Income Taxes

6 Months Ended

Jun. 30, 2013

Income Taxes

6.  Income Taxes 

The following table details the effective tax rates for the three and six months endedJune 30, 2013 and 2012. 

	Three months ended June 30,		Six months ended June 30,
	2013	2012	2013	2012
DPL	13.3%	51.0%	18.2%	37.4%

Income tax expense for the three and six months endedJune 30, 2013 and 2012 was calculated using the estimated annual effective income tax rates for 2013 and 2012 of 30.7% and 29.0%, 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.

For the three months endedJune 30, 2013,  DPL’s current period effective rate is less than the estimated annual effective rate due to a 2013 deferred tax adjustment related to the expiration of the statute of limitations on the 2007 and 2008 tax years. 

For the six months endedJune 30, 2013,  DPL’s current period effective rate is less than the estimated annual effective rate due primarily to a favorable resolution of the 2008 Internal Revenue Service examination in the first quarter of 2013 and a 2013 deferred tax adjustment related to the expiration of the statute of limitations on the 2007 and 2008 tax years.  The decrease in the effective rate compared to the same periods in 2012 is due to the factors mentioned above.

Deferred tax liabilities for DPL increased by approximately $29.9 million during the six months endedJune 30, 2013 primarily related to the resolution of the 2008 Internal Revenue Service examination in the first quarter of 2013, as well as changes in OCI and adjustments for differences between book and tax depreciation and amortization. 

The Internal Revenue Servicebegan an examination of our 2008 Federal income tax return during the second quarter of 2010.  The results of the examination were approved by the Joint Committee on Taxation on January 18, 2013.  As a result of the examination, DPL received a refund of $19.9 million and recorded a $1.2 million reduction to income tax expense.

DP&L [Member]

Income Taxes

6.  Income Taxes 

The following table details the effective tax rates for thethree and six months endedJune 30, 2013and 2012. 

	Three months ended June 30,		Six months ended June 30,
	2013	2012	2013	2012
DP&L	17.4%	33.3%	20.9%	32.2%

Income tax expense for thethree and six months endedJune 30, 2013 and 2012 was calculated using the estimated annual effective income tax rates for 2013 and 2012 of 29.6%and 32.0%, respectively.  Management estimates the annual effective tax rate based upon 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.

For the three months endedJune 30, 2013,  DP&L’s current period effective rate is less than the estimated annual effective rate due to a 2013 deferred tax adjustment related to the expiration of the statute of limitations on the 2007 and 2008 tax years.

For the six months endedJune 30, 2013,  DP&L’s current period effective rate is less than the estimated annual effective rate due primarily to a favorable resolution of the 2008 Internal Revenue Service examination in the first quarter of 2013 and the deferred tax adjustment related to the expiration of the statute of limitations discussed above.  The decrease in the effective rate compared to the same periods in 2012 is due to the factors mentioned above. 

Deferred tax liabilities for DP&L increased by approximately $24.0 million during the six months endedJune 30, 2013primarily related to the resolution of the 2008 Internal Revenue Service examination in the first quarter of 2013, as well as changes in OCI and adjustments for differences between book and tax depreciation and amortization.

The Internal Revenue Service began an examination of our 2008 federal income tax return during the second quarter of 2010.  The results of the examination were approved by the Joint Committee on Taxation on January 18, 2013.  As a result of the examination, DPL received a refund of $19.9 million and recorded a $1.2 million reduction to income tax expense.