Income Taxes

9 Months Ended

Sep. 30, 2015

Note 6 – Income Taxes

The following table details the effective tax rates for the three and nine months ended September 30, 2015 and 2014.



	Three months ended		Nine months ended
	September 30,		September 30,
	2015	2014	2015	2014
DPL	3.4%	(71.5)%	18.6%	(34.2)%

Income tax expense for the nine months ended September 30, 2015 and 2014 was calculated using the estimated annual effective income tax rates for 2015 and 2014 of 30.8% and (42.3)%, respectively. For the nine months ended September 30, 2015 and 2014, management estimated 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 and nine months ended September 30, 2015, DPL’s current period effective rate was less than the estimated annual effective rate primarily due to the sale of MC Squared and an anticipated refund from the IRS for the filing of an amended 2011 predecessor tax return to include the domestic manufacturing deduction. The increase in the effective rate compared to the same period in 2014 is primarily due to the non-deductible goodwill impairment in 2014 which did not occur in 2015.

THE DAYTON POWER AND LIGHT COMPANY [Member]

Entity Information [Line Items]

Income Taxes

Note 6 – Income Taxes

The following table details the effective tax rates for the three and nine months ended September 30, 2015 and 2014.



	Three months ended September 30,		Nine months ended September 30,
	2015	2014	2015	2014
DP&L	4.9%	19.8%	24.8%	23.2%

Income tax expense for the three and nine months ended September 30, 2015 and 2014 was calculated using the estimated annual effective income tax rates for 2015 and 2014 of 29.0% and 30.5%, respectively. For the three and nine months ended September 30, 2015 and 2014 management estimated 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 and nine months ended September 30, 2015, DP&L’s current period effective rate is less than the estimated annual effective rate primarily due to the anticipated refund from the IRS for the filing of an amended 2011 predecessor tax return to include the domestic manufacturing deduction and the deduction for the preferred stock dividends.