Income Taxes

3 Months Ended

Mar. 31, 2019

The following table details the effective tax rates for the three months ended March 31, 2019 and 2018.



	Three months ended
	March 31,
	2019	2018
DPL	14.1%	8.0%

Income tax expense for the three months ended March 31, 2019 and 2018 was calculated using the estimated annual effective income tax rates for 2019 and 2018 of 14.1% and 19.2%, 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. DPL’s effective combined state and federal income tax rate was 14.1% for the three months ended March 31, 2019. This is 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.

For the three months ended March 31, 2019, DPL’s current period effective tax rate 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 three months ended March 31, 2019 and 2018, DPL converted $1.5 million and $44.6 million, respectively, of accrued tax sharing liabilities with AES to additional equity investment in DPL.

THE DAYTON POWER AND LIGHT COMPANY [Member]

Entity Information [Line Items]

Income Taxes

The following table details the effective tax rates for the three months ended March 31, 2019 and 2018.



	Three months ended
	March 31,
	2019	2018
DP&L	17.4%	18.7%

Income tax expense for the three months ended March 31, 2019 and 2018 was calculated using the estimated annual effective income tax rates for 2019 and 2018 of 17.3% and 19.8%, 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 estimated rates could be materially different from the actual effective tax rates. DP&L’s effective combined state and federal income tax rate was 17.4% for the three months ended March 31, 2019. 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.

For the three months ended March 31, 2019, DP&L’s current period effective tax rate was not materially different than the estimated annual effective rate.