INCOME TAXES

EFFECTIVE TAX RATES

The effective tax rates from continuing operations for each of the Duke Energy Registrants are included in the following table.



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Duke Energy	32.1	%	28.8	%	32.3	%	29.6	%
Duke Energy Carolinas	34.7	%	35.1	%	35.0	%	34.6	%
Progress Energy	33.4	%	36.0	%	33.7	%	36.3	%
Duke Energy Progress	31.9	%	35.5	%	33.0	%	35.4	%
Duke Energy Florida	36.8	%	37.6	%	36.7	%	37.7	%
Duke Energy Ohio	34.8	%	34.3	%	35.1	%	29.2	%
Duke Energy Indiana	39.4	%	36.1	%	39.4	%	33.1	%
Piedmont	38.5	%	40.0	%	37.9	%	38.0	%

The increase in the effective tax rate (ETR) for Duke Energy for the three and six months ended June 30, 2017, is primarily due to favorable impacts in the prior year of finalizing federal tax audits and unfavorable tax levelization in the current year, partially offset by higher production tax credits related to wind projects placed in service.

The decrease in the ETR for Progress Energy for the three and six months ended June 30, 2017, is primarily due to lower North Carolina corporate tax rates.

The decrease in the ETR for Duke Energy Progress for the three and six months ended June 30, 2017, is primarily due to lower North Carolina corporate tax rates.

The increase in the ETR for Duke Energy Ohio for the six months ended June 30, 2017, is primarily due to an immaterial out of period adjustment in the prior year related to deferred tax balances associated with property, plant and equipment.

The increase in the ETR for Duke Energy Indiana for the three months ended June 30, 2017, is primarily due to favorable state tax credits recorded in the prior year. The increase in the ETR for Duke Energy Indiana for the six months ended June 30, 2017, is primarily due to an immaterial out of period adjustment in the prior year related to deferred tax balances associated with property, plant and equipment.

The decrease in the ETR for Piedmont for the three months ended June 30, 2017, is primarily due to lower North Carolina corporate tax rates.

TAXES ON FOREIGN EARNINGS

As of December 31, 2015, Duke Energy's intention was to indefinitely reinvest any future undistributed foreign earnings earned after December 31, 2014. 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 historical unremitted foreign earnings by approximately $95 million for the six months ended June 30, 2016. Due to the classification of the International Disposal Group as discontinued operations, income tax amounts related to the International Disposal Group's foreign earnings are presented within (Loss) Income from Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations. See Note 2 for additional information related to the sale of the International Disposal Group.