XML 100 R25.htm IDEA: XBRL DOCUMENT
v3.6.0.2

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2016
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income Tax Expense The following table is a summary of income tax expense for the years ended December 31:
(in millions) |  | 2016 |  | 2015 |  | 2014
Current tax expense |  | $ | 72.7 |  |  | $ | 15.1 |  |  | $ | 33.6 |
Deferred income taxes, net |  | 498.7 |  |  | 420.4 |  |  | 329.2 |
Investment tax credit, net |  | (4.9 | ) |  | (1.7 | ) |  | (1.1 | )
Total income tax expense |  | $ | 566.5 |  |  | $ | 433.8 |  |  | $ | 361.7 |
Statutory Rate Reconciliation The provision for income taxes for each of the years ended December 31 differs from the amount of income tax determined by applying the applicable United States statutory federal income tax rate to income before income taxes as a result of the following:
|  | 2016 |  | 2015 |  | 2014
|  |  |  | Effective |  |  |  | Effective |  |  |  | Effective
(in millions) |  | Amount |  | Tax Rate |  | Amount |  | Tax Rate |  | Amount |  | Tax Rate
Expected tax at statutory federal tax rates |  | $ | 526.4 |  |  | 35.0 | % |  | $ | 375.5 |  |  | 35.0 | % |  | $ | 332.5 |  |  | 35.0 | %
State income taxes net of federal tax benefit |  | 72.8 |  |  | 4.8 | % |  | 73.1 |  |  | 6.8 | % |  | 50.5 |  |  | 5.3 | %
Production tax credits |  | (15.7 | ) |  | (1.1 | )% |  | (17.4 | ) |  | (1.6 | )% |  | (17.4 | ) |  | (1.8 | )%
AFUDC – Equity |  | (8.8 | ) |  | (0.6 | )% |  | (7.1 | ) |  | (0.7 | )% |  | (1.9 | ) |  | (0.2 | )%
Investment tax credit restored |  | (4.9 | ) |  | (0.3 | )% |  | (1.7 | ) |  | (0.2 | )% |  | (1.1 | ) |  | (0.2 | )%
Other, net |  | (3.3 | ) |  | (0.2 | )% |  | 11.4 |  |  | 1.1 | % |  | (0.9 | ) |  | (0.1 | )%
Total income tax expense |  | $ | 566.5 |  |  | 37.6 | % |  | $ | 433.8 |  |  | 40.4 | % |  | $ | 361.7 |  |  | 38.0 | %
Deferred Income Tax Assets and Liabilities The components of deferred income taxes as of December 31 are as follows:
(in millions) |  | 2016 |  | 2015
Deferred tax assets |  |  |  |
Future tax benefits |  | $ | 430.4 |  |  | $ | 382.8 |
Employee benefits and compensation |  | 222.0 |  |  | 229.9 |
Deferred revenues |  | 207.2 |  |  | 219.9 |
Property-related |  | 54.5 |  |  | 59.5 |
Other |  | 230.6 |  |  | 177.1 |
Total deferred tax assets |  | 1,144.7 |  |  | 1,069.2 |
Valuation allowance |  | (15.0 | ) |  | (17.1 | )
Net deferred tax assets |  | $ | 1,129.7 |  |  | $ | 1,052.1 |
Deferred tax liabilities |  |  |  |
Property-related |  | $ | 4,979.3 |  |  | $ | 4,451.5 |
Investment in transmission affiliate |  | 476.9 |  |  | 420.4 |
Employee benefits and compensation |  | 401.6 |  |  | 428.9 |
Deferred transmission costs |  | 93.1 |  |  | 76.7 |
Other |  | 325.4 |  |  | 296.9 |
Total deferred tax liabilities |  | 6,276.3 |  |  | 5,674.4 |
Deferred tax liability, net |  | $ | 5,146.6 |  |  | $ | 4,622.3 |
Consistent with rate-making treatment, deferred taxes in the table above are offset for temporary differences that have related regulatory assets and liabilities. The components of net deferred tax assets associated with federal and state tax benefit carryforwards as of December 31, 2016 and 2015 are summarized in the tables below:
2016 (in millions) |  | Gross Value |  | Deferred Tax Effect |  | Valuation Allowance |  | Earliest Year of Expiration
Future tax benefits as of December 31, 2016 |  |  |  |  |  |  |  |
Federal net operating loss |  | $ | 407.6 |  |  | $ | 142.7 |  |  | $ | — |  |  | 2031
Federal foreign tax credit |  | — |  |  | 13.5 |  |  | (13.5 | ) |  | 2017
Other federal tax credit |  | — |  |  | 241.1 |  |  | — |  |  | 2025
Charitable contribution |  | 9.4 |  |  | 4.0 |  |  | (1.5 | ) |  | 2016
State net operating loss |  | 482.6 |  |  | 24.3 |  |  | — |  |  | 2024
State tax credit |  | — |  |  | 4.8 |  |  | — |  |  | 2016
Balance as of December 31, 2016 |  | $ | 899.6 |  |  | $ | 430.4 |  |  | $ | (15.0 | ) |  |
2015 (in millions) |  | Gross Value |  | Deferred Tax Effect |  | Valuation Allowance |  | Earliest Year of Expiration
Future tax benefits as of December 31, 2015 |  |  |  |  |  |  |  |
Federal net operating loss |  | $ | 412.3 |  |  | $ | 144.3 |  |  | $ | — |  |  | 2031
Federal foreign tax credit |  | — |  |  | 15.2 |  |  | (15.2 | ) |  | 2017
Other federal tax credit |  | — |  |  | 207.8 |  |  | — |  |  | 2025
Charitable contribution |  | 4.7 |  |  | 1.9 |  |  | (1.9 | ) |  | 2016
State net operating loss |  | 185.9 |  |  | 9.3 |  |  | — |  |  | 2024
State tax credit |  | — |  |  | 4.3 |  |  | — |  |  | 2016
Balance as of December 31, 2015 |  | $ | 602.9 |  |  | $ | 382.8 |  |  | $ | (17.1 | ) |  |
Valuation allowances of $15.0 million have been established for certain tax benefit carryforwards obtained in the Integrys acquisition based on our projected ability to realize such benefits by offsetting future tax liabilities. This is primarily the result of the extension of bonus depreciation. Realization is dependent on generating sufficient tax liabilities prior to expiration of the tax benefit carryforwards. Unrecognized Tax Benefits We previously adopted accounting guidance related to uncertainty in income taxes. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(in millions) |  | 2016 |  | 2015
Balance as of January 1 |  | $ | 9.5 |  |  | $ | 7.2 |
Acquired legacy Integrys unrecognized tax benefits |  | — |  |  | 3.6 |
Additions for tax positions of prior years |  | 6.7 |  |  | 0.3 |
Additions based on tax positions related to the current year |  | 1.1 |  |  | 0.2 |
Reductions for tax positions of prior years |  | (1.0 | ) |  | (1.1 | )
Reductions due to statute of limitations |  | (1.8 | ) |  | — |
Settlements during the period |  | — |  |  | (0.7 | )
Balance as of December 31 |  | $ | 14.5 |  |  | $ | 9.5 |
The amount of unrecognized tax benefits as of December 31, 2016 and 2015, excludes deferred tax assets related to uncertainty in income taxes of $6.6 million and $6.2 million, respectively. As of December 31, 2016 and 2015, the net amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate for continuing operations was $7.9 million and $2.2 million, respectively. We recognize interest and penalties accrued related to unrecognized tax benefits as a component of income tax expense. For the years ended December 31, 2016, 2015, and 2014, we recognized $0.2 million, zero, and $0.3 million of accrued interest in our income statements, respectively. For the years ended December 31, 2016, 2015, and 2014, we recognized no penalties in our income statements. For the year ended December 31, 2016, we had $0.8 million of interest accrued and no penalties accrued on our balance sheets. For the year ended December 31, 2015, we had $0.7 million of interest accrued and $0.1 million of penalties accrued on our balance sheets. We do not anticipate any significant increases or decreases in the total amounts of unrecognized tax benefits within the next 12 months. We file income tax returns in the United States federal jurisdiction and state tax returns based on income in our major state operating jurisdictions of Wisconsin, Illinois, Michigan, and Minnesota. We also file tax returns in other state and local jurisdictions with varying statutes of limitations. As of December 31, 2016, we were subject to examination by state or local tax authorities for the 2011 through 2016 tax years in our major state operating jurisdictions as follows:
Jurisdiction |  | Years
Federal |  | 2013–2016
Illinois |  | 2013–2016
Michigan |  | 2012–2016
Minnesota |  | 2014–2016
Wisconsin |  | 2011–2016

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration