DTE Energy 2009 Annual Report Download - page 25

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23
Other
The Company is unable to predict the outcome of the unresolved regulatory matters discussed herein. Resolution of these matters is
dependent upon future MPSC orders and appeals, which may materially impact the financial position, results of operations and cash
flows of the Company.
NOTE 10 — INCOME TAXES
Income Tax Summary
We are part of the consolidated federal income tax return of DTE Energy. Our federal income tax expense is determined on an
individual company basis with no allocation of tax benefits or expenses from other affiliates of DTE Energy. We have an income tax
receivable of $38 million at December 31, 2009, and an income tax payable of $2 million at December 31, 2008 due from/to DTE
Energy.
Total income tax expense varied from the statutory federal income tax rate for the following reasons:
(Dollars in Millions)
2009
2008
2007
Income tax expense at 35% statutory rate
$ 46
$ 41
$ 33
Investment tax credit
(1)
(1)
(1)
Depreciation
(7)
(7)
(7)
Employee Stock Ownership Plan dividends
(1)
(1)
(1)
Medicare Part D subsidy
(1)
(1)
(1)
State and local income taxes, net of federal benefit
3
3
—
Life insurance trust
—
3
(1)
Other, net
1
1
1
Total
$ 40
$ 38
$ 23
Effective income tax rate
30.0%
32.2%
24.5%
Components of income tax expense (benefit) were as follows: