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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Summary of income tax expense | The following table is a summary of income tax expense for the years ended December 31:
(in millions) |  | 2017 |  | 2016 |  | 2015
Current tax expense |  | $ | 111.8 |  |  | $ | 72.7 |  |  | $ | 15.1 |
Deferred income taxes, net |  | 274.4 |  |  | 498.7 |  |  | 420.4 |
Investment tax credit, net |  | (2.7 | ) |  | (4.9 | ) |  | (1.7 | )
Total income tax expense |  | $ | 383.5 |  |  | $ | 566.5 |  |  | $ | 433.8 |
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:
|  | 2017 |  | 2016 |  | 2015
|  |  |  | Effective |  |  |  | Effective |  |  |  | Effective
(in millions) |  | Amount |  | Tax Rate |  | Amount |  | Tax Rate |  | Amount |  | Tax Rate
Expected tax at statutory federal tax rates |  | $ | 555.5 |  |  | 35.0 | % |  | $ | 526.4 |  |  | 35.0 | % |  | $ | 375.5 |  |  | 35.0 | %
State income taxes net of federal tax benefit |  | 100.8 |  |  | 6.4 | % |  | 72.8 |  |  | 4.8 | % |  | 73.1 |  |  | 6.8 | %
Federal tax reform |  | (226.9 | ) |  | (14.3 | )% |  | — |  |  | — | % |  | — |  |  | — | %
Production tax credits |  | (16.8 | ) |  | (1.1 | )% |  | (15.7 | ) |  | (1.1 | )% |  | (17.4 | ) |  | (1.6 | )%
AFUDC – Equity |  | (4.0 | ) |  | (0.3 | )% |  | (8.8 | ) |  | (0.6 | )% |  | (7.1 | ) |  | (0.7 | )%
Investment tax credit restored |  | (2.7 | ) |  | (0.2 | )% |  | (4.9 | ) |  | (0.3 | )% |  | (1.7 | ) |  | (0.2 | )%
Other, net |  | (22.4 | ) |  | (1.4 | )% |  | (3.3 | ) |  | (0.2 | )% |  | 11.4 |  |  | 1.1 | %
Total income tax expense |  | $ | 383.5 |  |  | 24.1 | % |  | $ | 566.5 |  |  | 37.6 | % |  | $ | 433.8 |  |  | 40.4 | %
Components of deferred income taxes classified as net current assets and net long-term liabilities | The components of deferred income taxes as of December 31 are as follows:
(in millions) |  | 2017 |  | 2016
Deferred tax assets |  |  |  |
Tax gross up – regulatory items |  | $ | 585.8 |  |  | $ | — |
Future tax benefits |  | 303.9 |  |  | 430.4 |
Employee benefits and compensation |  | 164.2 |  |  | 222.0 |
Deferred revenues |  | 128.8 |  |  | 207.2 |
Property-related |  | 24.4 |  |  | 54.5 |
Other |  | 185.0 |  |  | 230.6 |
Total deferred tax assets |  | 1,392.1 |  |  | 1,144.7 |
Valuation allowance |  | (15.7 | ) |  | (15.0 | )
Net deferred tax assets |  | $ | 1,376.4 |  |  | $ | 1,129.7 |
Deferred tax liabilities |  |  |  |
Property-related |  | $ | 3,464.6 |  |  | $ | 4,979.3 |
Investment in transmission affiliate |  | 321.2 |  |  | 476.9 |
Employee benefits and compensation |  | 285.8 |  |  | 401.6 |
Deferred transmission costs |  | 60.1 |  |  | 93.1 |
Other |  | 244.5 |  |  | 325.4 |
Total deferred tax liabilities |  | 4,376.2 |  |  | 6,276.3 |
Deferred tax liability, net |  | $ | 2,999.8 |  |  | $ | 5,146.6 |
Components of deferred tax assets associated with federal and state tax benefit carryforwards | The components of net deferred tax assets associated with federal and state tax benefit carryforwards as of December 31, 2017 and 2016 are summarized in the tables below:
2017 (in millions) |  | Gross Value |  | Deferred Tax Effect |  | Valuation Allowance |  | Earliest Year of Expiration
Future tax benefits as of December 31, 2017 |  |  |  |  |  |  |  |
Federal foreign tax credit |  | $ | — |  |  | $ | 13.5 |  |  | $ | (13.5 | ) |  | 2018
Other federal tax credit |  | — |  |  | 259.6 |  |  | (0.1 | ) |  | 2025
Charitable contribution and capital loss |  | 21.7 |  |  | 8.6 |  |  | (2.1 | ) |  | 2017
State net operating loss |  | 282.7 |  |  | 17.2 |  |  | — |  |  | 2025
State tax credit |  | — |  |  | 5.0 |  |  | — |  |  | 2017
Balance as of December 31, 2017 |  | $ | 304.4 |  |  | $ | 303.9 |  |  | $ | (15.7 | ) |  |
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 | ) |  |
Reconciliation of the beginning and ending amount of 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) |  | 2017 |  | 2016
Balance as of January 1 |  | $ | 14.5 |  |  | $ | 9.5 |
Additions for tax positions of prior years |  | 7.9 |  |  | 6.7 |
Additions based on tax positions related to the current year |  | 0.5 |  |  | 1.1 |
Reductions for tax positions of prior years |  | (5.6 | ) |  | (1.0 | )
Reductions due to statute of limitations |  | — |  |  | (1.8 | )
Balance as of December 31 |  | $ | 17.3 |  |  | $ | 14.5 |
Summary of income tax examinations | As of December 31, 2017, we were subject to examination by state or local tax authorities for the 2013 through 2017 tax years in our major state operating jurisdictions as follows:
Jurisdiction |  | Years
Federal |  | 2014–2017
Illinois |  | 2013–2017
Michigan |  | 2013–2017
Minnesota |  | 2014–2017
Wisconsin |  | 2013–2017

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