Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

The components of Energen's income taxes consisted of the following:



Years ended December 31, (in thousands)	2011		2010		2009
Taxes estimated to be payable currently:
Federal	$	11,595	$	31,920	$	56,821
State	5,065		1,230		2,534
Total current	16,660		33,150		59,355
Taxes deferred:
Federal	125,622		121,804		75,644
State	3,419		12,036		8,972
Total deferred	129,041		133,840		84,616
Total income tax expense	$	145,701	$	166,990	$	143,971

Schedule of deferred tax assets and liabilities

Temporary differences and carryforwards which gave rise to Energen's deferred tax assets and liabilities were as follows:



(in thousands)	December 31, 2011						December 31, 2010
	Current			Noncurrent			Current			Noncurrent
Deferred tax assets:
Unbilled and deferred revenue	$	9,582		$	—		$	14,495		$	—
Allowance for doubtful accounts	4,848			—			5,626			—
Insurance accruals	2,562			—			2,350			—
Compensation accruals	11,181			—			9,822			—
Inventories	1,438			—			896			—
Other comprehensive income	2,799			12,801			—			46,244
Gas supply adjustment related accruals	1,196			—			1,407			—
Derivative instruments	13,167			—			—			—
State net operating losses and other carryforwards	987			3,022			811			2,866
Other	2,797			27			2,270			501
Total deferred tax assets	50,557			15,850			37,677			49,611
Valuation allowance	(270		)	(2,752		)	(311		)	(2,555		)
Total deferred tax assets	50,287			13,098			37,366			47,056
Deferred tax liabilities:
Depreciation and basis differences	—			791,073			—			632,032
Pension and other costs	—			25,685			—			29,437
Derivative instruments	—			—			333			—
Other comprehensive income	—			—			2,934			—
Other	1,469			2,467			1,367			671
Total deferred tax liabilities	1,469			819,225			4,634			662,140
Net deferred tax assets (liabilities)	$	48,818		$	(806,127	)	$	32,732		$	(615,084	)

Schedule of effective income tax tate reconciliation

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



Years ended December 31, (in thousands)	2011			2010			2009
Income tax expense at statutory federal income tax rate	$	141,864		$	160,229		$	140,104
Increase (decrease) resulting from:
State income taxes, net of federal income tax benefit	5,544			8,398			7,384
Qualified Section 199 production activities deduction	(593		)	(1,745		)	(2,715		)
401(k) stock dividend deduction	(532		)	(565		)	(567		)
Other, net	(582		)	673			(235		)
Total income tax expense	$	145,701		$	166,990		$	143,971
Effective income tax rate (%)	35.95			36.48			35.97

Schedule of reconciliation of unrecognized tax benefits

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



(in thousands)
Balance as of December 31, 2008	$	16,805
Additions based on tax positions related to the current year	2,530
Additions for tax positions of prior years	841
Reductions for tax positions of prior years (lapse of statute of limitations)	(2,379		)
Balance as of December 31, 2009	17,797
Additions based on tax positions related to the current year	1,436
Additions for tax positions of prior years	11,703
Reductions for tax positions of prior years	(3,624		)
Lapse of statute of limitations	(1,313		)
Settlements	(1,409		)
Balance as of December 31, 2010	24,590
Additions based on tax positions related to the current year	3,644
Additions for tax positions of prior years	2,324
Reductions for tax positions of prior years	(39		)
Lapse of statute of limitations	(1,482		)
Settlements	(18,444		)
Balance as of December 31, 2011	$	10,593

Alabama Gas Corporation

Income Tax Disclosure [Line Items]

Schedule of components of Income taxes

The components of Alagasco's income taxes consisted of the following:



Years ended December 31, (in thousands)	2011			2010		2009
Taxes estimated to be payable currently:
Federal	$	(1,280	)	$	859	$	11,035
State	(108		)	155		61
Total current	(1,388		)	1,014		11,096
Taxes deferred:
Federal	24,938			25,582		13,631
State	3,120			3,279		2,626
Total deferred	28,058			28,861		16,257
Total income tax expense	$	26,670		$	29,875	$	27,353

Schedule of deferred tax assets and liabilities

Temporary differences and carryforwards which gave rise to Alagasco's deferred tax assets and liabilities were as follows:



(in thousands)	December 31, 2011					December 31, 2010
	Current		Noncurrent			Current		Noncurrent
Deferred tax assets:
Unbilled and deferred revenue	$	9,582	$	—		$	14,495	$	—
Allowance for doubtful accounts	4,575		—			5,369		—
Insurance accruals	2,358		—			2,143		—
Compensation accruals	2,274		—			2,672		—
Inventories	1,438		—			896		—
Gas supply adjustment related accruals	1,196		—			1,407		—
State net operating losses and other carryforwards	987		—			811		—
Other	924		4			753		55
Total deferred tax assets	23,334		4			28,546		55
Deferred tax liabilities:
Depreciation and basis differences	—		156,121			—		114,193
Pension and other costs	—		25,375			—		27,642
Other	1,348		—			1,244		—
Total deferred tax liabilities	1,348		181,496			1,244		141,835
Net deferred tax assets (liabilities)	$	21,986	$	(181,492	)	$	27,302	$	(141,780	)

Schedule of effective income tax tate reconciliation

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



Years ended December 31, (in thousands)	2011			2010		2009
Income tax expense at statutory federal income tax rate	$	25,645		$	26,865	$	25,469
Increase (decrease) resulting from:
State income taxes, net of federal income tax benefit	2,059			2,157		2,045
Reversal of tax reserves from audit settlements, net	(1,365		)	—		—
Other, net	331			853		(161		)
Total income tax expense	$	26,670		$	29,875	$	27,353
Effective income tax rate (%)	36.40			38.92		37.59

Schedule of reconciliation of unrecognized tax benefits

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



(in thousands)
Balance as of December 31, 2008	$	6,890
Additions based on tax positions related to the current year	821
Additions for tax positions of prior years	197
Reductions for tax positions of prior years (lapse of statute of limitations)	(287		)
Balance as of December 31, 2009	7,621
Additions based on tax positions related to the current year	9
Additions for tax positions of prior years	11,645
Reductions for tax positions of prior years (lapse of statute of limitations)	(90		)
Settlements	(244		)
Balance as of December 31, 2010	18,941
Additions based on tax positions related to the current year	13
Additions for tax positions of prior years	1
Reductions for tax positions of prior years (lapse of statute of limitations)	(409		)
Settlements	(18,444		)
Balance as of December 31, 2011	$	102

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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