DTE Energy 2009 Annual Report Download - page 26

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24
(in Millions)
2009
2008
2007
Current income taxes
Federal
$ (21)
$ (30)
$ 16
State and other income tax expense
4
4
—
Total current income taxes
(17)
(26)
16
Deferred federal and other income tax expense
Federal
56
63
7
State and other income tax expense
1
1
—
Total deferred income taxes
57
64
7
Total
$ 40
$ 38
$ 23
Investment tax credits are deferred and amortized to income over the average life of the related property.
Deferred tax assets and liabilities are recognized for the estimated future tax effect of temporary differences between the tax basis of
assets or liabilities and the reported amounts in the financial statements. Deferred tax assets and liabilities are classified as current or
noncurrent according to the classification of the related assets or liabilities. Deferred tax assets and liabilities not related to assets or
liabilities are classified according to the expected reversal date of the temporary differences. Consistent with rate making treatment,
deferred taxes are offset in the table below for temporary differences which have related regulatory assets and liabilities.
Deferred income tax assets (liabilities) were comprised of the following at December 31:
(in Millions)
2009
2008
Property, plant and equipment
$ (201)
$ (150)
Pension and benefits
(108)
(91)
Other comprehensive income
1
1
Other, net
(9)
(10)
$ (317)
$ (250)
Current deferred income tax assets
$ 46
$ 40
Long term deferred income tax liabilities
(363)
(290)
$ (317)
$ (250)
Deferred income tax liabilities
$ (797)
$ (704)
Deferred income tax assets
480
454
$ (317)
$ (250)
The above table excludes unamortized investment tax credits of $10 million and $11 million at December 31, 2009 and 2008,
respectively.
Uncertain Tax Positions
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(in Millions)
2009
2008
Balance at January 1
$ 11
$ —
Additions for tax positions of current years
2
11
Reductions for tax positions of prior years
(1)
—
Balance at December 31
$ 12
$ 11
Unrecognized tax benefits at December 31, 2009, if recognized, would not have a significant impact on our effective rate.
The Company recognizes interest and penalties pertaining to income taxes in Interest expense and Other expenses, respectively, on our
Consolidated Statements of Operations. We had $1 million of accrued interest at December 31, 2009 and none at December 31, 2008.
We had no accrued penalties pertaining to income taxes at December 31, 2009 and December 31, 2008. We had $1 million interest