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Income Taxes | 12 Months Ended
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Dec. 31, 2011
Income Taxes [Abstract] |
Income Taxes | Note 7: Income Taxes Provisions for Federal and State Income Taxes reflected as operating expenses in the accompanying consolidated statements of earnings for the years ended December 31, 2011, 2010 and 2009 are shown in the table below:
|  | ($000's) |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Current Federal Tax Provision (Benefit) |  |  |  |  |  |  |  |  |  |  |  |
Current Benefit of Operating Loss Carrybacks |  | $ | — |  |  | $ | (6,026 | ) |  | $ | (3,226 | )
Total Current Federal Tax Provision (Benefit) |  |  | — |  |  |  | (6,026 | ) |  |  | (3,226 | )
Deferred Federal Tax Provision (Benefit) |  |  |  |  |  |  |  |  |  |  |  |
Utility Plant Differences |  |  | 13,002 |  |  |  | 11,821 |  |  |  | 8,716 |
Net Operating Loss Carryforwards |  |  | (4,844 | ) |  |  | (5,520 | ) |  |  | — |
Regulatory Assets and Liabilities |  |  | 513 |  |  |  | 3,338 |  |  |  | (1,308 | )
Other, net |  |  | (695 | ) |  |  | (480 | ) |  |  | (120 | )
Total Deferred Federal Tax Provision (Benefit) |  |  | 7,976 |  |  |  | 9,159 |  |  |  | 7,288 |
Total Federal Tax Provision |  |  | 7,976 |  |  |  | 3,133 |  |  |  | 4,062 |
State |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 1,358 |  |  |  | 28 |  |  |  | 1,578 |
Deferred |  |  | 691 |  |  |  | 1,303 |  |  |  | (218 | )
Total State Tax Provision |  |  | 2,049 |  |  |  | 1,331 |  |  |  | 1,360 |
Total Provision for Federal and State Income Taxes |  | $ | 10,025 |  |  | $ | 4,464 |  |  | $ | 5,422 |
The differences between the Company's provisions for Income Taxes and the provisions calculated at the statutory federal tax rate, expressed in percentages, are shown below:
|  | 2011 |  |  | 2010 |  |  | 2009 |
Statutory Federal Income Tax Rate |  |  | 34 | % |  |  | 34 | % |  |  | 34 | %
Income Tax Effects of: |  |  |  |  |  |  |  |  |  |  |  |
State Income Taxes, Net |  |  | 5 |  |  |  | 6 |  |  |  | 6 |
Utility Plant Differences |  |  | (1 | ) |  |  | (7 | ) |  |  | (3 | )
Other, Net |  |  | — |  |  |  | (1 | ) |  |  | (1 | )
Effective Income Tax Rate |  |  | 38 | % |  |  | 32 | % |  |  | 36 | %
Temporary differences which gave rise to deferred tax assets and liabilities in 2011 and 2010 are shown below:
Deferred Income Taxes (000's) |  | 2011 |  |  | 2010 |
Depreciation and Utility Plant |  | $ | 57,809 |  |  | $ | 44,608 |
Net Operating Loss Carryforwards |  |  | (11,656 | ) |  |  | (8,567 | )
AMT Tax Credit Carryforwards |  |  | (1,366 | ) |  |  | (1,366 | )
Regulatory Assets / Liabilities & Mechanisms |  |  | 32,627 |  |  |  | 33,421 |
Retirement Benefit Obligations |  |  | (33,591 | ) |  |  | (25,155 | )
Other, net |  |  | 2,463 |  |  |  | 883 |
Total Deferred Income Tax Liabilities |  | $ | 46,286 |  |  | $ | 43,824 |
The Company is subject to federal and state income taxes as well as various other business taxes. The Company accounts for income taxes in accordance with the FASB Codification guidance on Income Taxes which requires an asset and liability approach for the financial accounting and reporting of income taxes. Significant judgments and estimates are required in determining the current and deferred tax assets and liabilities. The Company's deferred tax assets and liabilities reflect its best assessment of estimated future taxes to be paid. Periodically, the Company assesses the realization of its deferred tax assets and liabilities and adjusts the income tax provision, the current tax liability and deferred taxes in the period in which the facts and circumstances which gave rise to the revision become known. The Company filed its tax returns for the year ended December 31, 2010 with the Internal Revenue Service (IRS) in September 2011. As a result, the Company generated net operating loss (NOL) carryforwards for income tax purposes of $9.5 million. As of December 31, 2011, the Company had recorded cumulative federal and state NOL carryforward assets of $11.7 million to offset against taxes payable in future periods. If unused, the Company's state NOL carryforward assets will begin to expire in 2019 and the federal NOL carryforward assets will begin to expire in 2029. In addition, at December 31, 2011, the Company had $1.4 million of Alternative Minimum Tax (AMT) credit carryforwards to offset future AMT taxes payable indefinitely. In its federal income tax return filings for the year ended December 31, 2009, the Company recognized NOL carrybacks against its federal taxable income for the years ended December 31, 2004, 2005, and 2007 in the amounts of $1.1 million, $12.8 million, and $9.6 million, respectively. The carryback of the 2009 NOL resulted in tax refunds of $7.5 million, which were received in 2011. According to Internal Revenue Code (IRC) rules, NOL refunds in excess of $2.0 million fall under the jurisdiction of the Joint Committee of Congress (Joint Committee) and are subject to review by the IRS and attorneys of the Joint Committee. As a result, the Company, on April 1, 2011, received notice that its federal income tax return filing for the year ended December 31, 2009 would be under examination by the IRS. The IRS is currently performing field work as part of their audit procedures. In addition, because of the application of the 2009 NOL, tax periods ended December 31, 2004, 2005 and 2007 are subject to examination to the extent of the application of the NOL to those periods. The Company believes that the ultimate resolution of this examination will not have a material impact on the Company's consolidated financial position or results of operations. On March 3, 2011 the Company received notice of approval from the Joint Committee regarding the settlement between the Company and the IRS for tax years ending December 31, 2006, December 31, 2007, and December 31, 2008, which were previously under examination. As a result of the settlement, in November 2010, the Company paid $1.7 million and $0.2 million in taxes and interest, respectively, principally for certain timing items deducted in 2008 related to emergency storm restoration costs; which, upon IRS review, were allowed to be deducted in the 2009 federal income tax returns. The Company classifies penalty and interest expense related to income tax liabilities as income tax expense and interest expense, respectively, in the Consolidated Statements of Earnings. The Company evaluated its tax positions at December 31, 2011 in accordance with the FASB Codification, and has concluded that no adjustment for recognition, derecognition, settlement and foreseeable future events to any unrecognized tax liabilities or assets as defined by the FASB Codification is required. The Company does not have any unrecognized tax positions for which it is reasonably possible that the total amounts recognized will significantly change within the next 12 months. The Company remains subject to examination by Federal, Maine, Massachusetts, and New Hampshire tax authorities for the tax periods ended December 31, 2008; December 31, 2009; and December 31, 2010.

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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 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: 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 Reference 6: 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 7: 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 8: 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=6881521&loc=d3e23780-122690 + Details
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