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Income Taxes
 12 Months Ended
Dec. 31, 2013
Income Tax Disclosure [Abstract]  
INCOME TAXES
INCOME TAXES
The following table presents the principal reasons why the effective income tax rate differed from the statutory federal income tax rate for the years ended December 31, 2013, 2012, and 2011:
 
Ameren Missouri
 
Ameren Illinois
 
Ameren
2013
 
 
 
 
 
Statutory federal income tax rate:
35
 %
 
35
 %
 
35
 %
Increases (decreases) from:
 
 
 
 
 
Depreciation differences
—

 
(1
)
 
—

Amortization of investment tax credit
(1
)
 
—

 
(1
)
State tax
3

 
6

 
4

Other permanent items(a)
1

 
—

 
—

Effective income tax rate
38
 %
 
40
 %
 
38
 %
2012
 
 
 
 
 
Statutory federal income tax rate:
35
 %
 
35
 %
 
35
 %
Increases (decreases) from:
 
 
 
 
 
Depreciation differences
(1
)
 
—

 
(1
)
Amortization of investment tax credit
(1
)
 
(1
)
 
(1
)
State tax
3

 
6

 
5

Reserve for uncertain tax positions
1

 
—

 
—

Other permanent items(a)
—

 
—

 
(1
)
Effective income tax rate
37
 %
 
40
 %
 
37
 %
2011
 
 
 
 
 
Statutory federal income tax rate:
35
 %
 
35
 %
 
35
 %
Increases (decreases) from:
 
 
 
 
 
Depreciation differences
(2
)
 
—

 
(1
)
Amortization of investment tax credit
(1
)
 
(1
)
 
(1
)
State tax
3

 
5

 
4

Reserve for uncertain tax positions
—

 
—

 
1

Tax credits
—

 
—

 
(1
)
Other permanent items(a)
1

 
—

 
—

Effective income tax rate
36
 %
 
39
 %
 
37
 %
(a)
Permanent items are treated differently for book and tax purposes and primarily include non-taxable income related to company-owned life insurance and deductions related to dividends on DRPlus and the 401(k) plan for Ameren, as well as nondeductible expenses related to lobbying and stock issuance costs for Ameren Missouri.
The following table presents the components of income tax expense (benefit) for the years ended December 31, 2013, 2012, and 2011:
 
Ameren Missouri
 
Ameren Illinois
 
Other
 
Ameren(a)
2013
 
 
 
 
 
 
 
Current taxes:
 
 
 
 
 
 
 
Federal
$
136

 
$
(15
)
 
$
(239
)
(b) 
$
(118
)
State
41

 
21

 
(43
)
(b) 
19

Deferred taxes:
 
 
 
 
 
 
 
Federal
64

 
99

 
205

(b) 
368

State
6

 
6

 
36

(b) 
48

Deferred investment tax credits, amortization
(5
)
 
(1
)
 
—

 
(6
)
Total income tax expense (benefit)
$
242

 
$
110

 
$
(41
)
 
$
311

2012
 
 
 
 
 
 
 
Current taxes:
 
 
 
 
 
 
 
Federal
$
(25
)
 
$
(7
)
 
$
72

 
$
40

State
(10
)
 
(3
)
 
23

 
10

Deferred taxes:
 
 
 
 
 
 
 
Federal
248

 
76

 
(120
)
 
204

State
44

 
30

 
(14
)
 
60

Deferred investment tax credits, amortization
(5
)
 
(2
)
 
—

 
(7
)
Total income tax expense (benefit)
$
252

 
$
94

 
$
(39
)
 
$
307

2011
 
 
 
 
 
 
 
Current taxes:
 
 
 
 
 
 
 
Federal
$
3

 
$
(24
)
 
$
15

 
$
(6
)
State
2

 
(4
)
 
—

 
(2
)
Deferred taxes:
 
 
 
 
 
 
 
Federal
129

 
123

 
(39
)
 
213

State
31

 
34

 
(10
)
 
55

Deferred investment tax credits, amortization
(4
)
 
(2
)
 
—

 
(6
)
Total income tax expense (benefit)
$
161

 
$
127

 
$
(34
)
 
$
254

(a)
Includes amounts for Ameren registrant and nonregistrant subsidiaries and intercompany eliminations.
(b)
These amounts are substantially related to the reversal of unrecognized tax benefits as a result of new IRS guidance related to the deductibility of expenditures to maintain, replace or improve steam or electric power generation property, along with casualty loss deductions for storm damage. They also reflect the increase in deferred tax expense due to available net operating losses.
The Illinois corporate income tax rate increased from 7.3% to 9.5%, as of January 2011. The tax rate is scheduled to decrease to 7.75% in 2015, and it is scheduled to return to 7.3% in 2025. This corporate income tax rate increase in Illinois increased current income tax expense in 2011 by $6 million and $4 million for Ameren and Ameren Illinois, respectively. As a result of this corporate income tax rate increase, accumulated deferred tax balances were revalued, resulting in a decrease in deferred tax expense of $2 million and $3 million for Ameren and Ameren Illinois, respectively, in 2011.
The following table presents the deferred tax assets and deferred tax liabilities recorded as a result of temporary differences at December 31, 2013, and 2012:
 
Ameren Missouri
 
Ameren Illinois
 
Other
 
Ameren(a)
2013
 
 
 
 
 
 
 
Accumulated deferred income taxes, net liability (asset):
 
 
 
 
 
 
 
Plant related
$
2,513

 
$
1,243

 
$
13

 
$
3,769

Regulatory assets, net
74

 
2

 
—

 
76

Deferred employee benefit costs
(74
)
 
(85
)
 
(114
)
 
(273
)
Purchase accounting
—

 
(27
)
 
(1
)
 
(28
)
ARO
(7
)
 
1

 
—

 
(6
)
Other(b)(c)
(17
)
 
(63
)
 
(398
)
 
(478
)
Total net accumulated deferred income tax liabilities (assets)(d)
$
2,489

 
$
1,071

 
$
(500
)
 
$
3,060

2012
 
 
 
 
 
 
 
Accumulated deferred income taxes, net liability (asset):
 
 
 
 
 
 
 
Plant related
$
2,385

 
$
1,145

 
$
20

 
$
3,550

Regulatory assets, net
73

 
—

 
—

 
73

Deferred employee benefit costs
(84
)
 
(102
)
 
(137
)
 
(323
)
Purchase accounting
—

 
(27
)
 
(1
)
 
(28
)
ARO
(7
)
 
1

 
—

 
(6
)
Other(b)
50

 
(77
)
 
(223
)
 
(250
)
Total net accumulated deferred income tax liabilities (assets)(e)
$
2,417

 
$
940

 
$
(341
)
 
$
3,016

(a)
Includes amounts for Ameren registrant and nonregistrant subsidiaries and intercompany eliminations.
(b)
Includes deferred tax assets related to net operating loss and tax credit carryforwards detailed in the table below.
(c)
Includes total valuation allowances for Ameren, Ameren Missouri, and Ameren Illinois of $7 million, $1 million, and $1 million, respectively, as of December 31, 2013. The state valuation allowances are shown in the table below.
(d)
Includes $20 million recorded in "Other current assets" on Ameren Missouri's balance sheet as of December 31, 2013.
(e)
Includes $26 million recorded in "Other current assets" on Ameren Missouri's balance sheet as of December 31, 2012.
The following table presents the components of deferred tax assets relating to net operating loss carryforwards and tax credit carryforwards at December 31, 2013:
 
Ameren Missouri
 
Ameren Illinois
 
Other
 
Ameren(a)
Net operating loss carryforwards:
 
 
 
 
 
 
 
Federal(b)
$
61

 
$
84

 
$
215

 
$
360

State(c)
3

 
11

 
34

 
48

Total net operating loss carryforwards
$
64

 
$
95

 
$
249

 
$
408

Tax credit carryforwards:
 
 
 
 
 
 
 
Federal(d)
$
12

 
$
—

 
$
76

 
$
88

State(e)
1

 
1

 
32

 
34

State valuation allowance(f)
(1
)
 
(1
)
 
(2
)
 
(4
)
Total tax credit carryforwards
$
12

 
$
—

 
$
106

 
$
118

(a)
Includes amounts for Ameren registrant and nonregistrant subsidiaries.
(b)
These will begin to expire in 2028.
(c)
These will begin to expire in 2017.
(d)
These will begin to expire in 2029.
(e)
These will begin to expire in 2014.
(f)
This balance increased by $2 million, $- million and $- million for Ameren, Ameren Missouri and Ameren Illinois, respectively, during 2013.
The following table presents the components of deferred tax assets relating to net operating loss carryforwards and tax credit carryforwards at December 31, 2012:
 
Ameren Missouri
 
Ameren Illinois
 
Other
 
Ameren(a)
Net operating loss carryforwards:
 
 
 
 
 
 
 
Federal(b)
$
61

 
$
61

 
$
51

 
$
173

State(c)
3

 
11

 
13

 
27

Total net operating loss carryforwards
$
64

 
$
72

 
$
64

 
$
200

Tax credit carryforwards:
 
 
 
 
 
 
 
Federal(d)
$
11

 
$
—

 
$
75

 
$
86

State(e)
1

 
1

 
23

 
25

State valuation allowance(f)
(1
)
 
(1
)
 
—

 
(2
)
Total tax credit carryforwards
$
11

 
$
—

 
$
98

 
$
109

(a)
Includes amounts for Ameren registrant and nonregistrant subsidiaries.
(b)
These will begin to expire in 2028
(c)
These will begin to expire in2017.
(d)
These will begin to expire in 2029.
(e)
These began to expire in 2013.
(f)
This balance increased by $1 million, $- million and $1 million for Ameren, Ameren Missouri and Ameren Illinois, respectively, during 2012.
Uncertain Tax Positions
A reconciliation of the change in the unrecognized tax benefit balance during the years ended December 31, 2011, 2012, and 2013, is as follows:
 
Ameren Missouri
 
Ameren Illinois
 
Other
 
Ameren(a)
Unrecognized tax benefits – January 1, 2011
$
164

 
$
56

 
$
26

 
$
246

Increases based on tax positions prior to 2011
15

 
—

 
7

 
22

Decreases based on tax positions prior to 2011
(63
)
 
(41
)
 
(21
)
 
(125
)
Increases based on tax positions related to 2011
13

 
—

 
4

 
17

Changes related to settlements with taxing authorities
(5
)
 
(4
)
 
(1
)
 
(10
)
Decreases related to the lapse of statute of limitations
—

 
—

 
(2
)
 
(2
)
Unrecognized tax benefits – December 31, 2011
$
124

 
$
11

 
$
13

 
$
148

Increases based on tax positions prior to 2012
4

 
—

 
1

 
5

Decreases based on tax positions prior to 2012
(7
)
 
(1
)
 
(5
)
 
(13
)
Increases (decreases) based on tax positions related to 2012
15

 
3

 
(1
)
 
17

Changes related to settlements with taxing authorities
—

 
—

 
—

 
—

Decreases related to the lapse of statute of limitations
—

 
—

 
(1
)
 
(1
)
Unrecognized tax benefits – December 31, 2012
$
136

 
$
13

 
$
7

 
$
156

Increases based on tax positions prior to 2013
—

 
2

 
5

 
7

Decreases based on tax positions prior to 2013
(122
)
 
(16
)
 
(5
)
 
(143
)
Increases based on tax positions related to 2013
16

 
—

 
53

(b) 
69

Changes related to settlements with taxing authorities
—

 
—

 
—

 
—

Increases related to the lapse of statute of limitations
1

 
—

 
—

 
1

Unrecognized tax benefits (detriments) – December 31, 2013
$
31

 
$
(1
)
 
$
60

 
$
90

Total unrecognized tax benefits that, if recognized, would affect the effective tax rates as of December 31, 2011
$
1

 
$
—

 
$
—

 
$
1

Total unrecognized tax benefits (detriments) that, if recognized, would affect the effective tax rates as of December 31, 2012
$
3

 
$
(1
)
 
$
(1
)
 
$
1

Total unrecognized tax benefits that, if recognized, would affect the effective tax rates as of December 31, 2013
$
3

 
$
—

 
$
51

(b) 
$
54


(a)
Includes amounts for Ameren registrant and nonregistrant subsidiaries.
(b)
Primarily due to tax positions relating to the New AER divestiture. The income statement impact of this unrecognized tax benefit was included in "Income (loss) from discontinued operations, net of taxes" on Ameren's consolidated statement of income (loss). See Note 16 – Divestiture Transactions and Discontinued Operations for additional information.
The Ameren Companies recognize interest charges (income) and penalties accrued on tax liabilities on a pretax basis as interest charges (income) or miscellaneous expense, respectively, in the statements of income.
A reconciliation of the change in the liability for interest on unrecognized tax benefits during the years ended December 31, 2011, 2012, and 2013, is as follows:
 
Ameren Missouri
 
Ameren Illinois
 
Other
 
Ameren(a)
Liability for interest – January 1, 2011
$
10

 
$
2

 
$
5

 
$
17

Interest income for 2011
(3
)
 
(1
)
 
(7
)
 
(11
)
Interest payment
(1
)
 
—

 
—

 
(1
)
Liability for interest – December 31, 2011
$
6

 
$
1

 
$
(2
)
 
$
5

Interest charges (income) for 2012
2

 
—

 
(1
)
 
1

Liability for interest – December 31, 2012
$
8

 
$
1

 
$
(3
)
 
$
6

Interest charges (income) for 2013
(8
)
 
(1
)
 
4

 
(5
)
Liability for interest – December 31, 2013
$
—

 
$
—

 
$
1

 
$
1


(a)
Includes amounts for Ameren registrant and nonregistrant subsidiaries and intercompany eliminations.
As of December 31, 2011, 2012, and 2013, the Ameren Companies have accrued no amount for penalties with respect to unrecognized tax benefits.
In 2011, a final settlement for the years 2005 and 2006 was reached with the IRS. It resulted in a reduction in uncertain tax liabilities of $39 million, $17 million and $12 million for Ameren, Ameren Missouri and Ameren Illinois, respectively. Ameren’s federal income tax returns for the years 2007 through 2011 are before the Appeals Office of the IRS. Ameren’s federal income tax return for the year 2012 is currently under examination.
It is reasonably possible that a settlement will be reached with the Appeals Office of the IRS in the next twelve months for the years 2007 through 2011. This settlement, primarily related to uncertain tax positions for capitalization versus currently deductible repair expense and research deductions, is expected to result in a decrease in uncertain tax benefits of approximately $20 million and $13 million for Ameren and Ameren Missouri, respectively. In addition, it is reasonably possible that other events will occur during the next twelve months that would cause the total amount of unrecognized tax benefits for the Ameren Companies to increase or decrease. However, the Ameren Companies do not believe any such increases or decreases, including the decrease from the reasonably possible IRS Appeals Office settlement discussed above, would be material to their results of operations, financial position, or liquidity.
In 2013, unrecognized tax benefits related to the deductibility of expenditures to maintain, replace, or improve steam or electric power generation property, along with casualty loss deductions for storm damage, were reduced by $103 million, $95 million and $5 million for Ameren, Ameren Missouri and Ameren Illinois, respectively. This reduction in unrecognized tax benefits did not impact overall income tax expense for the Ameren Companies. However, the liability for interest related to these unrecognized tax benefits has been released. In 2013, Ameren adopted an accounting method change as a result of the recent guidance issued by the IRS, establishing new rules for the amount and timing of the deductions to maintain, replace or improve generation property. In 2014, Ameren expects to adopt an accounting method change as a result of the recent guidance establishing new rules for the amount and timing of casualty loss deductions for storm damage.
State income tax returns are generally subject to examination for a period of three years after filing of the return. The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. The Ameren Companies do not currently have material state income tax issues under examination, administrative appeals, or litigation.
Ameren Missouri has an uncertain tax position tracker. Under Missouri's regulatory framework, uncertain tax positions do not reduce Ameren Missouri's electric rate base. When an uncertain income tax position liability is resolved, the MoPSC requires, through the uncertain tax position tracker, the creation of a regulatory asset or regulatory liability to reflect the time value, using the weighted-average cost of capital included in each of the electric rate orders in effect before the tax position was resolved, of the difference between the uncertain income tax position liability that was excluded from rate base and the final tax liability. The resulting regulatory asset or liability will affect earnings in the year it is created and then will be amortized over three years beginning on the effective date of new rates established in the next electric rate case.