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Income Taxes
3 Months Ended
Mar. 31, 2013
Income Taxes  
Income Taxes

F.                         Income Taxes

 

The Company estimates an annual effective income tax rate based on projected results for the year and applies this rate to income before taxes to calculate income tax expense.  Any refinements made due to subsequent information that affects the estimated annual effective income tax rate are reflected as adjustments in the current period.

 

The Company’s effective income tax rate for the three months ended March 31, 2013 was 33.0%, compared to 38.3% for the three months ended March 31, 2012.  The decrease in the effective income tax rate from the first quarter of 2012 is primarily attributable to unfavorable state net operating loss adjustments recorded in 2012 and the impact of the Partnership’s IPO.  The effective income tax rate is impacted by the recent IPO which modified the Midstream ownership structure and now reflects Partnership earnings for which the noncontrolling public limited partners are directly responsible for the related income taxes.

 

There were no material changes to the Company’s methodology for unrecognized tax benefits during the three months ended March 31, 2013. The Company’s consolidated federal income tax liability has been settled with the IRS through 2009. The Company is the subject of various state income tax examinations.  The Company believes that it is appropriately reserved for any uncertain tax positions.