Duke Energy 2014 Annual Report Download - page 225

205
PART II
DUKE ENERGY CORPORATION • DUKE ENERGY CAROLINAS, LLC • PROGRESS ENERGY, INC. •
DUKE ENERGY PROGRESS, INC. • DUKE ENERGY FLORIDA, INC. • DUKE ENERGY OHIO, INC. • DUKE ENERGY INDIANA, INC.
Combined Notes to Consolidated Financial Statements – (Continued)
Statutory Rate Reconciliation
The following tables present a reconciliation of income tax expense at the U.S. federal statutory tax rate to the actual tax expense from continuing operations.
Year Ended December 31, 2014
(in millions)
Duke
Energy
Duke
Energy
Carolinas
Progress
Energy
Duke
Energy
Progress
Duke
Energy
Florida
Duke
Energy
Ohio
Duke
Energy
Indiana
Income tax expense, computed at the statutory rate of 35 percent $ 1,447 $ 581 $ 497 $ 263 $ 314 $ 39 $ 195
State income tax, net of federal income tax effect 59 17 49 25 34 3 10
Tax differential on foreign earnings(a) (110) — — — — — —
AFUDC equity income (47) (32) (9) (9) — (1) (5)
Renewable energy production tax credits (67) — — — — — —
International tax dividend 373 — — — — — —
Other items, net 14 22 3 6 1 2 (3)
Income tax expense from continuing operations $ 1,669 $ 588 $ 540 $ 285 $ 349 $ 43 $ 197
Effective tax rate 40.4% 35.4% 38.0% 37.9% 38.9% 38.9% 35.5%
(a) Includes a $57 million benefi t as a result of the merger of two Chilean subsidiaries and a change in income tax rates in various countries primarily relating to Peru.
During the fourth quarter of 2014, Duke Energy declared a taxable dividend of foreign earnings in the form of notes payable that will result in the repatriation of
approximately $2.7 billion of cash held and expected to be generated by International Energy over a period of up to 8 years. As a result of the decision to repatriate all
cumulative historical undistributed foreign earnings, during the fourth quarter of 2014, Duke Energy recorded U.S. income tax expense of approximately $373 million.
Duke Energy’s intention is to indefi nitely reinvest prospective undistributed earnings generated by Duke Energy’s foreign subsidiaries, and accordingly U.S. deferred
taxes will not be provided for those earnings.
Year Ended December 31, 2013
(in millions)
Duke
Energy
Duke
Energy
Carolinas
Progress
Energy
Duke
Energy
Progress
Duke
Energy
Florida
Duke
Energy
Ohio
Duke
Energy
Indiana
Income tax expense, computed at the statutory rate of 35 percent $ 1,328 $ 549 $ 361 $ 276 $ 188 $ 39 $ 203
State income tax, net of federal income tax effect 66 56 31 31 20 2 23
Tax differential on foreign earnings (49) — — — — — —
AFUDC equity income (55) (32) (18) (15) (3) — (5)
Renewable energy production tax credits (62) — — — — — —
Other items, net (23) 21 (1) (4) 8 2 2
Income tax expense (benefi t) from continuing operations $ 1,205 $ 594 $ 373 $ 288 $ 213 $ 43 $ 223
Effective tax rate 31.8% 37.8% 36.2% 36.5% 39.6% 39.1% 38.4%
Year Ended December 31, 2012
(in millions)
Duke
Energy
Duke
Energy
Carolinas
Progress
Energy
Duke
Energy
Progress
Duke
Energy
Florida
Duke
Energy
Ohio
Duke
Energy
Indiana
Income tax expense, computed at the statutory rate of 35 percent $ 782 $ 461 $ 185 $ 134 $ 145 $ 27 $ (43)
State income tax, net of federal income tax effect 65 34 33 1 14 2 1
Tax differential on foreign earnings (69) — — — — — —
AFUDC equity income (101) (54) (37) (24) (13) (2) (26)
Renewable energy production tax credits (25) — — — — — —
Other items, net (29) 12 (9) (1) 1 6 (5)
Income tax expense from continuing operations $ 623 $ 453 $ 172 $ 110 $ 147 $ 33 $ (73)
Effective tax rate 27.9% 34.3% 32.7% 28.7% 35.7% 42.9% 59.5%