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Income Taxes | 12 Months Ended
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Sep. 30, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income before income taxes comprises the following:
| 2014 |  | 2013 |  | 2012
Domestic | $ | 699.2 |  |  | $ | 494.1 |  |  | $ | 245.6 |
Foreign | 68.6 |  |  | 96.3 |  |  | 59.0 |
Total income before income taxes | $ | 767.8 |  |  | $ | 590.4 |  |  | $ | 304.6 |
The provisions for income taxes consist of the following:
| 2014 |  | 2013 |  | 2012
Current expense (benefit): |  |  |  |  |
Federal | $ | 102.4 |  |  | $ | 53.3 |  |  | $ | (10.4 | )
State | 30.7 |  |  | 25.1 |  |  | 11.2 |
Foreign | 37.0 |  |  | 37.3 |  |  | 18.8 |
Investment tax credit | (1.6 | ) |  | (1.6 | ) |  | (2.9 | )
Total current expense | 168.5 |  |  | 114.1 |  |  | 16.7 |
Deferred expense (benefit): |  |  |  |  |
Federal | 61.9 |  |  | 54.6 |  |  | 81.7 |
State | 7.8 |  |  | (0.7 | ) |  | 7.0 |
Foreign | (2.7 | ) |  | (4.9 | ) |  | 1.8 |
Investment tax credit amortization | (0.3 | ) |  | (0.3 | ) |  | (0.3 | )
Total deferred expense | 66.7 |  |  | 48.7 |  |  | 90.2 |
Total income tax expense | $ | 235.2 |  |  | $ | 162.8 |  |  | $ | 106.9 |
Federal income taxes for Fiscal 2014, Fiscal 2013 and Fiscal 2012 are net of foreign tax credits of $12.1, $34.9 and $5.2, respectively. 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: |  |  |  |  |
Noncontrolling interests not subject to tax | (9.0 | ) |  | (8.7 | ) |  | 1.2 |
State income taxes, net of federal benefit | 3.4 |  |  | 3.4 |  |  | 4.0 |
Valuation allowance adjustments | — |  |  | (0.5 | ) |  | (1.5 | )
Effects of foreign operations | 1.0 |  |  | (1.8 | ) |  | (3.3 | )
Other, net | 0.2 |  |  | 0.2 |  |  | (0.3 | )
Effective tax rate | 30.6 | % |  | 27.6 | % |  | 35.1 | %
In December 2013, the French Parliament approved the Finance Bill for 2014 and amended the Finance Bill for 2013 (collectively, the “Finance Bills”). Among other things, the Finance Bills limit Antargaz’ ability to deduct certain interest expense for income tax purposes and temporarily increases the corporate surtax rate for a period of two years. Based upon our review of the Finance Bills and interpretive guidance, provisions of the Finance Bills associated with the deductibility of certain interest expense at Antargaz apply retroactively to such interest expense incurred during Fiscal 2013. In December 2013, the Company recorded additional income taxes of $5.7 to reflect the effects of the retroactive provisions of the Finance Bills and is included in effects of foreign operations in the effective tax rate table above. The effects of foreign operations in the table above for Fiscal 2012 reflects the impact of tax efficient structuring of certain of our international operations and, as a result of the Fiscal 2012 Shell Transaction, also reflects a greater proportion of pretax income in countries in which the statutory income tax rate is less than the U.S. statutory tax rate. The tax restructuring of certain of our international operations also permitted us to reduce our foreign tax credit valuation allowance by $4.6 during Fiscal 2012 which is included as a valuation allowance adjustment in the table above. Earnings of the Company’s foreign subsidiaries are generally subject to U.S. taxation upon repatriation to the U.S. and the Company’s tax provision reflects the related incremental U.S. tax except for certain foreign subsidiaries whose unremitted earnings are considered to be indefinitely reinvested. At September 30, 2014, unremitted earnings of foreign subsidiaries of approximately $42.7 were deemed to be indefinitely reinvested. No deferred tax liability has been recognized with regard to the remittance of such earnings. Because of the availability of U.S. foreign tax credits, it is likely no U.S. tax would be due if such earnings were repatriated. Pennsylvania utility ratemaking practice permits the flow through to ratepayers of state tax benefits resulting from accelerated tax depreciation. For Fiscal 2014, Fiscal 2013 and Fiscal 2012, the beneficial effects of state tax flow through of accelerated depreciation reduced income tax expense by $2.0, $1.5 and $3.2, respectively. The higher state tax flow through amount in Fiscal 2012 reflects the impact of 2010 U.S. Federal tax legislation that allowed taxpayers to fully deduct qualifying capital expenditures incurred after September 8, 2010, through the end of calendar 2011, when such property was placed in service before 2012. This legislation was also permitted for Pennsylvania state corporate income tax purposes. Deferred tax liabilities (assets) comprise the following at September 30:
| 2014 |  | 2013
Excess book basis over tax basis of property, plant and equipment | $ | 675.7 |  |  | $ | 626.9 |
Investment in AmeriGas Partners | 325.1 |  |  | 313.0 |
Intangible assets and goodwill | 53.0 |  |  | 65.1 |
Utility regulatory assets | 110.0 |  |  | 101.6 |
Foreign currency translation adjustment | — |  |  | 9.5 |
Other | 3.5 |  |  | 2.7 |
Gross deferred tax liabilities | 1,167.3 |  |  | 1,118.8 |
Pension plan liabilities | (40.6 | ) |  | (36.2 | )
Employee-related benefits | (48.8 | ) |  | (47.9 | )
Operating loss carryforwards | (27.9 | ) |  | (32.1 | )
Foreign tax credit carryforwards | (47.8 | ) |  | (81.8 | )
Utility regulatory liabilities | (14.8 | ) |  | (15.5 | )
Foreign currency translation adjustment | (14.1 | ) |  | — |
Derivative instruments | (11.0 | ) |  | (15.0 | )
Other | (13.0 | ) |  | (20.5 | )
Gross deferred tax assets | (218.0 | ) |  | (249.0 | )
Deferred tax assets valuation allowance | 59.2 |  |  | 97.6 |
Net deferred tax liabilities | $ | 1,008.5 |  |  | $ | 967.4 |
At September 30, 2014, foreign net operating loss carryforwards principally relating to Flaga and certain operations of Antargaz totaled $37.4 and $8.2, respectively, with no expiration dates. We have state net operating loss carryforwards primarily relating to certain subsidiaries which approximate $171.9 and expire through 2034. We also have operating loss carryforwards of $16.8 for certain operations of AmeriGas Propane that expire through 2033. At September 30, 2014, deferred tax assets relating to operating loss carryforwards include $8.4 for Flaga, $2.7 for Antargaz, $0.8 for UGI International Holdings BV, $6.5 for AmeriGas Propane and $9.5 for certain other subsidiaries. A valuation allowance of $15.1 has been provided for deferred tax assets related to state net operating loss carryforwards and other state deferred tax assets of certain subsidiaries because, on a state reportable basis, it is more likely than not that these assets will expire unused. A valuation allowance of $3.0 was also provided for deferred tax assets related to certain operations of Antargaz, Flaga and UGI International Holdings BV. Operating activities and tax deductions related to the exercise of non-qualified stock options contributed to the state net operating losses disclosed above. We first recognize the utilization of state net operating losses from operations (which exclude the impact of tax deductions for exercises of non-qualified stock options) to reduce income tax expense. Then, to the extent state net operating loss carryforwards, if realized, relate to non-qualified stock option deductions, the resulting benefits will be credited to UGI Corporation stockholders’ equity. The table of deferred tax assets and liabilities do not include $6.7 for Fiscal 2014 and $5.9 for Fiscal 2013 of deferred tax assets and associated valuation allowance for unrealized state tax benefits for equity compensation deductions. We have foreign tax credit carryforwards of approximately $47.8 expiring through 2024 resulting from the actual and planned repatriation of Antargaz’ accumulated earnings since acquisition which are includable in U.S. taxable income. Because we expect that these credits will expire unused, a valuation allowance has been provided for the entire foreign tax credit carryforward amount. The valuation allowance for all deferred tax assets decreased by $38.4 in Fiscal 2014 due to decreases in unusable foreign tax credits of $34.0 and foreign operating loss carryforwards of $4.8, partially offset by increases in unusable state operating loss tax benefits of $0.4. We conduct business and file tax returns in the U.S., numerous states, local jurisdictions and in France and certain other European countries. Our U.S. federal income tax returns are settled through the 2010 tax year, our French tax returns are settled through the 2010 tax year. The Antargaz French tax returns from 2011 to 2013 are currently under audit. Our Austrian tax returns are settled through 2012 and our other European tax returns are effectively settled for various years from 2005 to 2012. State and other income tax returns in the U.S. are generally subject to examination for a period of three to five years after the filing of the respective returns. As of September 30, 2014, we have unrecognized income tax benefits totaling $2.5 including related accrued interest of $0.1. If these unrecognized tax benefits were subsequently recognized, $2.5 would be recorded as a benefit to income taxes on the Consolidated Statement of Income and, therefore, would impact the reported effective tax rate. Generally, a net reduction in unrecognized tax benefits could occur because of the expiration of the statute of limitations in certain jurisdictions or as a result of settlements with tax authorities. There is an expected change in unrecognized tax benefits and related interest in the next twelve months in the amount of $0.6. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
| 2014 |  | 2013 |  | 2012
Unrecognized tax benefits - beginning of year | $ | 3.4 |  |  | $ | 2.9 |  |  | $ | 6.3 |
Additions for tax positions of the current year | 0.7 |  |  | 0.7 |  |  | 0.5 |
Additions for tax positions taken in prior years | — |  |  | — |  |  | 0.6 |
Settlements with tax authorities | (1.7 | ) |  | (0.2 | ) |  | (4.5 | )
Unrecognized tax benefits - end of year | $ | 2.4 |  |  | $ | 3.4 |  |  | $ | 2.9 |

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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