days	Cooling degree-days	381	355	26	7	%	381	355	26	7	%	Cooling degree-days	851	845	6	1	%	1,232	1,200	32	3	%

30-year average (b)	30-year average (b)											30-year average (b)
Heating degree-days	Heating degree-days	559	552				3,392	3,385				Heating degree-days	76	79				3,468	3,464
Cooling degree-days	Cooling degree-days	300	303				302	305				Cooling degree-days	674	671				976	976

(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				Six months ended					Three months ended				Nine months ended
		June 30,				June 30,					September 30,				September 30,
		2021	2020	change	% change	2021	2020	change	% change		2021	2020	change	% change	2021	2020	change	% change
Retail electric sales (b)	Retail electric sales (b)									Retail electric sales (b)
Residential	Residential	1,159	1,208	(49)	(4.1)%	2,689	2,606	83	3.2%	Residential	1,459	1,461	(2)	(0.1)%	4,148	4,067	81	2.0%
Commercial	Commercial	853	788	65	8.2%	1,687	1,643	44	2.7%	Commercial	1,011	973	38	3.9%	2,698	2,616	82	3.1%
Industrial	Industrial	925	763	162	21.2%	1,791	1,656	135	8.2%	Industrial	992	987	5	0.5%	2,783	2,643	140	5.3%
Governmental	Governmental	290	262	28	10.7%	569	553	16	2.9%	Governmental	333	319	14	4.4%	902	872	30	3.4%
Other	Other	4	3	1	33.3%	9	9	—	—%	Other	6	4	2	50.0%	15	13	2	15.4%
Total retail electric sales	Total retail electric sales	3,231	3,024	207	6.8%	6,745	6,467	278	4.3%	Total retail electric sales	3,801	3,744	57	1.5%	10,546	10,211	335	3.3%
Wholesale electric sales (c)	Wholesale electric sales (c)	109	81	28	34.6%	255	200	55	27.5%	Wholesale electric sales (c)	158	123	35	28.5%	413	323	90	27.9%
Total electric sales	Total electric sales	3,340	3,105	235	7.6%	7,000	6,667	333	5.0%	Total electric sales	3,959	3,867	92	2.4%	10,959	10,534	425	4.0%

Billed electric customers (end of period)	Billed electric customers (end of period)					532,152	528,350	3,802	0.7%	Billed electric customers (end of period)					532,810	529,764	3,046	0.6%

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

(b)DPL and AES Ohio retail electric sales represent the total transmission and distribution retail sales for the periods presented. SSO sales were ~~799~~968 kWh and ~~1,869~~2,837 kWh and ~~865~~1,057 kWh and ~~1,880~~2,937 kWh for the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively.

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

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The following chart shows the percentage changes in weather-normalized and actual retail electric sales volumes by customer class for the three months ended ~~June~~September 30, 2021 compared to the same period in the prior year:

The following chart shows the percentage changes in weather-normalized and actual retail electric sales volumes by customer class for the ~~six~~nine months ended ~~June~~September 30, 2021 compared to the same period in the prior year:

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During the three months ended ~~June~~September 30, 2021, Revenues ~~decreased $7.0~~increased $9.4 million to ~~$148.1~~$188.2 million compared to ~~$155.1~~$178.8 million in the same period of the prior year, and, during the ~~six~~nine months ended ~~June~~September 30, 2021, Revenues ~~decreased $3.0~~increased $6.4 million to ~~$323.3~~$511.5 million compared to ~~$326.3~~$505.1 million in the same period of the prior year. These changes were primarily the result of changes in the components of revenue shown below:


		Three months ended		Six months ended			Three months ended		Nine months ended
		June 30,		June 30,			September 30,		September 30,
$ in millions	$ in millions	2021 vs. 2020		2021 vs. 2020		$ in millions	2021 vs. 2020		2021 vs. 2020
Retail	Retail					Retail
Rate	Rate					Rate
Decrease in Energy Efficiency and USF Revenue Rate Riders	Decrease in Energy Efficiency and USF Revenue Rate Riders	(6.6)		$	(14.8)	Decrease in Energy Efficiency and USF Revenue Rate Riders	(9.0)		$	(23.8)
Decrease due to Energy Efficiency shared savings	Decrease due to Energy Efficiency shared savings	(5.3)		(8.7)		Decrease due to Energy Efficiency shared savings	(0.2)		(8.9)
Decrease in Competitive Bid Revenue Rate Rider (Standard Offer Rate)		(3.3)		(8.5)
Decrease due to deferred storm charges	Decrease due to deferred storm charges	(2.1)		(4.1)		Decrease due to deferred storm charges	(2.1)		(6.2)
Increase / (decrease) in Competitive Bid Revenue Rate Rider (Standard Offer Rate)						Increase / (decrease) in Competitive Bid Revenue Rate Rider (Standard Offer Rate)	3.1		(5.2)

Increase due to the TCRR Rider	Increase due to the TCRR Rider	7.3		12.4		Increase due to the TCRR Rider	15.8		28.2

Other	Other	(3.1)		(1.8)		Other	0.5		1.0
Net change in retail rate	Net change in retail rate	(13.1)		(25.5)		Net change in retail rate	8.1		(14.9)

Volume	Volume					Volume
For the three and six months ended, increase in demand due to the unfavorable impacts of the COVID-19 pandemic in the prior year. For the six months ended, increase in the volume of kWh sold is also due to favorable weather compared to the same period in the prior year.		2.5		10.2
For the three months ended, decrease in demand primarily due to a decrease in SSO sales volume from certain customers switching to CRES providers in the current year, and extreme weather in the same period in the prior year. For the nine months ended, increase in demand primarily due to favorable weather compared to the same period in the prior year.						For the three months ended, decrease in demand primarily due to a decrease in SSO sales volume from certain customers switching to CRES providers in the current year, and extreme weather in the same period in the prior year. For the nine months ended, increase in demand primarily due to favorable weather compared to the same period in the prior year.	(2.9)		4.8

Other miscellaneous	Other miscellaneous	0.2		0.4		Other miscellaneous	(0.7)		(0.3)
Total retail change	Total retail change	(10.4)		(14.9)		Total retail change	4.5		(10.4)

Wholesale	Wholesale					Wholesale

Increase primarily due to higher volumes at OVEC		1.9		4.2
Increase primarily due to higher rates and volumes at OVEC						Increase primarily due to higher rates and volumes at OVEC	3.6		7.8

RTO ancillary and capacity revenues	RTO ancillary and capacity revenues					RTO ancillary and capacity revenues
Increase primarily due to higher transmission rates as a result of changing from a stated rate to a formula rate in May 2020	Increase primarily due to higher transmission rates as a result of changing from a stated rate to a formula rate in May 2020	2.1		6.0		Increase primarily due to higher transmission rates as a result of changing from a stated rate to a formula rate in May 2020	2.0		8.0

Other	Other					Other
Miscellaneous revenues	Miscellaneous revenues	(0.6)		1.7		Miscellaneous revenues	(0.7)		1.0

Net change in revenues	Net change in revenues	$	(7.0)	$	(3.0)	Net change in revenues	$	9.4	$	6.4

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DPL – Net Purchased Power

During the three months ended ~~June~~September 30, 2021, Net purchased power increased ~~$4.7~~$17.9 million to ~~$53.9~~$83.9 million compared to ~~$49.2~~$66.0 million in the same period of the prior year, and, during the ~~six~~nine months ended ~~June~~September 30, 2021, Net purchased power increased ~~$13.4~~$31.3 million to ~~$125.4~~$209.3 million compared to ~~$112.0~~$178.0 million in the same period of the prior year. These changes were primarily the result of changes in the cost of purchased power shown below.

Three months ended

Six months ended

Three months ended

Nine months ended

June 30,

September 30,

$ in millions

2021 vs. 2020

$ in millions

2021 vs. 2020

Net purchased power

Purchased power

Rate

Increase due to pricing in the competitive bid process

0.3

For the three months ended, increase due to deferrals related to the Reconciliation Rider, OVEC costs and pricing in the competitive bid process. For the nine months ended, increase due to deferrals related to the Reconciliation Rider and OVEC costs, partially offset by pricing in the competitive bid process.

5.2

5.5

Volume

Increase / (decrease) due to retail load served primarily driven by weather

(1.9)

1.7

Increase / (decrease) due to retail load served primarily driven by weather

(1.5)

0.2

Total purchased power change

(1.6)

2.0

Total purchased power change

3.7

5.7

RTO charges

Increase primarily due to higher TCRR rates

6.3

11.4

Increase primarily due to higher TCRR rates

14.2

25.6

Net change in purchased power

4.7

13.4

Net change in purchased power

17.9

31.3

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DPL – Operation and Maintenance

During the three and ~~six~~nine months ended ~~June~~September 30, 2021, Operation and maintenance expense decreased ~~$5.8~~$7.9 million and ~~$18.0~~$25.9 million, respectively, compared to the same periods in the prior year. The main drivers of these changes are as follows:


		Three months ended		Six months ended			Three months ended		Nine months ended
		June 30,		June 30,			September 30,		September 30,
$ in millions	$ in millions	2021 vs. 2020		2021 vs. 2020		$ in millions	2021 vs. 2020		2021 vs. 2020
Decrease in uncollectible expenses for the low-income payment program, which is funded by the USF Revenue Rate Rider (a)	Decrease in uncollectible expenses for the low-income payment program, which is funded by the USF Revenue Rate Rider (a)	(3.8)		$	(8.1)	Decrease in uncollectible expenses for the low-income payment program, which is funded by the USF Revenue Rate Rider (a)	(4.7)		$	(12.8)
Decrease in Alternative Energy and Energy Efficiency programs (a)	Decrease in Alternative Energy and Energy Efficiency programs (a)	(2.8)		(6.8)		Decrease in Alternative Energy and Energy Efficiency programs (a)	(4.3)		(11.0)
Decrease in deferred storm costs (a)	Decrease in deferred storm costs (a)	$	(1.8)	(3.9)		Decrease in deferred storm costs (a)	$	(2.1)	(6.1)
Increase in TCRR costs (a)						Increase in TCRR costs (a)	1.5		2.6
Increase in charges from Service Company	Increase in charges from Service Company	1.5		0.8		Increase in charges from Service Company	0.5		1.5
Other, net	Other, net	1.1		—		Other, net	1.2		(0.1)

Net change in operation and maintenance expense	Net change in operation and maintenance expense	$	(5.8)	$	(18.0)	Net change in operation and maintenance expense	$	(7.9)	$	(25.9)

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

DPL – Depreciation and Amortization

During the three and nine months ended ~~June~~September 30, 2021, Depreciation and amortization increased ~~$0.4~~$0.3 million and $2.1 million, respectively, compared to the same ~~period in the prior year. The increase was primarily the result of higher depreciable property, plant and equipment balances in the current year.~~

~~During the six months ended June 30, 2021, Depreciation and amortization increased $1.8 million compared to the same period~~periods in the prior year. The increase was primarily the result of higher depreciable property, plant and equipment balances in the current year.

DPL – Taxes Other Than Income Taxes

During the three months ended September 30, 2021, Taxes other than income taxes increased $3.3 million compared to the same period in the prior year. The increase was primarily the result of a property tax true-up in the prior year, resulting from a new assessment from the state of Ohio.

During the nine months ended September 30, 2021, Taxes other than income taxes increased $2.5 million compared to the same period in the prior year. The increase was primarily the result of a property tax true-up in the prior year, resulting from a new assessment from the state of Ohio.

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DPL – Interest Expense

During the three months ended ~~June~~September 30, 2021, Interest expense decreased ~~$3.8~~$1.3 million compared to the same period in the prior year. The decrease was primarily the result of the refinancing of debt at DPL in 2020.

During the ~~six~~nine months ended ~~June~~September 30, 2021, Interest expense decreased ~~$7.1~~$8.4 million compared to the same period in the prior year. The decrease was primarily the result of the refinancing of debt at DPL in 2020.

DPL – Loss on Early Extinguishment of Debt

During the three and nine months ended September 30, 2020, DPL recorded Loss on early extinguishment of debt of $31.7 million primarily due to the make-whole premium payment of $30.8 million related to the redemption of the $380.0 million 7.25% Notes due 2021 in the third quarter of 2020.

DPL – Income Tax ~~Expense~~Benefit From Continuing Operations

Income tax ~~expense~~benefit was ~~$0.9~~$0.8 million during the three months ended ~~June~~September 30, 2021 compared to ~~expense~~a benefit of ~~$2.8~~$10.4 million during the three months ended ~~June~~September 30, 2020. The decrease was primarily due to ~~lower~~the change in income from continuing operations before income tax in the current year versus the prior year.

Income tax ~~expense~~benefit was ~~$0.6~~$0.2 million during the ~~six~~nine months ended ~~June~~September 30, 2021 compared to ~~expense~~a benefit of ~~$2.7~~$7.7 million during the ~~six~~nine months ended ~~June~~September 30, 2020. The decrease was primarily due to a lower estimated effective tax rate in the current year versus the prior year, a change from an estimated pre-tax loss in the prior year to estimated pre-tax income in the current year and the reversal of an uncertain tax position in the prior year.

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

DPL – Discontinued Operations

Net income / (loss) from discontinued operations was ~~$(0.2)~~$0.0 million and ~~$2.6~~$1.1 million for the three months ended ~~June~~September 30, 2021 and ~~June~~September 30, 2020, respectively, and $(0.8) million and ~~$2.0~~$3.1 million for the ~~six~~nine months ended ~~June~~September 30, 2021 and ~~June~~September 30, 2020, respectively. This ~~loss~~income / (loss) relates to the generation components of Stuart and Killen, which were retired in 2018 and sold in 2019, and Conesville, which was retired in May 2020 and sold in June 2020. See Part I, Item 1, Note 12 – Discontinued Operations 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) from continuing operations before income tax as management has concluded that this measure best reflects the underlying business performance of DPL and is the most relevant

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measure considered in DPL’s internal evaluation of the financial performance of its segment. The Utility segment is discussed further below.

Utility Segment

The Utility segment is comprised of AES Ohio’s electric transmission and distribution businesses, which distribute electricity to residential, commercial, industrial and governmental customers. AES Ohio distributes electricity to approximately ~~532,000~~533,000 retail customers located in a 6,000-square mile area of West Central Ohio. 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 recording regulatory assets when incurred costs are expected to be recovered in future customer rates and regulatory liabilities when current cost recoveries in customer rates relate to expected future costs. The Utility segment includes revenues and costs associated with our investment in OVEC and the historical results of AES Ohio’s Hutchings Coal Station, which was closed in 2013 and transferred to a third party in the fourth quarter of 2020.

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our 10-K. Intersegment sales, costs of sales and expenses are eliminated in consolidation. Certain shared and corporate costs are allocated between "Other" and the Utility reporting segment.

See Part I, Item 1, Note 10 – Business Segments of Notes to DPL's Condensed Consolidated Financial Statements for additional information regarding DPL’s reportable segment.

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


		Three months ended				Six months ended					Three months ended				Nine months ended
		June 30,				June 30,					September 30,				September 30,
$ in millions	$ in millions	2021		2020		2021		2020		$ in millions	2021		2020		2021		2020
Utility	Utility	$	9.1	$	15.5	$	30.6	$	28.4	Utility	$	16.1	$	21.3	$	46.7	$	49.7

Other	Other	(7.6)		(11.8)		(15.2)		(22.3)		Other	(8.4)		(41.0)		(23.6)		(63.3)
Income from continuing operations before income tax (a)		$	1.5	$	3.7	$	15.4	$	6.1
Income / (loss) from continuing operations before income tax (a)										Income / (loss) from continuing operations before income tax (a)	$	7.7	$	(19.7)	$	23.1	$	(13.6)

RESULTS OF OPERATIONS HIGHLIGHTS – DPL – Utility Segment

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

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RESULTS OF OPERATIONS HIGHLIGHTS – AES Ohio


		Three months ended								Six months ended									Three months ended								Nine months ended
		June 30,								June 30,									September 30,								September 30,
$ in millions	$ in millions	2021		2020		$ change		% change		2021		2020		$ change		% change		$ in millions	2021		2020		$ change		% change		2021		2020		$ change		% change
Revenues:	Revenues:																	Revenues:
Retail	Retail	$	128.3	$	138.7	$	(10.4)	(7)	%	$	277.3	$	292.2	$	(14.9)	(5)	%	Retail	$	164.2	$	159.7	$	4.5	3	%	$	441.5	$	451.9	$	(10.4)	(2)	%
Wholesale	Wholesale	3.6		1.8		1.8		100	%	8.6		4.5		4.1		91	%	Wholesale	6.8		3.2		3.6		113	%	15.4		7.7		7.7		100	%
RTO ancillary	RTO ancillary	12.1		10.1		2.0		20	%	26.9		20.8		6.1		29	%	RTO ancillary	12.5		11.5		1.0		9	%	39.4		32.3		7.1		22	%
Capacity revenues	Capacity revenues	1.3		1.1		0.2		18	%	2.2		2.3		(0.1)		(4)	%	Capacity revenues	1.8		0.9		0.9		100	%	4.0		3.2		0.8		25	%
Miscellaneous revenues	Miscellaneous revenues	0.6		1.4		(0.8)		(57)	%	3.7		2.3		1.4		61	%	Miscellaneous revenues	0.8		1.7		(0.9)		(53)	%	4.5		4.0		0.5		13	%
Total revenues	Total revenues	145.9		153.1		(7.2)		(5)	%	318.7		322.1		(3.4)		(1)	%	Total revenues	186.1		177.0		9.1		5	%	504.8		499.1		5.7		1	%

Operating costs and expenses	Operating costs and expenses																	Operating costs and expenses

Net fuel cost	Net fuel cost	0.1		0.3		(0.2)		(67)	%	0.5		0.9		(0.4)		(44)	%	Net fuel cost	—		0.4		(0.4)		(100)	%	0.5		1.3		(0.8)		(62)	%
Purchased power:	Purchased power:																	Purchased power:
Purchased power	Purchased power	41.6		43.3		(1.7)		(4)	%	102.6		100.6		2.0		2	%	Purchased power	59.4		55.7		3.7		7	%	162.0		156.3		5.7		4	%
RTO charges	RTO charges	12.0		5.7		6.3		111	%	22.2		10.8		11.4		106	%	RTO charges	24.3		10.0		14.3		143	%	46.5		20.8		25.7		124	%

Net purchased power cost	Net purchased power cost	53.6		49.0		4.6		9	%	124.8		111.4		13.4		12	%	Net purchased power cost	83.7		65.7		18.0		27	%	208.5		177.1		31.4		18	%

Operation and maintenance	Operation and maintenance	37.7		42.9		(5.2)		(12)	%	72.3		89.9		(17.6)		(20)	%	Operation and maintenance	39.3		47.9		(8.6)		(18)	%	111.6		137.8		(26.2)		(19)	%
Depreciation and amortization	Depreciation and amortization	18.5		18.2		0.3		2	%	37.2		35.5		1.7		5	%	Depreciation and amortization	18.6		18.2		0.4		2	%	55.8		53.7		2.1		4	%
Taxes other than income taxes	Taxes other than income taxes	20.7		21.0		(0.3)		(1)	%	41.0		41.8		(0.8)		(2)	%	Taxes other than income taxes	21.0		17.8		3.2		18	%	62.0		59.6		2.4		4	%

Total operating costs and expenses	Total operating costs and expenses	130.6		131.4		(0.8)		(1)	%	275.8		279.5		(3.7)		(1)	%	Total operating costs and expenses	162.6		150.0		12.6		8	%	438.4		429.5		8.9		2	%

Operating income	Operating income	15.3		21.7		(6.4)		(29)	%	42.9		42.6		0.3		1	%	Operating income	23.5		27.0		(3.5)		(13)	%	66.4		69.6		(3.2)		(5)	%

Other income / (expense), net:	Other income / (expense), net:																	Other income / (expense), net:
Interest expense	Interest expense	(6.0)		(6.4)		0.4		(6)	%	(12.0)		(12.6)		0.6		(5)	%	Interest expense	(6.1)		(5.9)		(0.2)		3	%	(18.1)		(18.5)		0.4		(2)	%

Other income / (expense)	Other income / (expense)	(0.2)		0.2		(0.4)		(200)	%	(0.3)		(1.6)		1.3		(81)	%	Other income / (expense)	(1.3)		0.2		(1.5)		(750)	%	(1.6)		(1.4)		(0.2)		14	%
Total other expense, net	Total other expense, net	(6.2)		(6.2)		—		—	%	(12.3)		(14.2)		1.9		(13)	%	Total other expense, net	(7.4)		(5.7)		(1.7)		30	%	(19.7)		(19.9)		0.2		(1)	%

Income before income tax (a)	Income before income tax (a)	$	9.1	$	15.5	$	(6.4)	(41)	%	$	30.6	$	28.4	$	2.2	8	%	Income before income tax (a)	$	16.1	$	21.3	$	(5.2)	(24)	%	$	46.7	$	49.7	$	(3.0)	(6)	%

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

AES Ohio – Revenues

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 are affected by regulated rates and riders including the changes to our ESP described in Note 3 - Regulatory Matters of our Form 10-K and Note 2 – Regulatory Matters of Notes to AES Ohio's Condensed Financial Statements.

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During the three months ended ~~June~~September 30, 2021, Revenues ~~decreased $7.2~~increased $9.1 million to ~~$145.9~~$186.1 million compared to ~~$153.1~~$177.0 million in the same period of the prior year, and, during the ~~six~~nine months ended ~~June~~September 30, 2021, Revenues ~~decreased $3.4~~increased $5.7 million to ~~$318.7~~$504.8 million compared to ~~$322.1~~$499.1 million in the same period of the prior year. These changes were primarily the result of changes in the components of revenue shown below:


		Three months ended		Six months ended			Three months ended		Nine months ended
		June 30,		June 30,			September 30,		September 30,
$ in millions	$ in millions	2021 vs. 2020		2021 vs. 2020		$ in millions	2021 vs. 2020		2021 vs. 2020
Retail	Retail					Retail
Rate	Rate					Rate
Decrease in Energy Efficiency and USF Revenue Rate Riders	Decrease in Energy Efficiency and USF Revenue Rate Riders	$	(6.6)	$	(14.8)	Decrease in Energy Efficiency and USF Revenue Rate Riders	$	(9.0)	$	(23.8)
Decrease due to Energy Efficiency shared savings	Decrease due to Energy Efficiency shared savings	(5.3)		(8.7)		Decrease due to Energy Efficiency shared savings	(0.2)		(8.9)
Decrease in Competitive Bid Revenue Rate Rider (Standard Offer Rate)		(3.3)		(8.5)
Decrease due to deferred storm charges	Decrease due to deferred storm charges	(2.1)		(4.1)		Decrease due to deferred storm charges	(2.1)		(6.2)
Increase / (decrease) in Competitive Bid Revenue Rate Rider (Standard Offer Rate)						Increase / (decrease) in Competitive Bid Revenue Rate Rider (Standard Offer Rate)	3.1		(5.2)

Increase due to the TCRR Rider	Increase due to the TCRR Rider	7.3		12.4		Increase due to the TCRR Rider	15.8		28.2

Other	Other	(3.1)		(1.8)		Other	0.5		1.0
Net change in retail rate	Net change in retail rate	(13.1)		(25.5)		Net change in retail rate	8.1		(14.9)

Volume	Volume					Volume
For the three and six months ended, increase in demand due to the unfavorable impacts of the COVID-19 pandemic in the prior year. For the six months ended, increase in the volume of kWh sold is also due to favorable weather compared to the same period in the prior year.		2.5		10.2
For the three months ended, decrease in demand primarily due to a decrease in SSO sales volume from certain customers switching to CRES providers in the current year, and extreme weather in the same period in the prior year. For the nine months ended, increase in demand primarily due to favorable weather compared to the same period in the prior year.						For the three months ended, decrease in demand primarily due to a decrease in SSO sales volume from certain customers switching to CRES providers in the current year, and extreme weather in the same period in the prior year. For the nine months ended, increase in demand primarily due to favorable weather compared to the same period in the prior year.	(2.9)		4.8

Other miscellaneous	Other miscellaneous	0.2		0.4		Other miscellaneous	(0.7)		(0.3)
Total retail change	Total retail change	(10.4)		(14.9)		Total retail change	4.5		(10.4)

Wholesale	Wholesale					Wholesale

Increase primarily due to higher volumes at OVEC		1.8		4.1
Increase primarily due to higher rates and volumes at OVEC						Increase primarily due to higher rates and volumes at OVEC	3.6		7.7

RTO ancillary and capacity revenues	RTO ancillary and capacity revenues					RTO ancillary and capacity revenues
Increase primarily due to higher transmission rates as a result of changing from a stated rate to a formula rate in May 2020	Increase primarily due to higher transmission rates as a result of changing from a stated rate to a formula rate in May 2020	2.2		6.0		Increase primarily due to higher transmission rates as a result of changing from a stated rate to a formula rate in May 2020	1.9		7.9

Other	Other					Other
Miscellaneous revenues	Miscellaneous revenues	(0.8)		1.4		Miscellaneous revenues	(0.9)		0.5

Net change in revenues	Net change in revenues	$	(7.2)	$	(3.4)	Net change in revenues	$	9.1	$	5.7

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AES Ohio – Net Purchased Power

During the three months ended ~~June~~September 30, 2021, net purchased power increased ~~$4.6~~$18.0 million to ~~$53.6~~$83.7 million compared to ~~$49.0~~$65.7 million in the same period of the prior year, and, during the ~~six~~nine months ended ~~June~~September 30, 2021, net purchased power increased ~~$13.4~~$31.4 million to ~~$124.8~~$208.5 million compared to ~~$111.4~~$177.1 million in the same period of the prior year. These changes were primarily the result of changes in the cost of purchased power shown below.

Three months ended

Six months ended

Three months ended

Nine months ended

June 30,

September 30,

$ in millions

2021 vs. 2020

$ in millions

2021 vs. 2020

Net purchased power

Purchased power

Rate

Increase due to pricing in the competitive bid process

0.2

0.3

5.2

5.5

Volume

Increase / (decrease) due to retail load served primarily driven by weather

(1.9)

1.7

Increase / (decrease) due to retail load served primarily driven by weather

(1.5)

0.2

Total purchased power change

(1.7)

2.0

Total purchased power change

3.7

5.7

RTO charges

Increase primarily due to higher TCRR rates

6.3

11.4

Increase primarily due to higher TCRR rates

14.3

25.7

Net change in purchased power

4.6

13.4

Net change in purchased power

18.0

31.4

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AES Ohio – Operation and Maintenance

During the three and ~~six~~nine months ended ~~June~~September 30, 2021, Operation and Maintenance expense decreased ~~$5.2~~$8.6 million and ~~$17.6~~$26.2 million, respectively, compared to the same periods in the prior year. The main drivers of these changes are as follows:


		Three months ended		Six months ended			Three months ended		Nine months ended
		June 30,		June 30,			September 30,		September 30,
$ in millions	$ in millions	2021 vs. 2020		2021 vs. 2020		$ in millions	2021 vs. 2020		2021 vs. 2020
Decrease in uncollectible expenses for the low-income payment program, which is funded by the USF Revenue Rate Rider (a)	Decrease in uncollectible expenses for the low-income payment program, which is funded by the USF Revenue Rate Rider (a)	(3.8)		$	(8.1)	Decrease in uncollectible expenses for the low-income payment program, which is funded by the USF Revenue Rate Rider (a)	(4.7)		$	(12.8)

Decrease in Alternative Energy and Energy Efficiency programs (a)	Decrease in Alternative Energy and Energy Efficiency programs (a)	(2.8)		(6.8)		Decrease in Alternative Energy and Energy Efficiency programs (a)	(4.3)		(11.0)

Decrease in deferred storm costs (a)	Decrease in deferred storm costs (a)	(1.8)		(3.9)		Decrease in deferred storm costs (a)	(2.1)		(6.1)
Increase in TCRR costs (a)						Increase in TCRR costs (a)	1.5		2.6
Increase in charges from Service Company	Increase in charges from Service Company	1.4		1.0		Increase in charges from Service Company	0.4		1.4
Other, net	Other, net	1.8		0.2		Other, net	0.6		(0.3)

Net change in operation and maintenance expense	Net change in operation and maintenance expense	$	(5.2)	$	(17.6)	Net change in operation and maintenance expense	$	(8.6)	$	(26.2)

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

AES Ohio – Depreciation and Amortization

During the three and nine months ended ~~June~~September 30, 2021 Depreciation and amortization increased ~~$0.3~~$0.4 million and $2.1 million, respectively, compared to the same ~~period in the prior year. The increase was primarily the result of higher depreciable property, plant and equipment balances in the current year.~~

~~During the six months ended June 30, 2021, Depreciation and amortization increased $1.7 million compared to the same period~~periods in the prior year. The increase was primarily the result of higher depreciable property, plant and equipment balances in the current year.

AES Ohio – Taxes Other Than Income Taxes

During the three months ended September 30, 2021, Taxes other than income taxes increased $3.2 million compared to the same period in the prior year. The increase was primarily the result of a property tax true-up in the prior year, resulting from a new assessment from the state of Ohio.

During the nine months ended September 30, 2021, Taxes other than income taxes increased $2.4 million compared to the same period in the prior year. The increase was primarily the result of a property tax true-up in the prior year, resulting from a new assessment from the state of Ohio.

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AES Ohio – Income Tax Expense ~~/ (Benefit)~~

Income tax expense was ~~$0.5~~$2.7 million during the three months ended ~~June~~September 30, 2021 compared to ~~a benefit of $(2.3)~~$3.5 million during the same period in the prior year. The change was primarily due to lower income from continuing operations before income tax in the ~~reversal of excess deferred taxes and the reversal of an uncertain tax position, which were partially offset by an adjustment to the deferred tax balances, in~~current year versus the prior year.

Income tax expense was ~~$3.7~~$6.4 million during the ~~six~~nine months ended ~~June~~September 30, 2021 compared to ~~a benefit of $(1.1)~~$2.4 million during the same period in the prior year. The change was primarily due to a decrease in the ~~reversal of excess deferred taxes and~~estimated effective tax rate as well as the reversal of an uncertain tax position ~~which were~~in the prior year, partially offset by ~~an adjustment to the~~a reversal of deferred ~~tax balances, in the prior year.~~income taxes.

See Note 6 – Income Taxes of Notes to AES Ohio's Condensed Financial Statements for further discussion.

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KEY TRENDS AND UNCERTAINTIES

During the remainder of 2021 and beyond, we expect our results will be primarily impacted by retail demand and weather. As discussed in Note 2 – Regulatory Matters of Notes to DPL's Condensed Consolidated Financial Statements and Note 2 – Regulatory Matters of Notes to AES Ohio's Condensed Financial Statements in Part I, Item 1 of this report, AES Ohio has requested PUCO approval to defer its decoupling costs consistent with the methodology approved in its distribution rate order. If approved, the deferral would be effective as of December 18, 2019 and going forward would reduce impacts of weather, energy efficiency programs and economic changes in customer demand. 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.

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. Responses to the COVID-19 pandemic by the State of Ohio and its residents and businesses continue to evolve as vaccine availability and usage continues and the state and businesses review and adjust the scope and requirements of social distancing measures.

Social distancing measures designed to slow the spread of the virus, such as business closures and operations limitations, impact energy demand within our service industry. In addition to the impacts to demand within our service territory, we also have incurred and ~~may~~expect to continue to incur expenses relating to COVID-19, and such expenses may include those that relate to events outside of our control. We experienced impacts from the pandemic in 2020 and into 2021 and expect to continue to experience impacts for the remainder of 2021, and any such impacts during that time or in other future periods could have material and adverse effects on our results of operations, financial condition and cash flows. The following discussion highlights our assessment of the impacts of the COVID-19 pandemic on our current financial and operating status, and our financial and operational outlook based on information known as of this filing. Also see "Item 1A. Risk Factors" to our Form 10-K.

Business Continuity - During the COVID-19 pandemic, we are taking a variety of measures to ensure our ability to generate, 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. We continue to respond to this global crisis through comprehensive measures to protect our employees and others while fulfilling our vital role in providing our customers with electric energy. While stay-at-home restrictions have been lifted in our service territory, most of our management and administrative personnel are able to work remotely, and we have not experienced significant issues affecting our operations or ability to maintain effective internal controls and produce reliable financial information. We prioritize the safety of our people and continue to develop targeted strategies, in line with legal and regulatory requirements, to promote vaccination in our business.

Demand - As the economic impact of the COVID-19 pandemic started to materialize in Ohio in the second half of March 2020 and continued for the duration of 2020 and into 2021, the COVID-19 pandemic primarily impacted our retail sales demand. Retail sales demand decreased in 2020, mostly from commercial and industrial customers, but

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has started to recover in 2021 as shown by the changes in weather-normalized volumes of kWh sold by customer class as follows:


		For the three months ended		For the three months ended		For the six months ended			For the three months ended		For the three months ended		For the three months ended		For the nine months ended
		March 31,		June 30,		June 30,			March 31,		June 30		September 30,		September 30,
		2021 vs. 2020	2020 vs. 2019	2021 vs. 2020	2020 vs. 2019	2021 vs. 2020	2020 vs. 2019		2021 vs. 2020	2020 vs. 2019	2021 vs. 2020	2020 vs. 2019	2021 vs. 2020	2020 vs. 2019	2021 vs. 2020	2020 vs. 2019
Residential	Residential	(1.2)%	0.3%	(3.0)%	8.5%	(2.0)%	3.6%	Residential	(1.2)%	0.3%	(4.2)%	8.5%	(6.6)%	11.0%	(3.9)%	6.0%
Commercial	Commercial	(2.8)%	(2.8)%	17.3%	(9.9)%	6.7%	(6.3)%	Commercial	(2.8)%	(2.8)%	14.0%	(9.9)%	(2.0)%	0.4%	2.5%	(3.9)%
Industrial	Industrial	(3.1)%	(1.5)%	20.6%	(19.9)%	7.8%	(10.9)%	Industrial	(3.1)%	(1.5)%	19.8%	(19.9)%	(1.0)%	0.9%	4.2%	(6.8)%
Government and Other	Government and Other	(3.9)%	(4.3)%	6.6%	(14.0)%	1.1%	(9.1)%	Government and Other	(3.9)%	(4.3)%	6.4%	(14.0)%	4.4%	(9.7)%	2.2%	(9.4)%
Total	Total	(2.3)%	(1.3)%	9.3%	(7.1)%	2.9%	(4.0)%	Total	(2.3)%	(1.3)%	7.7%	(7.1)%	(2.9)%	3.3%	0.3%	(1.5)%

As noted above, we also have incurred and ~~may~~expect to continue to incur expenses relating to COVID-19, however see Note 3, Regulatory Matters - COVID-19 to our Form 10-K for a discussion of regulatory measures which partially mitigate the impact of these expenses. While we have continued to experience COVID-19 impacts into 2021, we

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continue to expect that such impacts would ~~lessen as the scope and requirements of~~not be material, particularly with less expansive social distancing measures ~~continue to be adjusted~~generally in place currently and improvements in energy ~~demand improves.~~demand. The ultimate magnitude and duration of the COVID-19 pandemic is unknown at this time, however, and ~~may~~could have material and adverse effects on our results of operations, financial condition and cash flows in future periods.

Liquidity - We anticipate continuing to have sufficient liquidity to make all required payments, including payments for salaries and wages owed to our employees, during the COVID-19 pandemic. We also continue to not foresee a significant impact to our access to capital or our liquidity position as a result of the COVID-19 pandemic. For further discussion of our financial condition, liquidity, and capital requirements, see Part I, Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations – Capital Resources and Liquidity of this Form 10-Q.

Credit Exposures - We continue to monitor and manage our credit exposures in a prudent manner. During the year ended December 31, 2020, we experienced credit-related impacts from utility customers due to the prohibition of electric utilities, including us, from discontinuing electric utility service to customers through September 1, 2020 and due to the economic impacts of the COVID-19 pandemic, which began to improve in 2021. See Note 1 – Overview and Summary of Significant Accounting Policies of Notes to DPL's Condensed Consolidated Financial Statements and Note 1 – Overview and Summary of Significant Accounting Policies of Notes to AES Ohio's Condensed Financial Statements for further discussion of our allowance for credit losses. If these credit-related impacts from the COVID-19 pandemic continue into 2021 or beyond, further deterioration in our credit exposures and customer collections may result. However, as discussed in Note 3 – Regulatory Matters of Notes to DPL's Consolidated Financial Statements and Note 3 – Regulatory Matters of Notes to AES Ohio's Financial Statements in Item 8. - Financial Statements and Supplementary Data of our Form 10-K, AES Ohio’s uncollectible expense is deferred for future collection.

Supply Chain - ~~Our supply chain management has remained robust during this challenging time and we~~We continue to closely manage and monitor ~~developments.~~developments in our supply chain. We are experiencing certain minor delays and price increases, but these have not materially impacted our operations or capital projects to date.

Capital Projects - During the COVID-19 pandemic, our construction projects are proceeding without material delays. For further discussion of our capital requirements, see Part I, Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations – Capital Resources and Liquidity of this Form 10-Q.

CARES Act - The Coronavirus Aid, Relief, and Economic Security ("CARES") Act was passed by the U.S. Congress and signed into law on March 27, 2020. While we currently expect a limited impact from this legislation on our business, we have deferred the payment of federal payroll taxes in accordance with the provisions of this act. ~~At June~~As of September 30, 2021, the total deferral was approximately $2.1 million.

See Note 13 – Risks and Uncertainties of Notes to DPL's Condensed Consolidated Financial Statements and Note 11 – Risks and Uncertainties of Notes to AES Ohio's Condensed Financial Statements for more information and Part II, Item 1a - Risk Factors of this Form 10-Q for more information.

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Regulatory Environment

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 2020 Form 10-K and ~~Form~~Forms 10-Q previously filed with the SEC during 2021 describe other regulatory matters which have not materially changed since those filings. See Part I, Item 1, Note 2 – Regulatory Matters of Notes to DPL's Condensed Consolidated Financial Statements and Part I, Item 1, Note 2 – Regulatory Matters of Notes to AES Ohio's Condensed Financial Statements for further information regarding regulatory matters.

Distribution Rate Case - On November 30, 2020, AES Ohio filed a new ~~distribution rate case~~Distribution Rate Case with the PUCO. This rate case proposes a revenue increase of $120.8 million per year and incorporates the DIR investments that were planned and approved in the last rate case but not yet included in distribution rates, other distribution investments since September 2015 and investments necessitated by the tornados that occurred on Memorial Day in 2019. The rate case also includes a proposal for increased tree-trimming expenses and certain customer demand-side management programs and recovery of prior-approved regulatory assets for tree trimming, uncollectible expenses and rate case expense. This case is pending a commission order. On July 26, 2021, the PUCO staff filed its Staff Report of Investigation in the distribution rate case. ~~AES Ohio~~Settlement negotiations are currently ongoing, and the hearing is ~~preparing its response to this report. A hearing before the PUCO in this case has been~~ set to begin on ~~October 4,~~December 7, 2021.

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Stipulation and Recommendation - On October 23, 2020, AES Ohio entered into a Stipulation and Recommendation (settlement) with the staff of the PUCO and 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 AES Ohio passed the SEET for 2018 and 2019, and (iii) findings that AES Ohio's current ESP 1 satisfies the SEET and the more favorable in the aggregate (MFA) regulatory test. A hearing was held in January 2021 for consideration of this settlement and on June 16, 2021, the PUCO issued their opinion and order accepting the stipulation as filed. Applications for rehearing of the PUCO's orders relating to the comprehensive settlement were filed on July 16, 2021 and remain pending. Consistent with AES’ earlier statement of intent and based on recent discussions with AES, with the PUCO’s issuance of their opinion and order, DPL and AES Ohio expect that AES will make cash contributions of $150.0 million in 2021 to enable Smart Grid investment. See additional information in Note 2 – Regulatory Matters of Notes to DPL's Condensed Consolidated Financial Statements and Note 2 – Regulatory Matters of Notes to AES Ohio's Condensed Financial Statements.

Ohio House Bill 6 – Legislation was passed, Ohio House Bill 128, that repeals Ohio House Bill 6 provisions related to a nuclear fund and decoupling, effective June 30, 2021. Other provisions from Ohio House Bill 6 currently remain in place, which include the following: beginning January 1, 2020, permitted Ohio utilities, such as AES Ohio, may defer, recover or credit the net proceeds from selling energy and capacity received as part of their interest in OVEC and their OVEC-related costs through a statewide non-bypassable recovery mechanism through 2030; eliminates the annual energy efficiency targets for Ohio utilities after 2020; and allows Ohio utilities to construct customer-sited renewable generation for mercantile customers or groups of mercantile customers, the costs of which may only be recovered from those customers. If these provisions from Ohio House Bill 6 are repealed without a replacement with comparable provisions, it could have a material adverse effect on our results of operations, financial condition and cash flows.

Reference Rate Reform

As discussed in Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations, of our Form 10-K, in July 2017, the UK Financial Conduct Authority announced that it intends to phase out LIBOR by the end of 2021. In the U.S., the Alternative Reference Rate Committee at the Federal Reserve identified the Secured Overnight Financing Rate ("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 one week and two month LIBOR rates by December 31, 2021, and will cease publication of the one-month, three-month, six-month, and 12-month USD LIBOR rates by June 30, 2023. We maintain financial instruments that use LIBOR as an interest rate ~~benchmark. Although the full impact of the reform remains unknown, we have begun~~benchmark and will continue to engage with ~~our~~ counterparties to ~~discuss specific action items to be undertaken in order to prepare for amendments when they become due.~~make this transition.

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Environmental Matters

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 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;

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•NAAQS; and

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

Clean Air Act - Cross State Air Pollution Rule

CSAPR, which became effective in January 2015, addresses the "good neighbor" provision of the CAA, which prohibits sources within each state from emitting any air pollutant in an amount which will contribute significantly to any other state’s nonattainment, or interference with maintenance of, any NAAQS. The CSAPR is implemented, in part, through a market-based program under which compliance may be achievable through the acquisition and use of emissions allowances created by the USEPA. In October 2016, the USEPA published a final rule to update the CSAPR to address the 2008 ozone NAAQS (“CSAPR Update Rule”). The CSAPR Update Rule found that NOx ozone season emissions in 22 states (including Ohio) affect the ability of downwind states to attain and maintain the 2008 ozone NAAQS, and accordingly, the USEPA issued federal implementation plans that both generally provide updated CSAPR NOx ozone season emission budgets for electric generating units within these states and that implement these budgets through modifications to the CSAPR NOx ozone season allowance trading program. In December 2018, the USEPA determined that the 2016 CSAPR Update Rule fully satisfied 20 states (including Ohio) good neighbor obligations with respect to the 2008 Ozone NAAQS (“CSAPR Close-Out Rule”), obviating the need for the USEPA to promulgate Federal Implementation Plans (FIPs) in these states. In October 2019, the D.C. Circuit vacated and remanded the CSAPR Close-Out Rule. On July 28, 2020, the D.C. Circuit ordered the USEPA to issue FIPs addressing seven states’ (including Ohio) outstanding 2008 NAAQS “good neighbor” obligations by March 15, 2021. On April 30, 2021, the USEPA published a final rule to address the 2020 D.C. Circuit decision. The USEPA is issuing new or amended federal implementation plans for 12 states, including Ohio, with revised CSAPR NOx ozone season emission budgets for electric generating units within these states via a new CSAPR NOx Ozone Season Group 3 Trading Program. Implementation ~~is to begin~~began during the 2021 ozone season (May through September 2021) with an effective date of June ~~28.~~29, 2021. Subject sources in these states ~~will be~~are required to surrender an equivalent number of previously allocated 2021-2024 Group 2 allowances by deadlines in 2021. This requirement applies inclusive of assets and allowances that have since been sold and/or retired. While DPL no longer operates electric generating units subject to the revised CSAPR Update Rule, prior AES Ohio Generation sources ~~will be~~are required to surrender an equivalent number of previously allocated 2021-2024 Group 2 allowances. In July 2021, we acquired the required allowances and on July 14, 2021, the USEPA recalled an equivalent number of previously allocated 2021-2024 Group 1 allowances for Stuart and Killen fulfilling the requirement for surrender of allowances under the revised CSAPR Update Rule.

Waters of the U.S. and Navigable Waters Protection Rules

In June 2015, the USEPA and the U.S. Army Corps of Engineers ("the agencies") published a rule defining federal

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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 or otherwise change the number and types 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” (NWP) rule which again revised the definition of waters of the U.S. On August 30, 2021, the U.S. District Court for the District of Arizona issued an order vacating and remanding the NWP Rule. This vacatur of the NWP Rule applies nationwide. As such, the agencies are interpreting waters of the U.S. consistent with the pre-2015 regulatory regime until further notice. It is too early to determine whether any outcome of litigation or current or future revisions to rules interpreting federal jurisdiction over waters of the U.S. might have a material impact on our business, financial condition and results of operations.

CAPITAL RESOURCES AND LIQUIDITY

DPL and AES Ohio had unrestricted cash and cash equivalents of ~~$16.7~~$41.5 million and ~~$4.8~~$29.8 million, respectively, ~~at June~~as of September 30, 2021. 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 ~~$1,412.9~~$1,412.8 million and ~~$582.3~~$582.2 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.

Our discussion of DPL’s financial condition, liquidity and capital requirements include the results of its principal subsidiary AES Ohio.

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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:


		Six months ended June 30,					Nine months ended September 30,
$ in millions	$ in millions	2021		2020		$ in millions	2021		2020
Net cash provided by operating activities	Net cash provided by operating activities	$	16.7	$	82.8	Net cash provided by operating activities	$	56.5	$	81.7
Net cash used in investing activities	Net cash used in investing activities	(105.0)		(80.3)		Net cash used in investing activities	(160.2)		(125.4)
Net cash provided by financing activities	Net cash provided by financing activities	79.6		362.8		Net cash provided by financing activities	119.8		40.3

Net change	Net change	(8.7)		365.3		Net change	16.1		(3.4)
Balance at beginning of period	Balance at beginning of period	25.5		47.0		Balance at beginning of period	25.5		47.0
Cash, cash equivalents, and restricted cash at end of period	Cash, cash equivalents, and restricted cash at end of period	$	16.8	$	412.3	Cash, cash equivalents, and restricted cash at end of period	$	41.6	$	43.6

DPL – Net cash from operating activities


		Six months ended June 30,				$ change			Nine months ended September 30,				$ change
$ in millions	$ in millions	2021		2020		2021 vs. 2020		$ in millions	2021		2020		2021 vs. 2020
Net income		$	14.0	$	5.4	$	8.6
Net income / (loss)								Net income / (loss)	$	22.5	$	(2.8)	$	25.3
Depreciation and amortization	Depreciation and amortization	38.0		36.4		1.6		Depreciation and amortization	56.9		55.1		1.8
Deferred income taxes	Deferred income taxes	4.6		33.5		(28.9)		Deferred income taxes	2.3		32.3		(30.0)

Loss on early extinguishment of debt								Loss on early extinguishment of debt	—		31.7		(31.7)
Gain on disposal and sale of business, net	Gain on disposal and sale of business, net	—		(4.5)		4.5		Gain on disposal and sale of business, net	—		(4.5)		4.5

Net income, adjusted for non-cash items	Net income, adjusted for non-cash items	56.6		70.8		(14.2)		Net income, adjusted for non-cash items	81.7		111.8		(30.1)
Net change in operating assets and liabilities	Net change in operating assets and liabilities	(39.9)		12.0		(51.9)		Net change in operating assets and liabilities	(25.2)		(30.1)		4.9
Net cash provided by operating activities	Net cash provided by operating activities	$	16.7	$	82.8	$	(66.1)	Net cash provided by operating activities	$	56.5	$	81.7	$	(25.2)

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The net change in operating assets and liabilities during the ~~six~~nine months ended ~~June~~September 30, 2021 compared to the ~~six~~nine months ended ~~June~~September 30, 2020 was driven by the following:


$ in millions	$ Change
Increase from accounts payable primarily due to timing of payments	$	31.7
Increase from deferred regulatory costs, net primarily due to higher TCRR rates in the current year	22.2
Decrease from accrued taxes payable / receivable primarily due to tax payment of $52.0 million from AES in the prior year and timing of property tax payments, partially offset by an increase in the current tax expense in the current year	$	~~(44.5)~~(12.5)

Decrease from accounts receivable primarily due to higher collections on generation-related receivables in the prior year	~~(14.7)~~(11.2)
~~Increase~~Decrease from ~~deferred regulatory costs, net~~inventories primarily due to ~~higher TCRR rates~~purchases in the current year to support T&D and Smart Grid projects	(9.1)
Decrease from other non-current assets primarily due to prepaid SaaS implementation costs in the current year	~~9.7~~ (7.5)
Decrease from prepayments and other current assets primarily due to timing of payments	(6.9)

Other	~~(2.4)~~(1.8)
Net ~~decrease~~increase in cash from changes in operating assets and liabilities	$	~~(51.9)~~4.9

DPL – Net cash from investing activities

Net cash used in investing activities was ~~$(105.0)~~$(160.2) million for the ~~six~~nine months ended ~~June~~September 30, 2021 compared to ~~$(80.3)~~$(125.4) million for the ~~six~~nine months ended ~~June~~September 30, 2020. This increase of ~~$24.7~~$34.8 million in cash used primarily relates to an ~~$28.0~~$37.0 million increase in capital expenditures, due to increased spending on T&D projects in the current year, and $5.1 million of proceeds received from the sale of software in the prior year, partially offset by a ~~$7.9~~$7.4 million decrease in cost of removal payments in the current year.

DPL – Net cash from financing activities

Net cash provided by financing activities was ~~$79.6~~$119.8 million for the ~~six~~nine months ended ~~June~~September 30, 2021 compared to ~~$362.8~~$40.3 million from financing activities for the ~~six~~nine months ended ~~June~~September 30, 2020. This ~~decrease~~increase of ~~$283.2~~$79.5 million is primarily due to ~~a $415.0 million debt issuance and a $98.0 million equity contribution in the prior year, partially offset by~~ increased net borrowings from revolving credit facilities of ~~$224.0~~$174.0 million in the current ~~year. In addition, there was~~year and a ~~$5.7~~$7.6 million decrease in payments on deferred financing costs in the current year, partially offset by a $98.0 million equity contribution in the prior year.

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Cash Flow Analysis - AES Ohio

The following table summarizes the cash flows of AES Ohio:


		Six months ended June 30,					Nine months ended September 30,
$ in millions	$ in millions	2021		2020		$ in millions	2021		2020
Net cash provided by operating activities	Net cash provided by operating activities	$	32.6	$	38.7	Net cash provided by operating activities	$	81.3	$	49.7
Net cash used in investing activities	Net cash used in investing activities	(102.3)		(81.2)		Net cash used in investing activities	(156.2)		(125.8)
Net cash provided by financing activities	Net cash provided by financing activities	62.8		95.4		Net cash provided by financing activities	93.0		81.0

Net change	Net change	(6.9)		52.9		Net change	18.1		4.9
Balance at beginning of period	Balance at beginning of period	11.8		21.3		Balance at beginning of period	11.8		21.3
Cash, cash equivalents, and restricted cash at end of period	Cash, cash equivalents, and restricted cash at end of period	$	4.9	$	74.2	Cash, cash equivalents, and restricted cash at end of period	$	29.9	$	26.2

AES Ohio – Net cash from operating activities


		Six months ended June 30,				$ change			Nine months ended September 30,				$ change
$ in millions	$ in millions	2021		2020		2021 vs. 2020		$ in millions	2021		2020		2021 vs. 2020
Net income	Net income	$	26.9	$	29.5	$	(2.6)	Net income	$	40.3	$	47.3	$	(7.0)
Depreciation and amortization	Depreciation and amortization	37.2		35.5		1.7		Depreciation and amortization	55.8		53.7		2.1
Deferred income taxes	Deferred income taxes	3.7		1.2		2.5		Deferred income taxes	6.4		(0.1)		6.5

Net income, adjusted for non-cash items	Net income, adjusted for non-cash items	67.8		66.2		1.6		Net income, adjusted for non-cash items	102.5		100.9		1.6
Net change in operating assets and liabilities	Net change in operating assets and liabilities	(35.2)		(27.5)		(7.7)		Net change in operating assets and liabilities	(21.2)		(51.2)		30.0
Net cash provided by operating activities	Net cash provided by operating activities	$	32.6	$	38.7	$	(6.1)	Net cash provided by operating activities	$	81.3	$	49.7	$	31.6

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$ in millions	$ Change
~~Decrease~~Increase from ~~accrued taxes~~accounts payable ~~/ receivable~~ primarily due to timing of ~~property tax~~ payments	~~(15.9)~~26.6
Increase from deferred regulatory costs, net primarily due to higher TCRR rates in the current year	~~9.7~~22.2
Decrease from prepayments and other current assets primarily due to timing of payments	(9.3)
Decrease from other non-current assets primarily due to prepaid SaaS implementation costs in the current year	(6.7)
Decrease from inventories primarily due to purchases in the current year to support T&D and Smart Grid projects	(5.7)
Other	~~(1.5)~~2.9
Net ~~decrease~~increase in cash from changes in operating assets and liabilities	$	~~(7.7)~~30.0

AES Ohio – Net cash from investing activities

Net cash used in investing activities was ~~$(102.3)~~$(156.2) million for the ~~six~~nine months ended ~~June~~September 30, 2021 compared to ~~$(81.2)~~$(125.8) million for the ~~six~~nine months ended ~~June~~September 30, 2020. This increase of ~~$21.1~~$30.4 million in cash used primarily relates to a ~~$30.6~~$39.4 million increase in capital expenditures due to increased spending on T&D projects in the current year, partially offset by a ~~$7.9~~$7.4 million decrease in cost of removal ~~payments and $1.0 million of insurance proceeds in the current year.~~payments.

AES Ohio – Net cash from financing activities

Net cash provided by financing activities was ~~$62.8~~$93.0 million for the ~~six~~nine months ended ~~June~~September 30, 2021 compared to ~~$95.4~~$81.0 million from financing activities for the ~~six~~nine months ended ~~June~~September 30, 2020. This ~~decrease~~increase of ~~$32.6~~$12.0 million primarily relates to increased net borrowings from revolving credit facilities of $160.0 million in the current year, partially offset by a ~~prior year~~ $150.0 million equity contribution from DPL ~~and a $2.8 million increase~~ in ~~return of capital payments to~~ ~~DPL~~ ~~compared to~~ the prior ~~year, partially offset by increased net borrowings from revolving credit facilities of $120.0 million in the current~~ year.

LIQUIDITY

We expect our existing sources of liquidity to remain sufficient to meet our anticipated operating needs. Our business is capital intensive, requiring significant resources to fund operating expenses, construction expenditures, scheduled debt maturities and carrying costs, taxes and dividend payments. For 2021 and subsequent years, we expect to satisfy these requirements with cash from operations, funds from debt financing and/or equity capital contributions as our internal liquidity needs and market conditions warrant. We also expect that the borrowing capacity under bank credit facilities will continue to be available to manage working capital requirements during those periods.

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At ~~June~~September 30, 2021, AES Ohio and DPL have access to the following revolving credit facilities:


$ in millions	$ in millions	Type	Maturity	Commitment		Amounts available as of June 30, 2021		$ in millions	Type	Maturity	Commitment		Amounts available as of September 30, 2021
AES Ohio	AES Ohio	Revolving	June 2024	$	175.0	$	73.9	AES Ohio	Revolving	June 2024	$	175.0	$	33.9
DPL	DPL	Revolving	June 2023	110.0		30.0		DPL	Revolving	June 2023	105.0		25.0
				$	285.0	$	103.9				$	280.0	$	58.9

The AES Ohio ~~has~~Credit Agreement is an unsecured revolving credit ~~agreement~~facility with a syndicated bank group with a borrowing limit of $175.0 million and a $75.0 million letter of credit sublimit, as well as a feature that provides AES Ohio the ability to increase the size of the facility by an additional $100.0 million. This facility expires in June 2024. ~~At June~~As of September 30, 2021, there was one letter of credit in the amount of $1.1 million outstanding under this facility, and ~~$100.0~~$140.0 million in borrowings, with the remaining ~~$73.9~~$33.9 million available to AES Ohio.

The DPL ~~has~~Credit Agreement is a secured revolving credit facility with a syndicated bank group with a borrowing limit of ~~$110.0~~$105.0 million, with a $75.0 million letter of credit sublimit and a feature that provides DPL the ability to increase the size of the facility by an additional $50.0 million. This facility is secured by a pledge of common stock that DPL owns in AES Ohio. The facility expires in June 2023. ~~At June~~As of September 30, 2021, there were no letter of credits outstanding and $80.0 million in borrowings, with the remaining ~~$30.0~~$25.0 million available to DPL.

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Capital Requirements

~~Planned construction additions~~

Our capital expenditure program, including development and permitting costs, for the three-year period from 2021 ~~relate primarily~~through 2023 is currently estimated to ~~new investments in~~cost approximately $749.0 million, and ~~upgrades to~~ ~~AES Ohio’s~~ transmission and distribution system. Capital projects are subject to continuing review and are revised considering changes in financial and economic conditions, load forecasts, legislative and regulatory developments and changing environmental requirements, among other factors.includes estimates as follows:


$ in millions	2021		2022		2023		For the three-year period from 2021 through 2023
Distribution-related additions, improvements and extensions	$	100.0	$	99.0	$	100.0	$	299.0
Transmission-related additions and improvements	72.0		83.0		69.0		224.0
Smart Grid improvements and additions	22.0		60.0		75.0		157.0
Other	30.0		26.0		4.0		60.0
Total for AES Ohio	224.0		268.0		248.0		740.0

Other subsidiaries	2.0		3.0		4.0		9.0
Total for DPL	$	226.0	$	271.0	$	252.0	$	749.0

~~DPL~~ ~~is projecting to spend an estimated $733.0 million in capital projects for the period 2021 through 2023, of which $724.0 million is projected to be spent by~~ ~~AES Ohio~~.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 projects. See additional information in Note 2 – Regulatory Matters of Notes to DPL's Condensed Consolidated Financial Statements and Note 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 $76.0 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 I, Item 1, Note 5 – Long-term Debt of Notes to DPL's Condensed Consolidated Financial Statements and Part I, Item 1, Note 5 – Long-term Debt of Notes to AES Ohio's Condensed Financial Statements.

Debt and Credit Ratings

The following table presents, as of the filing of this report, the debt ratings and outlook for DPL and AES Ohio, along with the effective or affirmed date of each rating.

DPL

AES Ohio

Outlook

Fitch Ratings

BB (a)

BBB+(b)

Negative

Moody's Investors Service, Inc.

Ba1 (a)

A3 (b)

Stable

Standard & Poor's Financial Services LLC

BB+ (a)

BBB+ (b)

Stable

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

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

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The following table presents, as of the filing of this report, the credit ratings (issuer/corporate rating) and outlook for DPL and AES Ohio, along with the effective or affirmed date of each rating.

DPL

AES Ohio

Outlook

Fitch Ratings

BBB-

Negative

Moody's Investors Service, Inc.

Ba1

Baa2

Stable

Standard & Poor's Financial Services LLC

BB+

Stable

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.

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Off-Balance Sheet Arrangements

For information on guarantees, commercial commitments, and contractual obligations, see Part I, Item 1, Note 9 – Contractual Obligations, Commercial Commitments and Contingencies of Notes to DPL's Condensed Consolidated Financial Statements and Part I, Item 1, Note 9 – Contractual Obligations, Commercial Commitments and Contingencies of Notes to AES Ohio's Condensed Financial Statements.

Critical Accounting Policies and Estimates

DPL’s Condensed Consolidated Financial Statements and AES Ohio’s Condensed Financial Statements are prepared in accordance with GAAP. In connection with the preparation of these financial statements, our management is required to make assumptions, estimates and judgments that affect the reported amounts of assets, liabilities, revenues, 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; 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, 2020 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 ~~six~~nine months ended ~~June~~September 30, 2021.

Item 3 – Quantitative and Qualitative Disclosures about Market Risk

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

Item 4 – Controls and Procedures

Disclosure Controls and Procedures

DPL and AES Ohio, under the supervision and with the participation of its management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), evaluated the effectiveness of our “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of ~~June~~September 30, 2021, 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

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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.

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Part II – Other Information

Item 1 – Legal Proceedings

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

Our Form 10-K for the fiscal year ended December 31, 2020 and ~~Form~~Forms 10-Q for the ~~quarter~~quarters ended March 31, and June 30, 2021 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 Forms 10-K and 10-Q, and should be read in conjunction with such Forms 10-K and 10-Q.

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

Item 1A – Risk Factors

There have been no material changes to the risk factors as previously disclosed in our Form 10-K.

Item 2 – Unregistered Sale of Equity Securities and Use of Proceeds

None

Item 3 – Defaults Upon Senior Securities

None

Item 4 – Mine Safety Disclosures

Not applicable.

Item 5 – Other Information

None

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Item 6 – Exhibits

DPL

DP&L

Exhibit Number

Exhibit

Location

31(a)

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

Filed herewith as Exhibit 31(a)

31(b)

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

Filed herewith as Exhibit 31(b)

31(c)

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

Filed herewith as Exhibit 31(c)

31(d)

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

Filed herewith as Exhibit 31(d)

32(a)

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

Filed herewith as Exhibit 32(a)

32(b)

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

Filed herewith as Exhibit 32(b)

32(c)

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

Filed herewith as Exhibit 32(c)

32(d)

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

Filed herewith as Exhibit 32(d)

101.INS

XBRL Instance

Filed herewith as Exhibit 101.INS

101.SCH

XBRL Taxonomy Extension Schema

Filed herewith as Exhibit 101.SCH

101.CAL

XBRL Taxonomy Extension Calculation Linkbase

Filed herewith as Exhibit 101.CAL

101.DEF

XBRL Taxonomy Extension Definition Linkbase

Filed herewith as Exhibit 101.DEF

101.LAB

XBRL Taxonomy Extension Label Linkbase

Filed herewith as Exhibit 101.LAB

101.PRE

XBRL Taxonomy Extension Presentation Linkbase

Filed herewith as Exhibit 101.PRE

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

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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:	~~August 4,~~November 3, 2021	/s/ Gustavo Garavaglia
		Gustavo Garavaglia
		Vice President and Chief Financial Officer
		(principal financial officer)

	~~August 4,~~November 3, 2021	/s/ Jon S. Byers
		Jon S. Byers
		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:	~~August 4,~~November 3, 2021	/s/ Gustavo Garavaglia
		Gustavo Garavaglia
		Vice President and Chief Financial Officer
		(principal financial officer)

	~~August 4,~~November 3, 2021	/s/ Jon S. Byers
		Jon S. Byers
		Controller
		(principal accounting officer)

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