Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Components of Income Tax Expense from Continuing Operations

Components of income tax expense from continuing operations for the years ended December 31 are as follows:

	2013		2012			2011
State income taxes:
Current	$	7,202	$	26,604		$	(7,440	)
Deferred
Current		(405)		(280	)		(171	)
Non-current		26,821		24,256			44,576
	$	33,618	$	50,580		$	36,965
Federal income taxes:
Current	$	(19,995)	$	31,482		$	12,239
Deferred
Current		(1,324)		(2,031	)		(314	)
Non-current		225,408		178,495			151,403
Amortization of deferred investment tax credits		(1,501)		(1,518	)		(1,542	)
		202,588		206,428			161,786
	$	236,206	$	257,008		$	198,751

Reconciliation of Income Tax Expense from Continuing Operations

A reconciliation of income tax expense from continuing operations at the statutory federal income tax rate to actual income tax expense for the years ended December 31 is as follows:

	2013		2012			2011
Income tax at statutory rate	$	211,914	$	220,940		$	176,288
Increases (decreases) resulting from:
State taxes, net of federal taxes		21,852		32,877			24,027
Change in valuation allowance		(455)		143			(160	)
Flow through differences		3,217		3,032			2,895
Amortization of deferred investment tax credits		(1,501)		(1,518	)		(1,542	)
Subsidiary preferred dividends		584		634			668
Other, net		595		900			(3,425	)
Actual income tax expense	$	236,206	$	257,008		$	198,751

Components of Net Deferred Tax Liability from Continuing Operations

The following table provides the components of the net deferred tax liability from continuing operations at December 31:

	2013		2012
Deferred tax assets:
Advances and contributions	$	510,122	$	485,815
Deferred investment tax credits		10,027		10,610
Other postretirement benefits		107,773		100,301
Tax losses and credits		265,640		229,423
Pension benefits		122,143		113,919
Unamortized debt discount, net		20,249		21,711
Other		23,888		22,835
		1,059,842		984,614
Valuation allowance		(13,555)		(19,520	)
	$	1,046,287	$	965,094
Deferred tax liabilities:
Utility plant, principally due to depreciation differences	$	2,478,617	$	2,168,680
Income taxes recoverable through rates		81,135		82,400
Deferred security costs		58		921
Deferred business services project expenses		4,584		4,580
Deferred other postretirement benefits		65,071		57,895
Deferred pension benefits		169,336		102,847
Other		69,574		93,284
		2,868,375		2,510,607
	$	(1,822,088)	$	(1,545,513	)

Changes in Gross Liability Excluding Interest and Penalties for Unrecognized Tax Benefits

The following table summarizes the changes in the Company’s gross liability, excluding interest and penalties, for unrecognized tax benefits:

Balance at January 1, 2012	$	158,578
Increases in current period tax positions		40,620
Decreases in prior period measurement of tax positions		(18,205	)
Balance at December 31, 2012	$	180,993
Increases in current period tax positions		27,229
Decreases in prior period measurement of tax positions		(30,275	)
Balance at December 31, 2013	$	177,947

Changes in Valuation Allowance

The following table summarizes the changes in the Company’s valuation allowance:

Balance at January 1, 2011	$	23,788
Increases in current period tax positions		1,525
Decreases in current period tax positions		(3,734	)
Balance at December 31, 2011	$	21,579
Increases in current period tax positions		0
Decreases in current period tax positions		(2,059	)
Balance at December 31, 2012	$	19,520
Increases in current period tax positions		0
Decreases in current period tax positions		(5,965	)
Balance at December 31, 2013	$	13,555