Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Components of income before income taxes

The components of income before income taxes are as follows:



	Years Ended December 31,
	2018		2017^(a)		2016^(a)
	(millions)
U.S.	$	62	$	213	$	397
Foreign	211		68		43
Income before income taxes	$	273	$	281	$	440

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(a)	Prior-period financial information has been retrospectively adjusted as discussed in Note 14.

Components of income tax expense (benefit)

The components of income tax expense are as follows:



	Years Ended December 31,
	2018			2017^(a)		2016^(a)
	(millions)
Federal:
Current	$	4		$	—	$	—
Deferred	47			143		51
Total federal	51			143		51
State:
Current	(21		)	—		—
Deferred	33			8		11
Total state	12			8		11
Foreign:
Current	—			5		1
Deferred	(57		)	11		(6		)
Total foreign	(57		)	16		(5		)
Total income tax expense	$	6		$	167	$	57

Schedule of reconciliation of U.S. federal income tax at the statutory rate to income tax expense

A reconciliation of U.S. federal income tax at the statutory rate to the actual income taxes is as follows:



	Years Ended December 31,
	2018			2017^(a)			2016^(a)
	(millions)
Income tax expense at U.S. statutory rate of 21%, 35% and 35%, respectively	$	57		$	98		$	153
Increases (reductions) resulting from:
Taxes attributable to noncontrolling interests	(17		)	(32		)	(74		)
Tax reform impact on differential membership interests	17			—			—
State income taxes, net of federal tax benefit	10			6			7
Tax credits	(1		)	(1		)	(9		)
Valuation allowance	—			(1		)	(6		)
Effect of flow through entities and foreign tax differential	3			(7		)	(6		)
U.S. taxes on foreign earnings	3			7			4
Impact of tax reform	—			100			—
Withholding taxes, net of U.S. federal tax	—			—			(2		)
Adjustments associated with Canadian assets	(67		)	—			(11		)
Other	1			(3		)	1
Income tax expense	$	6		$	167		$	57

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(a)	Prior-period financial information has been retrospectively adjusted as discussed in Note 14.

Deferred tax assets and liabilities

The income tax effects of temporary differences giving rise to NEP's deferred income tax liabilities and assets are as follows:



	December 31,
	2018			2017^(a)
	(millions)
Deferred tax liabilities:
Property	$	—		$	(70	)
Investment in partnership	(133		)	(7		)
Other	—			(4		)
Total deferred tax liabilities	(133		)	(81		)
Deferred tax asset:
Net operating loss	228			184
Tax credit carryforwards	3			8
Other	—			8
Valuation allowance	(2		)	(1		)
Total deferred tax asset	229			199
Net deferred tax asset	$	96		$	118

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(a)	Prior-period financial information has been retrospectively adjusted as discussed in Note 14.

Deferred tax assets and liabilities included on the consolidated balance sheets are as follows:



	December 31,
	2018			2017^(a)
	(millions)
Deferred income taxes - assets	$	108		$	181
Deferred income taxes - liabilities	(12		)	(63		)
Net deferred income taxes	$	96		$	118

Components of deferred tax assets relating to operating loss and tax credit carryforwards

The components of deferred tax assets, before valuation allowance, relating to net operating loss carryforwards and tax credit carryforwards at December 31, 2018 are as follows:



	Amount			Expiration Dates
	(millions)
Net operating loss carryforwards:
Federal	$	210	^(a)	2034 - 2037
State	18			2034 - 2038
Total net operating loss carryforwards	$	228
Tax credit carryforwards	$	3		2019 - 2038

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(a) Includes approximately $53 million of net operating loss carryforwards with an indefinite expiration period.