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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes On December 22, 2017, tax reform legislation was signed into law which, among other things, reduced the federal corporate income tax rate from 35% to 21% effective January 1, 2018. As a result, NEE, including FPL, revalued its deferred income taxes as of December 31, 2017. At December 31, 2017, the revaluation reduced NEE’s net deferred income tax liabilities by approximately $6.5 billion, of which $4.5 billion related to net deferred income tax liabilities at FPL and the remaining $2 billion related to net deferred income tax liabilities at NEER. The $2 billion reduction in NEER’s deferred income tax liabilities increased NEER’s 2017 net income. The $4.5 billion reduction in FPL’s deferred income tax liabilities was recorded as a regulatory liability. The U.S. Department of Treasury has also released proposed regulations related to the business interest expense limitations and foreign tax credits associated with tax reform. These proposed regulations are not final and are subject to change in the regulatory review process. The components of income taxes are as follows:
| NEE |  | FPL
| Years Ended December 31, |  | Years Ended December 31,
| 2019 |  | 2018 |  | 2017 |  | 2019 |  | 2018 |  | 2017
| (millions)
Federal: |  |  |  |  |  |  |  |  |  |  |
Current | $ | 167 |  |  | $ | 30 |  |  | $ | 100 |  |  | $ | 348 |  |  | $ | 251 |  |  | $ | 168 |
Deferred | 115 |  |  | 1,153 |  |  | (1,047 | ) |  | (29 | ) |  | 134 |  |  | 776 |
Total federal | 282 |  |  | 1,183 |  |  | (947 | ) |  | 319 |  |  | 385 |  |  | 944 |
State: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current | 23 |  |  | 63 |  |  | 88 |  |  | 49 |  |  | 91 |  |  | 29 |
Deferred | 143 |  |  | 330 |  |  | 199 |  |  | 73 |  |  | 63 |  |  | 133 |
Total state | 166 |  |  | 393 |  |  | 287 |  |  | 122 |  |  | 154 |  |  | 162 |
Total income tax expense (benefit) | $ | 448 |  |  | $ | 1,576 |  |  | $ | (660 | ) |  | $ | 441 |  |  | $ | 539 |  |  | $ | 1,106 |
A reconciliation between the effective income tax rates and the applicable statutory rate is as follows:
| NEE |  | FPL
| Years Ended December 31, |  | Years Ended December 31,
| 2019 |  | 2018 |  | 2017 |  | 2019 |  | 2018 |  | 2017
Statutory federal income tax rate | 21.0 | % |  | 21.0 | % |  | 35.0 | % |  | 21.0 | % |  | 21.0 | % |  | 35.0 | %
Increases (reductions) resulting from: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
State income taxes - net of federal income tax benefit | 3.4 |  |  | 4.2 |  |  | 2.9 |  |  | 3.5 |  |  | 4.5 |  |  | 3.5 |
Taxes attributable to noncontrolling interests | 2.1 |  |  | 2.5 |  |  | — |  |  | — |  |  | — |  |  | — |
Tax reform rate change | — |  |  | — |  |  | (41.3 | ) |  | — |  |  | — |  |  | (0.5 | )
PTCs and ITCs - NEER | (7.2 | ) |  | (3.0 | ) |  | (8.4 | ) |  | — |  |  | — |  |  | — |
Amortization of deferred regulatory credit(a) | (6.2 | ) |  | (1.8 | ) |  | — |  |  | (8.1 | ) |  | (5.0 | ) |  | (0.1 | )
Convertible ITCs - NEER | — |  |  | — |  |  | 0.6 |  |  | — |  |  | — |  |  | — |
Other - net | (1.4 | ) |  | (1.5 | ) |  | (3.0 | ) |  | (0.5 | ) |  | (0.6 | ) |  | (0.9 | )
Effective income tax rate | 11.7 | % |  | 21.4 | % |  | (14.2 | )% |  | 15.9 | % |  | 19.9 | % |  | 37.0 | %
_________________________
(a) | 2019 reflects an adjustment of approximately $83 million recorded by FPL to reduce income tax expense for the cumulative amortization of excess deferred income taxes from January 1, 2018 as a result of a FPSC order in connection with its review of impacts associated with tax reform. One of the provisions of the order requires FPL to amortize approximately $870 million of its excess deferred income taxes over a period not to exceed ten years.
The income tax effects of temporary differences giving rise to consolidated deferred income tax liabilities and assets are as follows:
| NEE |  | FPL
| December 31, |  | December 31,
| 2019 |  | 2018 |  | 2019 |  | 2018
| (millions)
Deferred tax liabilities: |  |  |  |  |  |  |
Property-related | $ | 10,133 |  |  | $ | 9,315 |  |  | $ | 6,394 |  |  | $ | 6,113 |
Pension | 417 |  |  | 374 |  |  | 374 |  |  | 357 |
Investments in partnerships and joint ventures | 2,019 |  |  | 1,925 |  |  | — |  |  | — |
Other | 1,618 |  |  | 1,505 |  |  | 685 |  |  | 791 |
Total deferred tax liabilities | 14,187 |  |  | 13,119 |  |  | 7,453 |  |  | 7,261 |
Deferred tax assets and valuation allowance: |  |  |  |  |  |  |
Decommissioning reserves | 317 |  |  | 313 |  |  | 286 |  |  | 278 |
Net operating loss carryforwards | 380 |  |  | 350 |  |  | 2 |  |  | 3 |
Tax credit carryforwards | 3,406 |  |  | 3,259 |  |  | — |  |  | — |
ARO and accrued asset removal costs | 368 |  |  | 310 |  |  | 273 |  |  | 237 |
Regulatory liabilities | 1,335 |  |  | 1,277 |  |  | 1,219 |  |  | 1,283 |
Other | 515 |  |  | 751 |  |  | 258 |  |  | 295 |
Valuation allowance(a) | (285 | ) |  | (273 | ) |  | — |  |  | — |
Net deferred tax assets | 6,036 |  |  | 5,987 |  |  | 2,038 |  |  | 2,096 |
Net deferred income taxes | $ | 8,151 |  |  | $ | 7,132 |  |  | $ | 5,415 |  |  | $ | 5,165 |
______________________
(a) | Reflects a valuation allowance related to the solar projects in Spain that completely offsets the related deferred taxes, as well as deferred state tax credits and state operating loss carryforwards.
Deferred tax assets and liabilities are included on the consolidated balance sheets as follows:
| NEE |  | FPL
| December 31, |  | December 31,
| 2019 |  | 2018 |  | 2019 |  | 2018
|  |  | (millions) |  |
Noncurrent other assets | $ | 210 |  |  | $ | 235 |  |  | $ | — |  |  | $ | — |
Deferred income taxes - noncurrent liabilities | (8,361 | ) |  | (7,367 | ) |  | (5,415 | ) |  | (5,165 | )
Net deferred income taxes | $ | (8,151 | ) |  | $ | (7,132 | ) |  | $ | (5,415 | ) |  | $ | (5,165 | )
The components of NEE's deferred tax assets relating to net operating loss carryforwards and tax credit carryforwards at December 31, 2019 are as follows:
| Amount |  | Expiration Dates
| (millions) |  |
Net operating loss carryforwards: |  |  |
State | $ | 304 |  |  | 2020-2039
Foreign | 76 |  | (a) | 2020-2039
Net operating loss carryforwards | $ | 380 |  |  |
Tax credit carryforwards: |  |  |
Federal | $ | 3,060 |  |  | 2029-2039
State | 344 |  | (b) | 2020-2044
Foreign | 2 |  |  | 2034-2039
Tax credit carryforwards | $ | 3,406 |  |  |
______________________
(a) | Includes $58 million of net operating loss carryforwards with an indefinite expiration period.
(b) Includes $188 million of ITC carryforwards with an indefinite expiration period.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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