Income Taxes (Tables)

12 Months Ended

Sep. 30, 2014

The provisions for income taxes consist of the following:



	2014			2013			2012
Current expense (benefit):
Federal	$	38,786		$	21,807		$	(909	)
State	11,449			11,824			2,735
Total current expense	50,235			33,631			1,826
Deferred expense:
Federal	29,208			33,349			48,336
State	4,717			2,274			5,257
Investment tax credit amortization	(337		)	(342		)	(346		)
Total income tax expense	$	83,823		$	68,912		$	55,073

Reconciliation from US Federal Statutory Tax Rate to Effective Tax Rate

A reconciliation from the U.S. federal statutory tax rate to our effective tax rate is as follows:



	2014		2013		2012
U.S. federal statutory tax rate	35.0	%	35.0	%	35.0	%
Difference in tax rate due to:
State income taxes, net of federal	5.1		5.4		4.1
Other, net	0.2		(0.1	)	(0.6	)
Effective tax rate	40.3	%	40.3	%	38.5	%

Deferred Tax Liabilities (Assets)

Deferred tax liabilities (assets) comprise the following at September 30:



	2014			2013
Excess book basis over tax basis of property, plant and equipment	$	392,839		$	362,259
Goodwill	36,034			31,516
Regulatory assets	109,953			101,622
Other	1,349			949
Gross deferred tax liabilities	540,175			496,346
Pension plan liabilities	(40,461		)	(35,996		)
Allowance for doubtful accounts	(2,903		)	(2,290		)
Deferred investment tax credits	(1,632		)	(1,772		)
Employee-related expenses	(5,630		)	(5,850		)
Regulatory liabilities	(14,836		)	(15,472		)
Environmental liabilities	(4,389		)	(7,002		)
Derivative financial instruments	(6,224		)	(3,397		)
Other	(4,131		)	(1,922		)
Gross deferred tax assets	(80,206		)	(73,701		)
Net deferred tax liabilities	$	459,969		$	422,645

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:



	2014			2013		2012
Unrecognized tax benefits - beginning of year	$	1,087		$	1,048	$	4,898
Additions for tax positions of prior years	—			39		81
Settlements with tax authorities	(1,087		)	—		(3,931		)
Unrecognized tax benefits - end of year	$	—		$	1,087	$	1,048

- 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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