XML 51 R32.htm IDEA: XBRL DOCUMENT

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the amount of unrecognized tax benefits is as follows:

(Millions of Dollars)	Dec. 31, 2012		Dec. 31, 2011
Unrecognized tax benefit - Permanent tax positions	$	0.1	$	-
Unrecognized tax benefit - Temporary tax positions		1.2		1.5
Total unrecognized tax benefit	$	1.3	$	1.5

A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows:

(Millions of Dollars)	2012			2011			2010
Balance at Jan. 1	$	1.5		$	1.9		$	1.2
Additions based on tax positions related to the current year		0.5			0.6			0.7
Reductions based on tax positions related to the current year		(0.2	)		(0.1	)		-
Additions for tax positions of prior years		0.3			0.7			0.1
Reductions for tax positions of prior years		(0.8	)		(0.3	)		(0.1	)
Settlements with taxing authorities		-			(1.2	)		-
Lapse of applicable statutes of limitations		-			(0.1	)		-
Balance at Dec. 31	$	1.3		$	1.5		$	1.9

Tax Benefits Associated with NOL and Tax Credit Carryforwards

The unrecognized tax benefit balance was reduced by the tax benefits associated with NOL and tax credit carryforwards. The amounts of tax benefits associated with NOL and tax credit carryfowards are as follows:

(Millions of Dollars)		Dec. 31, 2012				Dec. 31, 2011
NOL and tax credit carryforwards		$	(0.9	)		$	(1.1	)

NOL and Tax Credit Carryforwards

Other Income Tax Matters — NOL amounts represent the amount of the tax loss that is carried forward and tax credits represent the deferred tax asset. NOL and tax credit carryforwards as of Dec. 31 were as follows:

(Millions of Dollars)	2012		2011
Federal NOL carryforward	$	44.3	$	59.3
Federal tax credit carryforwards		8.0		8.0
State NOL carryforward		3.4		3.5

Reconciliation of Effective Tax Rate

Total income tax expense from operations differs from the amount computed by applying the statutory federal income tax rate to income before income tax expense. The following reconciles such differences for the years ending Dec. 31:

	2012			2011			2010
Federal statutory rate		35.0	%		35.0	%		35.0	%
Increases (decreases) in tax from:
State income taxes, net of federal income tax benefit		3.4			4.4			3.5
Change in unrecognized tax benefits		0.1			(0.2	)		-
Tax credits recognized		(0.9	)		(0.9	)		(1.1	)
Regulatory differences — utility plant items		(0.3	)		0.5			(0.7	)
Medicare Part D		-			-			1.0
Other, net		(0.1	)		0.9			0.2
Effective income tax rate		37.2	%		39.7	%		37.9	%

Components of Income Tax Expense

The components of income tax expense for the years ending Dec. 31 were:

(Thousands of Dollars)	2012			2011			2010
Current federal tax expense (benefit)	$	930		$	(1,540	)	$	3,754
Current state tax expense		2,216			1,573			1,536
Current change in unrecognized tax (benefit) expense		(69	)		(1,418	)		730
Deferred federal tax expense		25,089			30,251			19,133
Deferred state tax expense		1,890			4,105			2,288
Deferred change in unrecognized tax expense (benefit)		128			1,254			(707	)
Deferred investment tax credits		(626	)		(611	)		(622	)
Total income tax expense	$	29,558		$	33,614		$	26,112

The components of deferred income tax expense for the years ending Dec. 31 were:

(Thousands of Dollars)	2012			2011			2010
Deferred tax expense excluding items below	$	27,995		$	34,017		$	20,987
Amortization and adjustments to deferred income taxes on
income tax regulatory assets and liabilities		(837	)		1,644			(222	)
Tax expense allocated to other comprehensive income		(51	)		(51	)		(51	)
Deferred tax expense	$	27,107		$	35,610		$	20,714

Components of Net Deferred Tax Liability

The components of the net deferred tax liability (current and noncurrent portions) at Dec. 31 were:

(Thousands of Dollars)	2012		2011
Deferred tax liabilities:
Difference between book and tax bases of property	$	265,202	$	241,003
Regulatory assets		52,898		52,131
Employee benefits		16,862		21,013
Other		10,535		9,328
Total deferred tax liabilities	$	345,497	$	323,475

Deferred tax assets:
Environmental remediation	$	43,344	$	44,154
NOL carryforward		17,588		22,318
Tax credit carryforward		8,011		7,998
Regulatory liabilities		5,927		6,222
Deferred investment tax credits		5,766		5,705
Other		2,191		2,403
Total deferred tax assets	$	82,827	$	88,800
Net deferred tax liability	$	262,670	$	234,675

- 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.

+ References+ Details