DPL LLC Revenue Soars, Net Income Dips Amid Debt Restructuring

TL;DR

**DPL's revenue is up, but net income is down, so watch their long-term debt management and regulatory approvals closely.**

AI Summary

DPL LLC reported a significant increase in revenue for the three months ended September 30, 2025, reaching $294.8 million, up from $227.5 million in the prior year, a 29.6% increase. Net income attributable to DPL LLC, however, slightly decreased to $8.3 million for the quarter, compared to $10.3 million in the same period of 2024, a 19.4% decline. For the nine months ended September 30, 2025, revenue rose to $779.0 million from $663.1 million, a 17.5% increase, but net income attributable to DPL LLC fell to $11.7 million from $23.1 million, a substantial 49.3% decrease. Operating income for the quarter more than doubled to $44.2 million from $22.5 million, driven by higher revenue offsetting increased operating costs like net purchased power, which rose to $113.7 million from $84.3 million. The company's balance sheet shows a decrease in total current liabilities from $1,034.2 million at December 31, 2024, to $352.4 million at September 30, 2025, primarily due to a significant reduction in short-term and current portion of long-term debt from $704.4 million to $0.2 million. Cash and cash equivalents increased to $109.6 million from $54.0 million. Strategic outlook includes continued investment in property, plant & equipment, which increased to $2,763.4 million from $2,571.4 million, and the sale of redeemable stock of subsidiaries generating $539.7 million in cash flow from financing activities.

Why It Matters

DPL LLC's strong revenue growth, particularly the 29.6% quarterly increase, signals robust demand for its utility services, which is positive for investors. However, the significant decline in net income attributable to DPL LLC, down 49.3% year-to-date, raises concerns about profitability and cost management, potentially impacting investor returns. The substantial reduction in short-term debt from $704.4 million to $0.2 million indicates a successful debt restructuring, improving the company's financial stability and reducing immediate liquidity risks. This move could free up capital for future investments in grid modernization, like the Smart Grid Phase 1, enhancing service reliability for customers and strengthening DPL's competitive position against other regional utilities.

Risk Assessment

Risk Level: medium — The risk level is medium due to the significant decline in net income attributable to DPL LLC by 49.3% year-to-date, despite strong revenue growth. This indicates potential pressures on profitability. Additionally, the company's reliance on regulatory approvals, such as the withdrawn Smart Grid Phase 2 plan, introduces uncertainty regarding future capital recovery and operational efficiency.

Analyst Insight

Investors should closely monitor DPL LLC's future earnings reports for signs of improved profitability and the impact of its debt restructuring on interest expenses. Evaluate the company's capital expenditure plans, especially regarding grid modernization, and the outcomes of regulatory filings with the PUCO, as these will dictate long-term growth and stability.

Financial Highlights

revenue

$294.8M

operating Margin

15.0%

total Assets

$3,589.4M

net Income

$8.3M

cash Position

$109.6M

revenue Growth

+29.6%

Revenue Breakdown

Key Numbers

• $294.8M — Quarterly Revenue (Increased from $227.5M in Q3 2024, a 29.6% rise.)
• $8.3M — Quarterly Net Income Attributable to DPL LLC (Decreased from $10.3M in Q3 2024, a 19.4% decline.)
• $779.0M — Nine-Month Revenue (Increased from $663.1M in 9M 2024, a 17.5% rise.)
• $11.7M — Nine-Month Net Income Attributable to DPL LLC (Decreased from $23.1M in 9M 2024, a 49.3% decline.)
• $44.2M — Quarterly Operating Income (More than doubled from $22.5M in Q3 2024.)
• $113.7M — Quarterly Net Purchased Power (Increased from $84.3M in Q3 2024.)
• $0.2M — Short-term and Current Portion of Long-term Debt (Significantly reduced from $704.4M at Dec 31, 2024.)
• $109.6M — Cash and Cash Equivalents (Increased from $54.0M at Dec 31, 2024.)
• $539.7M — Sale of Redeemable Stock of Subsidiaries (Generated cash flow from financing activities.)
• $2,763.4M — Property, Plant & Equipment, Net (Increased from $2,571.4M at Dec 31, 2024, indicating capital investment.)

Key Players & Entities

• DPL LLC (company) — registrant and utility company
• The AES Corporation (company) — ultimate parent company of DPL LLC
• AES Ohio (company) — principal indirect subsidiary of DPL LLC, doing business as The Dayton Power and Light Company
• PUCO (regulator) — Public Utilities Commission of Ohio, responsible for approving rates and plans
• PJM Interconnection, LLC (company) — Regional Transmission Organization (RTO) DPL participates in
• $294.8 million (dollar_amount) — DPL LLC's revenue for the three months ended September 30, 2025
• $8.3 million (dollar_amount) — Net income attributable to DPL LLC for the three months ended September 30, 2025
• $779.0 million (dollar_amount) — DPL LLC's revenue for the nine months ended September 30, 2025
• $11.7 million (dollar_amount) — Net income attributable to DPL LLC for the nine months ended September 30, 2025
• $704.4 million (dollar_amount) — Short-term and current portion of long-term debt at December 31, 2024

FAQ

Risk Factors

• Interest Expense Fluctuation [medium — financial]: Interest expense, net, was $19.2 million for the quarter, a slight decrease from $21.1 million in the prior year. While this indicates some stability, significant debt levels could expose the company to interest rate volatility.
• Rising Net Purchased Power Costs [high — operational]: Net purchased power costs increased to $113.7 million from $84.3 million in Q3 2024, a 34.9% rise. This significant increase, despite higher revenue, is a key driver of the net income decline.
• Income Tax Expense Volatility [medium — regulatory]: Income tax expense was $11.5 million in Q3 2025, a significant swing from a $7.5 million benefit in Q3 2024. This volatility impacts net income and requires careful management of tax liabilities.
• Dependence on Debt Reduction [medium — financial]: The company significantly reduced its short-term and current portion of long-term debt from $704.4 million to $0.2 million. While this improves liquidity, the strategy behind this reduction and its long-term implications need monitoring.
• Capital Expenditure Investments [medium — operational]: Property, plant & equipment, net, increased to $2,763.4 million from $2,571.4 million. Continued investment is crucial for infrastructure but requires ongoing capital allocation and management.

Industry Context

The utility sector, particularly for companies like DPL LLC, is characterized by significant capital investments in infrastructure and a heavy reliance on regulated rate structures. Trends include the transition to cleaner energy sources, increasing operational costs (like fuel and purchased power), and evolving regulatory landscapes that can impact cost recovery and profitability.

Regulatory Implications

DPL LLC operates in a heavily regulated environment. Changes in rate structures, environmental regulations, and accounting for regulatory assets and liabilities can significantly affect financial performance. The company's ability to recover costs, particularly for purchased power, through approved rates is a critical factor.

What Investors Should Do

1. Analyze the drivers of increased net purchased power costs.
2. Investigate the strategy behind the significant reduction in short-term debt.
3. Monitor the impact of capital expenditures on future returns.
4. Evaluate the sustainability of operating income growth.

Key Dates

• 2025-09-30: End of Third Quarter 2025 — Reporting period for the 10-Q, showing significant revenue growth but a decline in net income.
• 2024-09-30: End of Third Quarter 2024 — Prior year comparison period, highlighting the revenue increase and net income decrease for Q3 2025.
• 2024-12-31: End of Fiscal Year 2024 — Balance sheet comparison point, showing a substantial reduction in current liabilities, particularly short-term debt.

Glossary

Net purchased power

The cost of electricity purchased by the company from wholesale markets or other generators to meet customer demand, minus any power sold to the wholesale market. (A significant operating expense that increased substantially, impacting profitability.)

Redeemable stock of subsidiaries

Stock issued by subsidiaries that gives the holder the right to sell it back to the subsidiary at a specified price or under certain conditions. (The sale of this stock generated significant cash flow and impacted net income attributable to DPL LLC.)

Regulatory assets, current

Costs that have been incurred but have not yet been recovered from customers through rates, recognized as an asset on the balance sheet. (Represents amounts expected to be recovered in the future, impacting the company's asset base.)

Operating income

Profitability from a company's core business operations before accounting for interest and taxes. (More than doubled, indicating strong operational performance despite rising costs.)

Year-Over-Year Comparison

Compared to the prior year's third quarter, DPL LLC has demonstrated robust revenue growth of 29.6%, reaching $294.8 million. However, this top-line expansion has not translated into proportional profit growth, with net income attributable to DPL LLC declining by 19.4% to $8.3 million. This divergence is primarily driven by a significant increase in net purchased power costs, which rose by 34.9%, and other operating expenses, outpacing revenue gains. The balance sheet shows a substantial improvement in liquidity, with cash and cash equivalents doubling and short-term debt being almost entirely eliminated, indicating a strong deleveraging effort.

Key Financial Figures

• $350.0 million — as AES Ohio AES Ohio Credit Agreement $350.0 million AES Ohio Amended and Restated Credit Ag
• $47.0 million — s. The annual revenue limit for 2025 is $47.0 million. DPL DPL LLC and its consolidated sub
• $7.5 million — eferral cap. The annual deferral cap is $7.5 million in 2025. PUCO Public Utilities Commis

Filing Documents

• dpl-20250930.htm (10-Q) — 1734KB
• dpl10qex31a20250930q3.htm (EX-31.A) — 10KB
• dpl10qex31b20250930q3.htm (EX-31.B) — 10KB
• dpl10qex32a20250930q3.htm (EX-32.A) — 5KB
• dpl10qex32b20250930q3.htm (EX-32.B) — 6KB
• dpl-20250930_g1.jpg (GRAPHIC) — 104KB
• dpl-20250930_g2.jpg (GRAPHIC) — 94KB
• 0000787250-25-000039.txt ( ) — 10091KB
• dpl-20250930.xsd (EX-101.SCH) — 55KB
• dpl-20250930_cal.xml (EX-101.CAL) — 77KB
• dpl-20250930_def.xml (EX-101.DEF) — 642KB
• dpl-20250930_lab.xml (EX-101.LAB) — 604KB
• dpl-20250930_pre.xml (EX-101.PRE) — 664KB
• dpl-20250930_htm.xml (XML) — 1534KB

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1 FINANCIAL STATEMENTS Condensed Consolidated Statements of Operations 10 Condensed Consolidated Statements of Comprehensive Income 11 Condensed Consolidated Balance Sheets 12 Condensed Consolidated Statements of Cash Flows 13 Condensed Consolidated Statements of Changes in Equity 14 Notes to Unaudited Condensed Consolidated Financial Statements 15 Note 1. Overview and Summary of Significant Accounting Policies 15 Note 2. Regulatory Matters 20 Note 3. Fair Value 21 Note 4. Derivative Instruments and Hedging Activities 22 Note 5. Debt 23 Note 6. Income Taxes 24 Note 7. Benefit Plans 25 Note 8. Equity 25 Note 9. Commitments and Contingencies 26 Note 10. Business Segments 27 Note 11. Revenue 29

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 32

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 32 Executive Summary 32 Results of Operations 34 Key Trends and Uncertainties 39 Capital Resources and Liquidity 43 Critical Accounting Policies and Estimates 46

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 46

ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 46

CONTROLS AND PROCEDURES 47

ITEM 4 CONTROLS AND PROCEDURES 47

: OTHER INFORMATION

PART II: OTHER INFORMATION

LEGAL PROCEEDINGS 48

ITEM 1 LEGAL PROCEEDINGS 48

RISK FACTORS 48

ITEM 1A RISK FACTORS 48

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 48

ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 48

DEFAULTS UPON SENIOR SECURITIES 48

ITEM 3 DEFAULTS UPON SENIOR SECURITIES 48

MINE SAFETY DISCLOSURES 48

ITEM 4 MINE SAFETY DISCLOSURES 48

OTHER INFORMATION 49

ITEM 5 OTHER INFORMATION 49

EXHIBITS 50

ITEM 6 EXHIBITS 50 SIGNATURES 51 3 Table of Contents DPL LLC Form 10-Q for the Quarterly Period ended September 30, 2025 GLOSSARY OF TERMS The following select terms, abbreviations or acronyms are used in this Form 10-Q: Term Definition AES The AES Corporation - a global power company and the ultimate parent company of DPL AES Ohio The Dayton Power and Light Company, which does business as AES Ohio AES Ohio Credit Agreement $350.0 million AES Ohio Amended and Restated Credit Agreement, dated as of March 25, 2025 AES Ohio Generation AES Ohio Generation, LLC - a wholly-owned subsidiary of DPL, which previously operated EGUs and made wholesale sales AFUDC Allowance for Funds Used During Construction AOCI Accumulated Other Comprehensive Income AOCL Accumulated Other Comprehensive Loss ASC Accounting Standards Codification ASU Accounting Standards Update CAA U.S. Clean Air Act - the congressional act that directs the EPA's regulation of stationary and mobile sources of air pollution to protect air quality and stratospheric ozone CCR Coal Combustion Residuals - which consists of bottom ash, fly ash, boiler slag and flue gas desulfurization materials generated from burning coal CDPQ Caisse de dpt et placement du Qubec CRES Competitive Retail Electric Service CWA U.S. Clean Water Act DIR Distribution Investment Rider - established in the ESP 4 to recover certain distribution capital investments placed in service beginning June 30, 2020, for three years, and subject to increasing annual revenue limits and other terms. The annual revenue limit for 2025 is $47.0 million. DPL DPL LLC and its consolidated subsidiaries. On April 3, 2025, DPL Inc. converted its form of business organization from an Ohio corporation to an Ohio limited liability company (the "Conversion"). Upon the Conversion, DPL Inc. changed its name to DPL LLC. DP&L The Dayton Power and Light Company - the principal indirect subsidiary of DPL and a public utility that del

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION This report includes the filing of DPL. Throughout this report, the terms "the Company", "we," "us," "our" and "ours" are used to refer to both DPL and its subsidiaries, respectively and altogether, unless the context indicates otherwise. Discussions or areas of this report that apply only to DPL will be clearly noted in the applicable section.

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS 8 Table of Contents

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 9 Table of Contents DPL LLC Condensed Consolidated Statements of Operations (Unaudited) Three months ended Nine months ended September 30, September 30, $ in millions 2025 2024 2025 2024 REVENUE $ 294.8 $ 227.5 $ 779.0 $ 663.1 OPERATING COSTS AND EXPENSES: Net purchased power 113.7 84.3 291.6 243.5 Operation and maintenance 70.8 66.9 201.8 188.9 Depreciation and amortization 29.8 25.7 88.6 69.4 Taxes other than income taxes 36.3 28.1 100.4 84.4 Loss on asset disposal — — — 1.3 Total operating costs and expenses 250.6 205.0 682.4 587.5 OPERATING INCOME 44.2 22.5 96.6 75.6 OTHER INCOME / (EXPENSE), NET: Interest expense, net ( 19.2 ) ( 21.1 ) ( 63.0 ) ( 62.2 ) Other income / (expense), net ( 0.1 ) 1.4 0.3 5.1 Total other expense, net ( 19.3 ) ( 19.7 ) ( 62.7 ) ( 57.1 ) INCOME BEFORE INCOME TAX 24.9 2.8 33.9 18.5 Income tax expense / (benefit) 11.5 ( 7.5 ) 15.5 ( 4.6 ) NET INCOME 13.4 10.3 18.4 23.1 Less: Net income attributable to redeemable stock of subsidiaries ( 5.1 ) — ( 6.7 ) — NET INCOME ATTRIBUTABLE TO DPL LLC $ 8.3 $ 10.3 $ 11.7 $ 23.1 See Notes to Condensed Consolidated Financial Statements. 10 Table of Contents DPL LLC Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three months ended Nine months ended September 30, September 30, $ in millions 2025 2024 2025 2024 NET INCOME $ 13.4 $ 10.3 $ 18.4 $ 23.1 Derivative activity: Reclassification to earnings, net of income tax effect of $ 0.0 , $ 0.1 , $ 0.1 and $ 0.1 for each respective period ( 0.2 ) ( 0.1 ) ( 0.6 ) ( 0.6 ) Unfunded pension and other postretirement activity: Reclassification to earnings, net of income tax effect of $( 0.2 ), $ 0.0 , $( 0.1 ) and $( 0.1 ) for each respective period 0.1 — 0.5 0.1 Other comprehensive loss ( 0.1 ) ( 0.1 ) ( 0.1 ) ( 0.5 ) Comprehensive income 13.3 10.2 18.3 22.6 Less: Comprehensive income attributable to redeemable stock of subsidiaries 5.2 — 7.0 — COMPREHENSIVE INC

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