Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2011

Goodwill and Intangible Assets Disclosure [Abstract]

6. Goodwill and Other Intangible Assets

Goodwill at November 28, 2011 represents the value assigned at the Merger date. DPL had no goodwill recorded at December 31, 2010 and during the January 1, 2011 through November 27, 2011 predecessor period. Goodwill as of November 28, 2011 and December 31, 2011 was $2,568.1 million. DPL did not recognize any impairment losses related to goodwill during 2011.

The following tables summarize the balances comprising Intangible assets as of December 31, 2011:


$ in millions		December 31, 2011
		Gross		Accumulated			Net
		Balance		Amortization			Balance
Subject to Amortization
Electric Security Plan ^(a)	$	87.0	$	(8.6	)	$	78.4
Customer contracts ^(b)		28.0		(3.0	)		25.0
Customer relationships ^(c)		31.8		(0.5	)		31.3
Other ^(d)		3.9		(1.2	)		2.7
		150.7		(13.3	)		137.4
Not subject to Amortization
Tradmark/Trade name ^(e)		5.0		-			5.0

Total intangibles	$	155.7	$	(13.3	)	$	142.4

The following table summarizes, by category, intangible assets acquired during the year ended December 31, 2011:


				Weighted
				Average
			Subject to	Amortization
			Amortization/	Period	Amortization
$ in millions		Amount	Indefinite-lived	(years)	Method

Electric security plan ^(a)(f)	$	87.0	Subject to amortization	1	Other
Customer contracts ^(b)(f)		28.0	Subject to amortization	3	Other
Customer relationships ^(c)		31.8	Subject to amortization	15	Straight line
Other(a)		1.2	Subject to amortization	Various	As Utilized
Trademark/Trade name ^(e)		5.0	Indefinite-lived	N/A	N/A
	$	153.0

(a) Represents the value of DP&L's Electric Security Plan which is a rate plan for the supply and pricing of electric generation services. It provides a level of price stability to consumers of electricity compared to market-based electricity prices.

(b) Represents above market contracts that DPLER has with third party customers existing as of the Merger date.

(c) Represents relationships DPLER has with third party customers as of the Merger date, where DPLER has regular contact with the customer, and the customer has the ability to make direct contract with DPLER.

(d) Consists of various intangible assets including renewable energy credits, emission allowances, and other intangibles, none of which are individually significant.

(e) Trademark/Trade name represents the value assigned to the trade name of DPLER.

(f) The amortization method used reflects the pattern in which the economic benefits of the intangible asset are consumed. Amortization of these intangible assets is shown as a reduction within gross margin on our Consolidated Statements of Results of Operations.

Most of the intangible assets acquired during the period disclosed above arose from the acquisition of DPL by AES (see Note 2 for more information). An immaterial amount of intangible assets was acquired by DPL through the acquisition of MC Squared Energy Services on February 28, 2011.

The following table summarizes the amortization expense, broken down by intangible asset category for 2012 through 2016:


		Estimated amortization expense
$ in millions		2012		2013		2014		2015		2016

Electric security plan	$	78.4	$	-	$	-	$	-	$	-
Customer contracts		17.1		6.8		1.1		-		-
Customer relationships		2.5		2.5		2.5		2.5		2.2
Other		-		0.3		0.2		0.2		-

	$	98.0	$	9.6	$	3.8	$	2.7	$	2.2

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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