Proposed Merger with the AES Corporation	9 Months Ended
Sep. 30, 2011
Proposed Merger with the AES Corporation	16. Proposed Merger with The AES Corporation On April 19, 2011, DPL and The AES Corporation, a Delaware corporation ("AES"), entered into an Agreement and Plan of Merger (the "Merger Agreement") whereby AES will acquire DPL for $30.00 per share in a cash transaction valued at approximately $3.5 billion plus the assumption of $1.2 billion of debt. Upon closing, DPL will become a wholly-owned subsidiary of AES. The transaction has been unanimously approved by each of DPL's and AES' board of directors and was approved by DPL's shareholders on September 23, 2011. Consummation of the transaction is subject to certain conditions, including receipt of all required regulatory approvals from, among others, the FERC and the PUCO. On May 18, 2011, DPL and AES filed merger applications with the FERC and the PUCO. The FERC application will be deemed approved after 180 days, unless the FERC tolls for good cause the completed application for further consideration, which may or may not occur as part of the FERC's review. On October 26, 2011, DP&L reached a Stipulation and Recommendation with the PUCO staff and other parties in the AES/DP&L joint application for approval of the Proposed Merger. The Stipulation and Recommendation was filed with the PUCO on October 26, 2011, and is pending PUCO approval. Also on May 18, 2011, DPL and AES each filed their respective Premerger Notification and Report Forms with the Federal Trade Commission and the Department of Justice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Those filings initiated a statutory 30-day waiting period, which expired on June 14, 2011, when early termination of the waiting period was granted. The Vermont Department of Banking, Insurance, Securities and Health Care Administration also issued a formal approval with respect to the Proposed Merger on May 18, 2011. The parties anticipate receiving additional approvals and then closing the transaction during the fourth quarter of 2011 or first quarter of 2012. The Merger Agreement includes customary representations, warranties and restrictions, limitations and prohibitions as to actions we may or may not take in the period prior to consummation of the Proposed Merger or termination of the Merger Agreement. Among other restrictions, without the consent of AES, the Merger Agreement limits our total capital expenditures, limits the extent to which we can obtain financing through long-term debt and equity, and we may not, without the prior consent of AES, increase our quarterly common stock dividend of $0.3325 per share. DPL expects to continue its policy of paying regular quarterly cash dividends until closing. Dividends are expected to be paid on a prorated basis during the quarter in which the transaction closes. Dolphin Subsidiary II, Inc., a subsidiary of AES, issued $1.25 billion in long-term Senior Notes on October 3, 2011, to partially finance the Proposed Merger. Upon the consummation of the Proposed Merger, these notes are expected to become long-term debt obligations of DPL. DPL will not have any obligation associated with these notes if the Proposed Merger is not consummated. The Merger Agreement restricts DPL from soliciting or initiating discussions with third parties regarding other proposals to acquire DPL, subject to certain exceptions for responding to unsolicited third party acquisition proposals and engaging in discussions and negotiations regarding unsolicited third party acquisition proposals. The Merger Agreement also contains certain termination rights for both DPL and AES. Upon termination under specified circumstances, DPL will be required to pay AES a termination fee of $106 million. The following lawsuits have been filed in connection with the Proposed Merger (See Item 1a, "Risk Factors," for additional risks related to the Proposed Merger). Each of these lawsuits seeks, among other things, one or more of the following: to enjoin the defendants from consummating the Proposed Merger until certain conditions are met, or to rescind the Proposed Merger or for rescissory damages, or to recover damages if the Proposed Merger is consummated or to commence a sale process and/or obtain an alternative transaction or to promptly notice an annual shareholder meeting or to recover an unspecified amount of other damages and costs, including attorneys' fees and expenses, or a constructive trust or an accounting from the individual defendants for benefits they allegedly obtained as a result of their alleged breach of duty or an injunction specifically preventing DPL from paying a termination fee. On April 21, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming DPL and each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants. The lawsuit is a purported class action filed by Patricia A. Heinmullter on behalf of herself and an alleged class of DPL shareholders. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that AES and Dolphin Sub, Inc. aided and abetted such breach. On April 25, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming each member of DPL's board of directors and AES as defendants and naming DPL as a nominal defendant. The lawsuit filed by the Austren Trust is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the proposed Merger of DPL and AES and that AES aided and abetted such breach. On September 29, 2011 the Court entered an order dismissing the Austren Trust action without prejudice pursuant to a stipulation of dismissal filed by the parties. On April 26, 2011, a lawsuit was filed in the United States District Court for the Southern District of Ohio, Western Division (the "District Court"), naming each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants and naming DPL as a nominal defendant. The lawsuit filed by Stephen Kubiak is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the proposed Merger of DPL and AES and that AES and Dolphin Sub, Inc. aided and abetted such breach. On April 26, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants and naming DPL as a nominal defendant. The lawsuit filed by Sandra Meyr is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that AES and Dolphin Sub, Inc. aided and abetted such breach. On May 31, 2011, the Court granted the plaintiff's voluntary motion to dismiss the lawsuit without prejudice. On April 27, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming each member of DPL's board of directors and AES as defendants and naming DPL as a nominal defendant. The lawsuit filed by Thomas Strobhar is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that AES aided and abetted such breach. On September 28, 2011 the Court entered an order dismissing the Strobhar action without prejudice pursuant to a stipulation of dismissal filed by the parties. On April 27, 2011, another lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming DPL, each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants. The lawsuit filed by Laurence D. Paskowitz is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that DPL, AES and Dolphin Sub, Inc. aided and abetted such breach. On April 28, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming DPL and each member of DPL's board of directors as defendants. The lawsuit filed by Payne Family Trust is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES. On May 4, 2011, a lawsuit was filed in the District Court naming DPL, each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants. The lawsuit filed by Patrick Nichting is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that DPL, AES and Dolphin Sub, Inc. aided and abetted such breach. On May 6, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming DPL, each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants. The lawsuit filed by Robin Mahaffey, Jerome R. Baxter, and Donald and Patricia Aydelott is a purported class action on behalf of plaintiffs and an alleged class of DPL shareholders. Plaintiffs allege, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that DPL and AES aided and abetted such breach. On June 24, 2011, the plaintiffs filed a notice of voluntary dismissal of this action without prejudice. On May 10, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming each member of DPL's board of directors and AES as defendants and naming DPL as a nominal defendant. The lawsuit filed by Glenda E. Hime, Donald D. Foreman, Donald Moberly, James Sciarrotta, Barbara H. Sciarrotta, Robert Krebs and Frances Krebs is a purported class action on behalf of plaintiffs and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiffs allege, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that AES aided and abetted such breach. On September 28, 2011, the Court entered an order dismissing the Hime actions without prejudice pursuant to a stipulation of dismissal filed by the parties. On May 20, 2011, a lawsuit was filed in the United States District Court for the Southern District of Ohio, Western Division, naming DPL, each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants. The lawsuit filed by Ralph B. Holtmann and Catherine P. Holtmann is a purported class action on behalf of plaintiffs and an alleged class of DPL shareholders. Plaintiffs allege, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that DPL, AES and Dolphin Sub, Inc. aided and abetted such breach. On May 24, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming each member of DPL's board of directors and AES as defendants and naming DPL as a nominal defendant. The lawsuit filed by Maxine Levy is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that AES and Dolphin Sub, Inc. aided and abetted such breach. On June 13, 2011, the three actions pending in the District Court were consolidated. On June 14, 2011, the District Court granted Plaintiff Nichting's motion to appoint lead and liaison counsel. On June 30, 2011, plaintiffs in the consolidated federal action filed an amended complaint that adds claims based on alleged omissions in the preliminary proxy statement that DPL filed on June 22, 2011 (the "Preliminary Proxy Statement"). Plaintiffs , in their individual capacity only, assert a claim against DPL and its directors under Section 14(a) of the Securities Exchange Act of 1934 (the "Exchange Act") for purported omissions in the Preliminary Proxy Statement and a claim against DPL's directors for control person liability under Section 20(a) of the Exchange Act. In addition, plaintiffs purport to assert state law claims directly on behalf of Plaintiffs and an alleged class of DPL shareholders and derivatively on behalf of DPL. Plaintiffs allege, among other things, that DPL's directors breached their fiduciary duties in approving the Merger Agreement for the Proposed Merger of DPL and AES and that DPL AES and Dolphin Sub, Inc. aided and abetted such breach. On July 29, 2011, DPL, DPL's directors, AES and Dolphin Sub, Inc. entered into a Memorandum of Understanding (the "MOU") with the plaintiffs in the consolidated federal action reflecting their agreement in principle to settle the claims asserted in the consolidated federal action, subject to, among other things, the execution of a stipulation of settlement, completion of confirmatory discovery, provision of notice of the settlement to DPL's shareholders, approval of the settlement by the District Court, and consummation of the Proposed Merger. If approved by the District Court, the settlement will resolve all pending federal court litigation related to the Proposed Merger, including the Kubiak, Holtmann and Nichting actions, and would result in the release by the plaintiffs and the proposed settlement class, which consists of all record and beneficial holders of DPL's common stock during the period beginning April 19, 2011 through and including the consummation of the Merger (other than the defendants), of all claims that were or could have been brought challenging any aspect of the Merger Agreement, the Proposed Merger and any disclosures made in connection therewith (including the claims asserted in the lawsuits filed in Ohio state court described above, among other claims, but excluding any properly perfected claims for statutory appraisal in connection with the Proposed Merger). The MOU provides, among other things, for DPL to make certain supplemental disclosures concerning the Proposed Merger, which are contained in the definitive proxy statement DPL filed on August 5, 2011. In addition, the MOU provides that the plaintiffs intend to apply to the District Court for an award of reasonable attorneys' fees and expenses. DPL reserves all rights to object to any such application for a fee or expense award, but agreed to pay any fee or expense award in an amount ordered by the District Court. Notice of the proposed settlement will be sent to members of the proposed class and to DPL shareholders as of the date of the District Court's order preliminarily approving the settlement. The District Court will schedule a hearing regarding, among other things, approval of the proposed settlement and any application by plaintiffs' counsel for an award of attorneys' fees and expenses. There can be no assurance that the Proposed Merger will be consummated, that the parties will ultimately enter into a stipulation of settlement or that the District Court will approve the settlement even if the parties enter into such stipulation. In such event, the proposed settlement as contemplated by the MOU may be terminated. The settlement will not affect the amount of the merger consideration that DPL's shareholders are entitled to receive in the Proposed Merger. DPL and its board of directors believe that these lawsuits are without merit and are seeking to settle them to eliminate the burden and expense of litigation and to provide additional information to DPL's shareholders at a time and in a manner that would not have caused any further delay in DPL's 2011 Annual Meeting of Shareholders or cause any delay in the consummation of the Proposed Merger. Absent such settlement, DPL intends to vigorously defend against all of the claims referred to above. DPL expects to record transaction fees relating to the Proposed Merger consisting primarily of bankers' fees, legal fees, and change of control costs of approximately $45 million pre-tax during 2011. Further information concerning the Proposed Merger, including a copy of the Merger Agreement, is included in DPL's Definitive Proxy Statement filed with the SEC on August 5, 2011, as modified by a correction to the Definitive Proxy Statement filed with the SEC on August 24, 2011.
DP&L [Member]
Proposed Merger with the AES Corporation	16. Proposed Merger with The AES Corporation On April 19, 2011, DPL and The AES Corporation, a Delaware corporation ("AES"), entered into an Agreement and Plan of Merger (the "Merger Agreement") whereby AES will acquire DPL for $30.00 per share in a cash transaction valued at approximately $3.5 billion plus the assumption of $1.2 billion of debt. Upon closing, DPL will become a wholly-owned subsidiary of AES. The transaction has been unanimously approved by each of DPL's and AES' board of directors and was approved by DPL's shareholders on September 23, 2011. Consummation of the transaction is subject to certain conditions, including receipt of all required regulatory approvals from, among others, the FERC and the PUCO. On May 18, 2011, DPL and AES filed merger applications with the FERC and the PUCO. The FERC application will be deemed approved after 180 days, unless the FERC tolls for good cause the completed application for further consideration, which may or may not occur as part of the FERC's review. On October 26, 2011, DP&L reached a Stipulation and Recommendation with the PUCO staff and other parties in the AES/DP&L joint application for approval of the Proposed Merger. The Stipulation and Recommendation was filed with the PUCO on October 26, 2011, and is pending PUCO approval. Also on May 18, 2011, DPL and AES each filed their respective Premerger Notification and Report Forms with the Federal Trade Commission and the Department of Justice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Those filings initiated a statutory 30-day waiting period, which expired on June 14, 2011, when early termination of the waiting period was granted. The Vermont Department of Banking, Insurance, Securities and Health Care Administration also issued a formal approval with respect to the Proposed Merger on May 18, 2011. The parties anticipate receiving additional approvals and then closing the transaction during the fourth quarter of 2011 or first quarter of 2012. The Merger Agreement includes customary representations, warranties and restrictions, limitations and prohibitions as to actions we may or may not take in the period prior to consummation of the Proposed Merger or termination of the Merger Agreement. Among other restrictions, without the consent of AES, the Merger Agreement limits our total capital expenditures, limits the extent to which we can obtain financing through long-term debt and equity, and we may not, without the prior consent of AES, increase our quarterly common stock dividend of $0.3325 per share. DPL expects to continue its policy of paying regular quarterly cash dividends until closing. Dividends are expected to be paid on a prorated basis during the quarter in which the transaction closes. Dolphin Subsidiary II, Inc., a subsidiary of AES, issued $1.25 billion in long-term Senior Notes on October 3, 2011, to partially finance the Proposed Merger. Upon the consummation of the Proposed Merger, these notes are expected to become long-term debt obligations of DPL. DPL will not have any obligation associated with these notes if the Proposed Merger is not consummated. The Merger Agreement restricts DPL from soliciting or initiating discussions with third parties regarding other proposals to acquire DPL, subject to certain exceptions for responding to unsolicited third party acquisition proposals and engaging in discussions and negotiations regarding unsolicited third party acquisition proposals. The Merger Agreement also contains certain termination rights for both DPL and AES. Upon termination under specified circumstances, DPL will be required to pay AES a termination fee of $106 million. The following lawsuits have been filed in connection with the Proposed Merger (See Item 1a, "Risk Factors," for additional risks related to the Proposed Merger). Each of these lawsuits seeks, among other things, one or more of the following: to enjoin the defendants from consummating the Proposed Merger until certain conditions are met, or to rescind the Proposed Merger or for rescissory damages, or to recover damages if the Proposed Merger is consummated or to commence a sale process and/or obtain an alternative transaction or to promptly notice an annual shareholder meeting or to recover an unspecified amount of other damages and costs, including attorneys' fees and expenses, or a constructive trust or an accounting from the individual defendants for benefits they allegedly obtained as a result of their alleged breach of duty or an injunction specifically preventing DPL from paying a termination fee. On April 21, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming DPL and each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants. The lawsuit is a purported class action filed by Patricia A. Heinmullter on behalf of herself and an alleged class of DPL shareholders. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that AES and Dolphin Sub, Inc. aided and abetted such breach. On April 25, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming each member of DPL's board of directors and AES as defendants and naming DPL as a nominal defendant. The lawsuit filed by the Austren Trust is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the proposed Merger of DPL and AES and that AES aided and abetted such breach. On September 29, 2011 the Court entered an order dismissing the Austren Trust action without prejudice pursuant to a stipulation of dismissal filed by the parties. On April 26, 2011, a lawsuit was filed in the United States District Court for the Southern District of Ohio, Western Division (the "District Court"), naming each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants and naming DPL as a nominal defendant. The lawsuit filed by Stephen Kubiak is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the proposed Merger of DPL and AES and that AES and Dolphin Sub, Inc. aided and abetted such breach. On April 26, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants and naming DPL as a nominal defendant. The lawsuit filed by Sandra Meyr is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that AES and Dolphin Sub, Inc. aided and abetted such breach. On May 31, 2011, the Court granted the plaintiff's voluntary motion to dismiss the lawsuit without prejudice. On April 27, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming each member of DPL's board of directors and AES as defendants and naming DPL as a nominal defendant. The lawsuit filed by Thomas Strobhar is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that AES aided and abetted such breach. On September 28, 2011 the Court entered an order dismissing the Strobhar action without prejudice pursuant to a stipulation of dismissal filed by the parties. On April 27, 2011, another lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming DPL, each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants. The lawsuit filed by Laurence D. Paskowitz is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that DPL, AES and Dolphin Sub, Inc. aided and abetted such breach. On April 28, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming DPL and each member of DPL's board of directors as defendants. The lawsuit filed by Payne Family Trust is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES. On May 4, 2011, a lawsuit was filed in the District Court naming DPL, each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants. The lawsuit filed by Patrick Nichting is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that DPL, AES and Dolphin Sub, Inc. aided and abetted such breach. On May 6, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming DPL, each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants. The lawsuit filed by Robin Mahaffey, Jerome R. Baxter, and Donald and Patricia Aydelott is a purported class action on behalf of plaintiffs and an alleged class of DPL shareholders. Plaintiffs allege, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that DPL and AES aided and abetted such breach. On June 24, 2011, the plaintiffs filed a notice of voluntary dismissal of this action without prejudice. On May 10, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming each member of DPL's board of directors and AES as defendants and naming DPL as a nominal defendant. The lawsuit filed by Glenda E. Hime, Donald D. Foreman, Donald Moberly, James Sciarrotta, Barbara H. Sciarrotta, Robert Krebs and Frances Krebs is a purported class action on behalf of plaintiffs and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiffs allege, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that AES aided and abetted such breach. On September 28, 2011, the Court entered an order dismissing the Hime actions without prejudice pursuant to a stipulation of dismissal filed by the parties. On May 20, 2011, a lawsuit was filed in the United States District Court for the Southern District of Ohio, Western Division, naming DPL, each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants. The lawsuit filed by Ralph B. Holtmann and Catherine P. Holtmann is a purported class action on behalf of plaintiffs and an alleged class of DPL shareholders. Plaintiffs allege, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that DPL, AES and Dolphin Sub, Inc. aided and abetted such breach. On May 24, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming each member of DPL's board of directors and AES as defendants and naming DPL as a nominal defendant. The lawsuit filed by Maxine Levy is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that AES and Dolphin Sub, Inc. aided and abetted such breach. On June 13, 2011, the three actions pending in the District Court were consolidated. On June 14, 2011, the District Court granted Plaintiff Nichting's motion to appoint lead and liaison counsel. On June 30, 2011, plaintiffs in the consolidated federal action filed an amended complaint that adds claims based on alleged omissions in the preliminary proxy statement that DPL filed on June 22, 2011 (the "Preliminary Proxy Statement"). Plaintiffs , in their individual capacity only, assert a claim against DPL and its directors under Section 14(a) of the Securities Exchange Act of 1934 (the "Exchange Act") for purported omissions in the Preliminary Proxy Statement and a claim against DPL's directors for control person liability under Section 20(a) of the Exchange Act. In addition, plaintiffs purport to assert state law claims directly on behalf of Plaintiffs and an alleged class of DPL shareholders and derivatively on behalf of DPL. Plaintiffs allege, among other things, that DPL's directors breached their fiduciary duties in approving the Merger Agreement for the Proposed Merger of DPL and AES and that DPL AES and Dolphin Sub, Inc. aided and abetted such breach. On July 29, 2011, DPL, DPL's directors, AES and Dolphin Sub, Inc. entered into a Memorandum of Understanding (the "MOU") with the plaintiffs in the consolidated federal action reflecting their agreement in principle to settle the claims asserted in the consolidated federal action, subject to, among other things, the execution of a stipulation of settlement, completion of confirmatory discovery, provision of notice of the settlement to DPL's shareholders, approval of the settlement by the District Court, and consummation of the Proposed Merger. If approved by the District Court, the settlement will resolve all pending federal court litigation related to the Proposed Merger, including the Kubiak, Holtmann and Nichting actions, and would result in the release by the plaintiffs and the proposed settlement class, which consists of all record and beneficial holders of DPL's common stock during the period beginning April 19, 2011 through and including the consummation of the Merger (other than the defendants), of all claims that were or could have been brought challenging any aspect of the Merger Agreement, the Proposed Merger and any disclosures made in connection therewith (including the claims asserted in the lawsuits filed in Ohio state court described above, among other claims, but excluding any properly perfected claims for statutory appraisal in connection with the Proposed Merger). The MOU provides, among other things, for DPL to make certain supplemental disclosures concerning the Proposed Merger, which are contained in the definitive proxy statement DPL filed on August 5, 2011. In addition, the MOU provides that the plaintiffs intend to apply to the District Court for an award of reasonable attorneys' fees and expenses. DPL reserves all rights to object to any such application for a fee or expense award, but agreed to pay any fee or expense award in an amount ordered by the District Court. Notice of the proposed settlement will be sent to members of the proposed class and to DPL shareholders as of the date of the District Court's order preliminarily approving the settlement. The District Court will schedule a hearing regarding, among other things, approval of the proposed settlement and any application by plaintiffs' counsel for an award of attorneys' fees and expenses. There can be no assurance that the Proposed Merger will be consummated, that the parties will ultimately enter into a stipulation of settlement or that the District Court will approve the settlement even if the parties enter into such stipulation. In such event, the proposed settlement as contemplated by the MOU may be terminated. The settlement will not affect the amount of the merger consideration that DPL's shareholders are entitled to receive in the Proposed Merger. DPL and its board of directors believe that these lawsuits are without merit and are seeking to settle them to eliminate the burden and expense of litigation and to provide additional information to DPL's shareholders at a time and in a manner that would not have caused any further delay in DPL's 2011 Annual Meeting of Shareholders or cause any delay in the consummation of the Proposed Merger. Absent such settlement, DPL intends to vigorously defend against all of the claims referred to above. DPL expects to record transaction fees relating to the Proposed Merger consisting primarily of bankers' fees, legal fees, and change of control costs of approximately $45 million pre-tax during 2011. Further information concerning the Proposed Merger, including a copy of the Merger Agreement, is included in DPL's Definitive Proxy Statement filed with the SEC on August 5, 2011, as modified by a correction to the Definitive Proxy Statement filed with the SEC on August 24, 2011.

On April 19, 2011, DPL and The AES Corporation, a Delaware corporation ("AES"), entered into an Agreement and Plan of Merger (the "Merger Agreement") whereby AES will acquire DPL for $30.00 per share in a cash transaction valued at approximately $3.5 billion plus the assumption of $1.2 billion of debt. Upon closing, DPL will become a wholly-owned subsidiary of AES.

The transaction has been unanimously approved by each of DPL's and AES' board of directors and was approved by DPL's shareholders on September 23, 2011. Consummation of the transaction is subject to certain conditions, including receipt of all required regulatory approvals from, among others, the FERC and the PUCO. On May 18, 2011, DPL and AES filed merger applications with the FERC and the PUCO. The FERC application will be deemed approved after 180 days, unless the FERC tolls for good cause the completed application for further consideration, which may or may not occur as part of the FERC's review. On October 26, 2011, DP&L reached a Stipulation and Recommendation with the PUCO staff and other parties in the AES/DP&L joint application for approval of the Proposed Merger. The Stipulation and Recommendation was filed with the PUCO on October 26, 2011, and is pending PUCO approval.

Also on May 18, 2011, DPL and AES each filed their respective Premerger Notification and Report Forms with the Federal Trade Commission and the Department of Justice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Those filings initiated a statutory 30-day waiting period, which expired on June 14, 2011, when early termination of the waiting period was granted. The Vermont Department of Banking, Insurance, Securities and Health Care Administration also issued a formal approval with respect to the Proposed Merger on May 18, 2011. The parties anticipate receiving additional approvals and then closing the transaction during the fourth quarter of 2011 or first quarter of 2012.

The Merger Agreement includes customary representations, warranties and restrictions, limitations and prohibitions as to actions we may or may not take in the period prior to consummation of the Proposed Merger or termination of the Merger Agreement. Among other restrictions, without the consent of AES, the Merger Agreement limits our total capital expenditures, limits the extent to which we can obtain financing through long-term debt and equity, and we may not, without the prior consent of AES, increase our quarterly common stock dividend of $0.3325 per share.

DPL expects to continue its policy of paying regular quarterly cash dividends until closing. Dividends are expected to be paid on a prorated basis during the quarter in which the transaction closes.

Dolphin Subsidiary II, Inc., a subsidiary of AES, issued $1.25 billion in long-term Senior Notes on October 3, 2011, to partially finance the Proposed Merger. Upon the consummation of the Proposed Merger, these notes are expected to become long-term debt obligations of DPL. DPL will not have any obligation associated with these notes if the Proposed Merger is not consummated.

The Merger Agreement restricts DPL from soliciting or initiating discussions with third parties regarding other proposals to acquire DPL, subject to certain exceptions for responding to unsolicited third party acquisition proposals and engaging in discussions and negotiations regarding unsolicited third party acquisition proposals. The Merger Agreement also contains certain termination rights for both DPL and AES. Upon termination under specified circumstances, DPL will be required to pay AES a termination fee of $106 million.

The following lawsuits have been filed in connection with the Proposed Merger (See Item 1a, "Risk Factors," for additional risks related to the Proposed Merger). Each of these lawsuits seeks, among other things, one or more of the following: to enjoin the defendants from consummating the Proposed Merger until certain conditions are met, or to rescind the Proposed Merger or for rescissory damages, or to recover damages if the Proposed Merger is consummated or to commence a sale process and/or obtain an alternative transaction or to promptly notice an annual shareholder meeting or to recover an unspecified amount of other damages and costs, including attorneys' fees and expenses, or a constructive trust or an accounting from the individual defendants for benefits they allegedly obtained as a result of their alleged breach of duty or an injunction specifically preventing DPL from paying a termination fee.

On April 21, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming DPL and each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants. The lawsuit is a purported class action filed by Patricia A. Heinmullter on behalf of herself and an alleged class of DPL shareholders. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that AES and Dolphin Sub, Inc. aided and abetted such breach.

On April 25, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming each member of DPL's board of directors and AES as defendants and naming DPL as a nominal defendant. The lawsuit filed by the Austren Trust is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the proposed Merger of DPL and AES and that AES aided and abetted such breach. On September 29, 2011 the Court entered an order dismissing the Austren Trust action without prejudice pursuant to a stipulation of dismissal filed by the parties.

On April 26, 2011, a lawsuit was filed in the United States District Court for the Southern District of Ohio, Western Division (the "District Court"), naming each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants and naming DPL as a nominal defendant. The lawsuit filed by Stephen Kubiak is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the proposed Merger of DPL and AES and that AES and Dolphin Sub, Inc. aided and abetted such breach.

On April 26, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants and naming DPL as a nominal defendant. The lawsuit filed by Sandra Meyr is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that AES and Dolphin Sub, Inc. aided and abetted such breach. On May 31, 2011, the Court granted the plaintiff's voluntary motion to dismiss the lawsuit without prejudice.

On April 27, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming each member of DPL's board of directors and AES as defendants and naming DPL as a nominal defendant. The lawsuit filed by Thomas Strobhar is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that AES aided and abetted such breach. On September 28, 2011 the Court entered an order dismissing the Strobhar action without prejudice pursuant to a stipulation of dismissal filed by the parties.

On April 27, 2011, another lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming DPL, each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants. The lawsuit filed by Laurence D. Paskowitz is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that DPL, AES and Dolphin Sub, Inc. aided and abetted such breach.

On April 28, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming DPL and each member of DPL's board of directors as defendants. The lawsuit filed by Payne Family Trust is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES.

On May 4, 2011, a lawsuit was filed in the District Court naming DPL, each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants. The lawsuit filed by Patrick Nichting is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that DPL, AES and Dolphin Sub, Inc. aided and abetted such breach.

On May 6, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming DPL, each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants. The lawsuit filed by Robin Mahaffey, Jerome R. Baxter, and Donald and Patricia Aydelott is a purported class action on behalf of plaintiffs and an alleged class of DPL shareholders. Plaintiffs allege, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that DPL and AES aided and abetted such breach. On June 24, 2011, the plaintiffs filed a notice of voluntary dismissal of this action without prejudice.

On May 10, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming each member of DPL's board of directors and AES as defendants and naming DPL as a nominal defendant. The lawsuit filed by Glenda E. Hime, Donald D. Foreman, Donald Moberly, James Sciarrotta, Barbara H. Sciarrotta, Robert Krebs and Frances Krebs is a purported class action on behalf of plaintiffs and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiffs allege, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that AES aided and abetted such breach. On September 28, 2011, the Court entered an order dismissing the Hime actions without prejudice pursuant to a stipulation of dismissal filed by the parties.

On May 20, 2011, a lawsuit was filed in the United States District Court for the Southern District of Ohio, Western Division, naming DPL, each member of DPL's board of directors, AES and Dolphin Sub, Inc. as defendants. The lawsuit filed by Ralph B. Holtmann and Catherine P. Holtmann is a purported class action on behalf of plaintiffs and an alleged class of DPL shareholders. Plaintiffs allege, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that DPL, AES and Dolphin Sub, Inc. aided and abetted such breach.

On May 24, 2011, a lawsuit was filed in the Court of Common Pleas of Montgomery County, Ohio, naming each member of DPL's board of directors and AES as defendants and naming DPL as a nominal defendant. The lawsuit filed by Maxine Levy is a purported class action on behalf of plaintiff and an alleged class of DPL shareholders and a purported derivative action on behalf of DPL. Plaintiff alleges, among other things, that DPL's directors breached their fiduciary duties in approving the Proposed Merger of DPL and AES and that AES and Dolphin Sub, Inc. aided and abetted such breach.

On June 13, 2011, the three actions pending in the District Court were consolidated. On June 14, 2011, the District Court granted Plaintiff Nichting's motion to appoint lead and liaison counsel. On June 30, 2011, plaintiffs in the consolidated federal action filed an amended complaint that adds claims based on alleged omissions in the preliminary proxy statement that DPL filed on June 22, 2011 (the "Preliminary Proxy Statement"). Plaintiffs , in their individual capacity only, assert a claim against DPL and its directors under Section 14(a) of the Securities Exchange Act of 1934 (the "Exchange Act") for purported omissions in the Preliminary Proxy Statement and a claim against DPL's directors for control person liability under Section 20(a) of the Exchange Act. In addition, plaintiffs purport to assert state law claims directly on behalf of Plaintiffs and an alleged class of DPL shareholders and derivatively on behalf of DPL. Plaintiffs allege, among other things, that DPL's directors breached their fiduciary duties in approving the Merger Agreement for the Proposed Merger of DPL and AES and that DPL AES and Dolphin Sub, Inc. aided and abetted such breach.

On July 29, 2011, DPL, DPL's directors, AES and Dolphin Sub, Inc. entered into a Memorandum of Understanding (the "MOU") with the plaintiffs in the consolidated federal action reflecting their agreement in principle to settle the claims asserted in the consolidated federal action, subject to, among other things, the execution of a stipulation of settlement, completion of confirmatory discovery, provision of notice of the settlement to DPL's shareholders, approval of the settlement by the District Court, and consummation of the Proposed Merger. If approved by the District Court, the settlement will resolve all pending federal court litigation related to the Proposed Merger, including the Kubiak, Holtmann and Nichting actions, and would result in the release by the plaintiffs and the proposed settlement class, which consists of all record and beneficial holders of DPL's common stock during the period beginning April 19, 2011 through and including the consummation of the Merger (other than the defendants), of all claims that were or could have been brought challenging any aspect of the Merger Agreement, the Proposed Merger and any disclosures made in connection therewith (including the claims asserted in the lawsuits filed in Ohio state court described above, among other claims, but excluding any properly perfected claims for statutory appraisal in connection with the Proposed Merger). The MOU provides, among other things, for DPL to make certain supplemental disclosures concerning the Proposed Merger, which are contained in the definitive proxy statement DPL filed on August 5, 2011. In addition, the MOU provides that the plaintiffs intend to apply to the District Court for an award of reasonable attorneys' fees and expenses. DPL reserves all rights to object to any such application for a fee or expense award, but agreed to pay any fee or expense award in an amount ordered by the District Court. Notice of the proposed settlement will be sent to members of the proposed class and to DPL shareholders as of the date of the District Court's order preliminarily approving the settlement. The District Court will schedule a hearing regarding, among other things, approval of the proposed settlement and any application by plaintiffs' counsel for an award of attorneys' fees and expenses.

There can be no assurance that the Proposed Merger will be consummated, that the parties will ultimately enter into a stipulation of settlement or that the District Court will approve the settlement even if the parties enter into such stipulation. In such event, the proposed settlement as contemplated by the MOU may be terminated. The settlement will not affect the amount of the merger consideration that DPL's shareholders are entitled to receive in the Proposed Merger. DPL and its board of directors believe that these lawsuits are without merit and are seeking to settle them to eliminate the burden and expense of litigation and to provide additional information to DPL's shareholders at a time and in a manner that would not have caused any further delay in DPL's 2011 Annual Meeting of Shareholders or cause any delay in the consummation of the Proposed Merger.

Absent such settlement, DPL intends to vigorously defend against all of the claims referred to above.

DPL expects to record transaction fees relating to the Proposed Merger consisting primarily of bankers' fees, legal fees, and change of control costs of approximately $45 million pre-tax during 2011.

Further information concerning the Proposed Merger, including a copy of the Merger Agreement, is included in DPL's Definitive Proxy Statement filed with the SEC on August 5, 2011, as modified by a correction to the Definitive Proxy Statement filed with the SEC on August 24, 2011.