10-K - SCANA Corporation

Table of Contents
The tax effects of significant temporary differences comprising Consolidated SCE&G’s net deferred tax liability of $1.4
billion at December 31, 2011 and $1.2 billion at December 31, 2010 are as follows:
Millions of dollars 2011 2010
Deferred tax assets:
Nondeductible reserves $ 82 $ 85
Nuclear decommissioning 47 45
Unamortized investment tax credits 29 40
Deferred compensation 7 8
Unbilled revenue 19 19
Other 12 5
Total deferred tax assets 196 202
Deferred tax liabilities:
Property, plant and equipment 1,324 1,205
Pension plan income 28 45
Deferred employee benefit plan costs 110 91
Deferred fuel costs 48 42
Other 49 44
Total deferred tax liabilities 1,559 1,427
Net deferred tax liability $ 1,363 $ 1,225
Consolidated SCE&G is included in the consolidated federal income tax return of SCANA and files various applicable state
and local income tax returns. The IRS has completed examinations of SCANA’s federal returns through 2004, and SCANA’s federal
returns through 2007 are closed for additional assessment. With few exceptions, Consolidated SCE&G is no longer subject to state
and local income tax examinations by tax authorities for years before 2008.
In the first quarter of 2010, in connection with a fuel cost recovery settlement (see Note 2), SCE&G accelerated the
recognition of certain previously deferred state income tax credits. In the second quarter of 2010, SCE&G revised (reduced) its
estimate of the benefit to be realized from the domestic production activities deduction as a result of a change in method of accounting
for certain repairs for tax purposes. In the third quarter of 2010, in connection with the adoption of new retail electric base rates, and
pursuant to an SCPSC order, SCE&G accelerated the recognition of additional previously deferred state income tax credits (see Note
2) and also adopted the flow through method of accounting for current and future state tax credits.
Changes to Unrecognized Tax Benefits
Millions of dollars 2011 2010
Unrecognized tax benefits, January 1 $ 36 —
Gross increases-tax positions in prior period 5 —
Gross decreases-tax positions in prior period (8) —
Gross increases-current period tax positions 5 $ 36
Settlements — —
Lapse of statute of limitations — —
Unrecognized tax benefits, December 31 $ 38 $ 36
In connection with the change in method of accounting for certain repair costs for tax purposes referred to above,
Consolidated SCE&G identified approximately $38 million of unrecognized tax benefit. Because this method change is primarily a
temporary difference, this additional benefit, if recognized, would not have a significant effect on the effective tax rate. By December
31, 2012, it is reasonably possible that this unrecognized tax benefit could increase by as much as $12 million or decrease by as much
as $38 million. The events that could cause these changes are direct settlements with taxing authorities, legal or administrative
guidance by relevant taxing authorities, or the lapse of an applicable statute of limitation.
Consolidated SCE&G recognizes interest accrued related to unrecognized tax benefits within interest expense and recognizes
tax penalties within other expenses. Consolidated SCE&G has not accrued any significant amount of interest expense related to
unrecognized tax benefits or tax penalties in 2010 or 2009. Consolidated SCE&G has accrued $2 million of interest expense related to
unrecognized tax benefits in 2011.
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