Note 7 - Income Taxes

Questar

Details of Questar's income tax expense and deferred income taxes from continuing operations are provided in the following tables. The components of income tax expense were as follows:



	Year Ended December 31,
	2011			2010			2009
	(in millions)
Federal
Current	$	(22.3	)	$	18.3		$	19.7
Deferred	133.1			85.6			77.5
State
Current	(1.3		)	(0.2		)	2.6
Deferred	7.3			6.1			5.0
Deferred investment tax credits recognized	(0.4		)	(0.4		)	(0.4		)
Total income tax expense	$	116.4		$	109.4		$	104.4

The difference between the statutory federal income tax rate and the Company's effective income tax rate is explained as follows:



	Year Ended December 31,
	2011		2010		2009
Federal income taxes statutory rate	35.0	%	35.0	%	35.0	%
Increase (decrease) in rate as a result of:
State income taxes, net of federal income tax benefit	1.3		1.3		1.7
Tax benefits from dividends paid to employee stock plan	(0.5	)	(0.4	)	—
Other	0.1		0.4		(0.1	)
Effective income tax rate	35.9	%	36.3	%	36.6	%

Significant components of Questar's deferred income taxes were as follows:



	December 31,
	2011		2010
	(in millions)
Deferred tax liabilities
Property, plant and equipment	$	673.6	$	534.5
Deferred tax liabilities - noncurrent	673.6		534.5
Deferred tax assets
Employee benefits and compensation costs	116.1		59.8
Hedging activities	13.8		—
Net operating loss carryforward	39.2		—
Other	4.3		—
Deferred tax assets - noncurrent	173.4		59.8
Deferred income taxes – noncurrent	$	500.2	$	474.7
Deferred income taxes - current asset	$	16.1	$	14.8
Deferred income taxes - current liability	—		3.0
Deferred income taxes - current	$	16.1	$	11.8

Questar Pipeline

Details of Questar Pipeline's income tax expense and deferred income taxes are provided in the following tables. The components of income tax expense were as follows:



	Year Ended December 31,
	2011			2010		2009
	(in millions)
Federal
Current	$	(25.9	)	$	19.7	$	6.1
Deferred	62.9			16.7		25.3
State
Current	(0.7		)	1.5		1.3
Deferred	1.9			0.9		1.1
Total income tax expense	$	38.2		$	38.8	$	33.8

The difference between the statutory federal income tax rate and Questar Pipeline's effective income tax rate is explained as follows:



	Year Ended December 31,
	2011		2010		2009
Federal income taxes statutory rate	35.0	%	35.0	%	35.0	%
Increase in rate as a result of:
State income taxes, net of federal income tax benefit	1.0		1.5		1.7
Effective income tax rate	36.0	%	36.5	%	36.7	%

Significant components of Questar Pipeline's deferred income taxes were as follows:



	December 31,
	2011			2010
	(in millions)
Deferred tax liabilities
Property, plant and equipment	$	240.4		$	178.1
Employee benefits and compensation costs	3.8			2.0
Deferred tax liabilities - noncurrent	244.2			180.1
Deferred tax assets
Hedging activities	13.8			—
Net operating loss carryforward	29.3			—
Other	(0.3		)	—
Deferred tax assets - noncurrent	42.8			—
Deferred income taxes - noncurrent	$	201.4		$	180.1
Deferred income taxes - current asset	$	1.8		$	1.2

Questar Gas

Details of Questar Gas's income tax expense and deferred income taxes are provided in the following tables. The components of income tax expense were as follows:



	Year Ended December 31,
	2011			2010			2009
	(in millions)
Federal
Current	$	(10.5	)	$	(15.9	)	$	(8.3	)
Deferred	36.8			40.2			31.6
State
Current	(1.6		)	(2.2		)	(1.2		)
Deferred	3.2			3.5			2.7
Deferred investment tax credit recognized	(0.4		)	(0.4		)	(0.4		)
Total income tax expense	$	27.5		$	25.2		$	24.4

The difference between the statutory federal income tax rate and Questar Gas's effective income tax rate is explained as follows:



	Year Ended December 31,
	2011		2010		2009
Federal income taxes statutory rate	35.0	%	35.0	%	35.0	%
Increase (decrease) in rate as a result of:
State income taxes, net of federal income tax benefit	1.4		1.2		1.5
Amortize investment tax credits related to rate regulated assets	(0.5	)	(0.5	)	(0.6	)
Other	1.5		0.8		1.1
Effective income tax rate	37.4	%	36.5	%	37.0	%

Significant components of Questar Gas's deferred income taxes were as follows:



	December 31,
	2011		2010
	(in millions)
Deferred tax liabilities
Property, plant and equipment	$	264.7	$	225.0
Employee benefits and compensation costs	9.7		5.3
Deferred tax liabilities - noncurrent	274.4		230.3
Deferred tax assets
Net operating loss carryforward	14.6		—
Deferred tax assets - noncurrent	14.6		—
Deferred income taxes – noncurrent	$	259.8	$	230.3
Deferred income taxes - current asset	$	5.6	$	4.3
Deferred income taxes - current liability	—		3.0
Deferred income taxes - current	$	5.6	$	1.3