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Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2019
Tax Cuts and Jobs Act [Table Text Block] For the same reasons, the Registrant Subsidiaries’ December 31, 2019 and December 31, 2018 balance sheets reflect net regulatory liabilities for income taxes as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$487

 

$605

Entergy Louisiana

$531

 

$612

Entergy Mississippi

$237

 

$246

Entergy New Orleans

$59

 

$86

Entergy Texas

$253

 

$352

System Energy

$143

 

$163

Excess ADIT is generally classified into two categories: 1) the portion that is subject to the normalization requirements of the Act, i.e., “protected”, and 2) the portion that is not subject to such normalization provisions, referred to as “unprotected”. The Act provides that the normalization method of accounting for income taxes is required for
excess ADIT associated with public utility property. The Act provides for the use of the average rate assumption method (ARAM) for the determination of the timing of the return of excess ADIT associated with such property. Under ARAM, the excess ADIT is reduced over the remaining life of the asset. Remaining asset lives vary for each Registrant Subsidiary, but the average life of public utility property is typically 30 years or longer. Entergy will amortize the protected portion of the excess ADIT in conformity with the normalization requirements. The Registrant Subsidiaries’ net regulatory liability for income taxes as of December 31, 2019 and December 31, 2018, includes protected excess ADIT as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$490

 

$521

Entergy Louisiana

$797

 

$812

Entergy Mississippi

$261

 

$271

Entergy New Orleans

$62

 

$59

Entergy Texas

$228

 

$237

System Energy

$186

 

$202


During the second quarter of 2018, the Registrant Subsidiaries began paying unprotected excess accumulated deferred income taxes, associated with the effects of the Act, to their customers through rate riders and other means approved by their respective regulatory commissions. Payment of the unprotected excess accumulated deferred income taxes results in a reduction in the regulatory liability for income taxes and a corresponding reduction in income tax expense. This has a significant effect on the effective tax rate for the period as compared to the statutory tax rate. The Registrant Subsidiaries’ net regulatory liability for income taxes as of December 31, 2019 and December 31, 2018, includes unprotected excess ADIT as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$9

 

$117

Entergy Louisiana

$242

 

$295

Entergy New Orleans

$9

 

$25

Entergy Texas

$83

 

$171

System Energy

$—

 

$4


The return of unprotected excess accumulated deferred income taxes reduced Entergy’s and the Registrant Subsidiaries’ regulatory liability for income taxes as follows for 2019 and 2018:
 
2019
 
2018
 
(In Millions)
Entergy

$273

 

$776

Entergy Arkansas

$126

 

$368

Entergy Louisiana

$39

 

$141

Entergy Mississippi

$—

 

$159

Entergy New Orleans

$14

 

$13

Entergy Texas

$87

 

$15

System Energy

$7

 

$80
Income Tax Expenses From Continuing Operations

Income taxes for 2019, 2018, and 2017 for Entergy Corporation and Subsidiaries consist of the following:
 
2019
 
2018
 
2017
 
(In Thousands)
Current:
 
 
 
 
 
Federal

($14,416
)
 

$36,848

 

$29,595

State
6,535

 
7,274

 
15,478

Total
(7,881
)
 
44,122

 
45,073

Deferred and non-current - net
(155,956
)
 
(1,074,416
)
 
505,010

Investment tax credit adjustments - net
(5,988
)
 
(6,532
)
 
(7,513
)
Income taxes

($169,825
)
 

($1,036,826
)
 

$542,570
Total Income Taxes For Entergy Corporation And Subsidiaries The reasons for the differences for the years 2019, 2018, and 2017 are:
 
2019
 
2018
 
2017
 
(In Thousands)
Net income (loss) attributable to Entergy Corporation

$1,241,226

 

$848,661

 

$411,612

Preferred dividend requirements of subsidiaries
17,018

 
13,894

 
13,741

Consolidated net income (loss)
1,258,244

 
862,555

 
425,353

Income taxes
(169,825
)
 
(1,036,826
)
 
542,570

Income (loss) before income taxes

$1,088,419

 

($174,271
)
 

$967,923

Computed at statutory rate (21% for 2019 and 2018) (35% for 2017)

$228,568

 

($36,597
)
 

$338,773

Increases (reductions) in tax resulting from:
 

 
 

 
 

State income taxes net of federal income tax effect
61,791

 
21,398

 
44,179

Regulatory differences - utility plant items
(45,336
)
 
(37,507
)
 
39,825

Equity component of AFUDC
(30,444
)
 
(27,216
)
 
(33,282
)
Amortization of investment tax credits
(8,093
)
 
(8,304
)
 
(10,204
)
Flow-through / permanent differences
(2,059
)
 
439

 
8,727

Tax legislation enactment (a)
—

 
—

 
560,410

Amortization of excess ADIT (a)
(205,614
)
 
(577,082
)
 
—

Revisions of the 2017 tax legislation enactment regulatory liability accrual, including the effect of the Entergy Texas 2018 base rate proceeding
—

 
(40,494
)
 
—

Utility restructuring (b)
—

 
(169,918
)
 
—

Settlement on treatment of regulatory obligations (c)
—

 
(52,320
)
 
—

State income tax audit conclusion
—

 
(23,425
)
 
—

IRS audit adjustment
—

 
(8,404
)
 
—

Entergy Wholesale Commodities nuclear decommissioning trust restructuring (d)
—

 
(106,833
)
 
—

Entergy Wholesale Commodities restructuring (d)
(173,725
)
 
—

 
(373,277
)
FitzPatrick disposition
—

 
—

 
(44,344
)
Charitable contribution (d)
(19,101
)

—


—

Net operating loss recognition
(41,427
)

—


—

Provision for uncertain tax positions
7,332

 
24,569

 
8,756

Valuation allowance
59,345

 
2,211

 
—

Other - net
(1,062
)
 
2,657

 
3,007

Total income taxes as reported

($169,825
)
 

($1,036,826
)
 

$542,570

Effective Income Tax Rate
(15.6
%)
 
595.0
%
 
56.1
%


(a)
See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess ADIT in 2018 and 2019 and the tax legislation enactment in 2017.
(b)
See “Other Tax Matters - Entergy Arkansas and Entergy Mississippi Internal Restructuring” below for discussion of the Utility restructuring.
(c)
See “Income Tax Audits - 2012-2013 IRS Audit” below for discussion of the settlement.
(d)
See “Other Tax Matters - Entergy Wholesale Commodities Restructuring” below for discussion of the Entergy Wholesale Commodities nuclear decommissioning trust restructuring in 2018, the Entergy Wholesale Commodities restructurings in 2017 and 2019, and the charitable contribution in 2019.
Significant Components Of Accumulated Deferred Income Taxes And Accrued Taxes
Significant components of accumulated deferred income taxes and taxes accrued for Entergy Corporation and Subsidiaries as of December 31, 2019 and 2018 are as follows:
 
 
2019
 
2018
 
(In Thousands)
Deferred tax liabilities:
 
 
 
Plant basis differences - net

($4,111,761
)
 

($3,835,211
)
Regulatory assets
(389,573
)
 
(370,484
)
Nuclear decommissioning trusts/receivables
(1,015,542
)
 
(1,128,140
)
Pension, net funding
(348,260
)
 
(307,626
)
Combined unitary state taxes
(11,519
)
 
(9,440
)
Power purchase agreements
—

 
(73,335
)
Deferred fuel
(8,360
)
 
(29,953
)
Other
(445,378
)
 
(248,997
)
Total
(6,330,393
)
 
(6,003,186
)
Deferred tax assets:
 

 
 

Nuclear decommissioning liabilities
929,251

 
1,070,583

Regulatory liabilities
806,777

 
895,756

Pension and other post-employment benefits
297,272

 
305,736

Sale and leaseback
102,420

 
121,473

Compensation
87,355

 
86,461

Accumulated deferred investment tax credit
56,013

 
57,643

Provision for allowances and contingencies
126,886

 
135,631

Power purchase agreements
231,502

 
—

Unbilled/deferred revenues
(10,218
)
 
43,762

Net operating loss carryforwards
1,133,197

 
628,165

Capital losses and miscellaneous tax credits
22,597

 
20,549

Valuation allowance
(303,307
)
 
(243,726
)
Other
289,557

 
125,522

Total
3,769,302

 
3,247,555

Non-current accrued taxes (including unrecognized tax benefits)
(1,775,638
)
 
(1,296,928
)
Accumulated deferred income taxes and taxes accrued

($4,336,729
)
 

($4,052,559
)
Entergy's Estimated Tax Attributes, Carryovers And Their Expiration Dates
Entergy’s estimated tax attributes carryovers and their expiration dates as of December 31, 2019 are as follows:

Carryover Description
 
Carryover Amount
 
Year(s) of expiration
 
 
 
 
 
Federal net operating losses before 1/1/2018
 
$9.8 billion
 
2023-2037
Federal net operating losses - 1/1/2018 forward
 
$10.7 billion
 
N/A
State net operating losses
 
$20.8 billion
 
2020-2039
Federal and state charitable contributions
 
$395.8 million
 
2020-2024
Miscellaneous federal and state credits
 
$101.1 million
 
2020-2038
Reconciliation Of Unrecognized Tax Benefits A reconciliation of Entergy’s beginning and ending amount of unrecognized tax benefits is as follows:
 
2019
 
2018
 
2017
 
(In Thousands)
Gross balance at January 1

$7,181,482

 

$4,871,846

 

$3,909,855

Additions based on tax positions related to the current year
731,276

 
2,276,614

 
1,120,687

Additions for tax positions of prior years
151,628

 
506,142

 
283,683

Reductions for tax positions of prior years
(681,232
)
 
(274,600
)
 
(442,379
)
Settlements
—

 
(198,520
)
 
—

Gross balance at December 31
7,383,154

 
7,181,482

 
4,871,846

Offsets to gross unrecognized tax benefits:
 

 
 

 
 

Carryovers and refund claims
(5,831,587
)
 
(5,957,992
)
 
(3,945,524
)
Cash paid to taxing authorities
(10,000
)
 
(10,000
)
 
(10,000
)
Unrecognized tax benefits net of unused tax attributes, refund claims and payments (a)

$1,541,567

 

$1,213,490

 

$916,322



(a)
Potential tax liability above what is payable on tax returns
Entergy Arkansas [Member]  
Tax Cuts and Jobs Act [Table Text Block] For the same reasons, the Registrant Subsidiaries’ December 31, 2019 and December 31, 2018 balance sheets reflect net regulatory liabilities for income taxes as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$487

 

$605

Entergy Louisiana

$531

 

$612

Entergy Mississippi

$237

 

$246

Entergy New Orleans

$59

 

$86

Entergy Texas

$253

 

$352

System Energy

$143

 

$163

Excess ADIT is generally classified into two categories: 1) the portion that is subject to the normalization requirements of the Act, i.e., “protected”, and 2) the portion that is not subject to such normalization provisions, referred to as “unprotected”. The Act provides that the normalization method of accounting for income taxes is required for
excess ADIT associated with public utility property. The Act provides for the use of the average rate assumption method (ARAM) for the determination of the timing of the return of excess ADIT associated with such property. Under ARAM, the excess ADIT is reduced over the remaining life of the asset. Remaining asset lives vary for each Registrant Subsidiary, but the average life of public utility property is typically 30 years or longer. Entergy will amortize the protected portion of the excess ADIT in conformity with the normalization requirements. The Registrant Subsidiaries’ net regulatory liability for income taxes as of December 31, 2019 and December 31, 2018, includes protected excess ADIT as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$490

 

$521

Entergy Louisiana

$797

 

$812

Entergy Mississippi

$261

 

$271

Entergy New Orleans

$62

 

$59

Entergy Texas

$228

 

$237

System Energy

$186

 

$202


During the second quarter of 2018, the Registrant Subsidiaries began paying unprotected excess accumulated deferred income taxes, associated with the effects of the Act, to their customers through rate riders and other means approved by their respective regulatory commissions. Payment of the unprotected excess accumulated deferred income taxes results in a reduction in the regulatory liability for income taxes and a corresponding reduction in income tax expense. This has a significant effect on the effective tax rate for the period as compared to the statutory tax rate. The Registrant Subsidiaries’ net regulatory liability for income taxes as of December 31, 2019 and December 31, 2018, includes unprotected excess ADIT as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$9

 

$117

Entergy Louisiana

$242

 

$295

Entergy New Orleans

$9

 

$25

Entergy Texas

$83

 

$171

System Energy

$—

 

$4


The return of unprotected excess accumulated deferred income taxes reduced Entergy’s and the Registrant Subsidiaries’ regulatory liability for income taxes as follows for 2019 and 2018:
 
2019
 
2018
 
(In Millions)
Entergy

$273

 

$776

Entergy Arkansas

$126

 

$368

Entergy Louisiana

$39

 

$141

Entergy Mississippi

$—

 

$159

Entergy New Orleans

$14

 

$13

Entergy Texas

$87

 

$15

System Energy

$7

 

$80
Income Tax Expenses From Continuing Operations
Income taxes for 2019, 2018, and 2017 for Entergy’s Registrant Subsidiaries consist of the following:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Current:
 
 
 
 
 
 
 
 
 
 
 
 
Federal
 

($14,549
)
 

($20,173
)
 

($8,939
)
 

($5,822
)
 

$16,035

 

$16,256

State
 
(714
)
 
(735
)
 
5,823

 
1,856

 
663

 
(2,831
)
Total
 
(15,263
)
 
(20,908
)
 
(3,116
)
 
(3,966
)
 
16,698

 
13,425

Deferred and non-current - net
 
(30,278
)
 
147,453

 
34,579

 
4,248

 
(69,963
)
 
422

Investment tax credit adjustments - net
 
(1,228
)
 
(4,922
)
 
(597
)
 
(96
)
 
(631
)
 
1,502

Income taxes
 

($46,769
)
 

$121,623

 

$30,866

 

$186

 

($53,896
)
 

$15,349


2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Current:
 
 
 
 
 
 
 
 
 
 
 
 
Federal
 

($23,638
)
 

($15,841
)
 

($11,275
)
 

($10,813
)
 

$16,190

 

($9,786
)
State
 
(1,617
)
 
(1,122
)
 
(1,066
)
 
545

 
3,205

 
(1,821
)
Total
 
(25,255
)
 
(16,963
)
 
(12,341
)
 
(10,268
)
 
19,395

 
(11,607
)
Deferred and non-current - net
 
(270,586
)
 
(32,725
)
 
(114,738
)
 
7,943

 
(44,817
)
 
(35,329
)
Investment tax credit adjustments - net
 
(1,226
)
 
(4,923
)
 
1,306

 
(111
)
 
(821
)
 
(739
)
Income taxes
 

($297,067
)
 

($54,611
)
 

($125,773
)
 

($2,436
)
 

($26,243
)
 

($47,675
)

2017
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Current:
 
 
 
 
 
 
 
 
 
 
 
 
Federal
 

$16,086

 

($84,250
)
 

($8,845
)
 

($30,635
)
 

$6,034

 

$47,674

State
 
9,191

 
1,480

 
(924
)
 
(728
)
 
310

 
5,314

Total
 
25,277

 
(82,770
)
 
(9,769
)
 
(31,363
)
 
6,344

 
52,988

Deferred and non-current - net
 
69,753

 
572,988

 
83,501

 
62,946

 
43,102

 
19,243

Investment tax credit adjustments - net
 
(1,226
)
 
(4,920
)
 
187

 
1,695

 
(965
)
 
(2,262
)
Income taxes
 

$93,804

 

$485,298

 

$73,919

 

$33,278

 

$48,481

 

$69,969
Total Income Taxes For Entergy Corporation And Subsidiaries
Total income taxes for the Registrant Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before taxes.  The reasons for the differences for the years 2019, 2018, and 2017 are:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Net income
 

$262,964

 

$691,537

 

$119,925

 

$52,629

 

$159,397

 

$99,120

Income taxes
 
(46,769
)
 
121,623

 
30,866

 
186

 
(53,896
)
 
15,349

Pretax income
 

$216,195

 

$813,160

 

$150,791

 

$52,815

 

$105,501

 

$114,469

Computed at statutory rate (21%)
 

$45,401

 

$170,764

 

$31,666

 

$11,091

 

$22,155

 

$24,039

Increases (reductions) in tax resulting from:
 
 
 
 

 
 

 
 

 
 

 
 

State income taxes net of federal income tax effect
 
15,954

 
42,854

 
5,563

 
3,443

 
360

 
5,134

Regulatory differences - utility plant items
 
(10,627
)
 
(19,421
)
 
(5,556
)
 
(1,532
)
 
(1,987
)
 
(6,213
)
Equity component of AFUDC
 
(3,255
)
 
(15,545
)
 
(1,755
)
 
(2,088
)
 
(5,973
)
 
(1,829
)
Amortization of investment tax credits
 
(1,201
)
 
(4,871
)
 
(160
)
 
(88
)
 
(617
)
 
(1,155
)
Flow-through / permanent differences
 
696

 
439

 
160

 
(741
)
 
560

 
(500
)
Amortization of excess ADIT (b)
 
(90,921
)
 
(28,531
)
 
203

 
(11,724
)
 
(69,091
)
 
(5,550
)
Non-taxable dividend income
 
—

 
(26,795
)
 
—

 
—

 
—

 
—

Provision for uncertain tax positions
 
(3,517
)
 
1,519

 
500

 
1,672

 
430

 
1,300

Other - net
 
701

 
1,210

 
245

 
153

 
267

 
123

Total income taxes as reported
 

($46,769
)
 

$121,623

 

$30,866

 

$186

 

($53,896
)
 

$15,349

Effective Income Tax Rate
 
(21.6
%)
 
15.0
%
 
20.5
%
 
0.4
%
 
(51.1
%)
 
13.4
%


2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Net income
 

$252,707

 

$675,614

 

$126,078

 

$53,152

 

$162,235

 

$94,109

Income taxes
 
(297,067
)
 
(54,611
)
 
(125,773
)
 
(2,436
)
 
(26,243
)
 
(47,675
)
Pretax income
 

($44,360
)
 

$621,003

 

$305

 

$50,716

 

$135,992

 

$46,434

Computed at statutory rate (21%)
 

($9,316
)
 

$130,411

 

$64

 

$10,650

 

$28,558

 

$9,751

Increases (reductions) in tax resulting from:
 


 


 


 


 


 


State income taxes net of federal income tax effect
 
(794
)
 
26,031

 
(1,747
)
 
2,322

 
2,576

 
2,812

Regulatory differences - utility plant items
 
(14,916
)
 
(12,604
)
 
(4,103
)
 
(1,502
)
 
(1,872
)
 
(2,510
)
Equity component of AFUDC
 
(3,477
)
 
(16,784
)
 
(1,829
)
 
(1,248
)
 
(2,042
)
 
(1,837
)
Amortization of investment tax credits
 
(1,201
)
 
(4,871
)
 
(160
)
 
(109
)
 
(808
)
 
(1,155
)
Flow-through / permanent differences
 
570

 
3,203

 
1,893

 
(4,222
)
 
1,038

 
2,815

Revisions of the 2017 tax legislation enactment regulatory liability accrual, including the effect of the Entergy Texas 2018 base rate proceeding (a)
 
933

 
(2,810
)
 
(556
)
 
884

 
(43,799
)
 
(3,565
)
Amortization of excess ADIT (b)
 
(271,570
)
 
(104,313
)
 
(120,831
)
 
(9,878
)
 
(11,519
)
 
(58,971
)
Settlement on treatment of regulatory obligations (c)
 
—

 
(52,320
)
 
—

 
—

 
—

 
—

IRS audit adjustment
 
1,290

 
1,097

 
1,018

 
(96
)
 
524

 
(12
)
Non-taxable dividend income
 
—

 
(26,795
)
 
—

 
—

 
—

 
—

Provision for uncertain tax positions
 
724

 
3,949

 
240

 
613

 
839

 
4,876

Other - net
 
690

 
1,195

 
238

 
150

 
262

 
121

Total income taxes as reported
 

($297,067
)
 

($54,611
)
 

($125,773
)
 

($2,436
)
 

($26,243
)
 

($47,675
)
Effective Income Tax Rate
 
669.7
%
 
(8.8
%)
 
(41,237.0
%)
 
(4.8
%)
 
(19.3
%)
 
(102.7
%)


2017
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Net income
 

$139,844

 

$316,347

 

$110,032

 

$44,553

 

$76,173

 

$78,596

Income taxes
 
93,804

 
485,298

 
73,919

 
33,278

 
48,481

 
69,969

Pretax income
 

$233,648

 

$801,645

 

$183,951

 

$77,831

 

$124,654

 

$148,565

Computed at statutory rate (35%)
 

$81,777

 

$280,576

 

$64,383

 

$27,241

 

$43,629

 

$51,998

Increases (reductions) in tax resulting from:
 
 

 
 

 
 

 
 

 
 

 
 

State income taxes net of federal income tax effect
 
11,586

 
31,927

 
6,202

 
2,842

 
527

 
5,635

Regulatory differences - utility plant items
 
7,220

 
12,168

 
1,356

 
619

 
5,581

 
12,880

Equity component of AFUDC
 
(6,458
)
 
(18,020
)
 
(3,383
)
 
(847
)
 
(2,353
)
 
(2,221
)
Amortization of investment tax credits
 
(1,201
)
 
(4,871
)
 
(160
)
 
(124
)
 
(951
)
 
(2,896
)
Flow-through / permanent differences
 
3,098

 
3,774

 
1,567

 
(3,352
)
 
1,428

 
(276
)
Tax legislation enactment (b)
 
(3,090
)
 
217,258

 
3,492

 
6,153

 
2,981

 
(69
)
Non-taxable dividend income
 
—

 
(44,658
)
 
—

 
—

 
—

 
—

Provision for uncertain tax positions
 
200

 
5,700

 
228

 
600

 
(2,617
)
 
4,800

Other - net
 
672

 
1,444

 
234

 
146

 
256

 
118

Total income taxes as reported
 

$93,804

 

$485,298

 

$73,919

 

$33,278

 

$48,481

 

$69,969

Effective Income Tax Rate
 
40.1
%
 
60.5
%
 
40.2
%
 
42.8
%
 
38.9
%
 
47.1
%


(a)
See Note 2 to the financial statements for discussion of the Entergy Texas rate case settlement.
(b)
See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess ADIT in 2018 and 2019 and the tax legislation enactment in 2017.
(c)
See “Income Tax Audits - 2012-2013 IRS Audit” below for discussion of the settlement for Entergy Louisiana.
Significant Components Of Accumulated Deferred Income Taxes And Accrued Taxes
Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2019 and 2018 are as follows:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Deferred tax liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Plant basis differences - net
 

($979,033
)
 

($1,987,025
)
 

($565,202
)
 

($133,073
)
 

($551,365
)
 

($380,594
)
Regulatory assets
 
(170,949
)
 
(79,117
)
 
(10,528
)
 
(16,867
)
 
(59,745
)
 
(52,662
)
Nuclear decommissioning trusts/receivables
 
(120,306
)
 
(113,830
)
 
—

 
—

 
—

 
(100,621
)
Pension, net funding
 
(102,685
)
 
(98,743
)
 
(27,325
)
 
(11,859
)
 
(19,961
)
 
(21,609
)
Deferred fuel
 
—

 
(2,637
)
 
(609
)
 
(666
)
 
(4,380
)
 
(55
)
Other
 
(82,682
)
 
(94,139
)
 
(27,905
)
 
(25,909
)
 
2,059

 
(7,350
)
Total
 
(1,455,655
)
 
(2,375,491
)
 
(631,569
)
 
(188,374
)
 
(633,392
)
 
(562,891
)
Deferred tax assets:
 
 

 
 

 
 

 
 

 
 

 
 

Regulatory liabilities
 
250,410

 
283,507

 
53,421

 
33,258

 
65,602

 
121,011

Nuclear decommissioning liabilities
 
111,078

 
56,300

 
—

 
—

 
—

 
52,633

Pension and other post-employment benefits
 
(21,828
)
 
74,881

 
(5,844
)
 
(12,666
)
 
(15,406
)
 
(898
)
Sale and leaseback
 
—

 
—

 
—

 
—

 
—

 
102,480

Accumulated deferred investment tax credit
 
8,285

 
32,534

 
2,396

 
556

 
2,217

 
10,025

Provision for allowances and contingencies
 
5,365

 
77,298

 
12,963

 
24,022

 
4,024

 
—

Power purchase agreements
 
(15,087
)
 
18,004

 
1,147

 
7,961

 
26

 
—

Unbilled/deferred revenues
 
5,897

 
(28,081
)
 
4,715

 
1,428

 
5,544

 
—

Compensation
 
2,550

 
3,670

 
1,625

 
496

 
1,282

 
75

Net operating loss carryforwards
 
112,658

 
65,178

 
21,492

 
5,056

 
—

 
—

Capital losses and miscellaneous tax credits
 
—

 
—

 
45

 
—

 
—

 
7,857

Other
 
12,541

 
35,401

 
999

 
9,027

 
2,004

 
3

Total
 
471,869

 
618,692

 
92,959

 
69,138

 
65,293

 
293,186

Non-current accrued taxes (including unrecognized tax benefits)
 
(199,340
)
 
(707,714
)
 
(56,222
)
 
(235,300
)
 
(17,314
)
 
(544,235
)
Accumulated deferred income taxes and taxes accrued
 

($1,183,126
)
 

($2,464,513
)
 

($594,832
)
 

($354,536
)
 

($585,413
)
 

($813,940
)
2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Deferred tax liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Plant basis differences - net
 

($966,791
)
 

($1,893,831
)
 

($579,319
)
 

($135,143
)
 

($544,282
)
 

($403,809
)
Regulatory assets
 
(169,482
)
 
(74,917
)
 
(1,732
)
 
(20,009
)
 
(57,777
)
 
(46,627
)
Nuclear decommissioning trusts/receivables
 
(77,664
)
 
(71,470
)
 
—

 
—

 
—

 
(86,882
)
Pension, net funding
 
(91,962
)
 
(92,693
)
 
(24,398
)
 
(11,885
)
 
(20,331
)
 
(18,898
)
Deferred fuel
 
(5,801
)
 
(6,974
)
 
(11,819
)
 
(1,701
)
 
(2,835
)
 
(312
)
Other
 
(41,025
)
 
(34,700
)
 
(13,443
)
 
(7,640
)
 
(6,085
)
 
(4,544
)
Total
 
(1,352,725
)
 
(2,174,585
)
 
(630,711
)
 
(176,378
)
 
(631,310
)
 
(561,072
)
Deferred tax assets:
 
 

 
 

 
 

 
 

 
 

 
 

Regulatory liabilities
 
247,964

 
339,126

 
72,570

 
40,181

 
86,032

 
110,370

Nuclear decommissioning liabilities
 
99,479

 
48,738

 
—

 
—

 
—

 
46,643

Pension and other post-employment benefits
 
(19,068
)
 
80,102

 
(5,405
)
 
(11,371
)
 
(14,215
)
 
(632
)
Sale and leaseback
 
—

 
18,999

 
—

 
—

 
—

 
102,481

Accumulated deferred investment tax credit
 
8,599

 
33,928

 
2,541

 
579

 
2,347

 
9,649

Provision for allowances and contingencies
 
9,877

 
81,108

 
13,412

 
23,962

 
5,579

 
—

Power purchase agreements
 
(17,223
)
 
19,385

 
1,140

 
12,155

 
(18
)
 
—

Unbilled/deferred revenues
 
7,471

 
(17,345
)
 
5,527

 
636

 
7,016

 
—

Compensation
 
1,708

 
1,959

 
1,265

 
512

 
995

 
(260
)
Net operating loss carryforwards
 
6,338

 
20,118

 
4,896

 
480

 
261

 
—

Other
 
7,977

 
23,412

 
1,610

 
12,181

 
2,127

 
4

Total
 
353,122

 
649,530

 
97,556

 
79,315

 
90,124

 
268,255

Non-current accrued taxes (including unrecognized tax benefits)
 
(85,942
)
 
(701,666
)
 
(18,714
)
 
(226,532
)
 
(11,349
)
 
(512,479
)
Accumulated deferred income taxes and taxes accrued
 

($1,085,545
)
 

($2,226,721
)
 

($551,869
)
 

($323,595
)
 

($552,535
)
 

($805,296
)
Entergy's Estimated Tax Attributes, Carryovers And Their Expiration Dates
The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2019 are as follows:
 
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal net operating losses
 
$4.4 billion
 
$4.3 billion
 
$2 billion
 
$1.1 billion
 
$—
 
$—
Year(s) of expiration
 
N/A
 
2035-2037
 
N/A
 
2037
 
N/A
 
N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
State net operating losses
 
$4.5 billion
 
$5.2 billion
 
$2.1 billion
 
$1.2 billion
 
$—
 
$—
Year(s) of expiration
 
2024
 
2035-2039
 
2038-2039
 
2038-2039
 
N/A
 
N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
Misc. federal credits
 
$—
 
$5.2 million
 
$—
 
$—
 
$1.9 million
 
$3.2 million
Year(s) of expiration
 
N/A
 
2035-2038
 
N/A
 
N/A
 
2029-2038
 
2029-2038
 
 
 
 
 
 
 
 
 
 
 
 
 
State credits
 
$—
 
$—
 
$—
 
$—
 
$2.9 million
 
$13.1 million
Year(s) of expiration
 
N/A
 
N/A
 
N/A
 
N/A
 
2026
 
2020-2023
Reconciliation Of Unrecognized Tax Benefits
A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2019, 2018, and 2017 is as follows:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Gross balance at January 1, 2019
 

$1,298,662

 

$2,400,171

 

$508,765

 

$686,687

 

$17,802

 

$467,487

Additions based on tax positions related to the current year
 
84,335

 
28,705

 
68,594

 
40,676

 
2,312

 
5,496

Additions for tax positions of prior years
 
20,399

 
25,090

 
1,651

 
489

 
1,299

 
2,186

Reductions for tax positions of prior years
 
(62,154
)
 
(72,313
)
 
(12,723
)
 
(11,079
)
 
(7
)
 
(1,838
)
Gross balance at December 31, 2019
 
1,341,242

 
2,381,653

 
566,287

 
716,773

 
21,406

 
473,331

Offsets to gross unrecognized tax benefits:
 
 

 
 

 
 

 
 

 
 

 
 

Loss carryovers
 
(1,134,187
)
 
(1,573,257
)
 
(506,976
)
 
(445,430
)
 
(3,944
)
 
(8,392
)
Unrecognized tax benefits net of unused tax attributes and payments
 

$207,055

 

$808,396

 

$59,311

 

$271,343

 

$17,462

 

$464,939



2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Gross balance at January 1, 2018
 

($117,716
)
 

$2,518,457

 

$15,122

 

$679,544

 

$16,399

 

$445,511

Additions based on tax positions related to the current year (a)
 
1,430,828

 
30,577

 
493,039

 
2,261

 
1,978

 
18,271

Additions for tax positions of prior years
 
31,612

 
77,372

 
3,878

 
12,972

 
1,722

 
7,255

Reductions for tax positions of prior years
 
(21,619
)
 
(158,510
)
 
(3,253
)
 
(8,081
)
 
(2,262
)
 
(3,253
)
Settlements
 
(24,443
)
 
(67,725
)
 
(21
)
 
(9
)
 
(35
)
 
(297
)
Gross balance at December 31, 2018
 
1,298,662

 
2,400,171

 
508,765

 
686,687

 
17,802

 
467,487

Offsets to gross unrecognized tax benefits:
 
 

 
 

 
 

 
 

 
 

 
 

Loss carryovers
 
(1,173,839
)
 
(1,597,826
)
 
(478,268
)
 
(420,813
)
 
(3,199
)
 
(42,228
)
Unrecognized tax benefits net of unused tax attributes and payments
 

$124,823

 

$802,345

 

$30,497

 

$265,874

 

$14,603

 

$425,259


2017
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Gross balance at January 1, 2017
 

$2,503

 

$2,440,339

 

$12,206

 

$166,230

 

$15,946

 

$472,372

Additions based on tax positions related to the current year (a)
 
8,974

 
32,843

 
2,105

 
509,183

 
1,747

 
909

Additions for tax positions of prior years
 
3,682

 
235,331

 
1,267

 
13,364

 
3,115

 
1,432

Reductions for tax positions of prior years
 
(132,875
)
 
(190,056
)
 
(456
)
 
(9,233
)
 
(4,409
)
 
(29,202
)
Gross balance at December 31, 2017
 
(117,716
)
 
2,518,457

 
15,122

 
679,544

 
16,399

 
445,511

Offsets to gross unrecognized tax benefits:
 
 

 
 

 
 

 
 

 
 

 
 

Loss carryovers
 
—

 
(1,591,907
)
 
(15,122
)
 
(441,374
)
 
(638
)
 
(12,536
)
Unrecognized tax benefits net of unused tax attributes and payments
 

($117,716
)
 

$926,550

 

$—

 

$238,170

 

$15,761

 

$432,975



(a)
The primary additions for Entergy Mississippi in 2018, and Entergy New Orleans in 2017 are related to the mark-to-market treatment discussed in “Other Tax Matters - Tax Accounting Methods” below. The primary additions for Entergy Arkansas in 2018 are related to the nuclear decommissioning costs treatment and the mark-to-market treatment discussed in “Other Tax Matters - Tax Accounting Methods” below.
Summary Of Unrecognized Tax Benefits That Would Affect Effective Income Tax Rate
The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:
 
December 31,
 
2019
 
2018
 
2017
 
(In Millions)
Entergy Arkansas

$203.3

 

$85.4

 

$2.6

Entergy Louisiana

$556.3

 

$594.0

 

$575.8

Entergy Mississippi

$1.9

 

$1.5

 

$—

Entergy New Orleans

$242.7

 

$246.2

 

$31.7

Entergy Texas

$5.7

 

$5.1

 

$4.4

System Energy

$—

 

$—

 

$—
Summary Of Accrued Interest And Penalties Related To Unrecognized Tax Benefits
Accrued balances for the possible payment of interest related to unrecognized tax benefits are as follows:
 
December 31,
 
2019
 
2018
 
2017
 
(In Millions)
Entergy Arkansas

$3.1

 

$1.7

 

$1.6

Entergy Louisiana

$14.2

 

$17.9

 

$14.1

Entergy Mississippi

$1.7

 

$1.2

 

$1.0

Entergy New Orleans

$4.7

 

$2.7

 

$2.1

Entergy Texas

$1.1

 

$0.9

 

$0.4

System Energy

$14.5

 

$13.2

 

$8.5
Summary of Interest on Income Taxes Expense Related to Unrecognized Tax Benefits Interest (net-of-tax) was recorded as follows:
 
2019
 
2018
 
2017
 
(In Millions)
Entergy Arkansas

$1.4

 

$0.2

 

$0.2

Entergy Louisiana

($3.7
)
 

$3.8

 

$5.7

Entergy Mississippi

$0.5

 

$0.2

 

$0.2

Entergy New Orleans

$2.0

 

$0.6

 

$0.6

Entergy Texas

$0.2

 

$0.5

 

($0.8
)
System Energy

$1.3

 

$4.7

 

$4.8
Entergy Louisiana [Member]  
Tax Cuts and Jobs Act [Table Text Block] For the same reasons, the Registrant Subsidiaries’ December 31, 2019 and December 31, 2018 balance sheets reflect net regulatory liabilities for income taxes as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$487

 

$605

Entergy Louisiana

$531

 

$612

Entergy Mississippi

$237

 

$246

Entergy New Orleans

$59

 

$86

Entergy Texas

$253

 

$352

System Energy

$143

 

$163

Excess ADIT is generally classified into two categories: 1) the portion that is subject to the normalization requirements of the Act, i.e., “protected”, and 2) the portion that is not subject to such normalization provisions, referred to as “unprotected”. The Act provides that the normalization method of accounting for income taxes is required for
excess ADIT associated with public utility property. The Act provides for the use of the average rate assumption method (ARAM) for the determination of the timing of the return of excess ADIT associated with such property. Under ARAM, the excess ADIT is reduced over the remaining life of the asset. Remaining asset lives vary for each Registrant Subsidiary, but the average life of public utility property is typically 30 years or longer. Entergy will amortize the protected portion of the excess ADIT in conformity with the normalization requirements. The Registrant Subsidiaries’ net regulatory liability for income taxes as of December 31, 2019 and December 31, 2018, includes protected excess ADIT as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$490

 

$521

Entergy Louisiana

$797

 

$812

Entergy Mississippi

$261

 

$271

Entergy New Orleans

$62

 

$59

Entergy Texas

$228

 

$237

System Energy

$186

 

$202


During the second quarter of 2018, the Registrant Subsidiaries began paying unprotected excess accumulated deferred income taxes, associated with the effects of the Act, to their customers through rate riders and other means approved by their respective regulatory commissions. Payment of the unprotected excess accumulated deferred income taxes results in a reduction in the regulatory liability for income taxes and a corresponding reduction in income tax expense. This has a significant effect on the effective tax rate for the period as compared to the statutory tax rate. The Registrant Subsidiaries’ net regulatory liability for income taxes as of December 31, 2019 and December 31, 2018, includes unprotected excess ADIT as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$9

 

$117

Entergy Louisiana

$242

 

$295

Entergy New Orleans

$9

 

$25

Entergy Texas

$83

 

$171

System Energy

$—

 

$4


The return of unprotected excess accumulated deferred income taxes reduced Entergy’s and the Registrant Subsidiaries’ regulatory liability for income taxes as follows for 2019 and 2018:
 
2019
 
2018
 
(In Millions)
Entergy

$273

 

$776

Entergy Arkansas

$126

 

$368

Entergy Louisiana

$39

 

$141

Entergy Mississippi

$—

 

$159

Entergy New Orleans

$14

 

$13

Entergy Texas

$87

 

$15

System Energy

$7

 

$80
Income Tax Expenses From Continuing Operations
Income taxes for 2019, 2018, and 2017 for Entergy’s Registrant Subsidiaries consist of the following:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Current:
 
 
 
 
 
 
 
 
 
 
 
 
Federal
 

($14,549
)
 

($20,173
)
 

($8,939
)
 

($5,822
)
 

$16,035

 

$16,256

State
 
(714
)
 
(735
)
 
5,823

 
1,856

 
663

 
(2,831
)
Total
 
(15,263
)
 
(20,908
)
 
(3,116
)
 
(3,966
)
 
16,698

 
13,425

Deferred and non-current - net
 
(30,278
)
 
147,453

 
34,579

 
4,248

 
(69,963
)
 
422

Investment tax credit adjustments - net
 
(1,228
)
 
(4,922
)
 
(597
)
 
(96
)
 
(631
)
 
1,502

Income taxes
 

($46,769
)
 

$121,623

 

$30,866

 

$186

 

($53,896
)
 

$15,349


2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Current:
 
 
 
 
 
 
 
 
 
 
 
 
Federal
 

($23,638
)
 

($15,841
)
 

($11,275
)
 

($10,813
)
 

$16,190

 

($9,786
)
State
 
(1,617
)
 
(1,122
)
 
(1,066
)
 
545

 
3,205

 
(1,821
)
Total
 
(25,255
)
 
(16,963
)
 
(12,341
)
 
(10,268
)
 
19,395

 
(11,607
)
Deferred and non-current - net
 
(270,586
)
 
(32,725
)
 
(114,738
)
 
7,943

 
(44,817
)
 
(35,329
)
Investment tax credit adjustments - net
 
(1,226
)
 
(4,923
)
 
1,306

 
(111
)
 
(821
)
 
(739
)
Income taxes
 

($297,067
)
 

($54,611
)
 

($125,773
)
 

($2,436
)
 

($26,243
)
 

($47,675
)

2017
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Current:
 
 
 
 
 
 
 
 
 
 
 
 
Federal
 

$16,086

 

($84,250
)
 

($8,845
)
 

($30,635
)
 

$6,034

 

$47,674

State
 
9,191

 
1,480

 
(924
)
 
(728
)
 
310

 
5,314

Total
 
25,277

 
(82,770
)
 
(9,769
)
 
(31,363
)
 
6,344

 
52,988

Deferred and non-current - net
 
69,753

 
572,988

 
83,501

 
62,946

 
43,102

 
19,243

Investment tax credit adjustments - net
 
(1,226
)
 
(4,920
)
 
187

 
1,695

 
(965
)
 
(2,262
)
Income taxes
 

$93,804

 

$485,298

 

$73,919

 

$33,278

 

$48,481

 

$69,969
Total Income Taxes For Entergy Corporation And Subsidiaries
Total income taxes for the Registrant Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before taxes.  The reasons for the differences for the years 2019, 2018, and 2017 are:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Net income
 

$262,964

 

$691,537

 

$119,925

 

$52,629

 

$159,397

 

$99,120

Income taxes
 
(46,769
)
 
121,623

 
30,866

 
186

 
(53,896
)
 
15,349

Pretax income
 

$216,195

 

$813,160

 

$150,791

 

$52,815

 

$105,501

 

$114,469

Computed at statutory rate (21%)
 

$45,401

 

$170,764

 

$31,666

 

$11,091

 

$22,155

 

$24,039

Increases (reductions) in tax resulting from:
 
 
 
 

 
 

 
 

 
 

 
 

State income taxes net of federal income tax effect
 
15,954

 
42,854

 
5,563

 
3,443

 
360

 
5,134

Regulatory differences - utility plant items
 
(10,627
)
 
(19,421
)
 
(5,556
)
 
(1,532
)
 
(1,987
)
 
(6,213
)
Equity component of AFUDC
 
(3,255
)
 
(15,545
)
 
(1,755
)
 
(2,088
)
 
(5,973
)
 
(1,829
)
Amortization of investment tax credits
 
(1,201
)
 
(4,871
)
 
(160
)
 
(88
)
 
(617
)
 
(1,155
)
Flow-through / permanent differences
 
696

 
439

 
160

 
(741
)
 
560

 
(500
)
Amortization of excess ADIT (b)
 
(90,921
)
 
(28,531
)
 
203

 
(11,724
)
 
(69,091
)
 
(5,550
)
Non-taxable dividend income
 
—

 
(26,795
)
 
—

 
—

 
—

 
—

Provision for uncertain tax positions
 
(3,517
)
 
1,519

 
500

 
1,672

 
430

 
1,300

Other - net
 
701

 
1,210

 
245

 
153

 
267

 
123

Total income taxes as reported
 

($46,769
)
 

$121,623

 

$30,866

 

$186

 

($53,896
)
 

$15,349

Effective Income Tax Rate
 
(21.6
%)
 
15.0
%
 
20.5
%
 
0.4
%
 
(51.1
%)
 
13.4
%


2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Net income
 

$252,707

 

$675,614

 

$126,078

 

$53,152

 

$162,235

 

$94,109

Income taxes
 
(297,067
)
 
(54,611
)
 
(125,773
)
 
(2,436
)
 
(26,243
)
 
(47,675
)
Pretax income
 

($44,360
)
 

$621,003

 

$305

 

$50,716

 

$135,992

 

$46,434

Computed at statutory rate (21%)
 

($9,316
)
 

$130,411

 

$64

 

$10,650

 

$28,558

 

$9,751

Increases (reductions) in tax resulting from:
 


 


 


 


 


 


State income taxes net of federal income tax effect
 
(794
)
 
26,031

 
(1,747
)
 
2,322

 
2,576

 
2,812

Regulatory differences - utility plant items
 
(14,916
)
 
(12,604
)
 
(4,103
)
 
(1,502
)
 
(1,872
)
 
(2,510
)
Equity component of AFUDC
 
(3,477
)
 
(16,784
)
 
(1,829
)
 
(1,248
)
 
(2,042
)
 
(1,837
)
Amortization of investment tax credits
 
(1,201
)
 
(4,871
)
 
(160
)
 
(109
)
 
(808
)
 
(1,155
)
Flow-through / permanent differences
 
570

 
3,203

 
1,893

 
(4,222
)
 
1,038

 
2,815

Revisions of the 2017 tax legislation enactment regulatory liability accrual, including the effect of the Entergy Texas 2018 base rate proceeding (a)
 
933

 
(2,810
)
 
(556
)
 
884

 
(43,799
)
 
(3,565
)
Amortization of excess ADIT (b)
 
(271,570
)
 
(104,313
)
 
(120,831
)
 
(9,878
)
 
(11,519
)
 
(58,971
)
Settlement on treatment of regulatory obligations (c)
 
—

 
(52,320
)
 
—

 
—

 
—

 
—

IRS audit adjustment
 
1,290

 
1,097

 
1,018

 
(96
)
 
524

 
(12
)
Non-taxable dividend income
 
—

 
(26,795
)
 
—

 
—

 
—

 
—

Provision for uncertain tax positions
 
724

 
3,949

 
240

 
613

 
839

 
4,876

Other - net
 
690

 
1,195

 
238

 
150

 
262

 
121

Total income taxes as reported
 

($297,067
)
 

($54,611
)
 

($125,773
)
 

($2,436
)
 

($26,243
)
 

($47,675
)
Effective Income Tax Rate
 
669.7
%
 
(8.8
%)
 
(41,237.0
%)
 
(4.8
%)
 
(19.3
%)
 
(102.7
%)


2017
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Net income
 

$139,844

 

$316,347

 

$110,032

 

$44,553

 

$76,173

 

$78,596

Income taxes
 
93,804

 
485,298

 
73,919

 
33,278

 
48,481

 
69,969

Pretax income
 

$233,648

 

$801,645

 

$183,951

 

$77,831

 

$124,654

 

$148,565

Computed at statutory rate (35%)
 

$81,777

 

$280,576

 

$64,383

 

$27,241

 

$43,629

 

$51,998

Increases (reductions) in tax resulting from:
 
 

 
 

 
 

 
 

 
 

 
 

State income taxes net of federal income tax effect
 
11,586

 
31,927

 
6,202

 
2,842

 
527

 
5,635

Regulatory differences - utility plant items
 
7,220

 
12,168

 
1,356

 
619

 
5,581

 
12,880

Equity component of AFUDC
 
(6,458
)
 
(18,020
)
 
(3,383
)
 
(847
)
 
(2,353
)
 
(2,221
)
Amortization of investment tax credits
 
(1,201
)
 
(4,871
)
 
(160
)
 
(124
)
 
(951
)
 
(2,896
)
Flow-through / permanent differences
 
3,098

 
3,774

 
1,567

 
(3,352
)
 
1,428

 
(276
)
Tax legislation enactment (b)
 
(3,090
)
 
217,258

 
3,492

 
6,153

 
2,981

 
(69
)
Non-taxable dividend income
 
—

 
(44,658
)
 
—

 
—

 
—

 
—

Provision for uncertain tax positions
 
200

 
5,700

 
228

 
600

 
(2,617
)
 
4,800

Other - net
 
672

 
1,444

 
234

 
146

 
256

 
118

Total income taxes as reported
 

$93,804

 

$485,298

 

$73,919

 

$33,278

 

$48,481

 

$69,969

Effective Income Tax Rate
 
40.1
%
 
60.5
%
 
40.2
%
 
42.8
%
 
38.9
%
 
47.1
%


(a)
See Note 2 to the financial statements for discussion of the Entergy Texas rate case settlement.
(b)
See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess ADIT in 2018 and 2019 and the tax legislation enactment in 2017.
(c)
See “Income Tax Audits - 2012-2013 IRS Audit” below for discussion of the settlement for Entergy Louisiana.
Significant Components Of Accumulated Deferred Income Taxes And Accrued Taxes
Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2019 and 2018 are as follows:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Deferred tax liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Plant basis differences - net
 

($979,033
)
 

($1,987,025
)
 

($565,202
)
 

($133,073
)
 

($551,365
)
 

($380,594
)
Regulatory assets
 
(170,949
)
 
(79,117
)
 
(10,528
)
 
(16,867
)
 
(59,745
)
 
(52,662
)
Nuclear decommissioning trusts/receivables
 
(120,306
)
 
(113,830
)
 
—

 
—

 
—

 
(100,621
)
Pension, net funding
 
(102,685
)
 
(98,743
)
 
(27,325
)
 
(11,859
)
 
(19,961
)
 
(21,609
)
Deferred fuel
 
—

 
(2,637
)
 
(609
)
 
(666
)
 
(4,380
)
 
(55
)
Other
 
(82,682
)
 
(94,139
)
 
(27,905
)
 
(25,909
)
 
2,059

 
(7,350
)
Total
 
(1,455,655
)
 
(2,375,491
)
 
(631,569
)
 
(188,374
)
 
(633,392
)
 
(562,891
)
Deferred tax assets:
 
 

 
 

 
 

 
 

 
 

 
 

Regulatory liabilities
 
250,410

 
283,507

 
53,421

 
33,258

 
65,602

 
121,011

Nuclear decommissioning liabilities
 
111,078

 
56,300

 
—

 
—

 
—

 
52,633

Pension and other post-employment benefits
 
(21,828
)
 
74,881

 
(5,844
)
 
(12,666
)
 
(15,406
)
 
(898
)
Sale and leaseback
 
—

 
—

 
—

 
—

 
—

 
102,480

Accumulated deferred investment tax credit
 
8,285

 
32,534

 
2,396

 
556

 
2,217

 
10,025

Provision for allowances and contingencies
 
5,365

 
77,298

 
12,963

 
24,022

 
4,024

 
—

Power purchase agreements
 
(15,087
)
 
18,004

 
1,147

 
7,961

 
26

 
—

Unbilled/deferred revenues
 
5,897

 
(28,081
)
 
4,715

 
1,428

 
5,544

 
—

Compensation
 
2,550

 
3,670

 
1,625

 
496

 
1,282

 
75

Net operating loss carryforwards
 
112,658

 
65,178

 
21,492

 
5,056

 
—

 
—

Capital losses and miscellaneous tax credits
 
—

 
—

 
45

 
—

 
—

 
7,857

Other
 
12,541

 
35,401

 
999

 
9,027

 
2,004

 
3

Total
 
471,869

 
618,692

 
92,959

 
69,138

 
65,293

 
293,186

Non-current accrued taxes (including unrecognized tax benefits)
 
(199,340
)
 
(707,714
)
 
(56,222
)
 
(235,300
)
 
(17,314
)
 
(544,235
)
Accumulated deferred income taxes and taxes accrued
 

($1,183,126
)
 

($2,464,513
)
 

($594,832
)
 

($354,536
)
 

($585,413
)
 

($813,940
)
2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Deferred tax liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Plant basis differences - net
 

($966,791
)
 

($1,893,831
)
 

($579,319
)
 

($135,143
)
 

($544,282
)
 

($403,809
)
Regulatory assets
 
(169,482
)
 
(74,917
)
 
(1,732
)
 
(20,009
)
 
(57,777
)
 
(46,627
)
Nuclear decommissioning trusts/receivables
 
(77,664
)
 
(71,470
)
 
—

 
—

 
—

 
(86,882
)
Pension, net funding
 
(91,962
)
 
(92,693
)
 
(24,398
)
 
(11,885
)
 
(20,331
)
 
(18,898
)
Deferred fuel
 
(5,801
)
 
(6,974
)
 
(11,819
)
 
(1,701
)
 
(2,835
)
 
(312
)
Other
 
(41,025
)
 
(34,700
)
 
(13,443
)
 
(7,640
)
 
(6,085
)
 
(4,544
)
Total
 
(1,352,725
)
 
(2,174,585
)
 
(630,711
)
 
(176,378
)
 
(631,310
)
 
(561,072
)
Deferred tax assets:
 
 

 
 

 
 

 
 

 
 

 
 

Regulatory liabilities
 
247,964

 
339,126

 
72,570

 
40,181

 
86,032

 
110,370

Nuclear decommissioning liabilities
 
99,479

 
48,738

 
—

 
—

 
—

 
46,643

Pension and other post-employment benefits
 
(19,068
)
 
80,102

 
(5,405
)
 
(11,371
)
 
(14,215
)
 
(632
)
Sale and leaseback
 
—

 
18,999

 
—

 
—

 
—

 
102,481

Accumulated deferred investment tax credit
 
8,599

 
33,928

 
2,541

 
579

 
2,347

 
9,649

Provision for allowances and contingencies
 
9,877

 
81,108

 
13,412

 
23,962

 
5,579

 
—

Power purchase agreements
 
(17,223
)
 
19,385

 
1,140

 
12,155

 
(18
)
 
—

Unbilled/deferred revenues
 
7,471

 
(17,345
)
 
5,527

 
636

 
7,016

 
—

Compensation
 
1,708

 
1,959

 
1,265

 
512

 
995

 
(260
)
Net operating loss carryforwards
 
6,338

 
20,118

 
4,896

 
480

 
261

 
—

Other
 
7,977

 
23,412

 
1,610

 
12,181

 
2,127

 
4

Total
 
353,122

 
649,530

 
97,556

 
79,315

 
90,124

 
268,255

Non-current accrued taxes (including unrecognized tax benefits)
 
(85,942
)
 
(701,666
)
 
(18,714
)
 
(226,532
)
 
(11,349
)
 
(512,479
)
Accumulated deferred income taxes and taxes accrued
 

($1,085,545
)
 

($2,226,721
)
 

($551,869
)
 

($323,595
)
 

($552,535
)
 

($805,296
)
Entergy's Estimated Tax Attributes, Carryovers And Their Expiration Dates
The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2019 are as follows:
 
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal net operating losses
 
$4.4 billion
 
$4.3 billion
 
$2 billion
 
$1.1 billion
 
$—
 
$—
Year(s) of expiration
 
N/A
 
2035-2037
 
N/A
 
2037
 
N/A
 
N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
State net operating losses
 
$4.5 billion
 
$5.2 billion
 
$2.1 billion
 
$1.2 billion
 
$—
 
$—
Year(s) of expiration
 
2024
 
2035-2039
 
2038-2039
 
2038-2039
 
N/A
 
N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
Misc. federal credits
 
$—
 
$5.2 million
 
$—
 
$—
 
$1.9 million
 
$3.2 million
Year(s) of expiration
 
N/A
 
2035-2038
 
N/A
 
N/A
 
2029-2038
 
2029-2038
 
 
 
 
 
 
 
 
 
 
 
 
 
State credits
 
$—
 
$—
 
$—
 
$—
 
$2.9 million
 
$13.1 million
Year(s) of expiration
 
N/A
 
N/A
 
N/A
 
N/A
 
2026
 
2020-2023
Reconciliation Of Unrecognized Tax Benefits
A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2019, 2018, and 2017 is as follows:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Gross balance at January 1, 2019
 

$1,298,662

 

$2,400,171

 

$508,765

 

$686,687

 

$17,802

 

$467,487

Additions based on tax positions related to the current year
 
84,335

 
28,705

 
68,594

 
40,676

 
2,312

 
5,496

Additions for tax positions of prior years
 
20,399

 
25,090

 
1,651

 
489

 
1,299

 
2,186

Reductions for tax positions of prior years
 
(62,154
)
 
(72,313
)
 
(12,723
)
 
(11,079
)
 
(7
)
 
(1,838
)
Gross balance at December 31, 2019
 
1,341,242

 
2,381,653

 
566,287

 
716,773

 
21,406

 
473,331

Offsets to gross unrecognized tax benefits:
 
 

 
 

 
 

 
 

 
 

 
 

Loss carryovers
 
(1,134,187
)
 
(1,573,257
)
 
(506,976
)
 
(445,430
)
 
(3,944
)
 
(8,392
)
Unrecognized tax benefits net of unused tax attributes and payments
 

$207,055

 

$808,396

 

$59,311

 

$271,343

 

$17,462

 

$464,939



2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Gross balance at January 1, 2018
 

($117,716
)
 

$2,518,457

 

$15,122

 

$679,544

 

$16,399

 

$445,511

Additions based on tax positions related to the current year (a)
 
1,430,828

 
30,577

 
493,039

 
2,261

 
1,978

 
18,271

Additions for tax positions of prior years
 
31,612

 
77,372

 
3,878

 
12,972

 
1,722

 
7,255

Reductions for tax positions of prior years
 
(21,619
)
 
(158,510
)
 
(3,253
)
 
(8,081
)
 
(2,262
)
 
(3,253
)
Settlements
 
(24,443
)
 
(67,725
)
 
(21
)
 
(9
)
 
(35
)
 
(297
)
Gross balance at December 31, 2018
 
1,298,662

 
2,400,171

 
508,765

 
686,687

 
17,802

 
467,487

Offsets to gross unrecognized tax benefits:
 
 

 
 

 
 

 
 

 
 

 
 

Loss carryovers
 
(1,173,839
)
 
(1,597,826
)
 
(478,268
)
 
(420,813
)
 
(3,199
)
 
(42,228
)
Unrecognized tax benefits net of unused tax attributes and payments
 

$124,823

 

$802,345

 

$30,497

 

$265,874

 

$14,603

 

$425,259


2017
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Gross balance at January 1, 2017
 

$2,503

 

$2,440,339

 

$12,206

 

$166,230

 

$15,946

 

$472,372

Additions based on tax positions related to the current year (a)
 
8,974

 
32,843

 
2,105

 
509,183

 
1,747

 
909

Additions for tax positions of prior years
 
3,682

 
235,331

 
1,267

 
13,364

 
3,115

 
1,432

Reductions for tax positions of prior years
 
(132,875
)
 
(190,056
)
 
(456
)
 
(9,233
)
 
(4,409
)
 
(29,202
)
Gross balance at December 31, 2017
 
(117,716
)
 
2,518,457

 
15,122

 
679,544

 
16,399

 
445,511

Offsets to gross unrecognized tax benefits:
 
 

 
 

 
 

 
 

 
 

 
 

Loss carryovers
 
—

 
(1,591,907
)
 
(15,122
)
 
(441,374
)
 
(638
)
 
(12,536
)
Unrecognized tax benefits net of unused tax attributes and payments
 

($117,716
)
 

$926,550

 

$—

 

$238,170

 

$15,761

 

$432,975



(a)
The primary additions for Entergy Mississippi in 2018, and Entergy New Orleans in 2017 are related to the mark-to-market treatment discussed in “Other Tax Matters - Tax Accounting Methods” below. The primary additions for Entergy Arkansas in 2018 are related to the nuclear decommissioning costs treatment and the mark-to-market treatment discussed in “Other Tax Matters - Tax Accounting Methods” below.
Summary Of Unrecognized Tax Benefits That Would Affect Effective Income Tax Rate
The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:
 
December 31,
 
2019
 
2018
 
2017
 
(In Millions)
Entergy Arkansas

$203.3

 

$85.4

 

$2.6

Entergy Louisiana

$556.3

 

$594.0

 

$575.8

Entergy Mississippi

$1.9

 

$1.5

 

$—

Entergy New Orleans

$242.7

 

$246.2

 

$31.7

Entergy Texas

$5.7

 

$5.1

 

$4.4

System Energy

$—

 

$—

 

$—
Summary Of Accrued Interest And Penalties Related To Unrecognized Tax Benefits
Accrued balances for the possible payment of interest related to unrecognized tax benefits are as follows:
 
December 31,
 
2019
 
2018
 
2017
 
(In Millions)
Entergy Arkansas

$3.1

 

$1.7

 

$1.6

Entergy Louisiana

$14.2

 

$17.9

 

$14.1

Entergy Mississippi

$1.7

 

$1.2

 

$1.0

Entergy New Orleans

$4.7

 

$2.7

 

$2.1

Entergy Texas

$1.1

 

$0.9

 

$0.4

System Energy

$14.5

 

$13.2

 

$8.5
Summary of Interest on Income Taxes Expense Related to Unrecognized Tax Benefits Interest (net-of-tax) was recorded as follows:
 
2019
 
2018
 
2017
 
(In Millions)
Entergy Arkansas

$1.4

 

$0.2

 

$0.2

Entergy Louisiana

($3.7
)
 

$3.8

 

$5.7

Entergy Mississippi

$0.5

 

$0.2

 

$0.2

Entergy New Orleans

$2.0

 

$0.6

 

$0.6

Entergy Texas

$0.2

 

$0.5

 

($0.8
)
System Energy

$1.3

 

$4.7

 

$4.8
Entergy Mississippi [Member]  
Tax Cuts and Jobs Act [Table Text Block] For the same reasons, the Registrant Subsidiaries’ December 31, 2019 and December 31, 2018 balance sheets reflect net regulatory liabilities for income taxes as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$487

 

$605

Entergy Louisiana

$531

 

$612

Entergy Mississippi

$237

 

$246

Entergy New Orleans

$59

 

$86

Entergy Texas

$253

 

$352

System Energy

$143

 

$163

Excess ADIT is generally classified into two categories: 1) the portion that is subject to the normalization requirements of the Act, i.e., “protected”, and 2) the portion that is not subject to such normalization provisions, referred to as “unprotected”. The Act provides that the normalization method of accounting for income taxes is required for
excess ADIT associated with public utility property. The Act provides for the use of the average rate assumption method (ARAM) for the determination of the timing of the return of excess ADIT associated with such property. Under ARAM, the excess ADIT is reduced over the remaining life of the asset. Remaining asset lives vary for each Registrant Subsidiary, but the average life of public utility property is typically 30 years or longer. Entergy will amortize the protected portion of the excess ADIT in conformity with the normalization requirements. The Registrant Subsidiaries’ net regulatory liability for income taxes as of December 31, 2019 and December 31, 2018, includes protected excess ADIT as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$490

 

$521

Entergy Louisiana

$797

 

$812

Entergy Mississippi

$261

 

$271

Entergy New Orleans

$62

 

$59

Entergy Texas

$228

 

$237

System Energy

$186

 

$202


During the second quarter of 2018, the Registrant Subsidiaries began paying unprotected excess accumulated deferred income taxes, associated with the effects of the Act, to their customers through rate riders and other means approved by their respective regulatory commissions. Payment of the unprotected excess accumulated deferred income taxes results in a reduction in the regulatory liability for income taxes and a corresponding reduction in income tax expense. This has a significant effect on the effective tax rate for the period as compared to the statutory tax rate. The Registrant Subsidiaries’ net regulatory liability for income taxes as of December 31, 2019 and December 31, 2018, includes unprotected excess ADIT as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$9

 

$117

Entergy Louisiana

$242

 

$295

Entergy New Orleans

$9

 

$25

Entergy Texas

$83

 

$171

System Energy

$—

 

$4


The return of unprotected excess accumulated deferred income taxes reduced Entergy’s and the Registrant Subsidiaries’ regulatory liability for income taxes as follows for 2019 and 2018:
 
2019
 
2018
 
(In Millions)
Entergy

$273

 

$776

Entergy Arkansas

$126

 

$368

Entergy Louisiana

$39

 

$141

Entergy Mississippi

$—

 

$159

Entergy New Orleans

$14

 

$13

Entergy Texas

$87

 

$15

System Energy

$7

 

$80
Income Tax Expenses From Continuing Operations
Income taxes for 2019, 2018, and 2017 for Entergy’s Registrant Subsidiaries consist of the following:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Current:
 
 
 
 
 
 
 
 
 
 
 
 
Federal
 

($14,549
)
 

($20,173
)
 

($8,939
)
 

($5,822
)
 

$16,035

 

$16,256

State
 
(714
)
 
(735
)
 
5,823

 
1,856

 
663

 
(2,831
)
Total
 
(15,263
)
 
(20,908
)
 
(3,116
)
 
(3,966
)
 
16,698

 
13,425

Deferred and non-current - net
 
(30,278
)
 
147,453

 
34,579

 
4,248

 
(69,963
)
 
422

Investment tax credit adjustments - net
 
(1,228
)
 
(4,922
)
 
(597
)
 
(96
)
 
(631
)
 
1,502

Income taxes
 

($46,769
)
 

$121,623

 

$30,866

 

$186

 

($53,896
)
 

$15,349


2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Current:
 
 
 
 
 
 
 
 
 
 
 
 
Federal
 

($23,638
)
 

($15,841
)
 

($11,275
)
 

($10,813
)
 

$16,190

 

($9,786
)
State
 
(1,617
)
 
(1,122
)
 
(1,066
)
 
545

 
3,205

 
(1,821
)
Total
 
(25,255
)
 
(16,963
)
 
(12,341
)
 
(10,268
)
 
19,395

 
(11,607
)
Deferred and non-current - net
 
(270,586
)
 
(32,725
)
 
(114,738
)
 
7,943

 
(44,817
)
 
(35,329
)
Investment tax credit adjustments - net
 
(1,226
)
 
(4,923
)
 
1,306

 
(111
)
 
(821
)
 
(739
)
Income taxes
 

($297,067
)
 

($54,611
)
 

($125,773
)
 

($2,436
)
 

($26,243
)
 

($47,675
)

2017
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Current:
 
 
 
 
 
 
 
 
 
 
 
 
Federal
 

$16,086

 

($84,250
)
 

($8,845
)
 

($30,635
)
 

$6,034

 

$47,674

State
 
9,191

 
1,480

 
(924
)
 
(728
)
 
310

 
5,314

Total
 
25,277

 
(82,770
)
 
(9,769
)
 
(31,363
)
 
6,344

 
52,988

Deferred and non-current - net
 
69,753

 
572,988

 
83,501

 
62,946

 
43,102

 
19,243

Investment tax credit adjustments - net
 
(1,226
)
 
(4,920
)
 
187

 
1,695

 
(965
)
 
(2,262
)
Income taxes
 

$93,804

 

$485,298

 

$73,919

 

$33,278

 

$48,481

 

$69,969
Total Income Taxes For Entergy Corporation And Subsidiaries
Total income taxes for the Registrant Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before taxes.  The reasons for the differences for the years 2019, 2018, and 2017 are:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Net income
 

$262,964

 

$691,537

 

$119,925

 

$52,629

 

$159,397

 

$99,120

Income taxes
 
(46,769
)
 
121,623

 
30,866

 
186

 
(53,896
)
 
15,349

Pretax income
 

$216,195

 

$813,160

 

$150,791

 

$52,815

 

$105,501

 

$114,469

Computed at statutory rate (21%)
 

$45,401

 

$170,764

 

$31,666

 

$11,091

 

$22,155

 

$24,039

Increases (reductions) in tax resulting from:
 
 
 
 

 
 

 
 

 
 

 
 

State income taxes net of federal income tax effect
 
15,954

 
42,854

 
5,563

 
3,443

 
360

 
5,134

Regulatory differences - utility plant items
 
(10,627
)
 
(19,421
)
 
(5,556
)
 
(1,532
)
 
(1,987
)
 
(6,213
)
Equity component of AFUDC
 
(3,255
)
 
(15,545
)
 
(1,755
)
 
(2,088
)
 
(5,973
)
 
(1,829
)
Amortization of investment tax credits
 
(1,201
)
 
(4,871
)
 
(160
)
 
(88
)
 
(617
)
 
(1,155
)
Flow-through / permanent differences
 
696

 
439

 
160

 
(741
)
 
560

 
(500
)
Amortization of excess ADIT (b)
 
(90,921
)
 
(28,531
)
 
203

 
(11,724
)
 
(69,091
)
 
(5,550
)
Non-taxable dividend income
 
—

 
(26,795
)
 
—

 
—

 
—

 
—

Provision for uncertain tax positions
 
(3,517
)
 
1,519

 
500

 
1,672

 
430

 
1,300

Other - net
 
701

 
1,210

 
245

 
153

 
267

 
123

Total income taxes as reported
 

($46,769
)
 

$121,623

 

$30,866

 

$186

 

($53,896
)
 

$15,349

Effective Income Tax Rate
 
(21.6
%)
 
15.0
%
 
20.5
%
 
0.4
%
 
(51.1
%)
 
13.4
%


2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Net income
 

$252,707

 

$675,614

 

$126,078

 

$53,152

 

$162,235

 

$94,109

Income taxes
 
(297,067
)
 
(54,611
)
 
(125,773
)
 
(2,436
)
 
(26,243
)
 
(47,675
)
Pretax income
 

($44,360
)
 

$621,003

 

$305

 

$50,716

 

$135,992

 

$46,434

Computed at statutory rate (21%)
 

($9,316
)
 

$130,411

 

$64

 

$10,650

 

$28,558

 

$9,751

Increases (reductions) in tax resulting from:
 


 


 


 


 


 


State income taxes net of federal income tax effect
 
(794
)
 
26,031

 
(1,747
)
 
2,322

 
2,576

 
2,812

Regulatory differences - utility plant items
 
(14,916
)
 
(12,604
)
 
(4,103
)
 
(1,502
)
 
(1,872
)
 
(2,510
)
Equity component of AFUDC
 
(3,477
)
 
(16,784
)
 
(1,829
)
 
(1,248
)
 
(2,042
)
 
(1,837
)
Amortization of investment tax credits
 
(1,201
)
 
(4,871
)
 
(160
)
 
(109
)
 
(808
)
 
(1,155
)
Flow-through / permanent differences
 
570

 
3,203

 
1,893

 
(4,222
)
 
1,038

 
2,815

Revisions of the 2017 tax legislation enactment regulatory liability accrual, including the effect of the Entergy Texas 2018 base rate proceeding (a)
 
933

 
(2,810
)
 
(556
)
 
884

 
(43,799
)
 
(3,565
)
Amortization of excess ADIT (b)
 
(271,570
)
 
(104,313
)
 
(120,831
)
 
(9,878
)
 
(11,519
)
 
(58,971
)
Settlement on treatment of regulatory obligations (c)
 
—

 
(52,320
)
 
—

 
—

 
—

 
—

IRS audit adjustment
 
1,290

 
1,097

 
1,018

 
(96
)
 
524

 
(12
)
Non-taxable dividend income
 
—

 
(26,795
)
 
—

 
—

 
—

 
—

Provision for uncertain tax positions
 
724

 
3,949

 
240

 
613

 
839

 
4,876

Other - net
 
690

 
1,195

 
238

 
150

 
262

 
121

Total income taxes as reported
 

($297,067
)
 

($54,611
)
 

($125,773
)
 

($2,436
)
 

($26,243
)
 

($47,675
)
Effective Income Tax Rate
 
669.7
%
 
(8.8
%)
 
(41,237.0
%)
 
(4.8
%)
 
(19.3
%)
 
(102.7
%)


2017
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Net income
 

$139,844

 

$316,347

 

$110,032

 

$44,553

 

$76,173

 

$78,596

Income taxes
 
93,804

 
485,298

 
73,919

 
33,278

 
48,481

 
69,969

Pretax income
 

$233,648

 

$801,645

 

$183,951

 

$77,831

 

$124,654

 

$148,565

Computed at statutory rate (35%)
 

$81,777

 

$280,576

 

$64,383

 

$27,241

 

$43,629

 

$51,998

Increases (reductions) in tax resulting from:
 
 

 
 

 
 

 
 

 
 

 
 

State income taxes net of federal income tax effect
 
11,586

 
31,927

 
6,202

 
2,842

 
527

 
5,635

Regulatory differences - utility plant items
 
7,220

 
12,168

 
1,356

 
619

 
5,581

 
12,880

Equity component of AFUDC
 
(6,458
)
 
(18,020
)
 
(3,383
)
 
(847
)
 
(2,353
)
 
(2,221
)
Amortization of investment tax credits
 
(1,201
)
 
(4,871
)
 
(160
)
 
(124
)
 
(951
)
 
(2,896
)
Flow-through / permanent differences
 
3,098

 
3,774

 
1,567

 
(3,352
)
 
1,428

 
(276
)
Tax legislation enactment (b)
 
(3,090
)
 
217,258

 
3,492

 
6,153

 
2,981

 
(69
)
Non-taxable dividend income
 
—

 
(44,658
)
 
—

 
—

 
—

 
—

Provision for uncertain tax positions
 
200

 
5,700

 
228

 
600

 
(2,617
)
 
4,800

Other - net
 
672

 
1,444

 
234

 
146

 
256

 
118

Total income taxes as reported
 

$93,804

 

$485,298

 

$73,919

 

$33,278

 

$48,481

 

$69,969

Effective Income Tax Rate
 
40.1
%
 
60.5
%
 
40.2
%
 
42.8
%
 
38.9
%
 
47.1
%


(a)
See Note 2 to the financial statements for discussion of the Entergy Texas rate case settlement.
(b)
See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess ADIT in 2018 and 2019 and the tax legislation enactment in 2017.
(c)
See “Income Tax Audits - 2012-2013 IRS Audit” below for discussion of the settlement for Entergy Louisiana.
Significant Components Of Accumulated Deferred Income Taxes And Accrued Taxes
Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2019 and 2018 are as follows:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Deferred tax liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Plant basis differences - net
 

($979,033
)
 

($1,987,025
)
 

($565,202
)
 

($133,073
)
 

($551,365
)
 

($380,594
)
Regulatory assets
 
(170,949
)
 
(79,117
)
 
(10,528
)
 
(16,867
)
 
(59,745
)
 
(52,662
)
Nuclear decommissioning trusts/receivables
 
(120,306
)
 
(113,830
)
 
—

 
—

 
—

 
(100,621
)
Pension, net funding
 
(102,685
)
 
(98,743
)
 
(27,325
)
 
(11,859
)
 
(19,961
)
 
(21,609
)
Deferred fuel
 
—

 
(2,637
)
 
(609
)
 
(666
)
 
(4,380
)
 
(55
)
Other
 
(82,682
)
 
(94,139
)
 
(27,905
)
 
(25,909
)
 
2,059

 
(7,350
)
Total
 
(1,455,655
)
 
(2,375,491
)
 
(631,569
)
 
(188,374
)
 
(633,392
)
 
(562,891
)
Deferred tax assets:
 
 

 
 

 
 

 
 

 
 

 
 

Regulatory liabilities
 
250,410

 
283,507

 
53,421

 
33,258

 
65,602

 
121,011

Nuclear decommissioning liabilities
 
111,078

 
56,300

 
—

 
—

 
—

 
52,633

Pension and other post-employment benefits
 
(21,828
)
 
74,881

 
(5,844
)
 
(12,666
)
 
(15,406
)
 
(898
)
Sale and leaseback
 
—

 
—

 
—

 
—

 
—

 
102,480

Accumulated deferred investment tax credit
 
8,285

 
32,534

 
2,396

 
556

 
2,217

 
10,025

Provision for allowances and contingencies
 
5,365

 
77,298

 
12,963

 
24,022

 
4,024

 
—

Power purchase agreements
 
(15,087
)
 
18,004

 
1,147

 
7,961

 
26

 
—

Unbilled/deferred revenues
 
5,897

 
(28,081
)
 
4,715

 
1,428

 
5,544

 
—

Compensation
 
2,550

 
3,670

 
1,625

 
496

 
1,282

 
75

Net operating loss carryforwards
 
112,658

 
65,178

 
21,492

 
5,056

 
—

 
—

Capital losses and miscellaneous tax credits
 
—

 
—

 
45

 
—

 
—

 
7,857

Other
 
12,541

 
35,401

 
999

 
9,027

 
2,004

 
3

Total
 
471,869

 
618,692

 
92,959

 
69,138

 
65,293

 
293,186

Non-current accrued taxes (including unrecognized tax benefits)
 
(199,340
)
 
(707,714
)
 
(56,222
)
 
(235,300
)
 
(17,314
)
 
(544,235
)
Accumulated deferred income taxes and taxes accrued
 

($1,183,126
)
 

($2,464,513
)
 

($594,832
)
 

($354,536
)
 

($585,413
)
 

($813,940
)
2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Deferred tax liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Plant basis differences - net
 

($966,791
)
 

($1,893,831
)
 

($579,319
)
 

($135,143
)
 

($544,282
)
 

($403,809
)
Regulatory assets
 
(169,482
)
 
(74,917
)
 
(1,732
)
 
(20,009
)
 
(57,777
)
 
(46,627
)
Nuclear decommissioning trusts/receivables
 
(77,664
)
 
(71,470
)
 
—

 
—

 
—

 
(86,882
)
Pension, net funding
 
(91,962
)
 
(92,693
)
 
(24,398
)
 
(11,885
)
 
(20,331
)
 
(18,898
)
Deferred fuel
 
(5,801
)
 
(6,974
)
 
(11,819
)
 
(1,701
)
 
(2,835
)
 
(312
)
Other
 
(41,025
)
 
(34,700
)
 
(13,443
)
 
(7,640
)
 
(6,085
)
 
(4,544
)
Total
 
(1,352,725
)
 
(2,174,585
)
 
(630,711
)
 
(176,378
)
 
(631,310
)
 
(561,072
)
Deferred tax assets:
 
 

 
 

 
 

 
 

 
 

 
 

Regulatory liabilities
 
247,964

 
339,126

 
72,570

 
40,181

 
86,032

 
110,370

Nuclear decommissioning liabilities
 
99,479

 
48,738

 
—

 
—

 
—

 
46,643

Pension and other post-employment benefits
 
(19,068
)
 
80,102

 
(5,405
)
 
(11,371
)
 
(14,215
)
 
(632
)
Sale and leaseback
 
—

 
18,999

 
—

 
—

 
—

 
102,481

Accumulated deferred investment tax credit
 
8,599

 
33,928

 
2,541

 
579

 
2,347

 
9,649

Provision for allowances and contingencies
 
9,877

 
81,108

 
13,412

 
23,962

 
5,579

 
—

Power purchase agreements
 
(17,223
)
 
19,385

 
1,140

 
12,155

 
(18
)
 
—

Unbilled/deferred revenues
 
7,471

 
(17,345
)
 
5,527

 
636

 
7,016

 
—

Compensation
 
1,708

 
1,959

 
1,265

 
512

 
995

 
(260
)
Net operating loss carryforwards
 
6,338

 
20,118

 
4,896

 
480

 
261

 
—

Other
 
7,977

 
23,412

 
1,610

 
12,181

 
2,127

 
4

Total
 
353,122

 
649,530

 
97,556

 
79,315

 
90,124

 
268,255

Non-current accrued taxes (including unrecognized tax benefits)
 
(85,942
)
 
(701,666
)
 
(18,714
)
 
(226,532
)
 
(11,349
)
 
(512,479
)
Accumulated deferred income taxes and taxes accrued
 

($1,085,545
)
 

($2,226,721
)
 

($551,869
)
 

($323,595
)
 

($552,535
)
 

($805,296
)
Entergy's Estimated Tax Attributes, Carryovers And Their Expiration Dates
The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2019 are as follows:
 
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal net operating losses
 
$4.4 billion
 
$4.3 billion
 
$2 billion
 
$1.1 billion
 
$—
 
$—
Year(s) of expiration
 
N/A
 
2035-2037
 
N/A
 
2037
 
N/A
 
N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
State net operating losses
 
$4.5 billion
 
$5.2 billion
 
$2.1 billion
 
$1.2 billion
 
$—
 
$—
Year(s) of expiration
 
2024
 
2035-2039
 
2038-2039
 
2038-2039
 
N/A
 
N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
Misc. federal credits
 
$—
 
$5.2 million
 
$—
 
$—
 
$1.9 million
 
$3.2 million
Year(s) of expiration
 
N/A
 
2035-2038
 
N/A
 
N/A
 
2029-2038
 
2029-2038
 
 
 
 
 
 
 
 
 
 
 
 
 
State credits
 
$—
 
$—
 
$—
 
$—
 
$2.9 million
 
$13.1 million
Year(s) of expiration
 
N/A
 
N/A
 
N/A
 
N/A
 
2026
 
2020-2023
Reconciliation Of Unrecognized Tax Benefits
A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2019, 2018, and 2017 is as follows:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Gross balance at January 1, 2019
 

$1,298,662

 

$2,400,171

 

$508,765

 

$686,687

 

$17,802

 

$467,487

Additions based on tax positions related to the current year
 
84,335

 
28,705

 
68,594

 
40,676

 
2,312

 
5,496

Additions for tax positions of prior years
 
20,399

 
25,090

 
1,651

 
489

 
1,299

 
2,186

Reductions for tax positions of prior years
 
(62,154
)
 
(72,313
)
 
(12,723
)
 
(11,079
)
 
(7
)
 
(1,838
)
Gross balance at December 31, 2019
 
1,341,242

 
2,381,653

 
566,287

 
716,773

 
21,406

 
473,331

Offsets to gross unrecognized tax benefits:
 
 

 
 

 
 

 
 

 
 

 
 

Loss carryovers
 
(1,134,187
)
 
(1,573,257
)
 
(506,976
)
 
(445,430
)
 
(3,944
)
 
(8,392
)
Unrecognized tax benefits net of unused tax attributes and payments
 

$207,055

 

$808,396

 

$59,311

 

$271,343

 

$17,462

 

$464,939



2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Gross balance at January 1, 2018
 

($117,716
)
 

$2,518,457

 

$15,122

 

$679,544

 

$16,399

 

$445,511

Additions based on tax positions related to the current year (a)
 
1,430,828

 
30,577

 
493,039

 
2,261

 
1,978

 
18,271

Additions for tax positions of prior years
 
31,612

 
77,372

 
3,878

 
12,972

 
1,722

 
7,255

Reductions for tax positions of prior years
 
(21,619
)
 
(158,510
)
 
(3,253
)
 
(8,081
)
 
(2,262
)
 
(3,253
)
Settlements
 
(24,443
)
 
(67,725
)
 
(21
)
 
(9
)
 
(35
)
 
(297
)
Gross balance at December 31, 2018
 
1,298,662

 
2,400,171

 
508,765

 
686,687

 
17,802

 
467,487

Offsets to gross unrecognized tax benefits:
 
 

 
 

 
 

 
 

 
 

 
 

Loss carryovers
 
(1,173,839
)
 
(1,597,826
)
 
(478,268
)
 
(420,813
)
 
(3,199
)
 
(42,228
)
Unrecognized tax benefits net of unused tax attributes and payments
 

$124,823

 

$802,345

 

$30,497

 

$265,874

 

$14,603

 

$425,259


2017
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Gross balance at January 1, 2017
 

$2,503

 

$2,440,339

 

$12,206

 

$166,230

 

$15,946

 

$472,372

Additions based on tax positions related to the current year (a)
 
8,974

 
32,843

 
2,105

 
509,183

 
1,747

 
909

Additions for tax positions of prior years
 
3,682

 
235,331

 
1,267

 
13,364

 
3,115

 
1,432

Reductions for tax positions of prior years
 
(132,875
)
 
(190,056
)
 
(456
)
 
(9,233
)
 
(4,409
)
 
(29,202
)
Gross balance at December 31, 2017
 
(117,716
)
 
2,518,457

 
15,122

 
679,544

 
16,399

 
445,511

Offsets to gross unrecognized tax benefits:
 
 

 
 

 
 

 
 

 
 

 
 

Loss carryovers
 
—

 
(1,591,907
)
 
(15,122
)
 
(441,374
)
 
(638
)
 
(12,536
)
Unrecognized tax benefits net of unused tax attributes and payments
 

($117,716
)
 

$926,550

 

$—

 

$238,170

 

$15,761

 

$432,975



(a)
The primary additions for Entergy Mississippi in 2018, and Entergy New Orleans in 2017 are related to the mark-to-market treatment discussed in “Other Tax Matters - Tax Accounting Methods” below. The primary additions for Entergy Arkansas in 2018 are related to the nuclear decommissioning costs treatment and the mark-to-market treatment discussed in “Other Tax Matters - Tax Accounting Methods” below.
Summary Of Unrecognized Tax Benefits That Would Affect Effective Income Tax Rate
The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:
 
December 31,
 
2019
 
2018
 
2017
 
(In Millions)
Entergy Arkansas

$203.3

 

$85.4

 

$2.6

Entergy Louisiana

$556.3

 

$594.0

 

$575.8

Entergy Mississippi

$1.9

 

$1.5

 

$—

Entergy New Orleans

$242.7

 

$246.2

 

$31.7

Entergy Texas

$5.7

 

$5.1

 

$4.4

System Energy

$—

 

$—

 

$—
Summary Of Accrued Interest And Penalties Related To Unrecognized Tax Benefits
Accrued balances for the possible payment of interest related to unrecognized tax benefits are as follows:
 
December 31,
 
2019
 
2018
 
2017
 
(In Millions)
Entergy Arkansas

$3.1

 

$1.7

 

$1.6

Entergy Louisiana

$14.2

 

$17.9

 

$14.1

Entergy Mississippi

$1.7

 

$1.2

 

$1.0

Entergy New Orleans

$4.7

 

$2.7

 

$2.1

Entergy Texas

$1.1

 

$0.9

 

$0.4

System Energy

$14.5

 

$13.2

 

$8.5
Summary of Interest on Income Taxes Expense Related to Unrecognized Tax Benefits Interest (net-of-tax) was recorded as follows:
 
2019
 
2018
 
2017
 
(In Millions)
Entergy Arkansas

$1.4

 

$0.2

 

$0.2

Entergy Louisiana

($3.7
)
 

$3.8

 

$5.7

Entergy Mississippi

$0.5

 

$0.2

 

$0.2

Entergy New Orleans

$2.0

 

$0.6

 

$0.6

Entergy Texas

$0.2

 

$0.5

 

($0.8
)
System Energy

$1.3

 

$4.7

 

$4.8
Entergy New Orleans [Member]  
Tax Cuts and Jobs Act [Table Text Block] For the same reasons, the Registrant Subsidiaries’ December 31, 2019 and December 31, 2018 balance sheets reflect net regulatory liabilities for income taxes as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$487

 

$605

Entergy Louisiana

$531

 

$612

Entergy Mississippi

$237

 

$246

Entergy New Orleans

$59

 

$86

Entergy Texas

$253

 

$352

System Energy

$143

 

$163

Excess ADIT is generally classified into two categories: 1) the portion that is subject to the normalization requirements of the Act, i.e., “protected”, and 2) the portion that is not subject to such normalization provisions, referred to as “unprotected”. The Act provides that the normalization method of accounting for income taxes is required for
excess ADIT associated with public utility property. The Act provides for the use of the average rate assumption method (ARAM) for the determination of the timing of the return of excess ADIT associated with such property. Under ARAM, the excess ADIT is reduced over the remaining life of the asset. Remaining asset lives vary for each Registrant Subsidiary, but the average life of public utility property is typically 30 years or longer. Entergy will amortize the protected portion of the excess ADIT in conformity with the normalization requirements. The Registrant Subsidiaries’ net regulatory liability for income taxes as of December 31, 2019 and December 31, 2018, includes protected excess ADIT as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$490

 

$521

Entergy Louisiana

$797

 

$812

Entergy Mississippi

$261

 

$271

Entergy New Orleans

$62

 

$59

Entergy Texas

$228

 

$237

System Energy

$186

 

$202


During the second quarter of 2018, the Registrant Subsidiaries began paying unprotected excess accumulated deferred income taxes, associated with the effects of the Act, to their customers through rate riders and other means approved by their respective regulatory commissions. Payment of the unprotected excess accumulated deferred income taxes results in a reduction in the regulatory liability for income taxes and a corresponding reduction in income tax expense. This has a significant effect on the effective tax rate for the period as compared to the statutory tax rate. The Registrant Subsidiaries’ net regulatory liability for income taxes as of December 31, 2019 and December 31, 2018, includes unprotected excess ADIT as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$9

 

$117

Entergy Louisiana

$242

 

$295

Entergy New Orleans

$9

 

$25

Entergy Texas

$83

 

$171

System Energy

$—

 

$4


The return of unprotected excess accumulated deferred income taxes reduced Entergy’s and the Registrant Subsidiaries’ regulatory liability for income taxes as follows for 2019 and 2018:
 
2019
 
2018
 
(In Millions)
Entergy

$273

 

$776

Entergy Arkansas

$126

 

$368

Entergy Louisiana

$39

 

$141

Entergy Mississippi

$—

 

$159

Entergy New Orleans

$14

 

$13

Entergy Texas

$87

 

$15

System Energy

$7

 

$80
Income Tax Expenses From Continuing Operations
Income taxes for 2019, 2018, and 2017 for Entergy’s Registrant Subsidiaries consist of the following:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Current:
 
 
 
 
 
 
 
 
 
 
 
 
Federal
 

($14,549
)
 

($20,173
)
 

($8,939
)
 

($5,822
)
 

$16,035

 

$16,256

State
 
(714
)
 
(735
)
 
5,823

 
1,856

 
663

 
(2,831
)
Total
 
(15,263
)
 
(20,908
)
 
(3,116
)
 
(3,966
)
 
16,698

 
13,425

Deferred and non-current - net
 
(30,278
)
 
147,453

 
34,579

 
4,248

 
(69,963
)
 
422

Investment tax credit adjustments - net
 
(1,228
)
 
(4,922
)
 
(597
)
 
(96
)
 
(631
)
 
1,502

Income taxes
 

($46,769
)
 

$121,623

 

$30,866

 

$186

 

($53,896
)
 

$15,349


2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Current:
 
 
 
 
 
 
 
 
 
 
 
 
Federal
 

($23,638
)
 

($15,841
)
 

($11,275
)
 

($10,813
)
 

$16,190

 

($9,786
)
State
 
(1,617
)
 
(1,122
)
 
(1,066
)
 
545

 
3,205

 
(1,821
)
Total
 
(25,255
)
 
(16,963
)
 
(12,341
)
 
(10,268
)
 
19,395

 
(11,607
)
Deferred and non-current - net
 
(270,586
)
 
(32,725
)
 
(114,738
)
 
7,943

 
(44,817
)
 
(35,329
)
Investment tax credit adjustments - net
 
(1,226
)
 
(4,923
)
 
1,306

 
(111
)
 
(821
)
 
(739
)
Income taxes
 

($297,067
)
 

($54,611
)
 

($125,773
)
 

($2,436
)
 

($26,243
)
 

($47,675
)

2017
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Current:
 
 
 
 
 
 
 
 
 
 
 
 
Federal
 

$16,086

 

($84,250
)
 

($8,845
)
 

($30,635
)
 

$6,034

 

$47,674

State
 
9,191

 
1,480

 
(924
)
 
(728
)
 
310

 
5,314

Total
 
25,277

 
(82,770
)
 
(9,769
)
 
(31,363
)
 
6,344

 
52,988

Deferred and non-current - net
 
69,753

 
572,988

 
83,501

 
62,946

 
43,102

 
19,243

Investment tax credit adjustments - net
 
(1,226
)
 
(4,920
)
 
187

 
1,695

 
(965
)
 
(2,262
)
Income taxes
 

$93,804

 

$485,298

 

$73,919

 

$33,278

 

$48,481

 

$69,969
Total Income Taxes For Entergy Corporation And Subsidiaries
Total income taxes for the Registrant Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before taxes.  The reasons for the differences for the years 2019, 2018, and 2017 are:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Net income
 

$262,964

 

$691,537

 

$119,925

 

$52,629

 

$159,397

 

$99,120

Income taxes
 
(46,769
)
 
121,623

 
30,866

 
186

 
(53,896
)
 
15,349

Pretax income
 

$216,195

 

$813,160

 

$150,791

 

$52,815

 

$105,501

 

$114,469

Computed at statutory rate (21%)
 

$45,401

 

$170,764

 

$31,666

 

$11,091

 

$22,155

 

$24,039

Increases (reductions) in tax resulting from:
 
 
 
 

 
 

 
 

 
 

 
 

State income taxes net of federal income tax effect
 
15,954

 
42,854

 
5,563

 
3,443

 
360

 
5,134

Regulatory differences - utility plant items
 
(10,627
)
 
(19,421
)
 
(5,556
)
 
(1,532
)
 
(1,987
)
 
(6,213
)
Equity component of AFUDC
 
(3,255
)
 
(15,545
)
 
(1,755
)
 
(2,088
)
 
(5,973
)
 
(1,829
)
Amortization of investment tax credits
 
(1,201
)
 
(4,871
)
 
(160
)
 
(88
)
 
(617
)
 
(1,155
)
Flow-through / permanent differences
 
696

 
439

 
160

 
(741
)
 
560

 
(500
)
Amortization of excess ADIT (b)
 
(90,921
)
 
(28,531
)
 
203

 
(11,724
)
 
(69,091
)
 
(5,550
)
Non-taxable dividend income
 
—

 
(26,795
)
 
—

 
—

 
—

 
—

Provision for uncertain tax positions
 
(3,517
)
 
1,519

 
500

 
1,672

 
430

 
1,300

Other - net
 
701

 
1,210

 
245

 
153

 
267

 
123

Total income taxes as reported
 

($46,769
)
 

$121,623

 

$30,866

 

$186

 

($53,896
)
 

$15,349

Effective Income Tax Rate
 
(21.6
%)
 
15.0
%
 
20.5
%
 
0.4
%
 
(51.1
%)
 
13.4
%


2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Net income
 

$252,707

 

$675,614

 

$126,078

 

$53,152

 

$162,235

 

$94,109

Income taxes
 
(297,067
)
 
(54,611
)
 
(125,773
)
 
(2,436
)
 
(26,243
)
 
(47,675
)
Pretax income
 

($44,360
)
 

$621,003

 

$305

 

$50,716

 

$135,992

 

$46,434

Computed at statutory rate (21%)
 

($9,316
)
 

$130,411

 

$64

 

$10,650

 

$28,558

 

$9,751

Increases (reductions) in tax resulting from:
 


 


 


 


 


 


State income taxes net of federal income tax effect
 
(794
)
 
26,031

 
(1,747
)
 
2,322

 
2,576

 
2,812

Regulatory differences - utility plant items
 
(14,916
)
 
(12,604
)
 
(4,103
)
 
(1,502
)
 
(1,872
)
 
(2,510
)
Equity component of AFUDC
 
(3,477
)
 
(16,784
)
 
(1,829
)
 
(1,248
)
 
(2,042
)
 
(1,837
)
Amortization of investment tax credits
 
(1,201
)
 
(4,871
)
 
(160
)
 
(109
)
 
(808
)
 
(1,155
)
Flow-through / permanent differences
 
570

 
3,203

 
1,893

 
(4,222
)
 
1,038

 
2,815

Revisions of the 2017 tax legislation enactment regulatory liability accrual, including the effect of the Entergy Texas 2018 base rate proceeding (a)
 
933

 
(2,810
)
 
(556
)
 
884

 
(43,799
)
 
(3,565
)
Amortization of excess ADIT (b)
 
(271,570
)
 
(104,313
)
 
(120,831
)
 
(9,878
)
 
(11,519
)
 
(58,971
)
Settlement on treatment of regulatory obligations (c)
 
—

 
(52,320
)
 
—

 
—

 
—

 
—

IRS audit adjustment
 
1,290

 
1,097

 
1,018

 
(96
)
 
524

 
(12
)
Non-taxable dividend income
 
—

 
(26,795
)
 
—

 
—

 
—

 
—

Provision for uncertain tax positions
 
724

 
3,949

 
240

 
613

 
839

 
4,876

Other - net
 
690

 
1,195

 
238

 
150

 
262

 
121

Total income taxes as reported
 

($297,067
)
 

($54,611
)
 

($125,773
)
 

($2,436
)
 

($26,243
)
 

($47,675
)
Effective Income Tax Rate
 
669.7
%
 
(8.8
%)
 
(41,237.0
%)
 
(4.8
%)
 
(19.3
%)
 
(102.7
%)


2017
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Net income
 

$139,844

 

$316,347

 

$110,032

 

$44,553

 

$76,173

 

$78,596

Income taxes
 
93,804

 
485,298

 
73,919

 
33,278

 
48,481

 
69,969

Pretax income
 

$233,648

 

$801,645

 

$183,951

 

$77,831

 

$124,654

 

$148,565

Computed at statutory rate (35%)
 

$81,777

 

$280,576

 

$64,383

 

$27,241

 

$43,629

 

$51,998

Increases (reductions) in tax resulting from:
 
 

 
 

 
 

 
 

 
 

 
 

State income taxes net of federal income tax effect
 
11,586

 
31,927

 
6,202

 
2,842

 
527

 
5,635

Regulatory differences - utility plant items
 
7,220

 
12,168

 
1,356

 
619

 
5,581

 
12,880

Equity component of AFUDC
 
(6,458
)
 
(18,020
)
 
(3,383
)
 
(847
)
 
(2,353
)
 
(2,221
)
Amortization of investment tax credits
 
(1,201
)
 
(4,871
)
 
(160
)
 
(124
)
 
(951
)
 
(2,896
)
Flow-through / permanent differences
 
3,098

 
3,774

 
1,567

 
(3,352
)
 
1,428

 
(276
)
Tax legislation enactment (b)
 
(3,090
)
 
217,258

 
3,492

 
6,153

 
2,981

 
(69
)
Non-taxable dividend income
 
—

 
(44,658
)
 
—

 
—

 
—

 
—

Provision for uncertain tax positions
 
200

 
5,700

 
228

 
600

 
(2,617
)
 
4,800

Other - net
 
672

 
1,444

 
234

 
146

 
256

 
118

Total income taxes as reported
 

$93,804

 

$485,298

 

$73,919

 

$33,278

 

$48,481

 

$69,969

Effective Income Tax Rate
 
40.1
%
 
60.5
%
 
40.2
%
 
42.8
%
 
38.9
%
 
47.1
%


(a)
See Note 2 to the financial statements for discussion of the Entergy Texas rate case settlement.
(b)
See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess ADIT in 2018 and 2019 and the tax legislation enactment in 2017.
(c)
See “Income Tax Audits - 2012-2013 IRS Audit” below for discussion of the settlement for Entergy Louisiana.
Significant Components Of Accumulated Deferred Income Taxes And Accrued Taxes
Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2019 and 2018 are as follows:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Deferred tax liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Plant basis differences - net
 

($979,033
)
 

($1,987,025
)
 

($565,202
)
 

($133,073
)
 

($551,365
)
 

($380,594
)
Regulatory assets
 
(170,949
)
 
(79,117
)
 
(10,528
)
 
(16,867
)
 
(59,745
)
 
(52,662
)
Nuclear decommissioning trusts/receivables
 
(120,306
)
 
(113,830
)
 
—

 
—

 
—

 
(100,621
)
Pension, net funding
 
(102,685
)
 
(98,743
)
 
(27,325
)
 
(11,859
)
 
(19,961
)
 
(21,609
)
Deferred fuel
 
—

 
(2,637
)
 
(609
)
 
(666
)
 
(4,380
)
 
(55
)
Other
 
(82,682
)
 
(94,139
)
 
(27,905
)
 
(25,909
)
 
2,059

 
(7,350
)
Total
 
(1,455,655
)
 
(2,375,491
)
 
(631,569
)
 
(188,374
)
 
(633,392
)
 
(562,891
)
Deferred tax assets:
 
 

 
 

 
 

 
 

 
 

 
 

Regulatory liabilities
 
250,410

 
283,507

 
53,421

 
33,258

 
65,602

 
121,011

Nuclear decommissioning liabilities
 
111,078

 
56,300

 
—

 
—

 
—

 
52,633

Pension and other post-employment benefits
 
(21,828
)
 
74,881

 
(5,844
)
 
(12,666
)
 
(15,406
)
 
(898
)
Sale and leaseback
 
—

 
—

 
—

 
—

 
—

 
102,480

Accumulated deferred investment tax credit
 
8,285

 
32,534

 
2,396

 
556

 
2,217

 
10,025

Provision for allowances and contingencies
 
5,365

 
77,298

 
12,963

 
24,022

 
4,024

 
—

Power purchase agreements
 
(15,087
)
 
18,004

 
1,147

 
7,961

 
26

 
—

Unbilled/deferred revenues
 
5,897

 
(28,081
)
 
4,715

 
1,428

 
5,544

 
—

Compensation
 
2,550

 
3,670

 
1,625

 
496

 
1,282

 
75

Net operating loss carryforwards
 
112,658

 
65,178

 
21,492

 
5,056

 
—

 
—

Capital losses and miscellaneous tax credits
 
—

 
—

 
45

 
—

 
—

 
7,857

Other
 
12,541

 
35,401

 
999

 
9,027

 
2,004

 
3

Total
 
471,869

 
618,692

 
92,959

 
69,138

 
65,293

 
293,186

Non-current accrued taxes (including unrecognized tax benefits)
 
(199,340
)
 
(707,714
)
 
(56,222
)
 
(235,300
)
 
(17,314
)
 
(544,235
)
Accumulated deferred income taxes and taxes accrued
 

($1,183,126
)
 

($2,464,513
)
 

($594,832
)
 

($354,536
)
 

($585,413
)
 

($813,940
)
2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Deferred tax liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Plant basis differences - net
 

($966,791
)
 

($1,893,831
)
 

($579,319
)
 

($135,143
)
 

($544,282
)
 

($403,809
)
Regulatory assets
 
(169,482
)
 
(74,917
)
 
(1,732
)
 
(20,009
)
 
(57,777
)
 
(46,627
)
Nuclear decommissioning trusts/receivables
 
(77,664
)
 
(71,470
)
 
—

 
—

 
—

 
(86,882
)
Pension, net funding
 
(91,962
)
 
(92,693
)
 
(24,398
)
 
(11,885
)
 
(20,331
)
 
(18,898
)
Deferred fuel
 
(5,801
)
 
(6,974
)
 
(11,819
)
 
(1,701
)
 
(2,835
)
 
(312
)
Other
 
(41,025
)
 
(34,700
)
 
(13,443
)
 
(7,640
)
 
(6,085
)
 
(4,544
)
Total
 
(1,352,725
)
 
(2,174,585
)
 
(630,711
)
 
(176,378
)
 
(631,310
)
 
(561,072
)
Deferred tax assets:
 
 

 
 

 
 

 
 

 
 

 
 

Regulatory liabilities
 
247,964

 
339,126

 
72,570

 
40,181

 
86,032

 
110,370

Nuclear decommissioning liabilities
 
99,479

 
48,738

 
—

 
—

 
—

 
46,643

Pension and other post-employment benefits
 
(19,068
)
 
80,102

 
(5,405
)
 
(11,371
)
 
(14,215
)
 
(632
)
Sale and leaseback
 
—

 
18,999

 
—

 
—

 
—

 
102,481

Accumulated deferred investment tax credit
 
8,599

 
33,928

 
2,541

 
579

 
2,347

 
9,649

Provision for allowances and contingencies
 
9,877

 
81,108

 
13,412

 
23,962

 
5,579

 
—

Power purchase agreements
 
(17,223
)
 
19,385

 
1,140

 
12,155

 
(18
)
 
—

Unbilled/deferred revenues
 
7,471

 
(17,345
)
 
5,527

 
636

 
7,016

 
—

Compensation
 
1,708

 
1,959

 
1,265

 
512

 
995

 
(260
)
Net operating loss carryforwards
 
6,338

 
20,118

 
4,896

 
480

 
261

 
—

Other
 
7,977

 
23,412

 
1,610

 
12,181

 
2,127

 
4

Total
 
353,122

 
649,530

 
97,556

 
79,315

 
90,124

 
268,255

Non-current accrued taxes (including unrecognized tax benefits)
 
(85,942
)
 
(701,666
)
 
(18,714
)
 
(226,532
)
 
(11,349
)
 
(512,479
)
Accumulated deferred income taxes and taxes accrued
 

($1,085,545
)
 

($2,226,721
)
 

($551,869
)
 

($323,595
)
 

($552,535
)
 

($805,296
)
Entergy's Estimated Tax Attributes, Carryovers And Their Expiration Dates
The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2019 are as follows:
 
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal net operating losses
 
$4.4 billion
 
$4.3 billion
 
$2 billion
 
$1.1 billion
 
$—
 
$—
Year(s) of expiration
 
N/A
 
2035-2037
 
N/A
 
2037
 
N/A
 
N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
State net operating losses
 
$4.5 billion
 
$5.2 billion
 
$2.1 billion
 
$1.2 billion
 
$—
 
$—
Year(s) of expiration
 
2024
 
2035-2039
 
2038-2039
 
2038-2039
 
N/A
 
N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
Misc. federal credits
 
$—
 
$5.2 million
 
$—
 
$—
 
$1.9 million
 
$3.2 million
Year(s) of expiration
 
N/A
 
2035-2038
 
N/A
 
N/A
 
2029-2038
 
2029-2038
 
 
 
 
 
 
 
 
 
 
 
 
 
State credits
 
$—
 
$—
 
$—
 
$—
 
$2.9 million
 
$13.1 million
Year(s) of expiration
 
N/A
 
N/A
 
N/A
 
N/A
 
2026
 
2020-2023
Reconciliation Of Unrecognized Tax Benefits
A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2019, 2018, and 2017 is as follows:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Gross balance at January 1, 2019
 

$1,298,662

 

$2,400,171

 

$508,765

 

$686,687

 

$17,802

 

$467,487

Additions based on tax positions related to the current year
 
84,335

 
28,705

 
68,594

 
40,676

 
2,312

 
5,496

Additions for tax positions of prior years
 
20,399

 
25,090

 
1,651

 
489

 
1,299

 
2,186

Reductions for tax positions of prior years
 
(62,154
)
 
(72,313
)
 
(12,723
)
 
(11,079
)
 
(7
)
 
(1,838
)
Gross balance at December 31, 2019
 
1,341,242

 
2,381,653

 
566,287

 
716,773

 
21,406

 
473,331

Offsets to gross unrecognized tax benefits:
 
 

 
 

 
 

 
 

 
 

 
 

Loss carryovers
 
(1,134,187
)
 
(1,573,257
)
 
(506,976
)
 
(445,430
)
 
(3,944
)
 
(8,392
)
Unrecognized tax benefits net of unused tax attributes and payments
 

$207,055

 

$808,396

 

$59,311

 

$271,343

 

$17,462

 

$464,939



2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Gross balance at January 1, 2018
 

($117,716
)
 

$2,518,457

 

$15,122

 

$679,544

 

$16,399

 

$445,511

Additions based on tax positions related to the current year (a)
 
1,430,828

 
30,577

 
493,039

 
2,261

 
1,978

 
18,271

Additions for tax positions of prior years
 
31,612

 
77,372

 
3,878

 
12,972

 
1,722

 
7,255

Reductions for tax positions of prior years
 
(21,619
)
 
(158,510
)
 
(3,253
)
 
(8,081
)
 
(2,262
)
 
(3,253
)
Settlements
 
(24,443
)
 
(67,725
)
 
(21
)
 
(9
)
 
(35
)
 
(297
)
Gross balance at December 31, 2018
 
1,298,662

 
2,400,171

 
508,765

 
686,687

 
17,802

 
467,487

Offsets to gross unrecognized tax benefits:
 
 

 
 

 
 

 
 

 
 

 
 

Loss carryovers
 
(1,173,839
)
 
(1,597,826
)
 
(478,268
)
 
(420,813
)
 
(3,199
)
 
(42,228
)
Unrecognized tax benefits net of unused tax attributes and payments
 

$124,823

 

$802,345

 

$30,497

 

$265,874

 

$14,603

 

$425,259


2017
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Gross balance at January 1, 2017
 

$2,503

 

$2,440,339

 

$12,206

 

$166,230

 

$15,946

 

$472,372

Additions based on tax positions related to the current year (a)
 
8,974

 
32,843

 
2,105

 
509,183

 
1,747

 
909

Additions for tax positions of prior years
 
3,682

 
235,331

 
1,267

 
13,364

 
3,115

 
1,432

Reductions for tax positions of prior years
 
(132,875
)
 
(190,056
)
 
(456
)
 
(9,233
)
 
(4,409
)
 
(29,202
)
Gross balance at December 31, 2017
 
(117,716
)
 
2,518,457

 
15,122

 
679,544

 
16,399

 
445,511

Offsets to gross unrecognized tax benefits:
 
 

 
 

 
 

 
 

 
 

 
 

Loss carryovers
 
—

 
(1,591,907
)
 
(15,122
)
 
(441,374
)
 
(638
)
 
(12,536
)
Unrecognized tax benefits net of unused tax attributes and payments
 

($117,716
)
 

$926,550

 

$—

 

$238,170

 

$15,761

 

$432,975



(a)
The primary additions for Entergy Mississippi in 2018, and Entergy New Orleans in 2017 are related to the mark-to-market treatment discussed in “Other Tax Matters - Tax Accounting Methods” below. The primary additions for Entergy Arkansas in 2018 are related to the nuclear decommissioning costs treatment and the mark-to-market treatment discussed in “Other Tax Matters - Tax Accounting Methods” below.
Summary Of Unrecognized Tax Benefits That Would Affect Effective Income Tax Rate
The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:
 
December 31,
 
2019
 
2018
 
2017
 
(In Millions)
Entergy Arkansas

$203.3

 

$85.4

 

$2.6

Entergy Louisiana

$556.3

 

$594.0

 

$575.8

Entergy Mississippi

$1.9

 

$1.5

 

$—

Entergy New Orleans

$242.7

 

$246.2

 

$31.7

Entergy Texas

$5.7

 

$5.1

 

$4.4

System Energy

$—

 

$—

 

$—
Summary Of Accrued Interest And Penalties Related To Unrecognized Tax Benefits
Accrued balances for the possible payment of interest related to unrecognized tax benefits are as follows:
 
December 31,
 
2019
 
2018
 
2017
 
(In Millions)
Entergy Arkansas

$3.1

 

$1.7

 

$1.6

Entergy Louisiana

$14.2

 

$17.9

 

$14.1

Entergy Mississippi

$1.7

 

$1.2

 

$1.0

Entergy New Orleans

$4.7

 

$2.7

 

$2.1

Entergy Texas

$1.1

 

$0.9

 

$0.4

System Energy

$14.5

 

$13.2

 

$8.5
Summary of Interest on Income Taxes Expense Related to Unrecognized Tax Benefits Interest (net-of-tax) was recorded as follows:
 
2019
 
2018
 
2017
 
(In Millions)
Entergy Arkansas

$1.4

 

$0.2

 

$0.2

Entergy Louisiana

($3.7
)
 

$3.8

 

$5.7

Entergy Mississippi

$0.5

 

$0.2

 

$0.2

Entergy New Orleans

$2.0

 

$0.6

 

$0.6

Entergy Texas

$0.2

 

$0.5

 

($0.8
)
System Energy

$1.3

 

$4.7

 

$4.8
Entergy Texas [Member]  
Tax Cuts and Jobs Act [Table Text Block] For the same reasons, the Registrant Subsidiaries’ December 31, 2019 and December 31, 2018 balance sheets reflect net regulatory liabilities for income taxes as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$487

 

$605

Entergy Louisiana

$531

 

$612

Entergy Mississippi

$237

 

$246

Entergy New Orleans

$59

 

$86

Entergy Texas

$253

 

$352

System Energy

$143

 

$163

Excess ADIT is generally classified into two categories: 1) the portion that is subject to the normalization requirements of the Act, i.e., “protected”, and 2) the portion that is not subject to such normalization provisions, referred to as “unprotected”. The Act provides that the normalization method of accounting for income taxes is required for
excess ADIT associated with public utility property. The Act provides for the use of the average rate assumption method (ARAM) for the determination of the timing of the return of excess ADIT associated with such property. Under ARAM, the excess ADIT is reduced over the remaining life of the asset. Remaining asset lives vary for each Registrant Subsidiary, but the average life of public utility property is typically 30 years or longer. Entergy will amortize the protected portion of the excess ADIT in conformity with the normalization requirements. The Registrant Subsidiaries’ net regulatory liability for income taxes as of December 31, 2019 and December 31, 2018, includes protected excess ADIT as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$490

 

$521

Entergy Louisiana

$797

 

$812

Entergy Mississippi

$261

 

$271

Entergy New Orleans

$62

 

$59

Entergy Texas

$228

 

$237

System Energy

$186

 

$202


During the second quarter of 2018, the Registrant Subsidiaries began paying unprotected excess accumulated deferred income taxes, associated with the effects of the Act, to their customers through rate riders and other means approved by their respective regulatory commissions. Payment of the unprotected excess accumulated deferred income taxes results in a reduction in the regulatory liability for income taxes and a corresponding reduction in income tax expense. This has a significant effect on the effective tax rate for the period as compared to the statutory tax rate. The Registrant Subsidiaries’ net regulatory liability for income taxes as of December 31, 2019 and December 31, 2018, includes unprotected excess ADIT as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$9

 

$117

Entergy Louisiana

$242

 

$295

Entergy New Orleans

$9

 

$25

Entergy Texas

$83

 

$171

System Energy

$—

 

$4


The return of unprotected excess accumulated deferred income taxes reduced Entergy’s and the Registrant Subsidiaries’ regulatory liability for income taxes as follows for 2019 and 2018:
 
2019
 
2018
 
(In Millions)
Entergy

$273

 

$776

Entergy Arkansas

$126

 

$368

Entergy Louisiana

$39

 

$141

Entergy Mississippi

$—

 

$159

Entergy New Orleans

$14

 

$13

Entergy Texas

$87

 

$15

System Energy

$7

 

$80
Income Tax Expenses From Continuing Operations
Income taxes for 2019, 2018, and 2017 for Entergy’s Registrant Subsidiaries consist of the following:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Current:
 
 
 
 
 
 
 
 
 
 
 
 
Federal
 

($14,549
)
 

($20,173
)
 

($8,939
)
 

($5,822
)
 

$16,035

 

$16,256

State
 
(714
)
 
(735
)
 
5,823

 
1,856

 
663

 
(2,831
)
Total
 
(15,263
)
 
(20,908
)
 
(3,116
)
 
(3,966
)
 
16,698

 
13,425

Deferred and non-current - net
 
(30,278
)
 
147,453

 
34,579

 
4,248

 
(69,963
)
 
422

Investment tax credit adjustments - net
 
(1,228
)
 
(4,922
)
 
(597
)
 
(96
)
 
(631
)
 
1,502

Income taxes
 

($46,769
)
 

$121,623

 

$30,866

 

$186

 

($53,896
)
 

$15,349


2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Current:
 
 
 
 
 
 
 
 
 
 
 
 
Federal
 

($23,638
)
 

($15,841
)
 

($11,275
)
 

($10,813
)
 

$16,190

 

($9,786
)
State
 
(1,617
)
 
(1,122
)
 
(1,066
)
 
545

 
3,205

 
(1,821
)
Total
 
(25,255
)
 
(16,963
)
 
(12,341
)
 
(10,268
)
 
19,395

 
(11,607
)
Deferred and non-current - net
 
(270,586
)
 
(32,725
)
 
(114,738
)
 
7,943

 
(44,817
)
 
(35,329
)
Investment tax credit adjustments - net
 
(1,226
)
 
(4,923
)
 
1,306

 
(111
)
 
(821
)
 
(739
)
Income taxes
 

($297,067
)
 

($54,611
)
 

($125,773
)
 

($2,436
)
 

($26,243
)
 

($47,675
)

2017
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Current:
 
 
 
 
 
 
 
 
 
 
 
 
Federal
 

$16,086

 

($84,250
)
 

($8,845
)
 

($30,635
)
 

$6,034

 

$47,674

State
 
9,191

 
1,480

 
(924
)
 
(728
)
 
310

 
5,314

Total
 
25,277

 
(82,770
)
 
(9,769
)
 
(31,363
)
 
6,344

 
52,988

Deferred and non-current - net
 
69,753

 
572,988

 
83,501

 
62,946

 
43,102

 
19,243

Investment tax credit adjustments - net
 
(1,226
)
 
(4,920
)
 
187

 
1,695

 
(965
)
 
(2,262
)
Income taxes
 

$93,804

 

$485,298

 

$73,919

 

$33,278

 

$48,481

 

$69,969
Total Income Taxes For Entergy Corporation And Subsidiaries
Total income taxes for the Registrant Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before taxes.  The reasons for the differences for the years 2019, 2018, and 2017 are:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Net income
 

$262,964

 

$691,537

 

$119,925

 

$52,629

 

$159,397

 

$99,120

Income taxes
 
(46,769
)
 
121,623

 
30,866

 
186

 
(53,896
)
 
15,349

Pretax income
 

$216,195

 

$813,160

 

$150,791

 

$52,815

 

$105,501

 

$114,469

Computed at statutory rate (21%)
 

$45,401

 

$170,764

 

$31,666

 

$11,091

 

$22,155

 

$24,039

Increases (reductions) in tax resulting from:
 
 
 
 

 
 

 
 

 
 

 
 

State income taxes net of federal income tax effect
 
15,954

 
42,854

 
5,563

 
3,443

 
360

 
5,134

Regulatory differences - utility plant items
 
(10,627
)
 
(19,421
)
 
(5,556
)
 
(1,532
)
 
(1,987
)
 
(6,213
)
Equity component of AFUDC
 
(3,255
)
 
(15,545
)
 
(1,755
)
 
(2,088
)
 
(5,973
)
 
(1,829
)
Amortization of investment tax credits
 
(1,201
)
 
(4,871
)
 
(160
)
 
(88
)
 
(617
)
 
(1,155
)
Flow-through / permanent differences
 
696

 
439

 
160

 
(741
)
 
560

 
(500
)
Amortization of excess ADIT (b)
 
(90,921
)
 
(28,531
)
 
203

 
(11,724
)
 
(69,091
)
 
(5,550
)
Non-taxable dividend income
 
—

 
(26,795
)
 
—

 
—

 
—

 
—

Provision for uncertain tax positions
 
(3,517
)
 
1,519

 
500

 
1,672

 
430

 
1,300

Other - net
 
701

 
1,210

 
245

 
153

 
267

 
123

Total income taxes as reported
 

($46,769
)
 

$121,623

 

$30,866

 

$186

 

($53,896
)
 

$15,349

Effective Income Tax Rate
 
(21.6
%)
 
15.0
%
 
20.5
%
 
0.4
%
 
(51.1
%)
 
13.4
%


2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Net income
 

$252,707

 

$675,614

 

$126,078

 

$53,152

 

$162,235

 

$94,109

Income taxes
 
(297,067
)
 
(54,611
)
 
(125,773
)
 
(2,436
)
 
(26,243
)
 
(47,675
)
Pretax income
 

($44,360
)
 

$621,003

 

$305

 

$50,716

 

$135,992

 

$46,434

Computed at statutory rate (21%)
 

($9,316
)
 

$130,411

 

$64

 

$10,650

 

$28,558

 

$9,751

Increases (reductions) in tax resulting from:
 


 


 


 


 


 


State income taxes net of federal income tax effect
 
(794
)
 
26,031

 
(1,747
)
 
2,322

 
2,576

 
2,812

Regulatory differences - utility plant items
 
(14,916
)
 
(12,604
)
 
(4,103
)
 
(1,502
)
 
(1,872
)
 
(2,510
)
Equity component of AFUDC
 
(3,477
)
 
(16,784
)
 
(1,829
)
 
(1,248
)
 
(2,042
)
 
(1,837
)
Amortization of investment tax credits
 
(1,201
)
 
(4,871
)
 
(160
)
 
(109
)
 
(808
)
 
(1,155
)
Flow-through / permanent differences
 
570

 
3,203

 
1,893

 
(4,222
)
 
1,038

 
2,815

Revisions of the 2017 tax legislation enactment regulatory liability accrual, including the effect of the Entergy Texas 2018 base rate proceeding (a)
 
933

 
(2,810
)
 
(556
)
 
884

 
(43,799
)
 
(3,565
)
Amortization of excess ADIT (b)
 
(271,570
)
 
(104,313
)
 
(120,831
)
 
(9,878
)
 
(11,519
)
 
(58,971
)
Settlement on treatment of regulatory obligations (c)
 
—

 
(52,320
)
 
—

 
—

 
—

 
—

IRS audit adjustment
 
1,290

 
1,097

 
1,018

 
(96
)
 
524

 
(12
)
Non-taxable dividend income
 
—

 
(26,795
)
 
—

 
—

 
—

 
—

Provision for uncertain tax positions
 
724

 
3,949

 
240

 
613

 
839

 
4,876

Other - net
 
690

 
1,195

 
238

 
150

 
262

 
121

Total income taxes as reported
 

($297,067
)
 

($54,611
)
 

($125,773
)
 

($2,436
)
 

($26,243
)
 

($47,675
)
Effective Income Tax Rate
 
669.7
%
 
(8.8
%)
 
(41,237.0
%)
 
(4.8
%)
 
(19.3
%)
 
(102.7
%)


2017
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Net income
 

$139,844

 

$316,347

 

$110,032

 

$44,553

 

$76,173

 

$78,596

Income taxes
 
93,804

 
485,298

 
73,919

 
33,278

 
48,481

 
69,969

Pretax income
 

$233,648

 

$801,645

 

$183,951

 

$77,831

 

$124,654

 

$148,565

Computed at statutory rate (35%)
 

$81,777

 

$280,576

 

$64,383

 

$27,241

 

$43,629

 

$51,998

Increases (reductions) in tax resulting from:
 
 

 
 

 
 

 
 

 
 

 
 

State income taxes net of federal income tax effect
 
11,586

 
31,927

 
6,202

 
2,842

 
527

 
5,635

Regulatory differences - utility plant items
 
7,220

 
12,168

 
1,356

 
619

 
5,581

 
12,880

Equity component of AFUDC
 
(6,458
)
 
(18,020
)
 
(3,383
)
 
(847
)
 
(2,353
)
 
(2,221
)
Amortization of investment tax credits
 
(1,201
)
 
(4,871
)
 
(160
)
 
(124
)
 
(951
)
 
(2,896
)
Flow-through / permanent differences
 
3,098

 
3,774

 
1,567

 
(3,352
)
 
1,428

 
(276
)
Tax legislation enactment (b)
 
(3,090
)
 
217,258

 
3,492

 
6,153

 
2,981

 
(69
)
Non-taxable dividend income
 
—

 
(44,658
)
 
—

 
—

 
—

 
—

Provision for uncertain tax positions
 
200

 
5,700

 
228

 
600

 
(2,617
)
 
4,800

Other - net
 
672

 
1,444

 
234

 
146

 
256

 
118

Total income taxes as reported
 

$93,804

 

$485,298

 

$73,919

 

$33,278

 

$48,481

 

$69,969

Effective Income Tax Rate
 
40.1
%
 
60.5
%
 
40.2
%
 
42.8
%
 
38.9
%
 
47.1
%


(a)
See Note 2 to the financial statements for discussion of the Entergy Texas rate case settlement.
(b)
See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess ADIT in 2018 and 2019 and the tax legislation enactment in 2017.
(c)
See “Income Tax Audits - 2012-2013 IRS Audit” below for discussion of the settlement for Entergy Louisiana.
Significant Components Of Accumulated Deferred Income Taxes And Accrued Taxes
Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2019 and 2018 are as follows:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Deferred tax liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Plant basis differences - net
 

($979,033
)
 

($1,987,025
)
 

($565,202
)
 

($133,073
)
 

($551,365
)
 

($380,594
)
Regulatory assets
 
(170,949
)
 
(79,117
)
 
(10,528
)
 
(16,867
)
 
(59,745
)
 
(52,662
)
Nuclear decommissioning trusts/receivables
 
(120,306
)
 
(113,830
)
 
—

 
—

 
—

 
(100,621
)
Pension, net funding
 
(102,685
)
 
(98,743
)
 
(27,325
)
 
(11,859
)
 
(19,961
)
 
(21,609
)
Deferred fuel
 
—

 
(2,637
)
 
(609
)
 
(666
)
 
(4,380
)
 
(55
)
Other
 
(82,682
)
 
(94,139
)
 
(27,905
)
 
(25,909
)
 
2,059

 
(7,350
)
Total
 
(1,455,655
)
 
(2,375,491
)
 
(631,569
)
 
(188,374
)
 
(633,392
)
 
(562,891
)
Deferred tax assets:
 
 

 
 

 
 

 
 

 
 

 
 

Regulatory liabilities
 
250,410

 
283,507

 
53,421

 
33,258

 
65,602

 
121,011

Nuclear decommissioning liabilities
 
111,078

 
56,300

 
—

 
—

 
—

 
52,633

Pension and other post-employment benefits
 
(21,828
)
 
74,881

 
(5,844
)
 
(12,666
)
 
(15,406
)
 
(898
)
Sale and leaseback
 
—

 
—

 
—

 
—

 
—

 
102,480

Accumulated deferred investment tax credit
 
8,285

 
32,534

 
2,396

 
556

 
2,217

 
10,025

Provision for allowances and contingencies
 
5,365

 
77,298

 
12,963

 
24,022

 
4,024

 
—

Power purchase agreements
 
(15,087
)
 
18,004

 
1,147

 
7,961

 
26

 
—

Unbilled/deferred revenues
 
5,897

 
(28,081
)
 
4,715

 
1,428

 
5,544

 
—

Compensation
 
2,550

 
3,670

 
1,625

 
496

 
1,282

 
75

Net operating loss carryforwards
 
112,658

 
65,178

 
21,492

 
5,056

 
—

 
—

Capital losses and miscellaneous tax credits
 
—

 
—

 
45

 
—

 
—

 
7,857

Other
 
12,541

 
35,401

 
999

 
9,027

 
2,004

 
3

Total
 
471,869

 
618,692

 
92,959

 
69,138

 
65,293

 
293,186

Non-current accrued taxes (including unrecognized tax benefits)
 
(199,340
)
 
(707,714
)
 
(56,222
)
 
(235,300
)
 
(17,314
)
 
(544,235
)
Accumulated deferred income taxes and taxes accrued
 

($1,183,126
)
 

($2,464,513
)
 

($594,832
)
 

($354,536
)
 

($585,413
)
 

($813,940
)
2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Deferred tax liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Plant basis differences - net
 

($966,791
)
 

($1,893,831
)
 

($579,319
)
 

($135,143
)
 

($544,282
)
 

($403,809
)
Regulatory assets
 
(169,482
)
 
(74,917
)
 
(1,732
)
 
(20,009
)
 
(57,777
)
 
(46,627
)
Nuclear decommissioning trusts/receivables
 
(77,664
)
 
(71,470
)
 
—

 
—

 
—

 
(86,882
)
Pension, net funding
 
(91,962
)
 
(92,693
)
 
(24,398
)
 
(11,885
)
 
(20,331
)
 
(18,898
)
Deferred fuel
 
(5,801
)
 
(6,974
)
 
(11,819
)
 
(1,701
)
 
(2,835
)
 
(312
)
Other
 
(41,025
)
 
(34,700
)
 
(13,443
)
 
(7,640
)
 
(6,085
)
 
(4,544
)
Total
 
(1,352,725
)
 
(2,174,585
)
 
(630,711
)
 
(176,378
)
 
(631,310
)
 
(561,072
)
Deferred tax assets:
 
 

 
 

 
 

 
 

 
 

 
 

Regulatory liabilities
 
247,964

 
339,126

 
72,570

 
40,181

 
86,032

 
110,370

Nuclear decommissioning liabilities
 
99,479

 
48,738

 
—

 
—

 
—

 
46,643

Pension and other post-employment benefits
 
(19,068
)
 
80,102

 
(5,405
)
 
(11,371
)
 
(14,215
)
 
(632
)
Sale and leaseback
 
—

 
18,999

 
—

 
—

 
—

 
102,481

Accumulated deferred investment tax credit
 
8,599

 
33,928

 
2,541

 
579

 
2,347

 
9,649

Provision for allowances and contingencies
 
9,877

 
81,108

 
13,412

 
23,962

 
5,579

 
—

Power purchase agreements
 
(17,223
)
 
19,385

 
1,140

 
12,155

 
(18
)
 
—

Unbilled/deferred revenues
 
7,471

 
(17,345
)
 
5,527

 
636

 
7,016

 
—

Compensation
 
1,708

 
1,959

 
1,265

 
512

 
995

 
(260
)
Net operating loss carryforwards
 
6,338

 
20,118

 
4,896

 
480

 
261

 
—

Other
 
7,977

 
23,412

 
1,610

 
12,181

 
2,127

 
4

Total
 
353,122

 
649,530

 
97,556

 
79,315

 
90,124

 
268,255

Non-current accrued taxes (including unrecognized tax benefits)
 
(85,942
)
 
(701,666
)
 
(18,714
)
 
(226,532
)
 
(11,349
)
 
(512,479
)
Accumulated deferred income taxes and taxes accrued
 

($1,085,545
)
 

($2,226,721
)
 

($551,869
)
 

($323,595
)
 

($552,535
)
 

($805,296
)
Entergy's Estimated Tax Attributes, Carryovers And Their Expiration Dates
The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2019 are as follows:
 
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal net operating losses
 
$4.4 billion
 
$4.3 billion
 
$2 billion
 
$1.1 billion
 
$—
 
$—
Year(s) of expiration
 
N/A
 
2035-2037
 
N/A
 
2037
 
N/A
 
N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
State net operating losses
 
$4.5 billion
 
$5.2 billion
 
$2.1 billion
 
$1.2 billion
 
$—
 
$—
Year(s) of expiration
 
2024
 
2035-2039
 
2038-2039
 
2038-2039
 
N/A
 
N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
Misc. federal credits
 
$—
 
$5.2 million
 
$—
 
$—
 
$1.9 million
 
$3.2 million
Year(s) of expiration
 
N/A
 
2035-2038
 
N/A
 
N/A
 
2029-2038
 
2029-2038
 
 
 
 
 
 
 
 
 
 
 
 
 
State credits
 
$—
 
$—
 
$—
 
$—
 
$2.9 million
 
$13.1 million
Year(s) of expiration
 
N/A
 
N/A
 
N/A
 
N/A
 
2026
 
2020-2023
Reconciliation Of Unrecognized Tax Benefits
A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2019, 2018, and 2017 is as follows:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Gross balance at January 1, 2019
 

$1,298,662

 

$2,400,171

 

$508,765

 

$686,687

 

$17,802

 

$467,487

Additions based on tax positions related to the current year
 
84,335

 
28,705

 
68,594

 
40,676

 
2,312

 
5,496

Additions for tax positions of prior years
 
20,399

 
25,090

 
1,651

 
489

 
1,299

 
2,186

Reductions for tax positions of prior years
 
(62,154
)
 
(72,313
)
 
(12,723
)
 
(11,079
)
 
(7
)
 
(1,838
)
Gross balance at December 31, 2019
 
1,341,242

 
2,381,653

 
566,287

 
716,773

 
21,406

 
473,331

Offsets to gross unrecognized tax benefits:
 
 

 
 

 
 

 
 

 
 

 
 

Loss carryovers
 
(1,134,187
)
 
(1,573,257
)
 
(506,976
)
 
(445,430
)
 
(3,944
)
 
(8,392
)
Unrecognized tax benefits net of unused tax attributes and payments
 

$207,055

 

$808,396

 

$59,311

 

$271,343

 

$17,462

 

$464,939



2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Gross balance at January 1, 2018
 

($117,716
)
 

$2,518,457

 

$15,122

 

$679,544

 

$16,399

 

$445,511

Additions based on tax positions related to the current year (a)
 
1,430,828

 
30,577

 
493,039

 
2,261

 
1,978

 
18,271

Additions for tax positions of prior years
 
31,612

 
77,372

 
3,878

 
12,972

 
1,722

 
7,255

Reductions for tax positions of prior years
 
(21,619
)
 
(158,510
)
 
(3,253
)
 
(8,081
)
 
(2,262
)
 
(3,253
)
Settlements
 
(24,443
)
 
(67,725
)
 
(21
)
 
(9
)
 
(35
)
 
(297
)
Gross balance at December 31, 2018
 
1,298,662

 
2,400,171

 
508,765

 
686,687

 
17,802

 
467,487

Offsets to gross unrecognized tax benefits:
 
 

 
 

 
 

 
 

 
 

 
 

Loss carryovers
 
(1,173,839
)
 
(1,597,826
)
 
(478,268
)
 
(420,813
)
 
(3,199
)
 
(42,228
)
Unrecognized tax benefits net of unused tax attributes and payments
 

$124,823

 

$802,345

 

$30,497

 

$265,874

 

$14,603

 

$425,259


2017
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Gross balance at January 1, 2017
 

$2,503

 

$2,440,339

 

$12,206

 

$166,230

 

$15,946

 

$472,372

Additions based on tax positions related to the current year (a)
 
8,974

 
32,843

 
2,105

 
509,183

 
1,747

 
909

Additions for tax positions of prior years
 
3,682

 
235,331

 
1,267

 
13,364

 
3,115

 
1,432

Reductions for tax positions of prior years
 
(132,875
)
 
(190,056
)
 
(456
)
 
(9,233
)
 
(4,409
)
 
(29,202
)
Gross balance at December 31, 2017
 
(117,716
)
 
2,518,457

 
15,122

 
679,544

 
16,399

 
445,511

Offsets to gross unrecognized tax benefits:
 
 

 
 

 
 

 
 

 
 

 
 

Loss carryovers
 
—

 
(1,591,907
)
 
(15,122
)
 
(441,374
)
 
(638
)
 
(12,536
)
Unrecognized tax benefits net of unused tax attributes and payments
 

($117,716
)
 

$926,550

 

$—

 

$238,170

 

$15,761

 

$432,975



(a)
The primary additions for Entergy Mississippi in 2018, and Entergy New Orleans in 2017 are related to the mark-to-market treatment discussed in “Other Tax Matters - Tax Accounting Methods” below. The primary additions for Entergy Arkansas in 2018 are related to the nuclear decommissioning costs treatment and the mark-to-market treatment discussed in “Other Tax Matters - Tax Accounting Methods” below.
Summary Of Unrecognized Tax Benefits That Would Affect Effective Income Tax Rate
The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:
 
December 31,
 
2019
 
2018
 
2017
 
(In Millions)
Entergy Arkansas

$203.3

 

$85.4

 

$2.6

Entergy Louisiana

$556.3

 

$594.0

 

$575.8

Entergy Mississippi

$1.9

 

$1.5

 

$—

Entergy New Orleans

$242.7

 

$246.2

 

$31.7

Entergy Texas

$5.7

 

$5.1

 

$4.4

System Energy

$—

 

$—

 

$—
Summary Of Accrued Interest And Penalties Related To Unrecognized Tax Benefits
Accrued balances for the possible payment of interest related to unrecognized tax benefits are as follows:
 
December 31,
 
2019
 
2018
 
2017
 
(In Millions)
Entergy Arkansas

$3.1

 

$1.7

 

$1.6

Entergy Louisiana

$14.2

 

$17.9

 

$14.1

Entergy Mississippi

$1.7

 

$1.2

 

$1.0

Entergy New Orleans

$4.7

 

$2.7

 

$2.1

Entergy Texas

$1.1

 

$0.9

 

$0.4

System Energy

$14.5

 

$13.2

 

$8.5
Summary of Interest on Income Taxes Expense Related to Unrecognized Tax Benefits Interest (net-of-tax) was recorded as follows:
 
2019
 
2018
 
2017
 
(In Millions)
Entergy Arkansas

$1.4

 

$0.2

 

$0.2

Entergy Louisiana

($3.7
)
 

$3.8

 

$5.7

Entergy Mississippi

$0.5

 

$0.2

 

$0.2

Entergy New Orleans

$2.0

 

$0.6

 

$0.6

Entergy Texas

$0.2

 

$0.5

 

($0.8
)
System Energy

$1.3

 

$4.7

 

$4.8
System Energy [Member]  
Tax Cuts and Jobs Act [Table Text Block] For the same reasons, the Registrant Subsidiaries’ December 31, 2019 and December 31, 2018 balance sheets reflect net regulatory liabilities for income taxes as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$487

 

$605

Entergy Louisiana

$531

 

$612

Entergy Mississippi

$237

 

$246

Entergy New Orleans

$59

 

$86

Entergy Texas

$253

 

$352

System Energy

$143

 

$163

Excess ADIT is generally classified into two categories: 1) the portion that is subject to the normalization requirements of the Act, i.e., “protected”, and 2) the portion that is not subject to such normalization provisions, referred to as “unprotected”. The Act provides that the normalization method of accounting for income taxes is required for
excess ADIT associated with public utility property. The Act provides for the use of the average rate assumption method (ARAM) for the determination of the timing of the return of excess ADIT associated with such property. Under ARAM, the excess ADIT is reduced over the remaining life of the asset. Remaining asset lives vary for each Registrant Subsidiary, but the average life of public utility property is typically 30 years or longer. Entergy will amortize the protected portion of the excess ADIT in conformity with the normalization requirements. The Registrant Subsidiaries’ net regulatory liability for income taxes as of December 31, 2019 and December 31, 2018, includes protected excess ADIT as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$490

 

$521

Entergy Louisiana

$797

 

$812

Entergy Mississippi

$261

 

$271

Entergy New Orleans

$62

 

$59

Entergy Texas

$228

 

$237

System Energy

$186

 

$202


During the second quarter of 2018, the Registrant Subsidiaries began paying unprotected excess accumulated deferred income taxes, associated with the effects of the Act, to their customers through rate riders and other means approved by their respective regulatory commissions. Payment of the unprotected excess accumulated deferred income taxes results in a reduction in the regulatory liability for income taxes and a corresponding reduction in income tax expense. This has a significant effect on the effective tax rate for the period as compared to the statutory tax rate. The Registrant Subsidiaries’ net regulatory liability for income taxes as of December 31, 2019 and December 31, 2018, includes unprotected excess ADIT as follows:
 
2019
 
2018
 
(In Millions)
Entergy Arkansas

$9

 

$117

Entergy Louisiana

$242

 

$295

Entergy New Orleans

$9

 

$25

Entergy Texas

$83

 

$171

System Energy

$—

 

$4


The return of unprotected excess accumulated deferred income taxes reduced Entergy’s and the Registrant Subsidiaries’ regulatory liability for income taxes as follows for 2019 and 2018:
 
2019
 
2018
 
(In Millions)
Entergy

$273

 

$776

Entergy Arkansas

$126

 

$368

Entergy Louisiana

$39

 

$141

Entergy Mississippi

$—

 

$159

Entergy New Orleans

$14

 

$13

Entergy Texas

$87

 

$15

System Energy

$7

 

$80
Income Tax Expenses From Continuing Operations
Income taxes for 2019, 2018, and 2017 for Entergy’s Registrant Subsidiaries consist of the following:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Current:
 
 
 
 
 
 
 
 
 
 
 
 
Federal
 

($14,549
)
 

($20,173
)
 

($8,939
)
 

($5,822
)
 

$16,035

 

$16,256

State
 
(714
)
 
(735
)
 
5,823

 
1,856

 
663

 
(2,831
)
Total
 
(15,263
)
 
(20,908
)
 
(3,116
)
 
(3,966
)
 
16,698

 
13,425

Deferred and non-current - net
 
(30,278
)
 
147,453

 
34,579

 
4,248

 
(69,963
)
 
422

Investment tax credit adjustments - net
 
(1,228
)
 
(4,922
)
 
(597
)
 
(96
)
 
(631
)
 
1,502

Income taxes
 

($46,769
)
 

$121,623

 

$30,866

 

$186

 

($53,896
)
 

$15,349


2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Current:
 
 
 
 
 
 
 
 
 
 
 
 
Federal
 

($23,638
)
 

($15,841
)
 

($11,275
)
 

($10,813
)
 

$16,190

 

($9,786
)
State
 
(1,617
)
 
(1,122
)
 
(1,066
)
 
545

 
3,205

 
(1,821
)
Total
 
(25,255
)
 
(16,963
)
 
(12,341
)
 
(10,268
)
 
19,395

 
(11,607
)
Deferred and non-current - net
 
(270,586
)
 
(32,725
)
 
(114,738
)
 
7,943

 
(44,817
)
 
(35,329
)
Investment tax credit adjustments - net
 
(1,226
)
 
(4,923
)
 
1,306

 
(111
)
 
(821
)
 
(739
)
Income taxes
 

($297,067
)
 

($54,611
)
 

($125,773
)
 

($2,436
)
 

($26,243
)
 

($47,675
)

2017
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Current:
 
 
 
 
 
 
 
 
 
 
 
 
Federal
 

$16,086

 

($84,250
)
 

($8,845
)
 

($30,635
)
 

$6,034

 

$47,674

State
 
9,191

 
1,480

 
(924
)
 
(728
)
 
310

 
5,314

Total
 
25,277

 
(82,770
)
 
(9,769
)
 
(31,363
)
 
6,344

 
52,988

Deferred and non-current - net
 
69,753

 
572,988

 
83,501

 
62,946

 
43,102

 
19,243

Investment tax credit adjustments - net
 
(1,226
)
 
(4,920
)
 
187

 
1,695

 
(965
)
 
(2,262
)
Income taxes
 

$93,804

 

$485,298

 

$73,919

 

$33,278

 

$48,481

 

$69,969
Total Income Taxes For Entergy Corporation And Subsidiaries
Total income taxes for the Registrant Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before taxes.  The reasons for the differences for the years 2019, 2018, and 2017 are:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Net income
 

$262,964

 

$691,537

 

$119,925

 

$52,629

 

$159,397

 

$99,120

Income taxes
 
(46,769
)
 
121,623

 
30,866

 
186

 
(53,896
)
 
15,349

Pretax income
 

$216,195

 

$813,160

 

$150,791

 

$52,815

 

$105,501

 

$114,469

Computed at statutory rate (21%)
 

$45,401

 

$170,764

 

$31,666

 

$11,091

 

$22,155

 

$24,039

Increases (reductions) in tax resulting from:
 
 
 
 

 
 

 
 

 
 

 
 

State income taxes net of federal income tax effect
 
15,954

 
42,854

 
5,563

 
3,443

 
360

 
5,134

Regulatory differences - utility plant items
 
(10,627
)
 
(19,421
)
 
(5,556
)
 
(1,532
)
 
(1,987
)
 
(6,213
)
Equity component of AFUDC
 
(3,255
)
 
(15,545
)
 
(1,755
)
 
(2,088
)
 
(5,973
)
 
(1,829
)
Amortization of investment tax credits
 
(1,201
)
 
(4,871
)
 
(160
)
 
(88
)
 
(617
)
 
(1,155
)
Flow-through / permanent differences
 
696

 
439

 
160

 
(741
)
 
560

 
(500
)
Amortization of excess ADIT (b)
 
(90,921
)
 
(28,531
)
 
203

 
(11,724
)
 
(69,091
)
 
(5,550
)
Non-taxable dividend income
 
—

 
(26,795
)
 
—

 
—

 
—

 
—

Provision for uncertain tax positions
 
(3,517
)
 
1,519

 
500

 
1,672

 
430

 
1,300

Other - net
 
701

 
1,210

 
245

 
153

 
267

 
123

Total income taxes as reported
 

($46,769
)
 

$121,623

 

$30,866

 

$186

 

($53,896
)
 

$15,349

Effective Income Tax Rate
 
(21.6
%)
 
15.0
%
 
20.5
%
 
0.4
%
 
(51.1
%)
 
13.4
%


2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Net income
 

$252,707

 

$675,614

 

$126,078

 

$53,152

 

$162,235

 

$94,109

Income taxes
 
(297,067
)
 
(54,611
)
 
(125,773
)
 
(2,436
)
 
(26,243
)
 
(47,675
)
Pretax income
 

($44,360
)
 

$621,003

 

$305

 

$50,716

 

$135,992

 

$46,434

Computed at statutory rate (21%)
 

($9,316
)
 

$130,411

 

$64

 

$10,650

 

$28,558

 

$9,751

Increases (reductions) in tax resulting from:
 


 


 


 


 


 


State income taxes net of federal income tax effect
 
(794
)
 
26,031

 
(1,747
)
 
2,322

 
2,576

 
2,812

Regulatory differences - utility plant items
 
(14,916
)
 
(12,604
)
 
(4,103
)
 
(1,502
)
 
(1,872
)
 
(2,510
)
Equity component of AFUDC
 
(3,477
)
 
(16,784
)
 
(1,829
)
 
(1,248
)
 
(2,042
)
 
(1,837
)
Amortization of investment tax credits
 
(1,201
)
 
(4,871
)
 
(160
)
 
(109
)
 
(808
)
 
(1,155
)
Flow-through / permanent differences
 
570

 
3,203

 
1,893

 
(4,222
)
 
1,038

 
2,815

Revisions of the 2017 tax legislation enactment regulatory liability accrual, including the effect of the Entergy Texas 2018 base rate proceeding (a)
 
933

 
(2,810
)
 
(556
)
 
884

 
(43,799
)
 
(3,565
)
Amortization of excess ADIT (b)
 
(271,570
)
 
(104,313
)
 
(120,831
)
 
(9,878
)
 
(11,519
)
 
(58,971
)
Settlement on treatment of regulatory obligations (c)
 
—

 
(52,320
)
 
—

 
—

 
—

 
—

IRS audit adjustment
 
1,290

 
1,097

 
1,018

 
(96
)
 
524

 
(12
)
Non-taxable dividend income
 
—

 
(26,795
)
 
—

 
—

 
—

 
—

Provision for uncertain tax positions
 
724

 
3,949

 
240

 
613

 
839

 
4,876

Other - net
 
690

 
1,195

 
238

 
150

 
262

 
121

Total income taxes as reported
 

($297,067
)
 

($54,611
)
 

($125,773
)
 

($2,436
)
 

($26,243
)
 

($47,675
)
Effective Income Tax Rate
 
669.7
%
 
(8.8
%)
 
(41,237.0
%)
 
(4.8
%)
 
(19.3
%)
 
(102.7
%)


2017
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Net income
 

$139,844

 

$316,347

 

$110,032

 

$44,553

 

$76,173

 

$78,596

Income taxes
 
93,804

 
485,298

 
73,919

 
33,278

 
48,481

 
69,969

Pretax income
 

$233,648

 

$801,645

 

$183,951

 

$77,831

 

$124,654

 

$148,565

Computed at statutory rate (35%)
 

$81,777

 

$280,576

 

$64,383

 

$27,241

 

$43,629

 

$51,998

Increases (reductions) in tax resulting from:
 
 

 
 

 
 

 
 

 
 

 
 

State income taxes net of federal income tax effect
 
11,586

 
31,927

 
6,202

 
2,842

 
527

 
5,635

Regulatory differences - utility plant items
 
7,220

 
12,168

 
1,356

 
619

 
5,581

 
12,880

Equity component of AFUDC
 
(6,458
)
 
(18,020
)
 
(3,383
)
 
(847
)
 
(2,353
)
 
(2,221
)
Amortization of investment tax credits
 
(1,201
)
 
(4,871
)
 
(160
)
 
(124
)
 
(951
)
 
(2,896
)
Flow-through / permanent differences
 
3,098

 
3,774

 
1,567

 
(3,352
)
 
1,428

 
(276
)
Tax legislation enactment (b)
 
(3,090
)
 
217,258

 
3,492

 
6,153

 
2,981

 
(69
)
Non-taxable dividend income
 
—

 
(44,658
)
 
—

 
—

 
—

 
—

Provision for uncertain tax positions
 
200

 
5,700

 
228

 
600

 
(2,617
)
 
4,800

Other - net
 
672

 
1,444

 
234

 
146

 
256

 
118

Total income taxes as reported
 

$93,804

 

$485,298

 

$73,919

 

$33,278

 

$48,481

 

$69,969

Effective Income Tax Rate
 
40.1
%
 
60.5
%
 
40.2
%
 
42.8
%
 
38.9
%
 
47.1
%


(a)
See Note 2 to the financial statements for discussion of the Entergy Texas rate case settlement.
(b)
See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess ADIT in 2018 and 2019 and the tax legislation enactment in 2017.
(c)
See “Income Tax Audits - 2012-2013 IRS Audit” below for discussion of the settlement for Entergy Louisiana.
Significant Components Of Accumulated Deferred Income Taxes And Accrued Taxes
Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2019 and 2018 are as follows:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Deferred tax liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Plant basis differences - net
 

($979,033
)
 

($1,987,025
)
 

($565,202
)
 

($133,073
)
 

($551,365
)
 

($380,594
)
Regulatory assets
 
(170,949
)
 
(79,117
)
 
(10,528
)
 
(16,867
)
 
(59,745
)
 
(52,662
)
Nuclear decommissioning trusts/receivables
 
(120,306
)
 
(113,830
)
 
—

 
—

 
—

 
(100,621
)
Pension, net funding
 
(102,685
)
 
(98,743
)
 
(27,325
)
 
(11,859
)
 
(19,961
)
 
(21,609
)
Deferred fuel
 
—

 
(2,637
)
 
(609
)
 
(666
)
 
(4,380
)
 
(55
)
Other
 
(82,682
)
 
(94,139
)
 
(27,905
)
 
(25,909
)
 
2,059

 
(7,350
)
Total
 
(1,455,655
)
 
(2,375,491
)
 
(631,569
)
 
(188,374
)
 
(633,392
)
 
(562,891
)
Deferred tax assets:
 
 

 
 

 
 

 
 

 
 

 
 

Regulatory liabilities
 
250,410

 
283,507

 
53,421

 
33,258

 
65,602

 
121,011

Nuclear decommissioning liabilities
 
111,078

 
56,300

 
—

 
—

 
—

 
52,633

Pension and other post-employment benefits
 
(21,828
)
 
74,881

 
(5,844
)
 
(12,666
)
 
(15,406
)
 
(898
)
Sale and leaseback
 
—

 
—

 
—

 
—

 
—

 
102,480

Accumulated deferred investment tax credit
 
8,285

 
32,534

 
2,396

 
556

 
2,217

 
10,025

Provision for allowances and contingencies
 
5,365

 
77,298

 
12,963

 
24,022

 
4,024

 
—

Power purchase agreements
 
(15,087
)
 
18,004

 
1,147

 
7,961

 
26

 
—

Unbilled/deferred revenues
 
5,897

 
(28,081
)
 
4,715

 
1,428

 
5,544

 
—

Compensation
 
2,550

 
3,670

 
1,625

 
496

 
1,282

 
75

Net operating loss carryforwards
 
112,658

 
65,178

 
21,492

 
5,056

 
—

 
—

Capital losses and miscellaneous tax credits
 
—

 
—

 
45

 
—

 
—

 
7,857

Other
 
12,541

 
35,401

 
999

 
9,027

 
2,004

 
3

Total
 
471,869

 
618,692

 
92,959

 
69,138

 
65,293

 
293,186

Non-current accrued taxes (including unrecognized tax benefits)
 
(199,340
)
 
(707,714
)
 
(56,222
)
 
(235,300
)
 
(17,314
)
 
(544,235
)
Accumulated deferred income taxes and taxes accrued
 

($1,183,126
)
 

($2,464,513
)
 

($594,832
)
 

($354,536
)
 

($585,413
)
 

($813,940
)
2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Deferred tax liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Plant basis differences - net
 

($966,791
)
 

($1,893,831
)
 

($579,319
)
 

($135,143
)
 

($544,282
)
 

($403,809
)
Regulatory assets
 
(169,482
)
 
(74,917
)
 
(1,732
)
 
(20,009
)
 
(57,777
)
 
(46,627
)
Nuclear decommissioning trusts/receivables
 
(77,664
)
 
(71,470
)
 
—

 
—

 
—

 
(86,882
)
Pension, net funding
 
(91,962
)
 
(92,693
)
 
(24,398
)
 
(11,885
)
 
(20,331
)
 
(18,898
)
Deferred fuel
 
(5,801
)
 
(6,974
)
 
(11,819
)
 
(1,701
)
 
(2,835
)
 
(312
)
Other
 
(41,025
)
 
(34,700
)
 
(13,443
)
 
(7,640
)
 
(6,085
)
 
(4,544
)
Total
 
(1,352,725
)
 
(2,174,585
)
 
(630,711
)
 
(176,378
)
 
(631,310
)
 
(561,072
)
Deferred tax assets:
 
 

 
 

 
 

 
 

 
 

 
 

Regulatory liabilities
 
247,964

 
339,126

 
72,570

 
40,181

 
86,032

 
110,370

Nuclear decommissioning liabilities
 
99,479

 
48,738

 
—

 
—

 
—

 
46,643

Pension and other post-employment benefits
 
(19,068
)
 
80,102

 
(5,405
)
 
(11,371
)
 
(14,215
)
 
(632
)
Sale and leaseback
 
—

 
18,999

 
—

 
—

 
—

 
102,481

Accumulated deferred investment tax credit
 
8,599

 
33,928

 
2,541

 
579

 
2,347

 
9,649

Provision for allowances and contingencies
 
9,877

 
81,108

 
13,412

 
23,962

 
5,579

 
—

Power purchase agreements
 
(17,223
)
 
19,385

 
1,140

 
12,155

 
(18
)
 
—

Unbilled/deferred revenues
 
7,471

 
(17,345
)
 
5,527

 
636

 
7,016

 
—

Compensation
 
1,708

 
1,959

 
1,265

 
512

 
995

 
(260
)
Net operating loss carryforwards
 
6,338

 
20,118

 
4,896

 
480

 
261

 
—

Other
 
7,977

 
23,412

 
1,610

 
12,181

 
2,127

 
4

Total
 
353,122

 
649,530

 
97,556

 
79,315

 
90,124

 
268,255

Non-current accrued taxes (including unrecognized tax benefits)
 
(85,942
)
 
(701,666
)
 
(18,714
)
 
(226,532
)
 
(11,349
)
 
(512,479
)
Accumulated deferred income taxes and taxes accrued
 

($1,085,545
)
 

($2,226,721
)
 

($551,869
)
 

($323,595
)
 

($552,535
)
 

($805,296
)
Entergy's Estimated Tax Attributes, Carryovers And Their Expiration Dates
The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2019 are as follows:
 
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal net operating losses
 
$4.4 billion
 
$4.3 billion
 
$2 billion
 
$1.1 billion
 
$—
 
$—
Year(s) of expiration
 
N/A
 
2035-2037
 
N/A
 
2037
 
N/A
 
N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
State net operating losses
 
$4.5 billion
 
$5.2 billion
 
$2.1 billion
 
$1.2 billion
 
$—
 
$—
Year(s) of expiration
 
2024
 
2035-2039
 
2038-2039
 
2038-2039
 
N/A
 
N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
Misc. federal credits
 
$—
 
$5.2 million
 
$—
 
$—
 
$1.9 million
 
$3.2 million
Year(s) of expiration
 
N/A
 
2035-2038
 
N/A
 
N/A
 
2029-2038
 
2029-2038
 
 
 
 
 
 
 
 
 
 
 
 
 
State credits
 
$—
 
$—
 
$—
 
$—
 
$2.9 million
 
$13.1 million
Year(s) of expiration
 
N/A
 
N/A
 
N/A
 
N/A
 
2026
 
2020-2023
Reconciliation Of Unrecognized Tax Benefits
A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2019, 2018, and 2017 is as follows:
2019
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Gross balance at January 1, 2019
 

$1,298,662

 

$2,400,171

 

$508,765

 

$686,687

 

$17,802

 

$467,487

Additions based on tax positions related to the current year
 
84,335

 
28,705

 
68,594

 
40,676

 
2,312

 
5,496

Additions for tax positions of prior years
 
20,399

 
25,090

 
1,651

 
489

 
1,299

 
2,186

Reductions for tax positions of prior years
 
(62,154
)
 
(72,313
)
 
(12,723
)
 
(11,079
)
 
(7
)
 
(1,838
)
Gross balance at December 31, 2019
 
1,341,242

 
2,381,653

 
566,287

 
716,773

 
21,406

 
473,331

Offsets to gross unrecognized tax benefits:
 
 

 
 

 
 

 
 

 
 

 
 

Loss carryovers
 
(1,134,187
)
 
(1,573,257
)
 
(506,976
)
 
(445,430
)
 
(3,944
)
 
(8,392
)
Unrecognized tax benefits net of unused tax attributes and payments
 

$207,055

 

$808,396

 

$59,311

 

$271,343

 

$17,462

 

$464,939



2018
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Gross balance at January 1, 2018
 

($117,716
)
 

$2,518,457

 

$15,122

 

$679,544

 

$16,399

 

$445,511

Additions based on tax positions related to the current year (a)
 
1,430,828

 
30,577

 
493,039

 
2,261

 
1,978

 
18,271

Additions for tax positions of prior years
 
31,612

 
77,372

 
3,878

 
12,972

 
1,722

 
7,255

Reductions for tax positions of prior years
 
(21,619
)
 
(158,510
)
 
(3,253
)
 
(8,081
)
 
(2,262
)
 
(3,253
)
Settlements
 
(24,443
)
 
(67,725
)
 
(21
)
 
(9
)
 
(35
)
 
(297
)
Gross balance at December 31, 2018
 
1,298,662

 
2,400,171

 
508,765

 
686,687

 
17,802

 
467,487

Offsets to gross unrecognized tax benefits:
 
 

 
 

 
 

 
 

 
 

 
 

Loss carryovers
 
(1,173,839
)
 
(1,597,826
)
 
(478,268
)
 
(420,813
)
 
(3,199
)
 
(42,228
)
Unrecognized tax benefits net of unused tax attributes and payments
 

$124,823

 

$802,345

 

$30,497

 

$265,874

 

$14,603

 

$425,259


2017
 
Entergy Arkansas
 
Entergy Louisiana
 
Entergy Mississippi
 
Entergy New Orleans
 
Entergy Texas
 
System Energy
 
 
(In Thousands)
Gross balance at January 1, 2017
 

$2,503

 

$2,440,339

 

$12,206

 

$166,230

 

$15,946

 

$472,372

Additions based on tax positions related to the current year (a)
 
8,974

 
32,843

 
2,105

 
509,183

 
1,747

 
909

Additions for tax positions of prior years
 
3,682

 
235,331

 
1,267

 
13,364

 
3,115

 
1,432

Reductions for tax positions of prior years
 
(132,875
)
 
(190,056
)
 
(456
)
 
(9,233
)
 
(4,409
)
 
(29,202
)
Gross balance at December 31, 2017
 
(117,716
)
 
2,518,457

 
15,122

 
679,544

 
16,399

 
445,511

Offsets to gross unrecognized tax benefits:
 
 

 
 

 
 

 
 

 
 

 
 

Loss carryovers
 
—

 
(1,591,907
)
 
(15,122
)
 
(441,374
)
 
(638
)
 
(12,536
)
Unrecognized tax benefits net of unused tax attributes and payments
 

($117,716
)
 

$926,550

 

$—

 

$238,170

 

$15,761

 

$432,975



(a)
The primary additions for Entergy Mississippi in 2018, and Entergy New Orleans in 2017 are related to the mark-to-market treatment discussed in “Other Tax Matters - Tax Accounting Methods” below. The primary additions for Entergy Arkansas in 2018 are related to the nuclear decommissioning costs treatment and the mark-to-market treatment discussed in “Other Tax Matters - Tax Accounting Methods” below.
Summary Of Unrecognized Tax Benefits That Would Affect Effective Income Tax Rate
The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:
 
December 31,
 
2019
 
2018
 
2017
 
(In Millions)
Entergy Arkansas

$203.3

 

$85.4

 

$2.6

Entergy Louisiana

$556.3

 

$594.0

 

$575.8

Entergy Mississippi

$1.9

 

$1.5

 

$—

Entergy New Orleans

$242.7

 

$246.2

 

$31.7

Entergy Texas

$5.7

 

$5.1

 

$4.4

System Energy

$—

 

$—

 

$—
Summary Of Accrued Interest And Penalties Related To Unrecognized Tax Benefits
Accrued balances for the possible payment of interest related to unrecognized tax benefits are as follows:
 
December 31,
 
2019
 
2018
 
2017
 
(In Millions)
Entergy Arkansas

$3.1

 

$1.7

 

$1.6

Entergy Louisiana

$14.2

 

$17.9

 

$14.1

Entergy Mississippi

$1.7

 

$1.2

 

$1.0

Entergy New Orleans

$4.7

 

$2.7

 

$2.1

Entergy Texas

$1.1

 

$0.9

 

$0.4

System Energy

$14.5

 

$13.2

 

$8.5
Summary of Interest on Income Taxes Expense Related to Unrecognized Tax Benefits Interest (net-of-tax) was recorded as follows:
 
2019
 
2018
 
2017
 
(In Millions)
Entergy Arkansas

$1.4

 

$0.2

 

$0.2

Entergy Louisiana

($3.7
)
 

$3.8

 

$5.7

Entergy Mississippi

$0.5

 

$0.2

 

$0.2

Entergy New Orleans

$2.0

 

$0.6

 

$0.6

Entergy Texas

$0.2

 

$0.5

 

($0.8
)
System Energy

$1.3

 

$4.7

 

$4.8