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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

The components of income taxes are as follows:


	NEE						FPL
	Years Ended December 31,						Years Ended December 31,
	2021		2020		2019		2021		2020		2019
	(millions)
Federal:
Current	$	(26)	$	105	$	167	$	85	$	16	$	390
Deferred	311		(148)		115		545		474		(41)
Total federal	285		(43)		282		630		490		349
State:
Current	(62)		18		23		1		32		50
Deferred	125		69		143		207		156		85
Total state	63		87		166		208		188		135
Total income taxes	$	348	$	44	$	448	$	838	$	678	$	484

Reconciliation between the effective income tax rates and the applicable statutory rates

A reconciliation between the effective income tax rates and the applicable statutory rate is as follows:


	NEE						FPL
	Years Ended December 31,						Years Ended December 31,
	2021		2020		2019		2021		2020		2019
Statutory federal income tax rate	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(a)	1.6		2.8		3.4		4.1		4.2		3.5

Taxes attributable to noncontrolling interests	5.0		4.8		2.1		—		—		—

PTCs and ITCs – NEER	(10.3)		(11.8)		(7.2)		—		—		—
Amortization of deferred regulatory credit(b)	(4.4)		(7.2)		(6.2)		(3.5)		(4.9)		(8.0)
Foreign operations(c)	0.2		(2.4)		—		—		—		—


Other – net	(2.1)		(5.4)		(1.4)		(0.9)		(1.3)		(0.4)
Effective income tax rate	11.0	%	1.8	%	11.7	%	20.7	%	19.0	%	16.1	%

_________________________

(a)NEE's 2019 amount reflects a valuation allowance of approximately $48 million related to deferred state tax credits.

(b)2019 reflects 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 the Tax Cuts and Jobs Act. 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.

(c)The 2020 gain on sale of the Spain solar projects was not taxable for federal and state income tax purposes (see Note 1 – Disposal of Businesses/Assets and Sale of Noncontrolling Ownership Interests).

Schedule of deferred income tax liabilities and assets

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


	NEE				FPL
	December 31,				December 31,
	2021		2020		2021		2020
	(millions)
Deferred tax liabilities:
Property-related	$	10,018	$	10,065	$	7,831	$	7,548
Pension	564		437		425		394




Investments in partnerships and joint ventures	2,783		2,238		3		3
Other	2,092		1,730		1,232		862
Total deferred tax liabilities	15,457		14,470		9,491		8,807
Deferred tax assets and valuation allowance:
Decommissioning reserves	296		290		296		290

Net operating loss carryforwards	330		299		2		3
Tax credit carryforwards	4,646		3,859		182		4
ARO and accrued asset removal costs	199		347		126		272
Regulatory liabilities	1,421		1,380		1,397		1,356
Other	733		755		351		363
Valuation allowance(a)	(282)		(289)		—		—
Net deferred tax assets	7,343		6,641		2,354		2,288
Net deferred income taxes	$	8,114	$	7,829	$	7,137	$	6,519

______________________

(a)Reflects valuation allowances related to deferred state tax credits and state operating loss carryforwards.

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


	NEE				FPL
	December 31,				December 31,
	2021		2020		2021		2020
			(millions)

Noncurrent other assets	$	196	$	191	$	—	$	—

Deferred income taxes – noncurrent liabilities	(8,310)		(8,020)		(7,137)		(6,519)
Net deferred income taxes	$	(8,114)	$	(7,829)	$	(7,137)	$	(6,519)

Components of deferred tax assets relating to net operating loss carryforwards

The components of NEE's deferred tax assets relating to net operating loss carryforwards and tax credit carryforwards at December 31, 2021 are as follows:


	Amount			Expiration Dates
	(millions)
Net operating loss carryforwards:
Federal	$	51	(a)	2034 – 2038
State	264			2022 – 2041
Foreign	15			2022 – 2041
Net operating loss carryforwards	$	330
Tax credit carryforwards:
Federal	$	4,296		2030 – 2041
State	345		(b)	2022 – 2046
Foreign	5			2035 – 2041
Tax credit carryforwards	$	4,646

______________________

(a)Includes $49 million of net operating loss carryforwards with an indefinite expiration period.

(b)Includes $191 million of ITC carryforwards with an indefinite expiration period.