Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income Tax Expense Disclosure

The components of CERC’s income tax expense were as follows:

	Year Ended December 31,
	2010			2011		2012
	(in millions)
Current income tax expense (benefit):
Federal	$	(38	)	$	34	$	—
State	17			9		1
Total current expense (benefit)	(21		)	43		1
Deferred income tax expense (benefit):
Federal	234			140		198
State	(26		)	4		47
Total deferred expense	208			144		245
Total income tax expense	$	187		$	187	$	246

Reconciliation Of Expected Federal Income Tax Expense To Actual

A reconciliation of the expected federal income tax expense using the federal statutory income tax rate to the actual income tax expense and resulting effective income tax rate is as follows:

	Year Ended December 31,
	2010			2011			2012
	(in millions)
Income before income taxes	$	487		$	503		$	383
Federal statutory income tax rate	35		%	35		%	35		%
Expected federal income tax expense	170			176			134
Increase (decrease) in tax expense resulting from:
State income tax expense (benefit), net of federal income tax	(6		)	9			31
Increase (decrease) in settled and uncertain income tax positions	5			1			(7		)
Tax law change in deductibility of retiree health care costs	18			—			—
Goodwill impairment	—			—			88
Other, net	—			1			—
Total	17			11			112
Total income tax expense	$	187		$	187		$	246
Effective tax rate	38.4		%	37.2		%	64.2		%

Income Tax Asset Liability Disclosure

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities were as follows:

	December 31,
	2011			2012
	(in millions)
Deferred tax assets:
Current:
Allowance for doubtful accounts	$	9		$	9
Other	(1		)	—
Total current deferred tax assets	8			9
Non-current:
Employee benefits	57			49
Loss and credit carryforwards	238			192
Regulatory liabilities, net	—			196
Other	60			51
Total non-current deferred tax assets before valuation allowance	355			488
Valuation allowance	(3		)	(2		)
Total non-current deferred tax assets, net of valuation allowance	352			486
Total deferred tax assets, net of valuation allowance	360			495
Deferred tax liabilities:
Current:
Deferred gas costs	—			25
Other	—			5
Total current deferred tax liabilities	—			30
Non-current:
Depreciation	1,696			2,033
Regulatory assets, net	17			—
Other	59			129
Total non-current deferred tax liabilities	1,772			2,162
Total deferred tax liabilities	1,772			2,192
Accumulated deferred income taxes, net	$	1,412		$	1,697

Uncertain Income Tax Positions

Uncertain Income Tax Positions. The following table reconciles the beginning and ending balance of CERC’s unrecognized tax benefits (expenses):

	December 31,
	2010			2011			2012
	(in millions)
Balance, beginning of year	$	6		$	11		$	8
Tax Positions related to prior years:
Additions	—			(1		)	—
Reductions	(2		)	(3		)	(27		)
Tax Positions related to current year:
Additions	7			1			—
Settlements	—			—			(1		)
Balance, end of year	$	11		$	8		$	(20	)