Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Income Taxes

Income tax (benefit) expense components

	Years Ended December 31,
	2011			2010			2009
				(Thousands)
Current:
Federal	$	39,867		$	(25,377	)	$	(134,763	)
State	6,076			(388		)	(2,712		)
Subtotal	$	45,943		(25,765		)	(137,475		)
Deferred:
Federal	$	202,392		132,161			223,177
State	31,627			21,751			11,599
Subtotal	$	234,019		153,912			234,776
Amortization of deferred investment tax credit	(602		)	(627		)	(633		)
Total	$	279,360		$	127,520		$	96,668

Reconciliation of income tax expense to amount computed at the federal statutory rate

	Years Ended December 31,
	2011		2010		2009
			(Thousands)
Tax at statutory rate	$	265,695	$	124,327	$	88,759
State income taxes	25,416		14,585		8,681
Incentive or deferred compensation	–		–		8,925
Federal tax credits and incentives	(660)		(600)		1,613
Regulatory basis differences	(1,251)		(2,713)		(9,336)
Permanent basis differences	(2,411)		(1,258)		(3,025)
Other	(7,429)		(6,821)		1,051
Income tax expense	$	279,360	$	127,520	$	96,668
Effective tax rate	36.8%		35.9%		38.1%

Reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties)

	2011		2010		2009
	(Thousands)
Balance at January 1	$37,943		$  40,726		$ 34,171
Additions based on tax positions related to current year	1,245		2,524		10,622
Additions for tax positions of prior years	184		3,391		672
Reductions for tax positions of prior years	(7,886	)	(4,618	)	(1,550	)
Settlements	-		–		–
Lapse of statute of limitations	(756	)	(4,080	)	(3,189	)
Balance at December 31	$ 30,730		$  37,943		$ 40,726

Summary of net deferred income tax liabilities (assets)

	December 31,
	2011	2010
	(Thousands)
Deferred income taxes:
Total deferred income tax assets	$(449,888)	$ (385,948)
Total deferred income tax liabilities	2,038,225	1,622,520
Total net deferred income tax liabilities	1,588,337	1,236,572
Total deferred income tax liabilities (assets)
Tax depreciation in excess of book depreciation	1,037,691	918,567
Drilling and development costs expensed for income tax reporting	836,219	632,985
Accumulated other comprehensive income	120,295	21,217
Regulatory temporary differences	43,005	44,335
Deferred purchased gas cost	1,015	5,113
Financial instruments	(1,303)	302
Incentive compensation	(1,324)	(15,971)
Investment tax credit	(1,467)	(1,856)
Uncollectible accounts	(3,953)	(4,092)
Post-retirement benefits	(8,140)	(6,630)
Deferred compensation plans	(10,814)	(15,698)
Alternative minimum tax credit carryforward	(65,509)	(26,017)
Net operating loss carryforwards	(337,921)	(305,787)
Other	(19,457)	(9,896)
Total (including amounts classified as current (assets) of ($26,867) and ($33,586), respectively)	$1,588,337	$1,236,572