Income Taxes Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2012 and 2011 are presented below (in thousands):



	December 31,
	2012			2011
Deferred tax assets:
Benefit of tax loss carryforwards	$	7,798		$	21,737
Alternative minimum tax credit carryforward	21,599			19,863
Pensions and benefits	86,816			87,946
Asset retirement obligation	21,710			20,100
Deferred fuel	1,951			—
Other	14,549			20,524
Total gross deferred tax assets	154,423			170,170
Deferred tax liabilities:
Plant, principally due to depreciation and basis differences	(459,079		)	(424,319		)
Decommissioning	(29,416		)	(22,633		)
Deferred fuel	—			(2,493		)
Other	(4,310		)	(6,448		)
Total gross deferred tax liabilities	(492,805		)	(455,893		)
Net accumulated deferred income taxes	$	(338,382	)	$	(285,723	)

Schedule of Components of Income Tax Expense (Benefit)

The Company recognized income tax expense for 2012, 2011 and 2010 as follows (in thousands):



	Years Ended December 31,
	2012			2011			2010
Income tax expense:
Federal:
Current	$	1,487		$	5,084		$	19,251
Deferred	43,187			46,864			31,386
Total federal income tax	44,674			51,948			50,637
State:
Current	1,931			2,936			4,308
Deferred	697			(924		)	1,947
Total state income tax	2,628			2,012			6,255
Amortization of accumulated investment tax credits	(323		)	(252		)	(107		)
Total income tax expense	46,979			53,708			56,785
Tax expense classified as extraordinary gain	—			—			(5,769		)
Total income tax expense before extraordinary item	$	46,979		$	53,708		$	51,016

Schedule of Effective Income Tax Rate Reconciliation

Income tax provisions differ from amounts computed by applying the statutory federal income tax rate of 35% to book income before federal income tax as follows (in thousands):



	Years Ended December 31,
	2012			2011			2010
Federal income tax expense computed on income at statutory rate	$	48,239		$	55,036		$	55,086
Difference due to:
State taxes, net of federal benefit	1,708			1,308			4,066
AEFUDC	(1,845		)	(2,295		)	(3,578		)
Permanent tax differences	(604		)	(303		)	(3,103		)
Patient Protection and Affordable Care Act ("PPACA")	—			—			4,787
Other	(519		)	(38		)	(473		)
Total income tax expense	46,979			53,708			56,785
Tax expense classified as extraordinary gain	—			—			(5,769		)
Total income tax expense before extraordinary item	$	46,979		$	53,708		$	51,016
Effective income tax rate	34.1		%	34.2		%	36.1		%
Effective income tax rate without PPACA	34.1		%	34.2		%	33.0		%

Summary of Income Tax Contingencies

A reconciliation of the December 31, 2012, 2011 and 2010 amount of unrecognized tax benefits is as follows (in thousands):



	2012			2011		2010
Balance at January 1	$	9,500		$	7,300	$	600
Additions for tax positions related to the current year	1,600			2,200		6,300
Reductions for tax positions related to the current year	(900		)	—		—
Additions for tax positions of prior years	1,400			—		400
Reductions for tax positions of prior years	(1,800		)	—		—
Balance at December 31	$	9,800		$	9,500	$	7,300

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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