Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income tax expense consists of the following:


Income Tax Expense (Benefit)

(millions) For the year ended Dec. 31,	2012		2011		2010

Continuing Operations
Current income taxes
Federal		$15.7		$0.0		$5.7
State		1.1		0.9		(5.2)
Deferred income taxes
Federal		102.9		124.0		93.9
State		18.4		18.2		15.6
Amortization of investment tax credits		(0.3)		(0.4)		(0.4)

Income tax expense from continuing operations		$137.8		$142.7		$109.6

Discontinued Operations
Current income taxes
Federal		$0.0		$0.0		$0.0
Foreign		6.8		7.4		7.0
State		0.0		0.0		0.0
Deferred income taxes
Federal		14.9		4.4		53.5
Foreign		0.0		(0.3)		0.0
State		0.7		(0.3)		(0.1)

Income tax expense from discontinued operations		22.4		11.2		60.4

Total income tax expense		$160.2		$153.9		$170.0

Schedule of Income Taxes Calculated on Income before Income Taxes and Provision for Income Taxes

The reconciliation of the federal statutory rate to the company’s effective income tax rate is as follows:


Effective Income Tax Rate

(millions) For the year ended Dec. 31,	2012		2011		2010

Income tax expense at the federal statutory rate of 35%		$134.3		$137.7		$112.4
Increase (decrease) due to
State income tax, net of federal income tax		12.7		12.4		6.8
Equity portion of AFUDC		(0.9)		(0.4)		(0.7)
Valuation allowance		1.1		0.0		1.9
Depletion		(8.5)		(9.1)		(9.1)
Other		(0.9)		2.1		(1.7)

Total income tax expense from continuing operations		$137.8		$142.7		$109.6

Income tax expense as a percent of income from continuing operations, before income taxes		35.9%		36.3%		34.1%

Schedule of Deferred Tax Assets and Liabilities

The major components of the company’s deferred tax assets and liabilities recognized are as follows:


Deferred Income Taxes

(millions) As of Dec. 31,	2012		2011

Deferred tax liabilities ⁽¹⁾
Property related	$	1,023.3	$	884.2
Deferred fuel		11.3		3.9
Pension		43.0		38.4

Total deferred tax liabilities		1,077.6		926.5

Deferred tax assets ⁽¹⁾
Alternative minimum tax credit carryforward		211.8		196.1
Loss and credit carryforwards		473.2		503.4
Other postretirement benefits		68.0		69.5
Other		113.0		89.1

Total deferred tax assets		866.0		858.1
Valuation allowance		(3.0)		(9.7)

Total deferred tax assets, net of valuation allowance		863.0		848.4

Total deferred tax liability, net		214.6		78.1
Less: Current portion of deferred tax asset		(63.3)		(72.7)

Long-term portion of deferred tax liability, net	$	277.9	$	150.8

(1)

Certain property related assets and liabilities have been netted.

Schedule of Unrecognized Tax Benefits

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


Unrecognized Tax Benefits

(millions)	2012			2011

Balance at Jan. 1,		$4.1			$4.1
Decreases due to tax positions related to prior years		0.0			0.0
Decreases due to settlements with taxing authorities		0.0			0.0
Decreases due to expiration of statute of limitations		0.0			0.0
Dispositions		(1.2	)		0.0

Balance at Dec. 31,		$2.9			$4.1

TAMPA ELECTRIC CO [Member]

Schedule of Income Tax Expense

Income tax expense consists of the following components:

Income Tax Expense (Benefit)

(millions)
For the year ending Dec. 31,	2012		2011		2010

Current income taxes
Federal	$	(19.5)	$	(30.7)	$	60.1
State		5.6		2.9		13.6
Deferred income taxes
Federal		141.2		155.6		63.0
State		14.7		18.0		7.4
Amortization of investment tax credits		(0.3)		(0.4)		(0.4)

Total income tax expense	$	141.7	$	145.4	$	143.7

Schedule of Income Taxes Calculated on Income before Income Taxes and Provision for Income Taxes

The total income tax provisions differ from amounts computed by applying the federal statutory tax rate to income before income taxes as follows:


Effective Income Tax Rate

(millions)
For the years ended Dec. 31,	2012		2011		2010

Income tax expense at the federal statutory rate of 35%	$	129.1	$	133.2	$	135.3
Increase (decrease) due to
State income tax, net of federal income tax		13.2		13.6		13.6
Equity portion of AFUDC		(0.9)		(0.4)		(0.7)
Domestic production deduction		(0.4)		(1.5)		(3.2)
Other		0.7		0.5		(1.3)

Total income tax expense on consolidated statements of income	$	141.7	$	145.4	$	143.7

Income tax expense as a percent of income from continuing operations, before income taxes

Schedule of Deferred Tax Assets and Liabilities

The principal components of TEC’s deferred tax assets and liabilities recognized in the balance sheet are as follows:

Deferred Income Taxes

(millions)
As of Dec. 31,	2012		2011

Deferred tax liabilities ⁽¹⁾
Property related	$	1,016.2	$	879.1
Deferred fuel		11.3		3.9
Pension and postretirement benefits		106.6		99.0
Pension		36.7		31.7
Other		22.2		14.3

Total deferred tax liabilities		1,193.0		1,028.0

Deferred tax assets ⁽¹⁾
Medical benefits		49.0		50.0
Insurance reserves		31.1		28.2
Investment tax credits		5.5		5.7
Hedging activities		5.5		2.9
Pension and postretirement benefits		106.6		99.0
Unbilled revenue		14.8		19.6
Capitalized energy conservation assistance costs		19.6		20.0

Total deferred tax assets		232.1		225.4

Total deferred tax liability, net		960.9		802.6
Less: Current portion of deferred tax asset		(20.0)		(30.4)

Long-term portion of deferred tax liability, net	$	980.9	$	833.0

(1)

Certain property related assets and liabilities have been netted.

- 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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