INCOME TAXES

Our effective tax rate varied from the statutory federal income tax rate due to differences between the book and tax treatment of various transactions as follows:



(In thousands)	2015			2014			2013
Income tax expense at 35% statutory rate	$	134,357		$	138,042		$	123,329
State income taxes (net of federal benefit)	13,366			16,054			9,110
AFUDC equity	(8,469		)	(6,201		)	(9,715		)
Entergy Transaction expenses (a)	—			—			(5,614		)
Other — net	2,217			2,427			1,752
Total income tax provision	$	141,471		$	150,322		$	118,862

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(a)	See Note 17 for discussion of the Entergy Transaction.

Components of the income tax provision were as follows:



(In thousands)	2015		2014		2013
Current income tax expense	$	64,100	$	59,949	$	42,159
Deferred income tax expense	76,833		90,313		76,094
Benefits of operating loss carryforward	538		60		609
Total income tax provision	$	141,471	$	150,322	$	118,862

Deferred tax assets and liabilities are recognized for the estimated future tax effect of temporary differences between the tax basis of assets or liabilities and the reported amounts in the financial statements.

Deferred income tax assets (liabilities) consisted of the following at December 31:



(In thousands)	2015			2014
Property, plant and equipment	$	(678,567	)	$	(560,960	)
METC regulatory deferral (a)	(11,629		)	(12,721		)
Acquisition adjustments — ADIT deferrals (a)	(15,300		)	(15,164		)
Goodwill	(147,894		)	(133,138		)
Net revenue accruals and deferrals, including accrued interest (a)	961			22,047
Refund liabilities (a)	70,234			18,878
Pension and postretirement liabilities	18,508			14,196
State income tax NOLs (net of federal benefit)	20,375			20,004
Share-based compensation	13,661			12,211
Other — net	(5,775		)	(7,404		)
Net deferred tax liabilities	$	(735,426	)	$	(642,051	)
Gross deferred income tax liabilities	$	(888,727	)	$	(810,141	)
Gross deferred income tax assets	153,301			168,090
Net deferred tax liabilities	$	(735,426	)	$	(642,051	)

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(a)Described in Note 5.

We have state income tax net operating losses (“NOLs”) as of December 31, 2015, all of which we expect to use prior to their expiration. Our state income tax NOLs would expire beginning in 2022. In addition to the estimated state income tax NOL deferred tax assets in the table above, we have additional estimated state income tax NOLs of $8.6 million and $7.1 million tax effected, net of federal benefit, as of December 31, 2015 and 2014, respectively, that have not been recognized in the consolidated statements of financial position relating to tax deductions for share-based payment. The accounting standards for share-based payment require that a tax deduction that exceeds book value be recognized only if that deduction reduces taxes payable as a result of a realized cash benefit from the deduction.

Balance Sheet Classification of Deferred Taxes

As described in Note 3, we adopted accounting guidance that requires deferred tax assets and deferred tax liabilities to be presented as non-current in our balance sheet and have applied this change to all amounts presented in our consolidated statements of financial position. The following shows the impact of this adoption on our previously reported consolidated statement of financial position as of December 31, 2014:



(In thousands)	Reported		Adjustment			Adjusted
Current assets — Deferred income taxes	$	14,511	$	(14,511	)	$	—
Non-current liabilities — Deferred income taxes	656,562		(14,511		)	642,051