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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Tax Act On December 22, 2017, President Trump signed the Tax Act into law. Among other provisions, the Tax Act lowered the corporate federal income tax rate from 35 to 21 percent, limits interest deductions outside of regulated utility operations, requires the normalization of excess deferred taxes associated with property under the average rate assumption method as a prerequisite to qualifying for accelerated depreciation and repealed the federal manufacturing deduction. The Tax Act also repealed the corporate AMT and stipulates a refund of 50 percent of remaining AMT credit carryforwards (to the extent the credits exceed regular tax for the year) for tax years 2018, 2019 and 2020 with all remaining AMT credits to be refunded in tax year 2021. On December 22, 2017, the SEC staff issued SAB 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, which provides guidance on accounting for the Tax Act’s impact. SAB 118 provides a measurement period, which in no case should extend beyond one year from the Tax Act enactment date, during which a company acting in good faith may complete the accounting for the impacts of the Tax Act under ASC Topic 740. In accordance with SAB 118, a company must reflect the income tax effects of the Tax Act in the reporting period in which the accounting under ASC Topic 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete, a company can determine a reasonable estimate for those effects and record a provisional estimate in the financial statements in the first reporting period in which a reasonable estimate can be determined. As of December 31, 2018, the accounting for the effects of the Tax Act is complete. During the year ended December 31, 2018, Duke Energy recorded the following measurement period adjustments in accordance with SAB 118:
• | Additional tax expense of $23 million related to the completion of the analysis of Duke Energy’s existing regulatory liability related to deferred taxes;
• | A $10 million tax benefit for the remeasurement of deferred tax assets and deferred tax liabilities primarily related to the guidance on bonus depreciation issued by the IRS in August 2018 affecting the computation of the Company's 2017 Federal income tax liability;
• | Additional tax expense of $7 million related to the portion of the deferred tax asset as of December 31, 2017, that represents nondeductible long-term incentives under the Tax Act’s limitation on the deductibility of executive compensation; and
• | During the fourth quarter of 2018, the Company released the $76 million valuation allowance that it recorded in the first quarter of 2018 as a result of additional guidance published by the IRS that stated refundable AMT credits would not be subject to sequestration.
• | The majority of Duke Energy’s operations are regulated and it is expected that the Subsidiary Registrants will ultimately pass on the savings associated with the amount representing the remeasurement of deferred tax balances related to regulated operations to customers. For Duke Energy's regulated operations, where the reduction is expected to be returned to customers in future rates, the remeasurement has been deferred as a regulatory liability. During 2018, Duke Energy recorded an additional regulatory liability of $83 million, representing the revaluation of those deferred tax balances. The Subsidiary Registrants continue to respond to requests from regulators in various jurisdictions to determine the timing and magnitude of savings they will pass on to customers.
In addition, during 2018 Duke Energy reclassified $573 million of AMT credit carryforwards from noncurrent deferred tax liabilities to a current federal income tax receivable as the Company expects to receive this amount via a refund from the IRS in 2019, based on the expected filing of Duke Energy's 2018 income tax return in the second quarter of 2019. Income Tax Expense Components of Income Tax Expense
| Year Ended December 31, 2018
|  | Duke |  |  | Duke |  | Duke |  | Duke |  | Duke |  |
| Duke |  | Energy |  | Progress |  | Energy |  | Energy |  | Energy |  | Energy |  |
(in millions) | Energy |  | Carolinas |  | Energy |  | Progress |  | Florida |  | Ohio |  | Indiana |  | Piedmont |
Current income taxes |  |  |  |  |  |  |  |
Federal | $ | (647 | ) | $ | (8 | ) | $ | (135 | ) | $ | (71 | ) | $ | (49 | ) | $ | 20 |  | $ | 29 |  | $ | 67 |
State | (11 | ) | 6 |  | (5 | ) | (5 | ) | (10 | ) | (1 | ) | 3 |  | 1 |
Foreign | 3 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total current income taxes | (655 | ) | (2 | ) | (140 | ) | (76 | ) | (59 | ) | 19 |  | 32 |  | 68 |
Deferred income taxes |  |  |  |  |  |  |  |
Federal | 1,064 |  | 299 |  | 341 |  | 256 |  | 115 |  | 21 |  | 74 |  | (36 | )
State | 49 |  | 11 |  | 20 |  | (17 | ) | 45 |  | 3 |  | 22 |  | 5 |
Total deferred income taxes(a)(b) | 1,113 |  | 310 |  | 361 |  | 239 |  | 160 |  | 24 |  | 96 |  | (31 | )
Investment tax credit amortization | (10 | ) | (5 | ) | (3 | ) | (3 | ) | — |  | — |  | — |  | — |
Income tax expense from continuing operations | 448 |  | 303 |  | 218 |  | 160 |  | 101 |  | 43 |  | 128 |  | 37 |
Tax benefit from discontinued operations | (26 | ) | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total income tax expense included in Consolidated Statements of Operations | $ | 422 |  | $ | 303 |  | $ | 218 |  | $ | 160 |  | $ | 101 |  | $ | 43 |  | $ | 128 |  | $ | 37 |
(a) | Includes benefits of NOL carryforwards and tax credit carryforwards of $22 million at Duke Energy Carolinas, $293 million at Progress Energy, $59 million at Duke Energy Progress, $219 million at Duke Energy Florida, $17 million at Duke Energy Ohio, $21 million at Duke Energy Indiana and $39 million at Piedmont. In addition, total deferred income taxes includes utilization of NOL carryforwards and tax credit carryforwards of $18 million at Duke Energy.
(b) | For the year ended December 31, 2018, the Company has revised the December 31, 2017, estimates of the income tax effects of the Tax Act, in accordance with SAB 118. See the Statutory Rate Reconciliation section below for additional information on the Tax Act's impact on income tax expense.
| Year Ended December 31, 2017 |
|  | Duke |  |  | Duke |  | Duke |  | Duke |  | Duke |  |
| Duke |  | Energy |  | Progress |  | Energy |  | Energy |  | Energy |  | Energy |  |
(in millions) | Energy |  | Carolinas |  | Energy |  | Progress |  | Florida |  | Ohio |  | Indiana |  | Piedmont |
Current income taxes |  |  |  |  |  |  |  |
Federal | $ | (247 | ) | $ | 221 |  | $ | (436 | ) | $ | (95 | ) | $ | (188 | ) | $ | (37 | ) | $ | 128 |  | $ | (90 | )
State | 4 |  | 20 |  | (5 | ) | 2 |  | (11 | ) | 2 |  | 21 |  | (3 | )
Foreign | 3 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total current income taxes | (240 | ) | 241 |  | (441 | ) | (93 | ) | (199 | ) | (35 | ) | 149 |  | (93 | )
Deferred income taxes |  |  |  |  |  |  |  |
Federal | 1,344 |  | 381 |  | 664 |  | 378 |  | 194 |  | 99 |  | 138 |  | 147 |
State | 102 |  | 35 |  | 44 |  | 10 |  | 51 |  | (4 | ) | 14 |  | 8 |
Total deferred income taxes(a)(b) | 1,446 |  | 416 |  | 708 |  | 388 |  | 245 |  | 95 |  | 152 |  | 155 |
Investment tax credit amortization | (10 | ) | (5 | ) | (3 | ) | (3 | ) | — |  | (1 | ) | — |  | — |
Income tax expense from continuing operations | 1,196 |  | 652 |  | 264 |  | 292 |  | 46 |  | 59 |  | 301 |  | 62 |
Tax benefit from discontinued operations | (6 | ) | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total income tax expense included in Consolidated Statements of Operations | $ | 1,190 |  | $ | 652 |  | $ | 264 |  | $ | 292 |  | $ | 46 |  | $ | 59 |  | $ | 301 |  | $ | 62 |
(a) | Includes utilization of NOL carryforwards and tax credit carryforwards of $428 million at Duke Energy, $74 million at Progress Energy, $36 million at Duke Energy Florida, $17 million at Duke Energy Ohio, $42 million at Duke Energy Indiana and $79 million at Piedmont. In addition, total deferred income taxes includes benefits of NOL carryforwards and tax credit carryforwards of $10 million at Duke Energy Carolinas and $1 million at Duke Energy Progress.
(b) | As a result of the Tax Act, Duke Energy's deferred tax assets and liabilities were revalued as of December 31, 2017. See the Statutory Rate Reconciliation section below for additional information on the Tax Act's impact on income tax expense.
| Year Ended December 31, 2016
|  | Duke |  |  | Duke |  | Duke |  | Duke |  | Duke |
| Duke |  | Energy |  | Progress |  | Energy |  | Energy |  | Energy |  | Energy |
(in millions) | Energy |  | Carolinas |  | Energy |  | Progress |  | Florida |  | Ohio |  | Indiana |
Current income taxes |  |  |  |  |  |  |
Federal | $ | — |  | $ | 139 |  | $ | 15 |  | $ | (59 | ) | $ | 76 |  | $ | (7 | ) | $ | 7 |
State | (15 | ) | 25 |  | (19 | ) | (25 | ) | 22 |  | (13 | ) | 6 |
Foreign | 2 |  | — |  | — |  | — |  | — |  | — |  | — |
Total current income taxes | (13 | ) | 164 |  | (4 | ) | (84 | ) | 98 |  | (20 | ) | 13 |
Deferred income taxes |  |  |  |  |  |  |
Federal | 1,064 |  | 430 |  | 486 |  | 350 |  | 199 |  | 88 |  | 202 |
State | 117 |  | 45 |  | 50 |  | 40 |  | 25 |  | 11 |  | 11 |
Total deferred income taxes(a) | 1,181 |  | 475 |  | 536 |  | 390 |  | 224 |  | 99 |  | 213 |
Investment tax credit amortization | (12 | ) | (5 | ) | (5 | ) | (5 | ) | — |  | (1 | ) | (1 | )
Income tax expense from continuing operations | 1,156 |  | 634 |  | 527 |  | 301 |  | 322 |  | 78 |  | 225 |
Tax (benefit) expense from discontinued operations | (30 | ) | — |  | 1 |  | — |  | — |  | (36 | ) | — |
Total income tax expense included in Consolidated Statements of Operations | $ | 1,126 |  | $ | 634 |  | $ | 528 |  | $ | 301 |  | $ | 322 |  | $ | 42 |  | $ | 225 |
(a) | Includes benefits of NOL carryforwards and utilization of NOL and tax credit carryforwards of $648 million at Duke Energy, $4 million at Duke Energy Carolinas, $190 million at Progress Energy, $60 million at Duke Energy Progress, $49 million at Duke Energy Florida, $26 million at Duke Energy Ohio and $58 million at Duke Energy Indiana.
| Piedmont
| Two Months Ended | Year Ended October 31,
(in millions) | December 31, 2016 | 2016
Current income taxes |  |
Federal | $ | 4 |  | $ | 27 |
State | (2 | ) | 12 |
Total current income taxes | 2 |  | 39 |
Deferred income taxes |  |
Federal | 24 |  | 79 |
State | 6 |  | 6 |
Total deferred income taxes(a) | 30 |  | 85 |
Total income tax expense from continuing operations included in Consolidated Statements of Operations | $ | 32 |  | $ | 124 |
(a) | Includes benefits of NOL and tax carryforwards of $17 million and $91 million for the two months ended December 31, 2016, and the year ended October 31, 2016, respectively.
Duke Energy Income from Continuing Operations before Income Taxes
| Years Ended December 31,
(in millions) | 2018 |  | 2017 |  | 2016
Domestic(a) | $ | 3,018 |  |  | $ | 4,207 |  |  | $ | 3,689 |
Foreign | 55 |  |  | 59 |  |  | 45 |
Income from continuing operations before income taxes | $ | 3,073 |  |  | $ | 4,266 |  |  | $ | 3,734 |
(a) | Includes a $16 million expense in 2017 related to the Tax Act impact on equity earnings included within Equity in earnings (losses) of unconsolidated affiliates on the Consolidated Statement of Operations.
Taxes on Foreign Earnings In February 2016, Duke Energy announced it had initiated a process to divest the International Disposal Group and, accordingly, no longer intended to indefinitely reinvest post-2014 undistributed foreign earnings. This change in the company's intent, combined with the extension of bonus depreciation by Congress in late 2015, allowed Duke Energy to more efficiently utilize foreign tax credits and reduce U.S. deferred tax liabilities associated with the historical unremitted foreign earnings by approximately $95 million during the year ended December 31, 2016. Due to the classification of the International Disposal Group as discontinued operations beginning in the fourth quarter of 2016, income tax amounts related to the International Disposal Group's foreign earnings are presented within Income (Loss) From Discontinued Operations, net of tax on the Consolidated Statements of Operations. In December 2016, Duke Energy closed on the sale of the International Disposal Group in two separate transactions to execute the divestiture. See Note 2 for additional information on the sale. 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, 2018
|  | Duke |  |  | Duke |  | Duke |  | Duke |  | Duke |  |
| Duke |  | Energy |  | Progress |  | Energy |  | Energy |  | Energy |  | Energy |  |
(in millions) | Energy |  | Carolinas |  | Energy |  | Progress |  | Florida |  | Ohio |  | Indiana |  | Piedmont |
Income tax expense, computed at the statutory rate of 21 percent | $ | 645 |  | $ | 288 |  | $ | 263 |  | $ | 174 |  | $ | 137 |  | $ | 46 |  | $ | 109 |  | $ | 35 |
State income tax, net of federal income tax effect | 30 |  | 14 |  | 13 |  | (17 | ) | 28 |  | 2 |  | 20 |  | 4 |
Amortization of excess deferred income tax | (61 | ) | — |  | (55 | ) | (1 | ) | (54 | ) | (3 | ) | (2 | ) | — |
AFUDC equity income | (42 | ) | (15 | ) | (22 | ) | (12 | ) | (10 | ) | (2 | ) | (2 | ) | — |
AFUDC equity depreciation | 31 |  | 18 |  | 9 |  | 5 |  | 4 |  | 1 |  | 4 |  | — |
Renewable energy production tax credits | (129 | ) | — |  | — |  | — |  | — |  | — |  | — |  | — |
Other tax credits | (28 | ) | (7 | ) | (13 | ) | (5 | ) | (8 | ) | (1 | ) | (1 | ) | (3 | )
Tax Act(a) | 20 |  | 1 |  | 25 |  | 19 |  | — |  | 2 |  | — |  | — |
Other items, net | (18 | ) | 4 |  | (2 | ) | (3 | ) | 4 |  | (2 | ) | — |  | 1 |
Income tax expense from continuing operations | $ | 448 |  | $ | 303 |  | $ | 218 |  | $ | 160 |  | $ | 101 |  | $ | 43 |  | $ | 128 |  | $ | 37 |
Effective tax rate | 14.6 | % | 22.1 | % | 17.4 | % | 19.3 | % | 15.4 | % | 19.6 | % | 24.6 | % | 22.3 | %
(a) | For the year ended December 31, 2018, the Company revised the December 31, 2017 estimates of the income tax effects of the Tax Act, in accordance with SAB 118. Amounts primarily include but are not limited to items that are excluded for ratemaking purposes related certain wholesale fixed rate contracts, remeasurement of nonregulated net deferred tax liabilities, Federal net operating losses, and valuation allowance on foreign tax credits.
| Year Ended December 31, 2017 |
|  | Duke |  |  | Duke |  | Duke |  | Duke |  | Duke |  |
| Duke |  | Energy |  | Progress |  | Energy |  | Energy |  | Energy |  | Energy |  |
(in millions) | Energy |  | Carolinas |  | Energy |  | Progress |  | Florida |  | Ohio |  | Indiana |  | Piedmont |
Income tax expense, computed at the statutory rate of 35 percent | $ | 1,493 |  | $ | 653 |  | $ | 536 |  | $ | 353 |  | $ | 265 |  | $ | 88 |  | $ | 229 |  | $ | 70 |
State income tax, net of federal income tax effect | 69 |  | 36 |  | 25 |  | 8 |  | 26 |  | (1 | ) | 23 |  | 3 |
AFUDC equity income | (81 | ) | (37 | ) | (32 | ) | (17 | ) | (16 | ) | (4 | ) | (8 | ) | — |
Renewable energy production tax credits | (132 | ) | — |  | — |  | — |  | — |  | — |  | — |  | — |
Tax Act(a) | (112 | ) | 15 |  | (246 | ) | (40 | ) | (226 | ) | (23 | ) | 55 |  | (12 | )
Tax true up | (52 | ) | (24 | ) | (19 | ) | (13 | ) | (7 | ) | (5 | ) | (6 | ) | — |
Other items, net | 11 |  | 9 |  | — |  | 1 |  | 4 |  | 4 |  | 8 |  | 1 |
Income tax expense from continuing operations | $ | 1,196 |  | $ | 652 |  | $ | 264 |  | $ | 292 |  | $ | 46 |  | $ | 59 |  | $ | 301 |  | $ | 62 |
Effective tax rate | 28.0 | % | 34.9 | % | 17.2 | % | 29.0 | % | 6.1 | % | 23.4 | % | 46.0 | % | 30.8 | %
(a) | Amounts primarily include but are not limited to items that are excluded for ratemaking purposes related to abandoned or impaired assets, certain wholesale fixed rate contracts, remeasurement of nonregulated net deferred tax liabilities, Federal net operating losses, and valuation allowance on foreign tax credits.
| Year Ended December 31, 2016
|  | Duke |  |  | Duke |  | Duke |  | Duke |  | Duke |
| Duke |  | Energy |  | Progress |  | Energy |  | Energy |  | Energy |  | Energy |
(in millions) | Energy |  | Carolinas |  | Energy |  | Progress |  | Florida |  | Ohio |  | Indiana |
Income tax expense, computed at the statutory rate of 35 percent | $ | 1,307 |  | $ | 630 |  | $ | 548 |  | $ | 315 |  | $ | 306 |  | $ | 95 |  | $ | 212 |
State income tax, net of federal income tax effect | 64 |  | 46 |  | 20 |  | 10 |  | 30 |  | (2 | ) | 11 |
AFUDC equity income | (70 | ) | (36 | ) | (26 | ) | (17 | ) | (9 | ) | (2 | ) | (6 | )
Renewable energy production tax credits | (97 | ) | — |  | — |  | — |  | — |  | — |  | — |
Audit adjustment | 5 |  | 3 |  | — |  | — |  | — |  | — |  | — |
Tax true up | (14 | ) | (14 | ) | (11 | ) | (3 | ) | (9 | ) | (16 | ) | 2 |
Other items, net | (39 | ) | 5 |  | (4 | ) | (4 | ) | 4 |  | 3 |  | 6 |
Income tax expense from continuing operations | $ | 1,156 |  | $ | 634 |  | $ | 527 |  | $ | 301 |  | $ | 322 |  | $ | 78 |  | $ | 225 |
Effective tax rate | 31.0 | % | 35.2 | % | 33.7 | % | 33.4 | % | 36.9 | % | 28.9 | % | 37.1 | %
| Piedmont
| Two Months Ended | Year Ended October 31,
(in millions) | December 31, 2016 | 2016
Income tax expense, computed at the statutory rate of 35 percent | $ | 30 |  | $ | 111 |
State income tax, net of federal income tax effect | 1 |  | 11 |
Other items, net | 1 |  | 2 |
Income tax expense from continuing operations | $ | 32 |  | $ | 124 |
Effective tax rate | 37.2 | % | 39.1 | %
Valuation allowances have been established for certain state NOL carryforwards and state income tax credits that reduce deferred tax assets to an amount that will be realized on a more-likely-than-not basis. The net change in the total valuation allowance is included in the State income tax, net of federal income tax effect in the above tables. DEFERRED TAXES Net Deferred Income Tax Liability Components
| December 31, 2018
|  | Duke |  |  | Duke |  | Duke |  | Duke |  | Duke |  |
| Duke |  | Energy |  | Progress |  | Energy |  | Energy |  | Energy |  | Energy |  |
(in millions) | Energy |  | Carolinas |  | Energy |  | Progress |  | Florida |  | Ohio |  | Indiana |  | Piedmont |
Deferred credits and other liabilities | $ | 164 |  | $ | 64 |  | $ | 35 |  | $ | 53 |  | $ | — |  | $ | 17 |  | $ | 6 |  | $ | 17 |
Capital lease obligations | 60 |  | 26 |  | — |  | — |  | — |  | — |  | 2 |  | — |
Pension, post-retirement and other employee benefits | 347 |  | 24 |  | 110 |  | 47 |  | 58 |  | 16 |  | 24 |  | (1 | )
Progress Energy merger purchase accounting adjustments(a) | 483 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Tax credits and NOL carryforwards | 4,580 |  | 257 |  | 693 |  | 215 |  | 363 |  | 42 |  | 237 |  | 110 |
Regulatory liabilities and deferred credits | — |  | — |  | — |  | — |  | — |  | 56 |  | — |  | 48 |
Investments and other assets | — |  | — |  | — |  | — |  | — |  | 18 |  | — |  | 16 |
Other | 25 |  | 6 |  | 5 |  | 5 |  | — |  | 1 |  | (1 | ) | — |
Valuation allowance | (484 | ) | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total deferred income tax assets | 5,175 |  | 377 |  | 843 |  | 320 |  | 421 |  | 150 |  | 268 |  | 190 |
Investments and other assets | (1,317 | ) | (795 | ) | (430 | ) | (272 | ) | (163 | ) | — |  | (5 | ) | — |
Accelerated depreciation rates | (10,124 | ) | (3,207 | ) | (3,369 | ) | (1,735 | ) | (1,670 | ) | (967 | ) | (1,081 | ) | (733 | )
Regulatory assets and deferred debits, net | (1,540 | ) | (64 | ) | (985 | ) | (432 | ) | (574 | ) | — |  | (191 | ) | — |
Other | — |  | — |  | — |  | — |  | — |  | — |  | — |  | (8 | )
Total deferred income tax liabilities | (12,981 | ) | (4,066 | ) | (4,784 | ) | (2,439 | ) | (2,407 | ) | (967 | ) | (1,277 | ) | (741 | )
Net deferred income tax liabilities | $ | (7,806 | ) | $ | (3,689 | ) | $ | (3,941 | ) | $ | (2,119 | ) | $ | (1,986 | ) | $ | (817 | ) | $ | (1,009 | ) | $ | (551 | )
(a) | Primarily related to capital lease obligations and debt fair value adjustments.
The following table presents the expiration of tax credits and NOL carryforwards.
| December 31, 2018
(in millions) | Amount |  |  | Expiration Year
Investment tax credits | $ | 1,614 |  |  | 2024 |  | — |  | 2038
Alternative minimum tax credits | 574 |  |  | Refundable by 2021
Federal NOL carryforwards(a)(e) | 788 |  |  | 2022 |  | — |  | Indefinite
State NOL carryforwards and credits(b)(e) | 301 |  |  | 2019 |  | — |  | Indefinite
Foreign NOL carryforwards(c) | 12 |  |  | 2027 |  | — |  | 2037
Foreign Tax Credits(d) | 1,271 |  |  | 2024 |  | — |  | 2027
Charitable contribution carryforwards | 20 |  |  | 2019 |  | — |  | 2023
Total tax credits and NOL carryforwards | $ | 4,580 |  |  |  |  |  |  |
(a) | A valuation allowance of $4 million has been recorded on the Federal NOL carryforwards, as presented in the Net Deferred Income Tax Liability Components table.
(b) | A valuation allowance of $85 million has been recorded on the state NOL carryforwards, as presented in the Net Deferred Income Tax Liability Components table.
(c) | A valuation allowance of $12 million has been recorded on the foreign NOL carryforwards, as presented in the Net Deferred Income Tax Liability Components table.
(d) | A valuation allowance of $383 million has been recorded on the foreign tax credits, as presented in the Net Deferred Income Tax Liability Components table.
(e) | Indefinite carryforward for Federal NOLs, and NOLs for states that have adopted the Tax Act's NOL provisions, generated in tax years beginning after December 31, 2017.
| December 31, 2017
|  | Duke |  |  | Duke |  | Duke |  | Duke |  | Duke |  |
| Duke |  | Energy |  | Progress |  | Energy |  | Energy |  | Energy |  | Energy |  |
(in millions) | Energy |  | Carolinas |  | Energy |  | Progress |  | Florida |  | Ohio |  | Indiana |  | Piedmont |
Deferred credits and other liabilities | $ | 143 |  | $ | 33 |  | $ | 78 |  | $ | 23 |  | $ | 49 |  | $ | 11 |  | $ | 6 |  | $ | (5 | )
Capital lease obligations | 49 |  | 14 |  | — |  | — |  | — |  | — |  | 2 |  | — |
Pension, post-retirement and other employee benefits | 295 |  | (17 | ) | 111 |  | 44 |  | 60 |  | 14 |  | 18 |  | (4 | )
Progress Energy merger purchase accounting adjustments(a) | 536 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Tax credits and NOL carryforwards | 4,527 |  | 234 |  | 402 |  | 156 |  | 143 |  | 25 |  | 216 |  | 70 |
Regulatory liabilities and deferred credits | — |  | 222 |  | — |  | — |  | — |  | 65 |  | — |  | 61 |
Investments and other assets | — |  | — |  | — |  | — |  | — |  | — |  | 1 |  | 18 |
Other | 73 |  | 10 |  | 1 |  | 4 |  | — |  | — |  | — |  | — |
Valuation allowance | (519 | ) | — |  | (14 | ) | — |  | — |  | — |  | — |  | — |
Total deferred income tax assets | 5,104 |  | 496 |  | 578 |  | 227 |  | 252 |  | 115 |  | 243 |  | 140 |
Investments and other assets | (1,419 | ) | (849 | ) | (470 | ) | (289 | ) | (187 | ) | — |  | (14 | ) | — |
Accelerated depreciation rates | (9,216 | ) | (3,060 | ) | (2,803 | ) | (1,583 | ) | (1,257 | ) | (896 | ) | (966 | ) | (697 | )
Regulatory assets and deferred debits, net | (1,090 | ) | — |  | (807 | ) | (238 | ) | (569 | ) | — |  | (188 | ) | — |
Other | — |  | — |  | — |  | — |  | — |  | — |  | — |  | (7 | )
Total deferred income tax liabilities | (11,725 | ) | (3,909 | ) | (4,080 | ) | (2,110 | ) | (2,013 | ) | (896 | ) | (1,168 | ) | (704 | )
Net deferred income tax liabilities | $ | (6,621 | ) | $ | (3,413 | ) | $ | (3,502 | ) | $ | (1,883 | ) | $ | (1,761 | ) | $ | (781 | ) | $ | (925 | ) | $ | (564 | )
(a) | Primarily related to capital lease obligations and debt fair value adjustments.
On June 28, 2017, the North Carolina General Assembly amended N.C. Gen. Stat. 105-130.3, reducing the North Carolina corporate income tax rate from a statutory rate of 3.0 to 2.5 percent beginning January 1, 2019. Duke Energy recorded a net reduction of approximately $55 million to their North Carolina deferred tax liabilities in the second quarter of 2017. 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, Duke Energy Progress and Piedmont. 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. UNRECOGNIZED TAX BENEFITS The following tables present changes to unrecognized tax benefits.
| Year Ended December 31, 2018
|  | Duke |  |  | Duke |  | Duke |  | Duke |  | Duke |  |
| Duke |  | Energy |  | Progress |  | Energy |  | Energy |  | Energy |  | Energy |  |
(in millions) | Energy |  | Carolinas |  | Energy |  | Progress |  | Florida |  | Ohio |  | Indiana |  | Piedmont |
Unrecognized tax benefits – January 1 | $ | 25 |  | $ | 5 |  | $ | 5 |  | $ | 5 |  | $ | 5 |  | $ | 1 |  | $ | 1 |  | $ | 3 |
Unrecognized tax benefits increases (decreases) |  |  |  |  |  |  |  |
Gross decreases – tax positions in prior periods | (2 | ) | (1 | ) | — |  | — |  | (4 | ) | — |  | — |  | — |
Gross increases – current period tax positions | 7 |  | 2 |  | 4 |  | 1 |  | 2 |  | — |  | — |  | 1 |
Decreases due to settlements | (6 | ) | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total changes | (1 | ) | 1 |  | 4 |  | 1 |  | (2 | ) | — |  | — |  | 1 |
Unrecognized tax benefits – December 31 | $ | 24 |  | $ | 6 |  | $ | 9 |  | $ | 6 |  | $ | 3 |  | $ | 1 |  | $ | 1 |  | $ | 4 |
| Year Ended December 31, 2017 |
|  | Duke |  |  | Duke |  | Duke |  | Duke |  | Duke |  |
| Duke |  | Energy |  | Progress |  | Energy |  | Energy |  | Energy |  | Energy |  |
(in millions) | Energy |  | Carolinas |  | Energy |  | Progress |  | Florida |  | Ohio |  | Indiana |  | Piedmont |
Unrecognized tax benefits – January 1 | $ | 17 |  | $ | 1 |  | $ | 2 |  | $ | 2 |  | $ | 4 |  | $ | 4 |  | $ | — |  | $ | — |
Unrecognized tax benefits increases (decreases) |  |  |  |  |  |  |  |
Gross increases – tax positions in prior periods | 12 |  | 4 |  | 3 |  | 3 |  | 1 |  | 1 |  | 1 |  | 3 |
Gross decreases – tax positions in prior periods | (4 | ) | — |  | — |  | — |  | — |  | (4 | ) | — |  | — |
Total changes | 8 |  | 4 |  | 3 |  | 3 |  | 1 |  | (3 | ) | 1 |  | 3 |
Unrecognized tax benefits – December 31 | $ | 25 |  | $ | 5 |  | $ | 5 |  | $ | 5 |  | $ | 5 |  | $ | 1 |  | $ | 1 |  | $ | 3 |
| Year Ended December 31, 2016
|  | Duke |  |  | Duke |  | Duke |  | Duke |  | Duke |
| Duke |  | Energy |  | Progress |  | Energy |  | Energy |  | Energy |  | Energy |
(in millions) | Energy |  | Carolinas |  | Energy |  | Progress |  | Florida |  | Ohio |  | Indiana |
Unrecognized tax benefits – January 1 | $ | 88 |  | $ | 72 |  | $ | 1 |  | $ | 3 |  | $ | — |  | $ | — |  | $ | 1 |
Unrecognized tax benefits increases (decreases) |  |  |  |  |  |  |
Gross increases – tax positions in prior periods | — |  | — |  | — |  | — |  | 4 |  | 4 |  | — |
Gross decreases – tax positions in prior periods | (4 | ) | (4 | ) | (1 | ) | (1 | ) | — |  | — |  | — |
Decreases due to settlements | (68 | ) | (67 | ) | — |  | — |  | — |  | — |  | (1 | )
Reduction due to lapse of statute of limitations | 1 |  | — |  | 2 |  | — |  | — |  | — |  | — |
Total changes | (71 | ) | (71 | ) | 1 |  | (1 | ) | 4 |  | 4 |  | (1 | )
Unrecognized tax benefits – December 31 | $ | 17 |  | $ | 1 |  | $ | 2 |  | $ | 2 |  | $ | 4 |  | $ | 4 |  | $ | — |
The following table includes additional information regarding the Duke Energy Registrants' unrecognized tax benefits at December 31, 2018. All Duke Energy Registrants do not anticipate a material increase or decrease in unrecognized tax benefits within the next 12 months.
| December 31, 2018
|  | Duke |  |  | Duke |  | Duke |  | Duke |  | Duke |  |
| Duke |  | Energy |  | Progress |  | Energy |  | Energy |  | Energy |  | Energy |  |
(in millions) | Energy |  | Carolinas |  | Energy |  | Progress |  | Florida |  | Ohio |  | Indiana |  | Piedmont |
Amount that if recognized, would affect the effective tax rate or regulatory liability(a) | $ | 21 |  | $ | 6 |  | $ | 9 |  | $ | 6 |  | $ | 3 |  | $ | 1 |  | $ | 1 |  | $ | 4 |
Amount that if recognized, would be recorded as a component of discontinued operations | 2 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
(a) | Duke Energy, Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont are unable to estimate the specific amounts that would affect the effective tax rate versus the regulatory liability.
OTHER TAX MATTERS The following tables include interest recognized in the Consolidated Statements of Operations and the Consolidated Balance Sheets.
| Year Ended December 31, 2018
|  |  | Duke |
| Duke |  | Progress |  | Energy |
(in millions) | Energy |  | Energy |  | Progress |
Net interest income recognized related to income taxes | $ | 2 |  | $ | — |  | $ | — |
Interest payable related to income taxes | 3 |  | 1 |  | 1 |
| Year Ended December 31, 2017
|  | Duke |  |  | Duke |  | Duke |
| Duke |  | Energy |  | Progress |  | Energy |  | Energy |
(in millions) | Energy |  | Carolinas |  | Energy |  | Progress |  | Florida |
Net interest income recognized related to income taxes | $ | — |  | $ | — |  | $ | 1 |  | $ | — |  | $ | 1 |
Net interest expense recognized related to income taxes | — |  | 2 |  | — |  | — |  | — |
Interest payable related to income taxes | 5 |  | 25 |  | 1 |  | 1 |  | — |
| Year Ended December 31, 2016
|  | Duke |  |  | Duke |  | Duke |
| Duke |  | Energy |  | Progress |  | Energy |  | Energy |
(in millions) | Energy |  | Carolinas |  | Energy |  | Progress |  | Florida |
Net interest income recognized related to income taxes | $ | — |  | $ | — |  | $ | 1 |  | $ | — |  | $ | 2 |
Net interest expense recognized related to income taxes | — |  | 7 |  | — |  | — |  | — |
Interest payable related to income taxes | 4 |  | 23 |  | 1 |  | 1 |  | — |
Piedmont recognized $1 million in net interest income related to income taxes in the Consolidated Statements of Operations for the year ended October 31, 2016. Duke Energy and its subsidiaries are no longer subject to U.S. federal examination for years before 2015. With few exceptions, Duke Energy and its subsidiaries are no longer subject to state, local or non-U.S. income tax examinations by tax authorities for years before 2015.

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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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