2.2.0.7falseINCOME TAXES006060 - Disclosure - INCOME TAXEStruefalsefalsefalse1USDfalsefalseu000Standardhttp://www.xbrl.org/2003/iso4217USDiso42170u002Dividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0u001Standardhttp://www.xbrl.org/2003/instancesharesxbrli0$20gas_NotesToFinancialStatementsAbstractgasfalsenadurationNo definition available.falsefalsefalsefalsefalsetruefalsefalsefalsefalsefalsefalse1falsefalsefalsefalse00falsefalsefalsexbrli:stringItemTypestringNo definition available.false31us-gaap_IncomeTaxDisclosureTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalsefalse00<div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.5; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.         INCOME TAXES</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.5"><br /></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.5; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The effective income tax rate for the three months ended June 30, 2010 increased to 34.2 percent from 30.9 percent in the prior-year period.  The effective income tax rate for the six months ended June 30, 2010 increased to 32.6 percent from 30.7 percent in the prior-year period.<font style="DISPLAY: inline; FONT-SIZE: 10pt"> </font>The higher effective income tax rate for the three and six months ended June 30, 2010 is due primarily to higher forecasted annual pretax income (which causes a higher effective income tax rate since permanent differences and tax credits are a smaller share of pretax income), lower forecasted annual undistributed foreign earnings and the unfavorable impact of the tax law change with respect to Medicare Part D subsidies.  The higher effective income tax rate for the six month period is offset, in part, by favorable tax reserve adjustments recognized in the first quarter of 2010.</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.5"><br /></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.5; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In March 2010, the Health Care Act was signed into law resulting in comprehensive health care reform.  The Health Care Act contains a provision that eliminates the tax deduction related to Medicare Part D subsidies received after 2012.  Federal subsidies are provided to sponsors of retiree health benefit plans, such as Nicor Gas, that provide a benefit that is at least actuarially equivalent to the benefits under Medicare Part D.  Such subsidies have reduced the company’s actuarially determined projected benefit obligation and annual net periodic benefit costs.  Due to the change in taxation, in the first quarter of 2010 Nicor Gas reduced deferred tax assets by $17.5 million, reversed an existing regulatory income tax liability of $10.0 million, established a regulatory income tax asset of $7.0 million and recognized a $0.5 million charge to income tax expense.  Beginning in 2010, the change in taxation will also reduce earnings by an estimated $1.5 million annually for periods subsequent to the enactment date.</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.5"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> </font></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.5; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In 2006, the company reorganized certain shipping and related operations.  The reorganization allows the company to take advantage of certain provisions of the Jobs Act that provide the opportunity for tax savings subsequent to the date of the reorganization.  Generally, to the extent foreign shipping earnings are not repatriated to the United States, such earnings are not expected to be subject to current taxation.  In addition, to the extent such earnings are determined to be indefinitely reinvested offshore, no deferred income tax expense would be recorded by the company.  For the three months ended June 30, 2010, income tax expense has not been provided on approximately $2 million of foreign company shipping earnings.  There were no significant foreign shipping company earnings for the three months ended June 30, 2009. For the six months ended June 30, 2010 and 2009, income tax expense (benefit) has not been provided on approximately ($1) million and $5 million, respectively, of foreign company shipping earnings (loss).<font style="DISPLAY: inline; FONT-SIZE: 10pt"> </font>As of June 30, 2010, Nicor has not recorded deferred income taxes of approximately $57 million on approximately $164 million of cumulative undistributed foreign earnings.</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.5"><br /></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.5; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The company's major tax jurisdictions include the United States and Illinois, with tax returns examined by the IRS and IDR, respectively.  At June 30, 2010, the years that remain subject to examination include years beginning after 2006 for the IRS and years beginning after 2005 for the IDR.  The company’s liability for unrecognized tax benefits was $4.9 million at June 30, 2010 of which about $3 million, if recognized, would impact the company’s effective income tax rate.  The decrease in the liability for unrecognized tax benefits from $9.6 million at December 31, 2009 is due primarily to the settlement of an item concerning the timing of inclusion in taxable income of recoveries for environmental clean-up expenditures, lapses of statute of limitations and other tax reserve adjustments.  The company believes that it is reasonably possible that a change in the liability for unrecognized tax benefits could occur within 12 months, potentially decreasing it by about $5 million.</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.5"><br /></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.5; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The balance of unamortized investment tax credits at June 30, 2010, December 31, 2009 and June 30, 2009 was $24.2 million, $25.2 million and $24.7 million, respectively.</font></div> </div>5.         INCOME TAXES The effective income tax rate for the three months ended June 30, 2010falsefalsefalseus-types:textBlockItemTypetextblockDescription containing the entire income tax disclosure. Examples include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. This element may be used as a single block of text to encapsulate the entire disclosure including data and tables.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
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