Income Taxes

6 Months Ended

Jun. 30, 2019

The following table details the effective tax rates for the three and six months ended June 30, 2019 and 2018.



	Three months ended		Six months ended
	June 30,		June 30,
	2019	2018	2019	2018
DPL	16.6%	(12.9)%	12.8%	13.9%

Income tax expense for the six months ended June 30, 2019 and 2018 was calculated using the estimated annual effective income tax rates for 2019 and 2018 of 12.3% and 16.5%, respectively. Management estimates the annual effective tax rate based on its forecast of annual pre-tax income. To the extent that actual pre-tax results for the year differ from the forecasts applied to the most recent interim period, the estimated rates could be materially different from the actual effective tax rates. DPL’s effective combined state and federal income tax rate for all operations was 16.6% and 12.8% for the three and six months ended June 30, 2019, respectively. These rates are lower than the combined federal and state statutory rate of 21.6% primarily due to the flowthrough of the net tax benefit related to the reversal of excess deferred taxes of DP&L relative to pre-tax book losses.

For the six months ended June 30, 2019, DPL’s current period effective tax rate for all operations was not materially different than the estimated annual effective rate.

Per the terms of DP&L's 2017 ESP, DPL will not make any tax-sharing payments to AES and AES will forgo collection of the payments during the term of the DMR. As such, during the six months ended June 30, 2018, DPL converted $26.7 million of accrued tax sharing liabilities with AES to additional equity investment in DPL. Through the six months ended June 30, 2019, DPL has a current tax benefit. Consequently, there was no conversion of current tax liabilities in 2019.

THE DAYTON POWER AND LIGHT COMPANY [Member]

Entity Information [Line Items]

Income Taxes

The following table details the effective tax rates for the three and six months ended June 30, 2019 and 2018.



	Three months ended		Six months ended
	June 30,		June 30,
	2019	2018	2019	2018
DP&L	17.2%	12.3%	17.3%	15.7%

Income tax expense for the six months ended June 30, 2019 and 2018 was calculated using the estimated annual effective income tax rates for 2019 and 2018 of 17.1% and 17.2%, respectively. Management estimates the annual effective tax rate based on its forecast of annual pre-tax income. To the extent that actual pre-tax results for the year differ from the forecasts applied to the most recent interim period, the estimated rates could be materially different from the actual effective tax rates. DP&L’s effective combined state and federal income tax rate was 17.2% and 17.3% for the three and six months ended June 30, 2019, respectively. This is lower than the combined federal and state statutory rate of 21.6% primarily due to the net tax benefit related to the reversal of excess deferred taxes.