Income Taxes

12 Months Ended

Dec. 31, 2025

Income Taxes [Line Items]

Income Taxes

INCOME TAXES

The entire amount of income before income tax relates to domestic operations. DPL’s components of income tax expense were as follows:

	Years ended December 31,
$ in millions	2025		2024		2023
Components of tax expense / (benefit)
Federal - current	$	(2.6)	$	(17.7)	$	(20.0)
State and local - current	—		(0.1)		0.4
Total current	(2.6)		(17.8)		(19.6)
Federal - deferred	21.2		10.2		24.5
State and local - deferred	4.3		4.6		1.7
Total deferred	25.5		14.8		26.2
Tax expense / (benefit)	$	22.9	$	(3.0)	$	6.6

Effective and Statutory Rate Reconciliation

The provision for income taxes is different than the amount computed by applying the statutory tax rate to pretax income. The reasons for the difference for 2025, stated in amount and as a percentage of pretax income following the prospective adoption of ASU 2023-09, are as follows:

	2025
$ in millions	Amount		Percentage
U.S. Federal statutory tax rate	$	11.7	21.0	%
State and local income taxes, net of federal income tax effects (a)	4.1		7.3	%
Nontaxable or nondeductible items
AFUDC	1.0		1.7	%
Disregarded single-member LLCs not allocated income tax expense	2.8		5.0	%
Other adjustments
Reversal of Excess Deferred Taxes	3.3		6.0	%
Total income tax expense / Effective tax rate	$	22.9	41.0	%

(a)     State taxes in Ohio make up the majority (greater than 50 percent) of the tax effect in this category.

The reasons for the difference for 2024 and 2023, stated as a percentage of pretax income, prior to the adoption of ASU 2023-09, are as follows:

	2024		2023
Statutory Federal tax rate	21.0	%	21.0	%
State taxes, net of Federal tax benefit	5.2	%	2.5	%
AFUDC - equity	(4.5)	%	(0.2)	%
Depreciation of flow-through differences	(50.4)	%	(7.6)	%
Amortization of investment tax credits	(0.1)	%	—	%
Other, net	1.0	%	(0.1)	%
Effective tax rate	(27.8)	%	15.6	%

Deferred Income Taxes

Deferred income taxes reflect the net tax effects of (i) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and (ii) operating loss carryforwards. These items are stated at the enacted tax rates that are expected to be in effect when taxes are actually paid or recovered. Investment tax credits related to utility property have been deferred and are being amortized over the estimated useful lives of the related property.

The components of our deferred taxes are as follows:

	December 31,
$ in millions	2025		2024
Deferred tax liabilities
Relating to utility property, net	$	255.5	$	218.2
Regulatory assets recoverable through future rates	8.7		34.4
Employee benefit plans	3.7		4.5
Other	3.1		—
Total deferred tax liabilities	271.0		257.1
Deferred tax assets:
Operating loss carryforwards	33.2		—
Long-term debt	—		4.7
Other (a)	4.8		2.8
Total deferred tax assets	38.0		7.5
Deferred income tax liability - net	$	233.0	$	249.6

(a)    The Other caption includes deferred tax assets of $0.0 million in 2025 and $32.0 million in 2024 related to state and local tax net operating loss carryforwards, with related valuation allowances of $0.0 million in 2025 and $31.8 million in 2024.

The following table presents the tax expense / (benefit) related to pensions, postemployment benefits, cash flow hedges and financial instruments that were credited to Accumulated other comprehensive income / (loss):

	Years ended December 31,
$ in millions	2025		2024		2023
Tax expense / (benefit)	$	0.9	$	(0.1)	$	(0.6)

Uncertain Tax Positions

We apply the provisions of GAAP relating to the accounting for uncertainty in income taxes. The balance of unrecognized tax benefits did not change in 2024 and was $0.4 million at December 31, 2025 and 2024.

The following table presents the changes to our uncertain tax positions:

$ in millions	2025		2024		2023
Unrecognized tax benefits at January 1	$	0.4	$	0.4	$	0.4
Gross increases - current period tax positions	—		—		—
Gross decreases - prior period tax positions	—		—		—
Unrecognized tax benefits at December 31	$	0.4	$	0.4	$	0.4

Tax years subsequent to 2021 remain open to examination by taxing authorities. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, we believe we have appropriately accrued for our uncertain tax positions. However, audit outcomes and the timing of audit settlements and future events that would impact our previously recorded unrecognized tax benefits are subject to significant uncertainty. It is possible that the ultimate outcome of future examinations may exceed our provision for current unrecognized tax benefits.

We recognize interest and penalties related to unrecognized tax benefits in Income tax benefit. The amounts accrued and the tax expense / (benefit) recorded were not material for each period presented.

DPL is no longer subject to U.S. federal income tax examinations for tax years through 2021, but all subsequent periods are open. DPL is no longer subject to state income tax examinations for tax years through 2021 but all subsequent periods are open.

On April 3, 2025, DPL Inc. converted its form of business organization from an Ohio corporation to an Ohio limited liability company. As a result of the conversion, DPL LLC, Miami Valley Lighting, and AES Ohio Generation each became a disregarded single member LLC of AES for U.S. federal income tax purposes and are no longer severally liable for taxes reported on the consolidated federal income tax return of AES for periods beginning after April 3, 2025. DPL LLC will no longer allocate income tax expense to disregarded single member LLCs and has derecognized the tax balances, including AOCI tax balances, of all disregarded single-member LLCs. The net tax

liability of $28.1 million was transferred to AES and accounted for through equity effective April 3, 2025. However, DPL remains liable for taxes under its tax sharing agreement with AES.