DTE Energy 2012 Annual Report Download - page 85

Table of Contents





Property, plant and equipment 
$(3,131)
Securitized regulatory assets 
(360)
Alternative minimum tax credit carry-forwards 
294
Merger basis differences 
50
Pension and benefits 
(39)
Other comprehensive income 
99
Derivative assets and liabilities 
64
State net operating loss and credit carry-forwards 
30
Other 
(45)

(3,038)
Less valuation allowance 
(27)

$(3,065)
Current deferred income tax assets 
$51
Long-term deferred income tax liabilities 
(3,116)

$(3,065)
Deferred income tax assets 
$1,048
Deferred income tax liabilities 
(4,113)

$(3,065)
Production tax credits earned in prior years but not utilized totaled $ 254 million and are carried forward indefinitely as alternative minimum tax credits.
The majority of the production tax credits earned, including all of those from our synfuel projects, were generated from projects that had received a private
letter ruling (PLR) from the Internal Revenue Service (IRS). These PLRs provide assurance as to the appropriateness of using these credits to offset taxable
income, however, these tax credits are subject to IRS audit and adjustment.
The above table excludes deferred tax liabilities associated with unamortized investment tax credits that are shown separately on the Consolidated
Statements of Financial Position. Investment tax credits are deferred and amortized to income over the average life of the related property.
The Company has state deferred tax assets related to net operating loss and credit carry-forwards of $ 37 million and $30 million at December 31, 2012
and 2011, respectively. The state net operating loss and credit carry-forwards expire from 2013 through 2031. The Company has recorded valuation
allowances at December 31, 2012 and 2011 of approximately $33 million and $27 million, respectively, with respect to these deferred tax assets. In assessing
the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be
realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary
differences become deductible.
Uncertain Tax Positions
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:




Balance at January 1  
$28
$ 81
Additions for tax positions of prior years 
27
4
Reductions for tax positions of prior years 
(4)
(4)
Additions for tax positions of current year 
1
—
Settlements 
(3)
(53)
Lapse of statute of limitations 
(1)
—
Balance at December 31 
$48
$28
The Company had $3 million and $4 million of unrecognized tax benefits at December 31, 2012 and at December 31, 2011, respectively, that, if
recognized, would favorably impact its effective tax rate. During the next twelve months, it is reasonably possible that the Company will settle certain federal
and state tax examinations and audits. As a result, the
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