Income Tax Expense Continuing Operations

6 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

Income Tax Expense - Continuing Operations

15. Income Tax Expense – Continuing Operations

The following table provides a reconciliation of income tax expense calculated at the net composite federal and state statutory rate on income from continuing operations before income taxes and income tax expense for continuing operations reported on the Company’s consolidated statements of income for the three month and six month periods ended June 30, 2013 and 2012:

	Three Months Ended  June 30,						Six Months Ended  June 30,
(in thousands)	2013			2012			2013			2012
Income Before Income Taxes – Continuing Operations	$	9,598		$	7,418		$	30,718		$	18,061
Tax Computed at Company’s Net Composite Federal and State Statutory Rate (39%)		3,743			2,893			11,980			7,044
Increases (Decreases) in Tax from:
Federal Production Tax Credits (PTCs)		(1,841	)		(1,831	)		(3,430	)		(3,818	)
Reversal of Accrued Interest on Removal of Cost Capitalization Audit Issue		--			--			--			(676	)
North Dakota Wind Tax Credit Amortization – Net of Federal Taxes		(216	)		(149	)		(439	)		(371	)
Corporate Owned Life Insurance		(92	)		(13	)		(394	)		(385	)
Medicare Part D Subsidy		4			(194	)		--			(391	)
Employee Stock Ownership Plan Dividend Deduction		(188	)		(191	)		(378	)		(381	)
Deferred Tax Asset Reduction - North Dakota due to Tax Rate Decrease		365			--			365			--
Other Items - Net		319			2			276			(37	)
Income Tax Expense – Continuing Operations	$	2,094		$	517		$	7,980		$	985
Effective Income Tax Rate – Continuing Operations		21.8	%		7.0	%		26.0	%		5.5	%

The following table summarizes the activity related to our unrecognized tax benefits:

(in thousands)	2013
Balance on January 1	$	4,436
Increases Related to Tax Positions for Prior Years		67
Uncertain Positions Adjusted During Year		(511	)
Balance on June 30	$	3,992

The balance of unrecognized tax benefits as of June 30, 2013 would not reduce our effective tax rate if recognized. The total amount of unrecognized tax benefits as of June 30, 2013 is not expected to change significantly within the next six months. The Company classifies interest and penalties on tax uncertainties as components of the provision for income taxes in its consolidated statement of income. No interest is accrued on tax uncertainties as of June 30, 2013.