Duke Energy 2015 Annual Report Download - page 225

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PART II
DUKE ENERGY CORPORATION • DUKE ENERGY CAROLINAS, LLC • PROGRESS ENERGY, INC. •
DUKE ENERGY PROGRESS, LLC. • DUKE ENERGY FLORIDA, LLC. • DUKE ENERGY OHIO, INC. • DUKE ENERGY INDIANA, INC.
Combined Notes to Consolidated Financial Statements – (Continued)
December 31, 2014
(in millions)
Duke
Energy
Duke
Energy
Carolinas
Progress
Energy
Duke
Energy
Progress
Duke
Energy
Florida
Duke
Energy
Ohio
Duke
Energy
Indiana
Deferred credits and other liabilities $ 188 $ 53 $ 108 $ 28 $ 78 $ (8) $ 12
Capital lease obligations 63 10 — — — — 2
Pension, post-retirement and other employee benefits 546 4 188 96 93 17 43
Progress Energy merger purchase accounting adjustments(a) 1,124 — — — — — —
Tax credits and NOL carryforwards 3,540 157 980 91 252 38 260
Investments and other assets — — — — — 14 —
Other — 12 — 55 — 35 11
Valuation allowance (184) — (13) (1) — — —
Total deferred income tax assets 5,277 236 1,263 269 423 96 328
Investments and other assets (1,625) (1,051) (427) (232) (245) — (4)
Accelerated depreciation rates (11,715) (4,046) (3,284) (2,030) (1,252) (1,660) (1,603)
Regulatory assets and deferred debits, net (3,694) (953) (1,602) (809) (792) (141) (106)
Other (44) — (151) — (246) — —
Total deferred income tax liabilities (17,078) (6,050) (5,464) (3,071) (2,535) (1,801) (1,713)
Net deferred income tax liabilities $(11,801) $(5,814) $(4,201) $(2,802) $(2,112) $(1,705) $(1,385)
(a) Primarily related to capital lease obligations and debt fair value adjustments.
On July 23, 2013, HB 998 was signed into law. HB 998 reduces the
North Carolina corporate income tax rate from a statutory 6.9 percent to
6.0 percent in January 2014 with a further reduction to 5.0 percent in January
2015. Duke Energy recorded a net reduction of approximately $145 million
to its North Carolina deferred tax liability in the third quarter of 2013. The
significant majority of this deferred tax liability reduction was offset by recording
a regulatory liability pending NCUC determination of the disposition of the
amounts related to Duke Energy Carolinas and Duke Energy Progress. The
impact of HB 998 did not have a significant impact on the financial position,
results of operation, or cash flows of Duke Energy, Duke Energy Carolinas,
Progress Energy or Duke Energy Progress.
On August 6, 2015, pursuant to N.C. Gen. Stat. 105-130.3C, the North
Carolina Department of Revenue announced the North Carolina corporate
income tax rate would be reduced from a statutory rate of 5.0 percent to
4.0 percent beginning January 1, 2016. Duke Energy recorded a net reduction of
approximately $95 million to its North Carolina deferred tax liability in the third
quarter of 2015. The significant majority of this deferred tax liability reduction
was offset by recording a regulatory liability pending NCUC determination of
the disposition of amounts related to Duke Energy Carolinas and Duke Energy
Progress. The impact did not have a significant impact on the financial position,
results of operation, or cash flows of Duke Energy, Duke Energy Carolinas,
Progress Energy or Duke Energy Progress.
Balance Sheet Classification of Deferred Taxes
As discussed in Note 1, the FASB issued revised accounting guidance for the Balance Sheet classification of deferred taxes. As shown in the table below, all
deferred tax assets and liabilities are presented as noncurrent as of December 31, 2015. However, for December 31, 2014, the revised guidance was not applied. As a
result, a portion of deferred tax assets and liabilities is shown as current at December 31, 2014.
December 31, 2015
(in millions)
Duke
Energy
Duke
Energy
Carolinas
Progress
Energy
Duke
Energy
Progress
Duke
Energy
Florida
Duke
Energy
Ohio
Duke
Energy
Indiana
Investments and Other Assets: Other $ 80 $ — $ — $ — $ — $ — $ —
Deferred Credits and Other Liabilities: Deferred income taxes (12,705) (6,146) (4,790) (3,027) (2,460) (1,407) (1,657)
Net deferred income tax liabilities $(12,625) $(6,146) $(4,790) $(3,027) $(2,460) $(1,407) $(1,657)