Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

The following tables provide: (a) the components of income tax expense in 2018, 2017, and 2016; (b) the reconciliation between the statutory federal income tax rate and the effective income tax rate for 2018, 2017, and 2016; and (c) the components of accumulated deferred income tax assets and liabilities at December 31, 2018 and 2017.



	For the Year Ended December 31,
	2018			2017			2016
(in thousands)
Current Income Tax Expense
Federal	$	(845	)	$	2,803		$	(4,898	)
State	660			492			2,053
Other	(47		)	(71		)	(71		)
Total current income tax expense	(232		)	3,224			(2,916		)
Deferred Income Tax Expense ⁽¹⁾
Property, plant and equipment	19,164			8,314			31,062
Deferred gas costs	(1,435		)	2,002			1,163
Pensions and other employee benefits	463			180			237
FPU merger-related premium cost and deferred gain	(528		)	(1,148		)	(572		)
Net operating loss carryforwards	(331		)	193			(9		)
Other	3,893			1,544			(624		)
Total deferred income tax expense	21,226			11,085			31,257
Total Income Tax Expense	$	20,994		$	14,309		$	28,341

⁽¹⁾Includes $3.5 million, $873,000 and $2.1 million of deferred state income taxes for the years 2018, 2017 and 2016, respectively.

Summary of Reconciliation of Statutory Federal Tax and Effective Income Tax Rates



	For the Year Ended December 31,
	2018			2017			2016
(in thousands)
Reconciliation of Effective Income Tax Rates
Federal income tax expense ⁽¹⁾	$	16,291		$	25,351		$	22,759
State income taxes, net of federal benefit	4,088			1,894			3,422
ESOP dividend deduction	(158		)	(257		)	(264		)
Revaluation of deferred tax assets and liabilities	—			(14,299		)	—
Other	773			1,620			2,424
Total Income Tax Expense	$	20,994		$	14,309		$	28,341
Effective Income Tax Rate ⁽²⁾	27.06		%	19.75		%	38.81		%

⁽¹⁾ Federal income taxes were calculated at 21 percent for 2018 and 35 percent for 2017 and 2016.

⁽²⁾Effective tax rate 2017 includes the impact of the revaluation of deferred tax assets and liabilities for our unregulated businesses due to implementation of the TCJA.

Schedule of Accumulated Deferred Income Tax Assets and Liabilities



	As of December 31,
	2018		2017
(in thousands)
Deferred Income Taxes
Deferred income tax liabilities:
Property, plant and equipment	$	153,423	$	133,581
Acquisition adjustment	8,896		9,323
Loss on reacquired debt	32		153
Deferred gas costs	1,139		2,574
Natural gas conversion costs	3,987		2,760
Other	2,641		2,662
Total deferred income tax liabilities	170,118		151,053
Deferred income tax assets:
Pension and other employee benefits	3,711		4,698
Environmental costs	1,710		1,744
Net operating loss carryforwards	2,010		1,625
Self-insurance	151		164
Storm reserve liability	—		717
Other	5,716		6,255
Total deferred income tax assets	13,298		15,203
Deferred Income Taxes Per Consolidated Balance Sheets	$	156,820	$	135,850