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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2011

	Years ended December 31,
Components of Income Before Taxes	2011		2010			2009
	($ in millions)
Domestic	$	360.3	$	74.4		$	193.9
Foreign		19.1		2.5			16.0
Income before taxes	$	379.4	$	76.9		$	209.9

Components of Income Tax Provision
Current expense:
Federal	$	39.5	$	6.7		$	5.3
State		6.1		6.4			(3.5	)
Foreign		5.5		(2.7	)		-
		51.1		10.4			1.8
Deferred		86.6		1.7			72.4
Income tax provision	$	137.7	$	12.1		$	74.2

Effective tax rate reconciliation

The following table accounts for the difference between the actual tax provision and the amounts obtained by applying the statutory U.S. federal income tax rate of 35% to the income before taxes.

	Years ended December 31,
Effective Tax Rate Reconciliation (Percent)	2011			2010			2009
Statutory federal tax rate		35.0	%		35.0	%		35.0	%
Foreign rate differential		(0.1	)		(0.6	)		(0.1	)
Domestic manufacturing/export tax incentive		(1.0	)		(0.9	)		(0.3	)
Dividends paid to CEOP		(0.3	)		(1.5	)		(0.6	)
State income taxes, net		1.1			1.6			2.6
Change in tax contingencies		(1.1	)		(11.9	)		(0.9	)
Change in valuation allowance		0.1			(5.6	)		0.1
Return to provision		0.5			(0.8	)		(0.7	)
Remeasurement of deferred taxes		(1.3	)		-			-
Incremental tax effect of SunBelt remeasurement		3.3			-			-
Other, net		0.1			0.4			0.3
Effective tax rate		36.3	%		15.7	%		35.4	%

Components of deferred tax assets and liabilities

	December 31,
Components of Deferred Tax Assets and Liabilities	2011			2010
	($ in millions)
Deferred tax assets:
Pension and postretirement benefits	$	48.4		$	43.4
Environmental reserves		66.5			68.7
Asset retirement obligations		28.5			29.8
Accrued liabilities		42.4			46.8
Tax credits		10.2			15.7
Federal and state net operating losses		5.7			5.7
Capital loss carryforward		15.0			14.7
Other miscellaneous items		13.7			2.8
Total deferred tax assets		230.4			227.6
Valuation allowance		(24.1	)		(23.0	)
Net deferred tax assets		206.3			204.6
Deferred tax liabilities:
Property, plant and equipment		147.8			157.1
Intangible amortization		10.5			10.4
Inventory and prepaids		4.3			7.4
Partnerships		92.4			7.2
Total deferred tax liabilities		255.0			182.1
Net deferred tax (liability) asset	$	(48.7	)	$	22.5

Rollforward of tax benefits for the foreign tax credit carry-forwards and associated valuation allowance

Our tax benefits for the foreign tax credit carryforwards and the associated valuation allowance were as follows:

	Foreign Tax Benefit			Valuation Allowance
	($ in millions)
Balance at January 1, 2010	$	3.8		$	(3.8	)
Increases for prior year limitation		0.8			(0.8	)
Increases for current year limitation		2.4			-
Decreases for carryback of current year foreign losses		(4.9	)		4.6
Balance at December 31, 2010		2.1			-
Decreases for prior year utilization		(1.8	)		-
Increases for current year generation		3.0			-
Decreases for current year utilization		(3.3	)		-
Balance at December 31, 2011	$	-		$	-

Unrecognized tax benefits

The amounts of unrecognized tax benefits were as follows:

	December 31,
	2011			2010
	($ in millions)
Beginning balance	$	41.5		$	50.8
Increase for prior year tax positions		0.1			0.2
Decrease for prior year tax positions		-			(0.9	)
Increase for current year tax positions		-			1.7
Decrease due to tax settlements		(0.1	)		(2.3	)
Reductions due to statute of limitations		(3.6	)		(8.0	)
Ending balance	$	37.9		$	41.5

Tax years subject to examination

For our primary tax jurisdictions, the tax years that remain subject to examination are as follows:

		Tax Years
U.S. federal income tax		2007-2010
U.S. state income tax		2005-2010
Canadian federal income tax		2007-2010
Canadian provincial income tax		2007-2010

- 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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- Definition

Tabular disclosure of income tax examinations that an enterprise is currently subject to or that have been completed in the current period typically including a description of the examination, the jurisdiction conducting the examination, the tax year(s) under examination, the likelihood of an unfavorable settlement, the range of possible losses, the liability recorded, the increase or decrease in the liability from the prior period, and any penalties and interest that have been recorded.

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- Definition

Tabular disclosure of tax credit carryforwards available to reduce future taxable income, including amounts, expiration dates, limitations on use and the related deferred tax assets and valuation allowances.

+ References+ Details