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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | I NCOME T AXES We file a consolidated federal income tax return. Income tax expense allocated to our subsidiaries is based upon their respective taxable incomes and tax credits. State income tax returns are filed on a separate company basis in most states where we have operations and/or are required to file. Our state returns for tax years after 2014 are subject to examination. At December 31, 2018, the 2015 and 2016 federal income tax returns are under examination, and no report has been issued at this time. We had no net operating loss for federal income tax purposes as of December 31, 2018 and 2017. For state income tax purposes, we had net operating losses in various states of $60.1 million and $34.2 million as of December 31, 2018 and 2017, respectively, almost all of which will expire in 2037. We have recorded deferred tax assets of $2.0 million and $1.6 million related to state net operating loss carry-forwards at December 31, 2018 and 2017, respectively, but we have not recorded a valuation allowance to reduce the future benefit of the tax net operating losses because we believe they will be fully utilized. Federal Tax Reform On December 22, 2017, President Trump signed into law the TCJA. Substantially all of the provisions of the TCJA are effective for taxable years beginning on or after January 1, 2018. The provisions significantly impacting us include the reduction of the corporate federal income tax rate from 35 percent to 21 percent. Our federal income tax expense for periods beginning on January 1, 2018 are based on the new federal corporate income tax rate. The TCJA included changes to the Internal Revenue Code, which materially impacted our 2017 financial statements. ASC 740, Income Taxes, requires recognition of the effects of changes in tax laws in the period in which the law is enacted. ASC 740 requires deferred tax assets and liabilities to be measured at the enacted tax rate expected to apply when temporary differences are to be realized or settled. We have completed the assessment of the impact as it relates to accounting for certain effects of the TCJA. At the date of enactment in 2017, we re-measured deferred income taxes based upon the new corporate tax rate. See Note 19, Rates and Other Regulatory Activities, for further discussion of the TCJA's impact on our regulated businesses. In 2018, we elected early adoption of ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. Accordingly, we reclassified stranded tax effects resulting from the TCJA from accumulated other comprehensive loss to retained earnings, related to our employee benefit plans and commodity contracts cash flow hedges. 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.
| 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.
| 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 |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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