XML 30 R14.htm IDEA: XBRL DOCUMENT v3.20.2
Income Taxes
 6 Months Ended
Jun. 30, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes

NEE's effective income tax rate for the six months ended June 30, 2020 and 2019 was approximately (3.7)% and 10.2%, respectively. NEE's effective income tax rate for the six months ended June 30, 2020 is based on the composition of pretax income and primarily reflects the first quarter of 2020 impact of unfavorable changes in the fair value of interest rate derivative instruments and equity securities held in NEER's nuclear decommissioning funds, and the gain on the sale of the Spain solar projects that was not taxable for federal and state income tax purposes (see Note 11 - Disposal of Businesses).

A reconciliation between the effective income tax rates and the applicable statutory rate is as follows:
 
NEE
 
FPL
 
NEE
 
FPL
 
Three Months Ended June 30,
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
Six Months Ended June 30,
 
2020
 
2019
 
2020
 
2019
 
2020
 
2019
 
2020
 
2019
Statutory federal income tax rate
21.0
 %
 
21.0
 %
 
21.0
 %
 
21.0
 %
 
21.0
 %
 
21.0
 %
 
21.0
 %
 
21.0
 %
Increases (reductions) resulting from:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State income taxes - net of federal income tax benefit
4.2

 
2.0

 
3.9

 
1.6

 
0.8

 
3.0

 
4.1

 
3.0

Taxes attributable to noncontrolling interests
2.4

 
1.6

 
—

 
—

 
3.9

 
1.8

 
—

 
—

PTCs and ITCs - NEER
(5.7
)
 
(5.2
)
 
—

 
—

 
(9.9
)
 
(6.3
)
 
—

 
—

Amortization of deferred regulatory credit(a)
(3.7
)
 
(9.2
)
 
(5.0
)
 
(15.6
)
 
(6.4
)
 
(7.7
)
 
(5.0
)
 
(9.6
)
Foreign operations
(0.2
)
 
(0.1
)
 
—

 
—

 
(4.3
)
 
0.1

 
—

 
—

Other - net
(3.9
)
 
(0.3
)
 
(0.5
)
 
0.1

 
(8.8
)
 
(1.7
)
 
(1.5
)
 
(0.2
)
Effective income tax rate
14.1
 %
 
9.8
 %
 
19.4
 %
 
7.1
 %
 
(3.7
)%
 
10.2
 %
 
18.6
 %
 
14.2
 %

———————————————
(a)
The three and six months ended June 30, 2019 reflect an adjustment of approximately $83 million recorded by FPL to reduce income tax expense for the cumulative amortization of excess deferred income taxes from January 1, 2018 as a result of the FPSC's order in connection with its review of impacts associated with tax reform. One of the provisions of the order requires FPL to amortize approximately $870 million of its excess deferred income taxes over a period not to exceed ten years.

NEE recognizes PTCs as wind energy is generated and sold based on a per kWh rate prescribed in applicable federal and state statutes, which may differ significantly from amounts computed, on a quarterly basis, using an overall effective income tax rate anticipated for the full year. NEE uses this method of recognizing PTCs for specific reasons, including that PTCs are an integral part of the financial viability of most wind projects and a fundamental component of such wind projects' results of operations. PTCs, as well as ITCs, can significantly affect NEE's effective income tax rate depending on the amount of pretax income. The amount of PTCs recognized can be significantly affected by wind generation and by the roll off of PTCs after ten years of production.