Solid, stable regulated utility operations and cash flows; Focus on core utility operations and continued debt reduction; and Meaningful progress on environmental upgrades. High debt leverage; Increased capital expenditure needs through 2009; and Uncertainty as to how the regulatory environment will ultimately evolve in Ohio. The ratings on DPL Inc. reflect falling business risk centered on subsidiary Dayton Power&Light Co.'s (DP&L) core electric utility operations and the prospect for continued improvement in the consolidated financial profile. Future uncertainty over the direction of utility regulation in Ohio and the company's strategic direction in reaction to any fundamental changes in the state could stall the positive momentum in credit quality. The ratings are based on DP&L's regulated operations, which provide
