Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Components of income (loss) before income taxes

The components of income (loss) before income taxes from continuing operations for each of the years ended December 31 were as follows:



	2012			2011		2010
	(In thousands)
United States	$	(47,175	)	$	333,486	$	336,450
Foreign	1,708			2,740		30,100
Income (loss) before income taxes from continuing operations	$	(45,467	)	$	336,226	$	366,550

Income tax expense (benefit)

Income tax expense (benefit) from continuing operations for the years ended December 31 was as follows:



	2012			2011			2010
	(In thousands)
Current:
Federal	$	(26,858	)	$	(7,188	)	$	37,014
State	858			778			10,589
Foreign	(75		)	127			4,451
	(26,075		)	(6,283		)	52,054
Deferred:
Income taxes:
Federal	(1,224		)	105,528			62,618
State	(6,323		)	13,157			4,147
Investment tax credit - net	44			240			(180		)
	(7,503		)	118,925			66,585
Change in uncertain tax positions	1,974			(1,048		)	3,230
Change in accrued interest	458			(1,320		)	661
Total income tax expense (benefit)	$	(31,146	)	$	110,274		$	122,530

Deferred tax assets and deferred tax liabilities

Components of deferred tax assets and deferred tax liabilities at December 31 were as follows:



	2012			2011
	(In thousands)
Deferred tax assets:
Regulatory matters	$	121,781		$	119,189
Accrued pension costs	85,037			95,260
Asset retirement obligations	26,748			26,380
Compensation-related	23,441			16,241
Legal and environmental contingencies	8,046			21,788
Other	39,792			41,055
Total deferred tax assets	304,845			319,913
Deferred tax liabilities:
Depreciation and basis differences on property, plant and equipment	755,392			715,482
Basis differences on oil and natural gas producing properties	167,113			210,146
Regulatory matters	82,077			84,963
Intangible asset amortization	14,078			14,307
Other	18,441			23,774
Total deferred tax liabilities	1,037,101			1,048,672
Net deferred income tax liability	$	(732,256	)	$	(728,759	)

Schedule of change in net deferred income tax liability reconciliation [Table Text Block]

The following table reconciles the change in the net deferred income tax liability from December 31, 2011, to December 31, 2012, to deferred income tax expense:



	2012
(In thousands)
Change in net deferred income tax liability from the preceding table	$	3,497
Deferred taxes associated with other comprehensive loss	1,267
Deferred taxes associated with discontinued operations	(9,863		)
Other	(2,404		)
Deferred income tax expense for the period	$	(7,503	)

Reconciliation of income tax expense (benefit) at statutory federal rate versus actual rate

Total income tax expense (benefit) differs from the amount computed by applying the statutory federal income tax rate to income (loss) before taxes. The reasons for this difference were as follows:



Years ended December 31,	2012					2011					2010
	Amount			%		Amount			%		Amount			%
	(Dollars in thousands)
Computed tax at federal statutory rate	$	(15,914	)	35.0		$	117,679		35.0		$	128,293		35.0
Increases (reductions) resulting from:
State income taxes, net of federal income tax benefit (expense)	2,469			(5.4	)	10,653			3.2		10,210			2.8
Resolution of tax matters and uncertain tax positions	2,559			(5.6	)	(3,906		)	(1.2	)	667			.2
Federal renewable energy credit	(3,401		)	7.5		(3,485		)	(1.0	)	(2,185		)	(.6	)
Depletion allowance	(3,728		)	8.2		(3,266		)	(1.0	)	(2,810		)	(.8	)
Deductible K-Plan dividends	(2,829		)	6.2		(2,282		)	(.7	)	(2,309		)	(.6	)
Deferred tax rate changes	(3,083		)	6.8		(417		)	(.1	)	(1,262		)	(.3	)
AFUDC equity	(1,500		)	3.3		(873		)	(.3	)	(1,494		)	(.4	)
Other	(5,719		)	12.5		(3,829		)	(1.1	)	(6,580		)	(1.9	)
Total income tax expense (benefit)	$	(31,146	)	68.5		$	110,274		32.8		$	122,530		33.4

Reconciliation of unrecognized tax benefits (excluding interest)

A reconciliation of the unrecognized tax benefits (excluding interest) for the years ended December 31 was as follows:



	2012		2011			2010
	(In thousands)
Balance at beginning of year	$	11,206	$	9,378		$	6,148
Additions for tax positions of prior years	3,708		4,172			3,230
Settlements	—		(2,344		)	—
Balance at end of year	$	14,914	$	11,206		$	9,378

- 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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