INCOME TAXES

The following table presents the principal reasons for the difference between the effective income tax rate and the statutory federal income tax rate for the years ended December 31, 2015, 2014, and 2013:



	Ameren Missouri		Ameren Illinois		Ameren
2015
Statutory federal income tax rate:	35	%	35	%	35	%
Increases (decreases) from:
Depreciation differences	—		(2	)	(1	)
Amortization of investment tax credit	(1	)	—		(1	)
State tax	3		5		5
Other permanent items	—		(1	)	—
Effective income tax rate	37	%	37	%	38	%
2014
Statutory federal income tax rate:	35	%	35	%	35	%
Increases (decreases) from:
Amortization of investment tax credit	(1	)	—		(1	)
State tax	3		6		4
Other permanent items	—		—		1
Effective income tax rate	37	%	41	%	39	%
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	1		—		—
Effective income tax rate	38	%	40	%	38	%

The following table presents the components of income tax expense (benefit) for the years ended December 31, 2015, 2014, and 2013:



	Ameren Missouri			Ameren Illinois			Other				Ameren
2015
Current taxes:
Federal	$	110		$	(83	)	$	(29	)		$	(2	)
State	17			(11		)	(10		)		(4		)
Deferred taxes:
Federal	71			193			35				299
State	16			29			31				76
Deferred investment tax credits, amortization	(5		)	(1		)	—				(6		)
Total income tax expense	$	209		$	127		$	27			$	363
2014
Current taxes:
Federal	$	(13	)	$	(51	)	$	27			$	(37	)
State	(3		)	(2		)	(32		)		(37		)
Deferred taxes:
Federal	222			159			(12		)		369
State	28			38			22				88
Deferred investment tax credits, amortization	(5		)	(1		)	—				(6		)
Total income tax expense	$	229		$	143		$	5			$	377
2013
Current taxes:
Federal	$	136		$	(15	)	$	(239	)	^(a)	$	(118	)
State	41			21			(43		)	^(a)	19
Deferred taxes:
Federal	64			99			205			^(a)	368
State	6			6			36			^(a)	48
Deferred investment tax credits, amortization	(5		)	(1		)	—				(6		)
Total income tax expense (benefit)	$	242		$	110		$	(41	)		$	311


(a)	These amounts are substantially related to the reversal of unrecognized tax benefits as a result of 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. The amounts also reflect the increase in deferred tax expense due to available net operating losses.

The Illinois corporate income tax rate was increased to 9.5% from January 2011 through December 2014. The tax rate decreased to 7.75% on January 1, 2015, and is scheduled to decrease to 7.3% on January 1, 2025.

The following table presents the deferred tax assets and deferred tax liabilities recorded as a result of temporary differences at December 31, 2015 and 2014:



	Ameren Missouri			Ameren Illinois			Other			Ameren
2015
Accumulated deferred income taxes, net liability (asset):
Plant related	$	2,931		$	1,587		$	37		$	4,555
Regulatory assets, net	81			(1		)	—			80
Deferred employee benefit costs	(76		)	(40		)	(91		)	(207		)
Revenue requirement reconciliation adjustments	—			66			—			66
Tax carryforwards	(65		)	(133		)	(405		)	(603		)
Other	(27		)	1			20			(6		)
Total net accumulated deferred income tax liabilities (assets)^(a)	$	2,844		$	1,480		$	(439	)	$	3,885
2014
Accumulated deferred income taxes, net liability (asset):
Plant related	$	2,776		$	1,393		$	16		$	4,185
Regulatory assets, net	82			(5		)	1			78
Deferred employee benefit costs	(80		)	(45		)	(95		)	(220		)
Revenue requirement reconciliation adjustments	—			66			3			69
Tax carryforwards	(107		)	(139		)	(429		)	(675		)
Other	86			(22		)	70			134
Total net accumulated deferred income tax liabilities (assets) ^(a)	$	2,757		$	1,248		$	(434	)	$	3,571


(a)	Reflects the adoption of the new authoritative accounting guidance for the balance sheet classification of deferred income taxes. See Note 1 – Summary of Significant Accounting Policies for additional information.

The following table presents the components of deferred tax assets relating to net operating loss carryforwards, tax credit carryforwards, and charitable contribution carryforwards at December 31, 2015:



	Ameren Missouri		Ameren Illinois		Other			Ameren
Net operating loss carryforwards:
Federal^(a)	$	35	$	127	$	245		$	407
State^(b)	4		4		38			46
Total net operating loss carryforwards	$	39	$	131	$	283		$	453
Tax credit carryforwards:
Federal^(c)	$	26	$	1	$	78		$	105
State^(d)	—		1		40			41
State valuation allowance^(e)	—		—		(2		)	(2		)
Total tax credit carryforwards	$	26	$	2	$	116		$	144
Charitable contribution carryforwards^(f)	$	—	$	—	$	10		$	10
Valuation allowance^(e)	—		—		(4		)	(4		)
Total charitable contribution carryforwards	$	—	$	—	$	6		$	6


(a)	Will begin to expire in 2029.


(b)	Will begin to expire in 2023.


(c)	Will begin to expire in 2029.


(d)	Will begin to expire in 2016.


(e)	See Schedule II under Part IV, Item 15, in this report for information on changes in the valuation allowance.


(f)	Will begin to expire in 2016.



	Ameren Missouri			Ameren Illinois			Other			Ameren
Net operating loss carryforwards:
Federal^(a)	$	75		$	127		$	255		$	457
State^(b)	11			10			53			74
Total net operating loss carryforwards	$	86		$	137		$	308		$	531
Tax credit carryforwards:
Federal^(c)	$	21		$	1		$	77		$	99
State^(d)	1			2			33			36
State valuation allowance^(e)	(1		)	(1		)	(2		)	(4		)
Total tax credit carryforwards	$	21		$	2		$	108		$	131
Charitable contribution carryforwards^(f)	$	—		$	—		$	19		$	19
Valuation allowance^(e)	—			—			(6		)	(6		)
Total charitable contribution carryforwards	$	—		$	—		$	13		$	13


(a)	Will begin to expire in 2028


(b)	Will begin to expire in 2019.


(c)	Will begin to expire in 2029.


(d)	Began to expire in 2013.


(e)	See Schedule II under Part IV, Item 15, in this report for information on changes in the valuation allowance.


(f)	Began to expire in 2013.

Uncertain Tax Positions

A reconciliation of the change in the unrecognized tax benefit balance during the years ended December 31, 2013, 2014, and 2015, is as follows:



	Ameren Missouri			Ameren Illinois			Other				Ameren
Unrecognized tax benefits – January 1, 2013	$	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			^(a)	69
Changes related to settlements with taxing authorities	—			—			—				—
Decreases related to the lapse of statute of limitations	1			—			—				1
Unrecognized tax benefits – December 31, 2013	$	31		$	(1	)	$	60			$	90
Increases based on tax positions prior to 2014	1			1			4				6
Decreases based on tax positions prior to 2014	(32		)	(1		)	(9		)		(42		)
Increases based on tax positions related to 2014	—			—			—				—
Changes related to settlements with taxing authorities	—			—			—				—
Increases related to the lapse of statute of limitations	—			—			—				—
Unrecognized tax benefits – December 31, 2014	$	—		$	(1	)	$	55			$	54
Increases based on tax positions prior to 2015	—			1			1				2
Decreases based on tax positions prior to 2015	—			—			(56		)	^(a)	(56		)
Increases based on tax positions related to 2015	—			—			—				—
Changes related to settlements with taxing authorities	—			—			—				—
Increases related to the lapse of statute of limitations	—			—			—				—
Unrecognized tax benefits – December 31, 2015	$	—		$	—		$	—			$	—
Total unrecognized tax benefits that, if recognized, would affect the effective tax rates as of December 31, 2013	$	3		$	—		$	51		^(a)	$	54
Total unrecognized tax benefits (detriments) that, if recognized, would affect the effective tax rates as of December 31, 2014	$	—		$	(1	)	$	53		^(a)	$	52
Total unrecognized tax benefits that, if recognized, would affect the effective tax rates as of December 31, 2015	$	—		$	—		$	—			$	—


(a)	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, 2013, 2014, and 2015, is as follows:



	Ameren Missouri			Ameren Illinois			Other			Ameren
Liability for interest – January 1, 2013	$	8		$	1		$	(3	)	$	6
Interest charges (income) for 2013	(8		)	(1		)	4			(5		)
Liability for interest – December 31, 2013	$	—		$	—		$	1		$	1
Interest charges (income) for 2014	—			—			(1		)	(1		)
Liability for interest – December 31, 2014	$	—		$	—		$	—		$	—
Interest charges (income) for 2015	—			—			—			—
Liability for interest – December 31, 2015	$	—		$	—		$	—		$	—

As of December 31, 2013, 2014, and 2015, the Ameren Companies have accrued no amount for penalties with respect to unrecognized tax benefits.

In 2015, final settlements for tax years 2012 and 2013 were reached with the IRS. There were no uncertain tax positions related to the 2012 tax year, as of December 31, 2014, so this settlement did not affect the amount of recorded unrecognized tax benefits during 2015. The settlement related to the 2013 tax year resolved the uncertain tax position associated with the final tax basis of New AER and the related tax benefit resulting from the divested merchant generation business. The settlement resulted in a reduction of Ameren's unrecognized tax benefits of $53 million and an increase to net income from discontinued operations. See Note 16 – Divestiture Transactions and Discontinued Operations for additional information.

In 2014, final settlements for tax years 2007 through 2011 were reached with the IRS. These settlements, which resolved the uncertain tax positions associated with the timing of research tax deductions for these years, resulted in a decrease in Ameren’s and Ameren Missouri’s unrecognized tax benefits of $20 million, and $13 million, respectively. In addition, the settlement for tax years 2007 through 2011 provided certainty for the previously uncertain tax positions associated with the timing of research tax deductions for the remaining open tax years of 2012, 2013, and 2014. The certainty provided from the settlement resulted in an $18 million decrease in both Ameren’s and Ameren Missouri’s unrecognized tax benefits. The settlement also resulted in a $2 million increase to Ameren’s state unrecognized tax benefits. The net reduction in unrecognized tax benefits in 2014 did not materially affect income tax expense for the Ameren Companies.

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 affect income tax expense for the Ameren Companies. However, the liability for interest related to these unrecognized tax benefits was released in 2013. In 2013, Ameren adopted an accounting method change as a result of guidance issued by the IRS, with respect to the amount and timing of the deductions to maintain, replace, or improve generation property.

State income tax returns are generally subject to examination for a period of three years after filing. The state impact of any federal changes remains subject to examination by various states for up to one year after formal notification to the states. The Ameren Companies currently do not 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 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.