Income Taxes

12 Months Ended

Oct. 31, 2012

Income Taxes Disclosure [Abstract]

Income Tax Disclosure Text Block

11. Income Taxes

The components of income tax expense for the years ended October 31, 2012, 2011 and 2010 are presented below.

	2012				2011				2010
In thousands	Federal		State		Federal		State		Federal		State
Charged (Credited) to operating income:
Current	$	(29,062)	$	1,857	$	(11,403)	$	4,209	$	18,133	$	3,928
Deferred		86,496		10,144		64,806		6,597		33,432		6,866
Tax Credits:
Utilization		-		-		184		-		105		-
Amortization		(334)		-		(325)		-		(382)		-
Total		57,100		12,001		53,262		10,806		51,288		10,794
Charged (Credited) to other income (expense):
Current		5,636		1,027		3,263		(36)		22,519		3,755
Deferred		2,214		239		4,167		824		2,963		557
Total		7,850		1,266		7,430		788		25,482		4,312
Total	$	64,950	$	13,267	$	60,692	$	11,594	$	76,770	$	15,106

A reconciliation of income tax expense at the federal statutory rate to recorded income tax expense for the years ended October 31, 2012, 2011 and 2010 is presented below.

In thousands	2012		2011		2010
Federal taxes at 35%	$	69,322	$	65,049	$	81,841
State income taxes, net of federal benefit		8,624		7,536		9,819
Amortization of investment tax credits		(334)		(325)		(382)
Other, net		605		26		598
Total	$	78,217	$	72,286	$	91,876

As of October 31, 2012 and 2011, deferred income taxes consisted of the following temporary differences.

In thousands		2012		2011
Deferred tax assets:
Benefit of loss carryforwards	$	3,092	$	2,474
Employee benefits and compensation		22,286		10,267
Revenue requirement		10,148		10,306
Utility plant		11,285		10,799
Other		9,173		6,043
Total deferred tax assets		55,984		39,889
Valuation allowance		(505)		(505)
Total deferred tax assets, net		55,479		39,384
Deferred tax liabilities:
Utility plant		523,232		437,388
Revenues and cost of gas		26,816		6,896
Equity method investments		34,092		32,296
Deferred costs		73,744		55,142
Other		8,348		18,830
Total deferred tax liabilities		666,232		550,552
Net deferred income tax liabilities	$	610,753	$	511,168

As of October 31, 2012 and 2011, total net deferred income tax assets were net of a valuation allowance to reduce amounts to the amounts that we believe will be more likely than not realized. We and our wholly owned subsidiaries file a consolidated federal income tax return and various state income tax returns. As of October 31, 2012 and 2011, we had federal net operating loss carryforwards of $5.9 million and $6.2 million, respectively, which expire from 2021 through 2025.As of October 31, 2012, we had federal charitable contribution carryforwards of $2.3 million, which expire from 2016 through 2017. As of October 31, 2012 and 2011, we had state net operating loss carryforwards of $6.8 million and $7 million, respectively, which expire from 2020 through 2027. We may use theloss carryforwards to offset taxable income. The federal net operating loss carryforwardsare subject to an annual limitation of $.3 million.

We are no longer subject to federal income tax examinations for tax years ending before and including October 31, 2008, and with few exceptions, state income tax examinations by tax authorities for years ended before and including October 31, 2008.

A reconciliation of changes in the deferred tax valuation allowance for the years ended October 31, 2012, 2011 and 2010 is presented below.

In thousands		2012		2011		2010
Balance at beginning of year	$	505	$	1,324	$	1,400
Credited to income tax expense		-		(819)		(76)
Balance at end of year	$	505	$	505	$	1,324

There were nounrecognized tax benefits for the yearsended October 31, 2012 and 2011.