Income Taxes
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Dec. 31, 2011
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Income Taxes Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | INCOME TAXES Income tax expense (benefit) consists of the following (in millions):
The significant differences between the U.S. federal statutory rate and PGE’s effective tax rate for financial reporting purposes are as follows:
Deferred income tax assets and liabilities consist of the following (in millions):
Certain reclassifications have been made to the 2010 deferred income tax assets and deferred income tax liabilities presented in the preceding table to conform with the 2011 presentation and include the following: (i) an increase in Depreciation and amortization and a decrease in Regulatory liabilities of $220 million related to asset retirement obligations; (ii) an increase in Price risk management and a decrease in Regulatory liabilities of $74 million related to fair value adjustments; (iii) an increase in Employee benefits and a decrease in Regulatory assets of $73 million related to actuarial adjustments; and (iv) an increase in Regulatory assets and a decrease in Other of $8 million related to reacquired long-term debt. As of December 31, 2011, PGE had no federal loss carryforwards and state loss carryforwards of less than $1 million, which will expire at various dates from 2016 through 2031. In addition, PGE has federal and state tax credit carryforwards of $42 million and $14 million, respectively, which will expire at various dates from 2012 through 2031. PGE believes that it is more likely than not that its deferred income tax assets as of December 31, 2011 will be realized; accordingly, no valuation allowance has been recorded. As of December 31, 2010, PGE believed the benefit from state credit carryforwards expiring in 2011 would not be realized and, in recognition of this risk, the Company recorded a valuation allowance of $2 million on the deferred tax assets relating to these state credit carryforwards. During 2011, these state credit carryforwards expired unused. The net change in the valuation allowance for the years ended December 31, 2011 and 2010 were decreases of $2 million and $1 million, respectively. As of December 31, 2010, the amount of the Company’s unrecognized tax benefit was $2 million, including interest, resulting from a gross increase in a position taken in a prior period. During the year ended December 31, 2010, the Company recognized $1 million in interest and no penalties. During the first quarter of 2011, the unrecognized tax benefit of $2 million was recognized as a result of filing for a federal tax accounting method change. As of December 31, 2011, PGE has no unrecognized tax benefits. PGE files income tax returns in the U.S. federal jurisdiction, the states of Oregon and Montana, and certain local jurisdictions. The Internal Revenue Service (IRS) performed an examination of PGE’s income tax returns for 2007 and 2008 during 2010. This audit closed in the first quarter of 2011, with no material findings. In addition, the IRS commenced examination of the 2006, 2009, and 2010 income tax returns in the fourth quarter of 2011. The Company is not currently under examination by state or local tax authorities. |