Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes

NOTE 13 – 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, 2011, 2010, and 2009:

	Ameren			Ameren Missouri			Ameren Illinois			Genco
2011:
Statutory federal income tax rate:		35	%		35	%		35	%		35	%
Increases (decreases) from:
Production activities deduction		-			-			-			3
Depreciation differences		(1	)		(2	)		-			-
Amortization of investment tax credit		(1	)		(1	)		(1	)		(1	)
State tax		4			3			5			6
Tax credits		-			-			-			(1	)
Other permanent items(a)		-			1			-			-
Effective income tax rate		37	%		36	%		39	%		42	%
2010:
Statutory federal income tax rate:		35	%		35	%		35	%		35	%
Increases (decreases) from:
Non-deductible impairment of goodwill		32			-			-			(144	)
Production activities deduction		-			-			-			7
Depreciation differences		(4	)		(3	)		-			-
Amortization of investment tax credit		(2	)		(1	)		(1	)		4
State tax		8			3			5			(14	)
Reserve for uncertain tax positions		(1	)		-			-			(6	)
Tax credits		(3	)		-			-			13
Change in federal tax law(b)		3			1			-			(19	)
Other permanent items(c)		-			-			-			(1	)
Effective income tax rate		68	%		35	%		39	%		(125	)%
2009:
Statutory federal income tax rate:		35	%		35	%		35	%		35	%
Increases (decreases) from:
Depreciation differences		(1	)		(3	)		(1	)		-
Amortization of investment tax credit		(1	)		(1	)		(1	)		-
State tax		5			3			5			4
Reserve for uncertain tax positions		(1	)		-			-			-
Other permanent items(d)		(1	)		-			(1	)		(1	)
Tax credits		(1	)		(1	)		-			-
Effective income tax rate		35	%		33	%		37	%		38	%

(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 Bill of 2010.

(c) Permanent items are treated differently for book and tax purposes and primarily include nondeductible expenses for Genco.

(d) Permanent items are treated differently for book and tax purposes and primarily include Internal Revenue Code Section 199 production activity deductions for Ameren and Genco, company-owned life insurance for Ameren and Ameren Illinois, employee stock ownership plan dividends for Ameren, and nondeductible expenses for Ameren Illinois.

The following table presents the components of income tax expense (benefit) for the years ended December 31, 2011, 2010, and 2009:

	Ameren(a)			Ameren Missouri			Ameren Illinois			Genco
2011:
Current taxes:
Federal	$	(27	)	$	3		$	(24	)	$	(21	)
State		(5	)		2			(4	)		(7	)
Deferred taxes:
Federal		273			129			123			43
State		76			31			34			18
Deferred investment tax credits, amortization		(7	)		(4	)		(2	)		(1	)
Total income tax expense	$	310		$	161		$	127		$	32
2010:
Current taxes:
Federal	$	13		$	(14	)	$	(20	)	$	(5	)
State		10			(15	)		(5	)		6
Deferred taxes:
Federal		274			206			132			22
State		36			27			32			(2	)
Deferred investment tax credits, amortization		(8	)		(5	)		(2	)		(1	)
Total income tax expense	$	325		$	199		$	137		$	20
2009:
Current taxes:
Federal	$	(73	)	$	(117	)	$	(8	)	$	22
State		3			(31	)		14			14
Deferred taxes:
Federal		337			239			64			57
State		74			42			11			9
Deferred investment tax credits, amortization		(9	)		(5	)		(2	)		(1	)
Total income tax expense	$	332		$	128		$	79		$	101

(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, $4 million and $3 million for Ameren, Ameren Illinois and Genco, 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, $3 million and $- million for Ameren, Ameren Illinois, and Genco, respectively.

The following table presents the deferred tax assets and deferred tax liabilities recorded as a result of temporary differences at December 31, 2011, and 2010:

	Ameren(a)			Ameren Missouri			Ameren Illinois			Genco
2011:
Accumulated deferred income taxes, net liability (asset):
Plant related	$	3,811		$	2,134		$	1,003		$	457
Deferred intercompany tax gain/basis step-up		3			(1	)		55			(54	)
Regulatory assets, net		73			73			-			-
Deferred employee benefit costs		(367	)		(88	)		(109	)		(67	)
Purchase accounting		35			-			(27	)		15
ARO		(37	)		-			1			(25	)
Other		(223	)		6			(86	)		(22	)
Total net accumulated deferred income tax liabilities(b)	$	3,295		$	2,124		$	837		$	304
2010:
Accumulated deferred income taxes, net liability (asset):
Plant related	$	3,310		$	1,974		$	750		$	378
Deferred intercompany tax gain/basis step-up		2			(2	)		71			(68	)
Regulatory assets (liabilities), net		67			68			(1	)		-
Deferred employee benefit costs		(360	)		(87	)		(124	)		(45	)
Purchase accounting		106			-			41			17
ARO		(48	)		(9	)		1			(27	)
Other		(120	)		7			(57	)		10
Total net accumulated deferred income tax liabilities(c)	$	2,957		$	1,951		$	681		$	265

(a) Includes amounts for Ameren registrant and nonregistrant subsidiaries and intercompany eliminations.

(b) Includes $20 million, $8 million and $58 million as current assets recorded in the balance sheet for Ameren, Ameren Missouri and Ameren Illinois, respectively.

(c) Includes $43 million as current assets recorded in the balance sheet for Ameren Illinois. Includes $71 million, $43 million and $12 million as current liabilities recorded in the balance sheets for Ameren, Ameren Missouri and Genco, respectively.

The following table presents the components of deferred tax assets relating to net operating loss carryforwards and tax credit carryforwards at December 31, 2011:

	Ameren		Ameren Missouri		Ameren Illinois		Genco
Net operating loss carryforwards:
Federal(a)	$	136	$	50	$	33	$	8
State(b)		17		3		6		-
Total net operating loss carryforwards	$	153	$	53	$	39	$	8
Tax credit carryforwards:
Federal(c)	$	72	$	11	$	-	$	1
State(d)		28		1		-		4
Total tax credit carryforwards	$	100	$	12	$	-	$	5

(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 2012.

Uncertain Tax Positions

A reconciliation of the change in the unrecognized tax benefit balance during the years ended December 31, 2009, 2010, and 2011, is as follows:

	Ameren			Ameren Missouri			Ameren Illinois			Genco
Unrecognized tax benefits – January 1, 2009	$	110		$	20		$	-		$	48
Increases based on tax positions prior to 2009		90			76			-			9
Decreases based on tax positions prior to 2009		(84	)		(19	)		-			(31	)
Increases based on tax positions related to 2009		19			11			-			3
Changes related to settlements with taxing authorities		-			-			-			-
Decreases related to the lapse of statute of limitations		-			-			-			-
Unrecognized tax benefits – December 31, 2009	$	135		$	88		$	-		$	29
Increases based on tax positions prior to 2010		72			40			27			4
Decreases based on tax positions prior to 2010		(38	)		(12	)		(2	)		(16	)
Increases based on tax positions related to 2010		77			48			31			3
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		$	20
Increases based on tax positions prior to 2011		22			15			-			1
Decreases based on tax positions prior to 2011		(125	)		(63	)		(41	)		(12	)
Increases based on tax positions related to 2011		17			13			-			1
Changes related to settlements with taxing authorities		(10	)		(5	)		(4	)		-
Decreases related to the lapse of statute of limitations		(2	)		-			-			(1	)
Unrecognized tax benefits – December 31, 2011	$	148		$	124		$	11		$	9
Total unrecognized tax benefits (detriments) that, if recognized, would affect the effective tax rates as of December 31, 2009	$	6		$	3		$	-		$	-
Total unrecognized tax benefits that, if recognized, would affect the effective tax rates as of December 31, 2010	$	-		$	3		$	-		$	1
Total unrecognized tax benefits that, if recognized, would affect the effective tax rates as of December 31, 2011	$	1		$	1		$	-		$	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 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, 2009, 2010, and 2011, is as follows:

	Ameren			Ameren Missouri			Ameren Illinois			Genco
Liability for interest – January 1, 2009	$	10		$	2		$	-		$	4
Interest charges (income) for 2009		(2	)		2			-			(2	)
Liability for interest – December 31, 2009	$	8		$	4		$	-		$	2
Interest charges for 2010		9			6			2			-
Liability for interest – December 31, 2010	$	17		$	10		$	2		$	2
Interest income for 2011		(11	)		(3	)		(1	)		(1	)
Interest payment		(1	)		(1	)		-			-
Liability for interest – December 31, 2011	$	5		$	6		$	1		$	1

As of December 31, 2009, December 31, 2010, and December 31, 2011, the Ameren Companies have accrued no amount for penalties with respect to unrecognized tax benefits.

In the second quarter of 2011, a final settlement for the years 2005 and 2006 was reached with the Internal Revenue Service. It resulted in the reduction of uncertain tax liabilities by $39 million, $17 million, $12 million, and $4 million for Ameren, Ameren Missouri, Ameren Illinois and Genco, respectively. Ameren's federal income tax returns for the years 2007 through 2009 are before the Appeals Office of the Internal Revenue Service. Ameren's federal income tax return for the year 2010 is currently under examination.

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.

It is expected that a partial settlement will be reached with the Appeals Office of the Internal Revenue Service in the next twelve months for the years 2007 through 2009 that would result in a decrease in uncertain tax liabilities. 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 would be material to their results of operations, financial position, or liquidity.

Ameren Illinois Company [Member]

Income Taxes

NOTE 13 – 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, 2011, 2010, and 2009:

	Ameren			Ameren Missouri			Ameren Illinois			Genco
2011:
Statutory federal income tax rate:		35	%		35	%		35	%		35	%
Increases (decreases) from:
Production activities deduction		-			-			-			3
Depreciation differences		(1	)		(2	)		-			-
Amortization of investment tax credit		(1	)		(1	)		(1	)		(1	)
State tax		4			3			5			6
Tax credits		-			-			-			(1	)
Other permanent items(a)		-			1			-			-
Effective income tax rate		37	%		36	%		39	%		42	%
2010:
Statutory federal income tax rate:		35	%		35	%		35	%		35	%
Increases (decreases) from:
Non-deductible impairment of goodwill		32			-			-			(144	)
Production activities deduction		-			-			-			7
Depreciation differences		(4	)		(3	)		-			-
Amortization of investment tax credit		(2	)		(1	)		(1	)		4
State tax		8			3			5			(14	)
Reserve for uncertain tax positions		(1	)		-			-			(6	)
Tax credits		(3	)		-			-			13
Change in federal tax law(b)		3			1			-			(19	)
Other permanent items(c)		-			-			-			(1	)
Effective income tax rate		68	%		35	%		39	%		(125	)%
2009:
Statutory federal income tax rate:		35	%		35	%		35	%		35	%
Increases (decreases) from:
Depreciation differences		(1	)		(3	)		(1	)		-
Amortization of investment tax credit		(1	)		(1	)		(1	)		-
State tax		5			3			5			4
Reserve for uncertain tax positions		(1	)		-			-			-
Other permanent items(d)		(1	)		-			(1	)		(1	)
Tax credits		(1	)		(1	)		-			-
Effective income tax rate		35	%		33	%		37	%		38	%

(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 Bill of 2010.

(c) Permanent items are treated differently for book and tax purposes and primarily include nondeductible expenses for Genco.

(d) Permanent items are treated differently for book and tax purposes and primarily include Internal Revenue Code Section 199 production activity deductions for Ameren and Genco, company-owned life insurance for Ameren and Ameren Illinois, employee stock ownership plan dividends for Ameren, and nondeductible expenses for Ameren Illinois.

The following table presents the components of income tax expense (benefit) for the years ended December 31, 2011, 2010, and 2009:

	Ameren(a)			Ameren Missouri			Ameren Illinois			Genco
2011:
Current taxes:
Federal	$	(27	)	$	3		$	(24	)	$	(21	)
State		(5	)		2			(4	)		(7	)
Deferred taxes:
Federal		273			129			123			43
State		76			31			34			18
Deferred investment tax credits, amortization		(7	)		(4	)		(2	)		(1	)
Total income tax expense	$	310		$	161		$	127		$	32
2010:
Current taxes:
Federal	$	13		$	(14	)	$	(20	)	$	(5	)
State		10			(15	)		(5	)		6
Deferred taxes:
Federal		274			206			132			22
State		36			27			32			(2	)
Deferred investment tax credits, amortization		(8	)		(5	)		(2	)		(1	)
Total income tax expense	$	325		$	199		$	137		$	20
2009:
Current taxes:
Federal	$	(73	)	$	(117	)	$	(8	)	$	22
State		3			(31	)		14			14
Deferred taxes:
Federal		337			239			64			57
State		74			42			11			9
Deferred investment tax credits, amortization		(9	)		(5	)		(2	)		(1	)
Total income tax expense	$	332		$	128		$	79		$	101

(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, $4 million and $3 million for Ameren, Ameren Illinois and Genco, 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, $3 million and $- million for Ameren, Ameren Illinois, and Genco, respectively.

The following table presents the deferred tax assets and deferred tax liabilities recorded as a result of temporary differences at December 31, 2011, and 2010:

	Ameren(a)			Ameren Missouri			Ameren Illinois			Genco
2011:
Accumulated deferred income taxes, net liability (asset):
Plant related	$	3,811		$	2,134		$	1,003		$	457
Deferred intercompany tax gain/basis step-up		3			(1	)		55			(54	)
Regulatory assets, net		73			73			-			-
Deferred employee benefit costs		(367	)		(88	)		(109	)		(67	)
Purchase accounting		35			-			(27	)		15
ARO		(37	)		-			1			(25	)
Other		(223	)		6			(86	)		(22	)
Total net accumulated deferred income tax liabilities(b)	$	3,295		$	2,124		$	837		$	304
2010:
Accumulated deferred income taxes, net liability (asset):
Plant related	$	3,310		$	1,974		$	750		$	378
Deferred intercompany tax gain/basis step-up		2			(2	)		71			(68	)
Regulatory assets (liabilities), net		67			68			(1	)		-
Deferred employee benefit costs		(360	)		(87	)		(124	)		(45	)
Purchase accounting		106			-			41			17
ARO		(48	)		(9	)		1			(27	)
Other		(120	)		7			(57	)		10
Total net accumulated deferred income tax liabilities(c)	$	2,957		$	1,951		$	681		$	265

(a) Includes amounts for Ameren registrant and nonregistrant subsidiaries and intercompany eliminations.

(b) Includes $20 million, $8 million and $58 million as current assets recorded in the balance sheet for Ameren, Ameren Missouri and Ameren Illinois, respectively.

(c) Includes $43 million as current assets recorded in the balance sheet for Ameren Illinois. Includes $71 million, $43 million and $12 million as current liabilities recorded in the balance sheets for Ameren, Ameren Missouri and Genco, respectively.

The following table presents the components of deferred tax assets relating to net operating loss carryforwards and tax credit carryforwards at December 31, 2011:

	Ameren		Ameren Missouri		Ameren Illinois		Genco
Net operating loss carryforwards:
Federal(a)	$	136	$	50	$	33	$	8
State(b)		17		3		6		-
Total net operating loss carryforwards	$	153	$	53	$	39	$	8
Tax credit carryforwards:
Federal(c)	$	72	$	11	$	-	$	1
State(d)		28		1		-		4
Total tax credit carryforwards	$	100	$	12	$	-	$	5

(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 2012.

Uncertain Tax Positions

A reconciliation of the change in the unrecognized tax benefit balance during the years ended December 31, 2009, 2010, and 2011, is as follows:

	Ameren			Ameren Missouri			Ameren Illinois			Genco
Unrecognized tax benefits – January 1, 2009	$	110		$	20		$	-		$	48
Increases based on tax positions prior to 2009		90			76			-			9
Decreases based on tax positions prior to 2009		(84	)		(19	)		-			(31	)
Increases based on tax positions related to 2009		19			11			-			3
Changes related to settlements with taxing authorities		-			-			-			-
Decreases related to the lapse of statute of limitations		-			-			-			-
Unrecognized tax benefits – December 31, 2009	$	135		$	88		$	-		$	29
Increases based on tax positions prior to 2010		72			40			27			4
Decreases based on tax positions prior to 2010		(38	)		(12	)		(2	)		(16	)
Increases based on tax positions related to 2010		77			48			31			3
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		$	20
Increases based on tax positions prior to 2011		22			15			-			1
Decreases based on tax positions prior to 2011		(125	)		(63	)		(41	)		(12	)
Increases based on tax positions related to 2011		17			13			-			1
Changes related to settlements with taxing authorities		(10	)		(5	)		(4	)		-
Decreases related to the lapse of statute of limitations		(2	)		-			-			(1	)
Unrecognized tax benefits – December 31, 2011	$	148		$	124		$	11		$	9
Total unrecognized tax benefits (detriments) that, if recognized, would affect the effective tax rates as of December 31, 2009	$	6		$	3		$	-		$	-
Total unrecognized tax benefits that, if recognized, would affect the effective tax rates as of December 31, 2010	$	-		$	3		$	-		$	1
Total unrecognized tax benefits that, if recognized, would affect the effective tax rates as of December 31, 2011	$	1		$	1		$	-		$	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 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, 2009, 2010, and 2011, is as follows:

	Ameren			Ameren Missouri			Ameren Illinois			Genco
Liability for interest – January 1, 2009	$	10		$	2		$	-		$	4
Interest charges (income) for 2009		(2	)		2			-			(2	)
Liability for interest – December 31, 2009	$	8		$	4		$	-		$	2
Interest charges for 2010		9			6			2			-
Liability for interest – December 31, 2010	$	17		$	10		$	2		$	2
Interest income for 2011		(11	)		(3	)		(1	)		(1	)
Interest payment		(1	)		(1	)		-			-
Liability for interest – December 31, 2011	$	5		$	6		$	1		$	1

As of December 31, 2009, December 31, 2010, and December 31, 2011, the Ameren Companies have accrued no amount for penalties with respect to unrecognized tax benefits.

In the second quarter of 2011, a final settlement for the years 2005 and 2006 was reached with the Internal Revenue Service. It resulted in the reduction of uncertain tax liabilities by $39 million, $17 million, $12 million, and $4 million for Ameren, Ameren Missouri, Ameren Illinois and Genco, respectively. Ameren's federal income tax returns for the years 2007 through 2009 are before the Appeals Office of the Internal Revenue Service. Ameren's federal income tax return for the year 2010 is currently under examination.

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.

It is expected that a partial settlement will be reached with the Appeals Office of the Internal Revenue Service in the next twelve months for the years 2007 through 2009 that would result in a decrease in uncertain tax liabilities. 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 would be material to their results of operations, financial position, or liquidity.

Ameren Energy Generating Company [Member]

Income Taxes

NOTE 13 – 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, 2011, 2010, and 2009:

	Ameren			Ameren Missouri			Ameren Illinois			Genco
2011:
Statutory federal income tax rate:		35	%		35	%		35	%		35	%
Increases (decreases) from:
Production activities deduction		-			-			-			3
Depreciation differences		(1	)		(2	)		-			-
Amortization of investment tax credit		(1	)		(1	)		(1	)		(1	)
State tax		4			3			5			6
Tax credits		-			-			-			(1	)
Other permanent items(a)		-			1			-			-
Effective income tax rate		37	%		36	%		39	%		42	%
2010:
Statutory federal income tax rate:		35	%		35	%		35	%		35	%
Increases (decreases) from:
Non-deductible impairment of goodwill		32			-			-			(144	)
Production activities deduction		-			-			-			7
Depreciation differences		(4	)		(3	)		-			-
Amortization of investment tax credit		(2	)		(1	)		(1	)		4
State tax		8			3			5			(14	)
Reserve for uncertain tax positions		(1	)		-			-			(6	)
Tax credits		(3	)		-			-			13
Change in federal tax law(b)		3			1			-			(19	)
Other permanent items(c)		-			-			-			(1	)
Effective income tax rate		68	%		35	%		39	%		(125	)%
2009:
Statutory federal income tax rate:		35	%		35	%		35	%		35	%
Increases (decreases) from:
Depreciation differences		(1	)		(3	)		(1	)		-
Amortization of investment tax credit		(1	)		(1	)		(1	)		-
State tax		5			3			5			4
Reserve for uncertain tax positions		(1	)		-			-			-
Other permanent items(d)		(1	)		-			(1	)		(1	)
Tax credits		(1	)		(1	)		-			-
Effective income tax rate		35	%		33	%		37	%		38	%

(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 Bill of 2010.

(c) Permanent items are treated differently for book and tax purposes and primarily include nondeductible expenses for Genco.

(d) Permanent items are treated differently for book and tax purposes and primarily include Internal Revenue Code Section 199 production activity deductions for Ameren and Genco, company-owned life insurance for Ameren and Ameren Illinois, employee stock ownership plan dividends for Ameren, and nondeductible expenses for Ameren Illinois.

The following table presents the components of income tax expense (benefit) for the years ended December 31, 2011, 2010, and 2009:

	Ameren(a)			Ameren Missouri			Ameren Illinois			Genco
2011:
Current taxes:
Federal	$	(27	)	$	3		$	(24	)	$	(21	)
State		(5	)		2			(4	)		(7	)
Deferred taxes:
Federal		273			129			123			43
State		76			31			34			18
Deferred investment tax credits, amortization		(7	)		(4	)		(2	)		(1	)
Total income tax expense	$	310		$	161		$	127		$	32
2010:
Current taxes:
Federal	$	13		$	(14	)	$	(20	)	$	(5	)
State		10			(15	)		(5	)		6
Deferred taxes:
Federal		274			206			132			22
State		36			27			32			(2	)
Deferred investment tax credits, amortization		(8	)		(5	)		(2	)		(1	)
Total income tax expense	$	325		$	199		$	137		$	20
2009:
Current taxes:
Federal	$	(73	)	$	(117	)	$	(8	)	$	22
State		3			(31	)		14			14
Deferred taxes:
Federal		337			239			64			57
State		74			42			11			9
Deferred investment tax credits, amortization		(9	)		(5	)		(2	)		(1	)
Total income tax expense	$	332		$	128		$	79		$	101

(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, $4 million and $3 million for Ameren, Ameren Illinois and Genco, 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, $3 million and $- million for Ameren, Ameren Illinois, and Genco, respectively.

The following table presents the deferred tax assets and deferred tax liabilities recorded as a result of temporary differences at December 31, 2011, and 2010:

	Ameren(a)			Ameren Missouri			Ameren Illinois			Genco
2011:
Accumulated deferred income taxes, net liability (asset):
Plant related	$	3,811		$	2,134		$	1,003		$	457
Deferred intercompany tax gain/basis step-up		3			(1	)		55			(54	)
Regulatory assets, net		73			73			-			-
Deferred employee benefit costs		(367	)		(88	)		(109	)		(67	)
Purchase accounting		35			-			(27	)		15
ARO		(37	)		-			1			(25	)
Other		(223	)		6			(86	)		(22	)
Total net accumulated deferred income tax liabilities(b)	$	3,295		$	2,124		$	837		$	304
2010:
Accumulated deferred income taxes, net liability (asset):
Plant related	$	3,310		$	1,974		$	750		$	378
Deferred intercompany tax gain/basis step-up		2			(2	)		71			(68	)
Regulatory assets (liabilities), net		67			68			(1	)		-
Deferred employee benefit costs		(360	)		(87	)		(124	)		(45	)
Purchase accounting		106			-			41			17
ARO		(48	)		(9	)		1			(27	)
Other		(120	)		7			(57	)		10
Total net accumulated deferred income tax liabilities(c)	$	2,957		$	1,951		$	681		$	265

(a) Includes amounts for Ameren registrant and nonregistrant subsidiaries and intercompany eliminations.

(b) Includes $20 million, $8 million and $58 million as current assets recorded in the balance sheet for Ameren, Ameren Missouri and Ameren Illinois, respectively.

(c) Includes $43 million as current assets recorded in the balance sheet for Ameren Illinois. Includes $71 million, $43 million and $12 million as current liabilities recorded in the balance sheets for Ameren, Ameren Missouri and Genco, respectively.

The following table presents the components of deferred tax assets relating to net operating loss carryforwards and tax credit carryforwards at December 31, 2011:

	Ameren		Ameren Missouri		Ameren Illinois		Genco
Net operating loss carryforwards:
Federal(a)	$	136	$	50	$	33	$	8
State(b)		17		3		6		-
Total net operating loss carryforwards	$	153	$	53	$	39	$	8
Tax credit carryforwards:
Federal(c)	$	72	$	11	$	-	$	1
State(d)		28		1		-		4
Total tax credit carryforwards	$	100	$	12	$	-	$	5

(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 2012.

Uncertain Tax Positions

A reconciliation of the change in the unrecognized tax benefit balance during the years ended December 31, 2009, 2010, and 2011, is as follows:

	Ameren			Ameren Missouri			Ameren Illinois			Genco
Unrecognized tax benefits – January 1, 2009	$	110		$	20		$	-		$	48
Increases based on tax positions prior to 2009		90			76			-			9
Decreases based on tax positions prior to 2009		(84	)		(19	)		-			(31	)
Increases based on tax positions related to 2009		19			11			-			3
Changes related to settlements with taxing authorities		-			-			-			-
Decreases related to the lapse of statute of limitations		-			-			-			-
Unrecognized tax benefits – December 31, 2009	$	135		$	88		$	-		$	29
Increases based on tax positions prior to 2010		72			40			27			4
Decreases based on tax positions prior to 2010		(38	)		(12	)		(2	)		(16	)
Increases based on tax positions related to 2010		77			48			31			3
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		$	20
Increases based on tax positions prior to 2011		22			15			-			1
Decreases based on tax positions prior to 2011		(125	)		(63	)		(41	)		(12	)
Increases based on tax positions related to 2011		17			13			-			1
Changes related to settlements with taxing authorities		(10	)		(5	)		(4	)		-
Decreases related to the lapse of statute of limitations		(2	)		-			-			(1	)
Unrecognized tax benefits – December 31, 2011	$	148		$	124		$	11		$	9
Total unrecognized tax benefits (detriments) that, if recognized, would affect the effective tax rates as of December 31, 2009	$	6		$	3		$	-		$	-
Total unrecognized tax benefits that, if recognized, would affect the effective tax rates as of December 31, 2010	$	-		$	3		$	-		$	1
Total unrecognized tax benefits that, if recognized, would affect the effective tax rates as of December 31, 2011	$	1		$	1		$	-		$	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 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, 2009, 2010, and 2011, is as follows:

	Ameren			Ameren Missouri			Ameren Illinois			Genco
Liability for interest – January 1, 2009	$	10		$	2		$	-		$	4
Interest charges (income) for 2009		(2	)		2			-			(2	)
Liability for interest – December 31, 2009	$	8		$	4		$	-		$	2
Interest charges for 2010		9			6			2			-
Liability for interest – December 31, 2010	$	17		$	10		$	2		$	2
Interest income for 2011		(11	)		(3	)		(1	)		(1	)
Interest payment		(1	)		(1	)		-			-
Liability for interest – December 31, 2011	$	5		$	6		$	1		$	1

As of December 31, 2009, December 31, 2010, and December 31, 2011, the Ameren Companies have accrued no amount for penalties with respect to unrecognized tax benefits.

In the second quarter of 2011, a final settlement for the years 2005 and 2006 was reached with the Internal Revenue Service. It resulted in the reduction of uncertain tax liabilities by $39 million, $17 million, $12 million, and $4 million for Ameren, Ameren Missouri, Ameren Illinois and Genco, respectively. Ameren's federal income tax returns for the years 2007 through 2009 are before the Appeals Office of the Internal Revenue Service. Ameren's federal income tax return for the year 2010 is currently under examination.

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.

It is expected that a partial settlement will be reached with the Appeals Office of the Internal Revenue Service in the next twelve months for the years 2007 through 2009 that would result in a decrease in uncertain tax liabilities. 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 would be material to their results of operations, financial position, or liquidity.

Union Electric Company [Member]

Income Taxes

NOTE 13 – 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, 2011, 2010, and 2009:

	Ameren			Ameren Missouri			Ameren Illinois			Genco
2011:
Statutory federal income tax rate:		35	%		35	%		35	%		35	%
Increases (decreases) from:
Production activities deduction		-			-			-			3
Depreciation differences		(1	)		(2	)		-			-
Amortization of investment tax credit		(1	)		(1	)		(1	)		(1	)
State tax		4			3			5			6
Tax credits		-			-			-			(1	)
Other permanent items(a)		-			1			-			-
Effective income tax rate		37	%		36	%		39	%		42	%
2010:
Statutory federal income tax rate:		35	%		35	%		35	%		35	%
Increases (decreases) from:
Non-deductible impairment of goodwill		32			-			-			(144	)
Production activities deduction		-			-			-			7
Depreciation differences		(4	)		(3	)		-			-
Amortization of investment tax credit		(2	)		(1	)		(1	)		4
State tax		8			3			5			(14	)
Reserve for uncertain tax positions		(1	)		-			-			(6	)
Tax credits		(3	)		-			-			13
Change in federal tax law(b)		3			1			-			(19	)
Other permanent items(c)		-			-			-			(1	)
Effective income tax rate		68	%		35	%		39	%		(125	)%
2009:
Statutory federal income tax rate:		35	%		35	%		35	%		35	%
Increases (decreases) from:
Depreciation differences		(1	)		(3	)		(1	)		-
Amortization of investment tax credit		(1	)		(1	)		(1	)		-
State tax		5			3			5			4
Reserve for uncertain tax positions		(1	)		-			-			-
Other permanent items(d)		(1	)		-			(1	)		(1	)
Tax credits		(1	)		(1	)		-			-
Effective income tax rate		35	%		33	%		37	%		38	%

(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 Bill of 2010.

(c) Permanent items are treated differently for book and tax purposes and primarily include nondeductible expenses for Genco.

(d) Permanent items are treated differently for book and tax purposes and primarily include Internal Revenue Code Section 199 production activity deductions for Ameren and Genco, company-owned life insurance for Ameren and Ameren Illinois, employee stock ownership plan dividends for Ameren, and nondeductible expenses for Ameren Illinois.

The following table presents the components of income tax expense (benefit) for the years ended December 31, 2011, 2010, and 2009:

	Ameren(a)			Ameren Missouri			Ameren Illinois			Genco
2011:
Current taxes:
Federal	$	(27	)	$	3		$	(24	)	$	(21	)
State		(5	)		2			(4	)		(7	)
Deferred taxes:
Federal		273			129			123			43
State		76			31			34			18
Deferred investment tax credits, amortization		(7	)		(4	)		(2	)		(1	)
Total income tax expense	$	310		$	161		$	127		$	32
2010:
Current taxes:
Federal	$	13		$	(14	)	$	(20	)	$	(5	)
State		10			(15	)		(5	)		6
Deferred taxes:
Federal		274			206			132			22
State		36			27			32			(2	)
Deferred investment tax credits, amortization		(8	)		(5	)		(2	)		(1	)
Total income tax expense	$	325		$	199		$	137		$	20
2009:
Current taxes:
Federal	$	(73	)	$	(117	)	$	(8	)	$	22
State		3			(31	)		14			14
Deferred taxes:
Federal		337			239			64			57
State		74			42			11			9
Deferred investment tax credits, amortization		(9	)		(5	)		(2	)		(1	)
Total income tax expense	$	332		$	128		$	79		$	101

(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, $4 million and $3 million for Ameren, Ameren Illinois and Genco, 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, $3 million and $- million for Ameren, Ameren Illinois, and Genco, respectively.

The following table presents the deferred tax assets and deferred tax liabilities recorded as a result of temporary differences at December 31, 2011, and 2010:

	Ameren(a)			Ameren Missouri			Ameren Illinois			Genco
2011:
Accumulated deferred income taxes, net liability (asset):
Plant related	$	3,811		$	2,134		$	1,003		$	457
Deferred intercompany tax gain/basis step-up		3			(1	)		55			(54	)
Regulatory assets, net		73			73			-			-
Deferred employee benefit costs		(367	)		(88	)		(109	)		(67	)
Purchase accounting		35			-			(27	)		15
ARO		(37	)		-			1			(25	)
Other		(223	)		6			(86	)		(22	)
Total net accumulated deferred income tax liabilities(b)	$	3,295		$	2,124		$	837		$	304
2010:
Accumulated deferred income taxes, net liability (asset):
Plant related	$	3,310		$	1,974		$	750		$	378
Deferred intercompany tax gain/basis step-up		2			(2	)		71			(68	)
Regulatory assets (liabilities), net		67			68			(1	)		-
Deferred employee benefit costs		(360	)		(87	)		(124	)		(45	)
Purchase accounting		106			-			41			17
ARO		(48	)		(9	)		1			(27	)
Other		(120	)		7			(57	)		10
Total net accumulated deferred income tax liabilities(c)	$	2,957		$	1,951		$	681		$	265

(a) Includes amounts for Ameren registrant and nonregistrant subsidiaries and intercompany eliminations.

(b) Includes $20 million, $8 million and $58 million as current assets recorded in the balance sheet for Ameren, Ameren Missouri and Ameren Illinois, respectively.

(c) Includes $43 million as current assets recorded in the balance sheet for Ameren Illinois. Includes $71 million, $43 million and $12 million as current liabilities recorded in the balance sheets for Ameren, Ameren Missouri and Genco, respectively.

The following table presents the components of deferred tax assets relating to net operating loss carryforwards and tax credit carryforwards at December 31, 2011:

	Ameren		Ameren Missouri		Ameren Illinois		Genco
Net operating loss carryforwards:
Federal(a)	$	136	$	50	$	33	$	8
State(b)		17		3		6		-
Total net operating loss carryforwards	$	153	$	53	$	39	$	8
Tax credit carryforwards:
Federal(c)	$	72	$	11	$	-	$	1
State(d)		28		1		-		4
Total tax credit carryforwards	$	100	$	12	$	-	$	5

(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 2012.

Uncertain Tax Positions

A reconciliation of the change in the unrecognized tax benefit balance during the years ended December 31, 2009, 2010, and 2011, is as follows:

	Ameren			Ameren Missouri			Ameren Illinois			Genco
Unrecognized tax benefits – January 1, 2009	$	110		$	20		$	-		$	48
Increases based on tax positions prior to 2009		90			76			-			9
Decreases based on tax positions prior to 2009		(84	)		(19	)		-			(31	)
Increases based on tax positions related to 2009		19			11			-			3
Changes related to settlements with taxing authorities		-			-			-			-
Decreases related to the lapse of statute of limitations		-			-			-			-
Unrecognized tax benefits – December 31, 2009	$	135		$	88		$	-		$	29
Increases based on tax positions prior to 2010		72			40			27			4
Decreases based on tax positions prior to 2010		(38	)		(12	)		(2	)		(16	)
Increases based on tax positions related to 2010		77			48			31			3
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		$	20
Increases based on tax positions prior to 2011		22			15			-			1
Decreases based on tax positions prior to 2011		(125	)		(63	)		(41	)		(12	)
Increases based on tax positions related to 2011		17			13			-			1
Changes related to settlements with taxing authorities		(10	)		(5	)		(4	)		-
Decreases related to the lapse of statute of limitations		(2	)		-			-			(1	)
Unrecognized tax benefits – December 31, 2011	$	148		$	124		$	11		$	9
Total unrecognized tax benefits (detriments) that, if recognized, would affect the effective tax rates as of December 31, 2009	$	6		$	3		$	-		$	-
Total unrecognized tax benefits that, if recognized, would affect the effective tax rates as of December 31, 2010	$	-		$	3		$	-		$	1
Total unrecognized tax benefits that, if recognized, would affect the effective tax rates as of December 31, 2011	$	1		$	1		$	-		$	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 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, 2009, 2010, and 2011, is as follows:

	Ameren			Ameren Missouri			Ameren Illinois			Genco
Liability for interest – January 1, 2009	$	10		$	2		$	-		$	4
Interest charges (income) for 2009		(2	)		2			-			(2	)
Liability for interest – December 31, 2009	$	8		$	4		$	-		$	2
Interest charges for 2010		9			6			2			-
Liability for interest – December 31, 2010	$	17		$	10		$	2		$	2
Interest income for 2011		(11	)		(3	)		(1	)		(1	)
Interest payment		(1	)		(1	)		-			-
Liability for interest – December 31, 2011	$	5		$	6		$	1		$	1

As of December 31, 2009, December 31, 2010, and December 31, 2011, the Ameren Companies have accrued no amount for penalties with respect to unrecognized tax benefits.

In the second quarter of 2011, a final settlement for the years 2005 and 2006 was reached with the Internal Revenue Service. It resulted in the reduction of uncertain tax liabilities by $39 million, $17 million, $12 million, and $4 million for Ameren, Ameren Missouri, Ameren Illinois and Genco, respectively. Ameren's federal income tax returns for the years 2007 through 2009 are before the Appeals Office of the Internal Revenue Service. Ameren's federal income tax return for the year 2010 is currently under examination.

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.

It is expected that a partial settlement will be reached with the Appeals Office of the Internal Revenue Service in the next twelve months for the years 2007 through 2009 that would result in a decrease in uncertain tax liabilities. 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 would be material to their results of operations, financial position, or liquidity.