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Income Tax
9 Months Ended
Sep. 30, 2017
Income Tax Disclosure [Abstract]  
Income Tax
Income Tax
Con Edison’s income tax expense decreased to $270 million for the three months ended September 30, 2017 from $314 million for the three months ended September 30, 2016. Con Edison's effective tax rate for the three months ended September 30, 2017 and 2016 was 37 percent and 39 percent, respectively. The decrease in Con Edison's effective tax rate is primarily due to lower state income taxes, offset in part by a decrease in tax benefits for plant-related flow through items.

CECONY’s income tax expense increased to $242 million for the three months ended September 30, 2017 from $226 million for the three months ended September 30, 2016. CECONY's effective tax rate for the three months ended September 30, 2017 and 2016 was 38 percent and 37 percent, respectively. The increase in CECONY's effective tax rate is primarily due to a decrease in tax benefits for plant-related flow through items and lower research and development credits, offset in part by lower state income taxes.

Con Edison’s income tax expense decreased to $599 million for the nine months ended September 30, 2017 from $602 million for the nine months ended September 30, 2016. Con Edison's effective tax rate for the nine months ended September 30, 2017 and 2016 was 37 percent. The effective tax rate remained unchanged as lower state income taxes were offset by a decrease in tax benefits for plant-related flow through items.

CECONY’s income tax expense increased to $551 million for the nine months ended September 30, 2017 from $491 million for the nine months ended September 30, 2016. CECONY's effective tax rate for the nine months ended September 30, 2017 and 2016 was 38 percent and 36 percent, respectively. The increase in CECONY's effective tax rate is primarily due to a decrease in tax benefits for plant-related flow through items and lower research and development tax credits, offset in part by lower state income taxes.

Con Edison anticipates a federal consolidated net operating loss for 2017, primarily due to bonus depreciation. Con Edison expects to carryback a portion of its 2017 net operating loss to recover $19 million of income tax. The remaining 2017 net operating loss, as well as general business tax credits generated in 2017, will be carried forward to future tax years. A deferred tax asset for these tax attribute carryforwards was recorded, and no valuation allowance has been provided, as it is more likely than not that the deferred tax asset will be realized.

Uncertain Tax Positions
At September 30, 2017, the estimated liability for uncertain tax positions for Con Edison was $41 million ($21 million for CECONY). Con Edison reasonably expects to resolve approximately $35 million ($24 million, net of federal taxes) of its uncertain tax positions within the next twelve months, including $21 million ($15 million, net of federal taxes), which, if recognized, would reduce Con Edison’s effective tax rate. The amount related to CECONY is approximately $18 million ($13 million, net of federal taxes), including $4 million, which, if recognized, would reduce CECONY’s effective tax rate. The total amount of unrecognized tax benefits, if recognized, that would reduce Con Edison’s effective tax rate is $25 million ($18 million, net of federal taxes).
The Companies recognize interest on liabilities for uncertain tax positions in interest expense and would recognize penalties, if any, in operating expenses in the Companies’ consolidated income statements. In the three and nine months ended September 30, 2017, the Companies recognized an immaterial amount of interest expense and no penalties for uncertain tax positions in their consolidated income statements. At September 30, 2017 and December 31, 2016, the Companies recognized an immaterial amount of accrued interest on their consolidated balance sheets.