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Income Taxes (Tables)

12 Months Ended

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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