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Income Taxes
 12 Months Ended
Dec. 31, 2012
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, 2012, 2011, and 2010:
 
Ameren
 
Ameren Missouri
 
Ameren Illinois
2012
 
 
 
 
 
Statutory federal income tax rate:
35
 %
 
35
 %
 
35
 %
Increases (decreases) from:
 
 
 
 
 
Depreciation differences
—

 
(1
)
 
—

Amortization of investment tax credit
1

 
(1
)
 
(1
)
State tax
5

 
3

 
6

Reserve for uncertain tax positions
—

 
1

 
—

Effective income tax rate
41
 %
 
37
 %
 
40
 %
2011
 
 
 
 
 
Statutory federal income tax rate:
35
 %
 
35
 %
 
35
 %
Increases (decreases) from:
 
 
 
 
 
Depreciation differences
(1
)
 
(2
)
 
—

Amortization of investment tax credit
(1
)
 
(1
)
 
(1
)
State tax
4

 
3

 
5

Other permanent items(a)
—

 
1

 
—

Effective income tax rate
37
 %
 
36
 %
 
39
 %
2010
 
 
 
 
 
Statutory federal income tax rate:
35
 %
 
35
 %
 
35
 %
Increases (decreases) from:
 
 
 
 
 
Non-deductible impairment of goodwill
32

 
—

 
—

Depreciation differences
(4
)
 
(3
)
 
—

Amortization of investment tax credit
(2
)
 
(1
)
 
(1
)
State tax
8

 
3

 
5

Reserve for uncertain tax positions
(1
)
 
—

 
—

Tax credits
(3
)
 
—

 
—

Change in federal tax law(b)
3

 
1

 
—

Effective income tax rate
68
 %
 
35
 %
 
39
 %
(a)
Permanent items are treated differently for book and tax purposes and primarily include nondeductible expenses related to lobbying and stock issuance expenses for Ameren Missouri.
(b)
Relates to change in taxation of prescription drug benefits to retiree participants from the enactment in 2010 of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010.


The following table presents the components of income tax expense (benefit) for the years ended December 31, 2012, 2011, and 2010:
 
Ameren(a)
 
Ameren Missouri
 
Ameren Illinois
2012
 
 
 
 
 
Current taxes:
 
 
 
 
 
Federal
$
31

 
$
(25
)
 
$
(7
)
State
3

 
(10
)
 
(3
)
Deferred taxes:
 
 
 
 
 
Federal
(590
)
 
248

 
76

State
(117
)
 
44

 
30

Deferred investment tax credits, amortization
(7
)
 
(5
)
 
(2
)
Total income tax expense (benefit)
$
(680
)
 
$
252

 
$
94

2011
 
 
 
 
 
Current taxes:
 
 
 
 
 
Federal
$
(27
)
 
$
3

 
$
(24
)
State
(5
)
 
2

 
(4
)
Deferred taxes:
 
 
 
 
 
Federal
273

 
129

 
123

State
76

 
31

 
34

Deferred investment tax credits, amortization
(7
)
 
(4
)
 
(2
)
Total income tax expense
$
310

 
$
161

 
$
127

2010
 
 
 
 
 
Current taxes:
 
 
 
 
 
Federal
$
13

 
$
(14
)
 
$
(20
)
State
10

 
(15
)
 
(5
)
Deferred taxes:
 
 
 
 
 
Federal
274

 
206

 
132

State
36

 
27

 
32

Deferred investment tax credits, amortization
(8
)
 
(5
)
 
(2
)
Total income tax expense
$
325

 
$
199

 
$
137

(a)
Includes amounts for Ameren registrant and nonregistrant subsidiaries and intercompany eliminations.
The Illinois corporate income tax rate increased from 7.3% to 9.5%, starting in 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, 2012, and 2011:
 
Ameren(a)
 
Ameren Missouri
 
Ameren Illinois
2012
 
 
 
 
 
Accumulated deferred income taxes, net liability (asset):
 
 
 
 
 
Plant related
$
4,201

 
$
2,386

 
$
1,106

Long-lived asset impairments
(986
)
 
—

 
—

Deferred intercompany tax gain/basis step-up
2

 
(1
)
 
39

Regulatory assets, net
73

 
73

 
—

Deferred employee benefit costs
(337
)
 
(84
)
 
(102
)
Purchase accounting
(10
)
 
—

 
(27
)
ARO
(44
)
 
(7
)
 
1

Other(b)
(278
)
 
50

 
(77
)
Total net accumulated deferred income tax liabilities(c)
$
2,621

 
$
2,417

 
$
940

2011
 
 
 
 
 
Accumulated deferred income taxes, net liability (asset):
 
 
 
 
 
Plant related
$
3,826

 
$
2,134

 
$
1,003

Long-lived asset impairments
(15
)
 
—

 
—

Deferred intercompany tax gain/basis step-up
3

 
(1
)
 
55

Regulatory assets, net
73

 
73

 
—

Deferred employee benefit costs
(367
)
 
(88
)
 
(109
)
Purchase accounting
35

 
—

 
(27
)
ARO
(37
)
 
—

 
1

Other
(223
)
 
6

 
(86
)
Total net accumulated deferred income tax liabilities(d)
$
3,295

 
$
2,124

 
$
837

(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 $26 million recorded in "Other current assets" on Ameren Missouri's balance sheet as of December 31, 2012.
(d)
Includes $8 million recorded in "Other current assets" on Ameren Missouri's balance sheet as of December 31, 2011.
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
 
Ameren Missouri
 
Ameren Illinois
Net operating loss carryforwards:
 
 
 
 
 
Federal(a)
$
212

 
$
61

 
$
61

State(b)
29

 
3

 
11

Total net operating loss carryforwards
$
241

 
$
64

 
$
72

Tax credit carryforwards:
 
 
 
 
 
Federal(c)
$
87

 
$
11

 
$
—

State(d)
35

 
1

 
1

State valuation allowance(e)
(4
)
 
(1
)
 
(1
)
Total tax credit carryforwards
$
118

 
$
11

 
$
—

(a)
These will begin to expire in 2028.
(b)
These will begin to expire in 2017.
(c)
These will begin to expire in 2029.
(d)
These will begin to expire in 2013.
(e)
This balance increased by $2 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, 2010, 2011, and 2012, is as follows:
 
Ameren
 
Ameren Missouri
 
Ameren Illinois
Unrecognized tax benefits - January 1, 2010
$
135

 
$
88

 
$
—

Increases based on tax positions prior to 2010
72

 
40

 
27

Decreases based on tax positions prior to 2010
(38
)
 
(12
)
 
(2
)
Increases based on tax positions related to 2010
77

 
48

 
31

Changes related to settlements with taxing authorities
—

 
—

 
—

Decreases related to the lapse of statute of limitations
—

 
—

 
—

Unrecognized tax benefits - December 31, 2010
$
246

 
$
164

 
$
56

Increases based on tax positions prior to 2011
22

 
15

 
—

Decreases based on tax positions prior to 2011
(125
)
 
(63
)
 
(41
)
Increases based on tax positions related to 2011
17

 
13

 
—

Changes related to settlements with taxing authorities
(10
)
 
(5
)
 
(4
)
Decreases related to the lapse of statute of limitations
(2
)
 
—

 
—

Unrecognized tax benefits - December 31, 2011
$
148

 
$
124

 
$
11

Increases based on tax positions prior to 2012
5

 
4

 
—

Decreases based on tax positions prior to 2012
(13
)
 
(7
)
 
(1
)
Increases based on tax positions related to 2012
17

 
15

 
3

Changes related to settlements with taxing authorities
—

 
—

 
—

Decreases related to the lapse of statute of limitations
(1
)
 
—

 
—

Unrecognized tax benefits - December 31, 2012
$
156

 
$
136

 
$
13

Total unrecognized tax benefits that, if recognized, would affect the effective tax rates as of December 31, 2010
$
—

 
$
3

 
$
—

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
$
1

 
$
3

 
$
(1
)

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, 2010, 2011, and 2012, is as follows:
 
Ameren
 
Ameren Missouri
 
Ameren Illinois
Liability for interest - January 1, 2010
$
8

 
$
4

 
$
—

Interest charges for 2010
9

 
6

 
2

Liability for interest - December 31, 2010
$
17

 
$
10

 
$
2

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

Liability for interest - December 31, 2011
$
5

 
$
6

 
$
1

Interest charges for 2012
1

 
2

 
—

Liability for interest - December 31, 2012
$
6

 
$
8

 
$
1


As of December 31, 2010, 2011, and 2012, 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 Internal Revenue Service. 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 2010 are before the Appeals Office of the Internal Revenue Service. Ameren’s federal income tax return for the year 2011 is currently under examination.
It is reasonably possible that a settlement will be reached with the Appeals Office of the Internal Revenue Service in the next twelve months for the years 2007 through 2010. This settlement, primarily related to uncertain tax positions for capitalization versus currently deductible repair expense and research tax deductions, is expected to result in a decrease in uncertain tax benefits of approximately $143 million, $119 million, and $13 million for Ameren, Ameren Missouri and Ameren Illinois, respectively. In addition. it is reasonably possible that other events will occur during the next 12 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.
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.