Xcel Energy 2003 Annual Report Download - page 45

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
XCEL ENERGY 2003 ANNUAL REPORT 61
Total income tax expense from continuing operations differs from the amount computed by applying the statutory federal income tax rate to income
before income tax expense. Following is a table reconciling such differences:
2003 2002 2001
Federal statutory rate 35.0% 35.0% 35.0%
Increases (decreases) in tax from:
State income taxes, net of federal income tax benefit 2.2 3.2 3.6
Life insurance policies (3.9) (3.3) (2.4)
Tax credits recognized (4.2) (4.7) (2.9)
Regulatory differences – utility plant items 0.8 1.5 2.3
Resolution of income tax audits (5.2) ––
Other – net (1.0) (0.8) (1.2)
Total effective income tax rate 23.7 30.9 34.4
Extraordinary item ––(0.6)
Effective income tax rate from continuing operations 23.7% 30.9% 33.8%
Income taxes comprise the following expense (benefit) items:
(Thousands of dollars) 2003 2002 2001
Current federal tax expense $107,770 $104,658 $305,709
Current state tax expense (1,194) 19,864 37,185
Current tax credits (15,269) (19,079) (13,544)
Deferred federal tax expense 77,730 129,556 (25,547)
Deferred state tax expense 2,104 17,301 13,336
Deferred investment tax credits (12,499) (16,686) (12,797)
Income tax expense excluding extraordinary items 158,642 235,614 304,342
Tax expense on extraordinary items –– 5,747
Total income tax expense from continuing operations $158,642 $235,614 $310,089
As of Dec. 31, 2002, Xcel Energy management intended to indefinitely reinvest the earnings of the Argentina operations of Xcel Energy International and,
therefore, had not provided deferred taxes for the effects of currency devaluations. However, during 2003, the board of directors of Xcel Energy approved
management’s plan to exit the business conducted by Xcel Energy International. Accordingly, any tax effects are recorded in discontinued operations.
The components of Xcel Energy’s net deferred tax liability from continuing operations (current and noncurrent portions) at Dec. 31 were:
(Thousands of dollars) 2003 2002
Deferred tax liabilities:
Differences between book and tax basis of property $1,845,091 $1,784,754
Regulatory assets 243,671 171,292
Employee benefits and other accrued liabilities 82,186 63,079
Partnership income/loss 23,551 26,778
Service contracts 18,757 20,794
Tax benefit transfer leases 5,330 10,993
Other 35,352 32,086
Total deferred tax liabilities $2,253,938 $2,109,776
Deferred tax assets:
Deferred investment tax credits $61,394 $ 66,472
Other comprehensive income 55,525 70,703
Regulatory liabilities 43,816 47,579
Net operating loss carry forward 35,890 –
Tax credit carry forward 11,668 –
Other 19,778 27,538
Total deferred tax assets $228,071 $ 212,292
Net deferred tax liability $2,025,867 $1,897,484