INCOME TAXES (Tables)

9 Months Ended

Sep. 30, 2014

The components of the Company’s income taxes consisted of the following:



	Nine Months ended		Calender Year Ended December 31,
($ Millions)	September 30, 2014		2013		2012
Taxes estimated to be payable currently:
Federal	$	14.1	$	17.5	$	18.3
State	1.8		2.2		0.7
Total current	$	15.9	$	19.7	$	19.0
Taxes deferred:
Federal	$	3.5	$	13.3	$	9.1
State	0.5		1.7		2.2
Total deferred	$	4.0	$	15.0	$	11.3
Total income tax expense	$	19.9	$	34.7	$	30.3

Significant Items in Net Deferred Tax Liability

Temporary differences and carryforwards which gave rise to the Company’s deferred tax assets and liabilities were as follows:



($ Millions)	September 30, 2014				December 31, 2013
	Current		Noncurrent		Current		Noncurrent
Deferred tax assets:
Unbilled and deferred revenue	$	2.5	$	—	$	12.5	$	—
Allowance for doubtful accounts	—		—		1.8		—
Insurance accruals	—		—		1.8		—
Compensation accruals	—		—		2.5		—
Inventories	—		—		1.3		—
Gas supply adjustment related accruals	—		—		0.7		—
Pension and other costs	—		10.6		—		—
Goodwill	—		266.1		—		—
Net operating loss	—		5.1		—		—
Other	0.2		—		1.0		—
Total deferred tax assets	$	2.7	$	281.8	$	21.6	$	—
Deferred tax liabilities:
Depreciation and basis differences	$	—	$	4.0	$	—	$	186.6
Pension and other costs	—		—		—		19.0
Other	0.4		—		1.6		—
Total deferred tax liabilities	0.4		4.0		1.6		205.6
Net deferred tax assets (liabilities)	$	2.3	$	277.8	$	20.0	$	(205.6	)

Effective income tax rate variation from stated tax rate

Total income tax expense for the Company differed from the amount that would have been provided by applying the statutory federal income tax rate of 35% to earnings before taxes as illustrated below:



	Nine Months Ended			Calendar Year Ended December 31,
($ Millions)	September 30, 2014			2013			2012
Income tax expense at statutory federal income tax rate	$	18.5		$	32.2		$	27.9
Increase (decrease) resulting from:
State income taxes, net of federal income tax benefit	1.5			2.6			2.3
Other, net	(0.1		)	(0.1		)	0.1
Total income tax expense	$	19.9		$	34.7		$	30.3
Effective income tax rate (%)	37.6		%	37.7		%	38.0		%

Unrecognized Tax Benefit Reconciliation

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



($ Millions)
Balance as of December 31, 2011	$	0.1
Additions based on tax positions related to the current year	0.1
Additions for tax positions of prior years	0.2
Reductions for tax positions of prior years (lapse of statute of limitations)	(0.1		)
Balance as of December 31, 2012	0.3
Reductions for tax positions of prior years (lapse of statute of limitations)	—
Balance as of December 31, 2013	0.3
Reductions for transfer of balances to Energen	(0.3		)
Balance as of September 30, 2014	$	—