Income Taxes

6 Months Ended

Jun. 30, 2017

The following table details the effective tax rates for the three and six months ended June 30, 2017 and 2016.



	Three months ended		Six months ended
	June 30,		June 30,
	2017	2016	2017	2016
DPL	94.3%	39.2%	31.2%	39.5%

Income tax expense for the six months ended June 30, 2017 and 2016 was calculated using the estimated annual effective income tax rates for 2017 and 2016 of 30.9% and 38.8%, 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 rates estimated could be materially different from the actual effective tax rates.

The decrease in the annual effective rate compared to the same period in 2016 is primarily due to the forecasted tax expense relating to flow-through depreciation and the projected manufacturer's production deduction.

For the three months ended June 30, 2017, DPL’s current period effective tax rate was greater than the estimated annual effective rate primarily due to the impact of the fixed-asset impairment recorded in the first quarter of 2017. See Note 14 – Fixed-asset Impairments for more information.

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, 2017 and 2016.



	Three months ended		Six months ended
	June 30,		June 30,
	2017	2016	2017	2016
DP&L	38.8%	36.4%	31.3%	36.9%

Income tax expense for the three and six months ended June 30, 2017 and 2016 was calculated using the estimated annual effective income tax rates for 2017 and 2016 of 30.4% and 36.7%, 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 rates estimated could be materially different from the actual effective tax rates. To the extent that actual pre-tax results for the year differ from the forecasts applied to the most recent interim period, the rates estimated could be materially different from the actual effective tax rates.

Income taxes paid, net, were $26.2 million and $0.1 million for the six months ended June 30, 2017 and 2016, respectively. For the six months ended June 30, 2017, the $26.2 million represented payments made to DPL.