Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

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



Years ended December 31, (in thousands)	2012		2011		2010
Taxes estimated to be payable currently:
Federal	$	16,295	$	11,595	$	31,920
State	3,125		5,065		1,230
Total current	19,420		16,660		33,150
Taxes deferred:
Federal	119,053		125,622		121,804
State	5,346		3,419		12,036
Total deferred	124,399		129,041		133,840
Total income tax expense	$	143,819	$	145,701	$	166,990

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, 2012						December 31, 2011
	Current			Noncurrent			Current			Noncurrent
Deferred tax assets:
Unbilled and deferred revenue	$	10,137		$	—		$	9,582		$	—
Allowance for doubtful accounts	2,408			—			4,848			—
Insurance accruals	2,021			—			2,562			—
Compensation accruals	13,116			—			11,181			—
Inventories	1,664			—			1,438			—
Other comprehensive income	—			19,158			2,799			12,801
Gas supply adjustment related accruals	969			—			1,196			—
Derivative instruments	—			—			13,167			—
State net operating losses and other carryforwards	—			3,577			987			3,022
Other	3,140			25			2,797			27
Total deferred tax assets	33,455			22,760			50,557			15,850
Valuation allowance	(268		)	(2,793		)	(270		)	(2,752		)
Total deferred tax assets	33,187			19,967			50,287			13,098
Deferred tax liabilities:
Depreciation and basis differences	—			898,625			—			791,073
Pension and other costs	—			20,143			—			25,685
Derivative instruments	4,272			3,162			—			—
Other comprehensive income	18,133			—			—			—
Other	2,262			3,638			1,469			2,467
Total deferred tax liabilities	24,667			925,568			1,469			819,225
Net deferred tax assets (liabilities)	$	8,520		$	(905,601	)	$	48,818		$	(806,127	)

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)	2012			2011			2010
Income tax expense at statutory federal income tax rate	$	139,083		$	141,864		$	160,229
Increase (decrease) resulting from:
State income taxes, net of federal income tax benefit	4,904			5,544			8,398
Qualified Section 199 production activities deduction	(94		)	(593		)	(1,745		)
401(k) stock dividend deduction	(514		)	(532		)	(565		)
Other, net	440			(582		)	673
Total income tax expense	$	143,819		$	145,701		$	166,990
Effective income tax rate (%)	36.19			35.95			36.48

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, 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
Additions based on tax positions related to the current year	3,731
Additions for tax positions of prior years	269
Reductions for tax positions of prior years	(446		)
Lapse of statute of limitations	(1,592		)
Balance as of December 31, 2012	$	12,555

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)	2012		2011			2010
Taxes estimated to be payable currently:
Federal	$	18,227	$	(1,280	)	$	859
State	739		(108		)	155
Total current	18,966		(1,388		)	1,014
Taxes deferred:
Federal	9,066		24,938			25,582
State	2,212		3,120			3,279
Total deferred	11,278		28,058			28,861
Total income tax expense	$	30,244	$	26,670		$	29,875

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, 2012					December 31, 2011
	Current		Noncurrent			Current		Noncurrent
Deferred tax assets:
Unbilled and deferred revenue	$	10,137	$	—		$	9,582	$	—
Allowance for doubtful accounts	2,155		—			4,575		—
Insurance accruals	1,856		—			2,358		—
Compensation accruals	2,645		—			2,274		—
Inventories	1,664		—			1,438		—
Gas supply adjustment related accruals	969		—			1,196		—
State net operating losses and other carryforwards	—		—			987		—
Other	774		2			924		4
Total deferred tax assets	20,200		2			23,334		4
Deferred tax liabilities:
Depreciation and basis differences	—		167,329			—		156,121
Pension and other costs	—		22,054			—		25,375
Other	1,401		—			1,348		—
Total deferred tax liabilities	1,401		189,383			1,348		181,496
Net deferred tax assets (liabilities)	$	18,799	$	(189,381	)	$	21,986	$	(181,492	)

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)	2012		2011			2010
Income tax expense at statutory federal income tax rate	$	27,876	$	25,645		$	26,865
Increase (decrease) resulting from:
State income taxes, net of federal income tax benefit	2,238		2,059			2,157
Reversal of tax reserves from audit settlements, net	—		(1,365		)	—
Other, net	130		331			853
Total income tax expense	$	30,244	$	26,670		$	29,875
Effective income tax rate (%)	37.97		36.40			38.92

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, 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
Additions based on tax positions related to the current year	62
Additions for tax positions of prior years	201
Reductions for tax positions of prior years (lapse of statute of limitations)	(58		)
Balance as of December 31, 2012	$	307

- 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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