DTE Energy 2011 Annual Report Download - page 23

21
(in Millions)
Property, plant and equipment
Pension and benefits
Net operating loss
Other comprehensive income
Other, net
Current deferred income tax assets
Long term deferred income tax liabilities
Deferred income tax liabilities
Deferred income tax assets
2011
$(430)
(154)
58
2
—
$(524)
$ 36
(560)
$(524)
$(919)
395
$(524)
2010
$(341)
(127)
76
1
(25)
$(416)
$ 38
(454)
$(416)
$(935)
519
$(416)
The above table excludes unamortized investment tax credits of $8 million and $9 million at December 31, 2011 and 2010,
respectively. Investment tax credits are deferred and amortized to income over the average life of the related property.
Uncertain Tax Positions
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(in Millions)
Balance at January 1
Reductions for tax positions of prior years
Settlements
Balance at December 31
2011
$ 2
(1)
—
$ 1
2010
$ 12
(1)
(9)
$ 2
Unrecognized tax benefits at December 31, 2011 and December 31, 2010, 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 its Consolidated Statements of Operations. The Company had insignificant amounts of accrued interest at December 31,
2011 and December 31, 2010. The Company had no accrued penalties pertaining to income taxes. We had an insignificant
interest benefit in relation to income tax for the year ended December 31, 2011 and $1 million interest benefit in relation to
income tax for the years ended December 31, 2010.
In 2010, DTE Energy and its subsidiaries settled a federal tax audit for the 2007 and 2008 tax years, which resulted in the
recognition of $9 million of unrecognized tax benefits by MichCon. The Company's federal income tax returns for 2009 and
subsequent years remain subject to examination by the IRS. The Company's Michigan Business Tax returns for 2008 and
subsequent years remain subject to examination by the State of Michigan.
Michigan Corporate Income Tax (MCIT)
On May 25, 2011, the Michigan Business Tax (MBT) was repealed and the MCIT was enacted and became effective January 1,
2012. The MCIT subjects corporations with business activity in Michigan to a 6 percent tax rate on an apportioned income tax
base and eliminates the modified gross receipts tax and nearly all credits available under the MBT. The MCIT also eliminated
the future deductions allowed under MBT that enabled companies to establish a one-time deferred tax asset upon enactment of
the MBT to offset deferred tax liabilities that resulted from enactment of the MBT.
As a result of the enactment of the MCIT, the net state deferred tax liability was remeasured to reflect the impact of the MCIT
tax rate on cumulative temporary differences expected to reverse after the effective date. The net impact of this remeasurement
was a decrease in deferred income tax liabilities of $6 million that was offset against the regulatory asset established upon the
enactment of the MBT. Due to the elimination of the future tax deductions allowed under the MBT, the one-time MBT
deferred tax asset that was established upon the enactment of the MBT has been remeasured to zero. The net impact of this