Income Taxes

12 Months Ended

Dec. 31, 2014

Income Taxes

INCOME TAXES (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Income taxes from continuing operations for 2014, 2013, and 2012 for Entergy Corporation and Subsidiaries consist of the following:

	2014			2013			2012
	(In Thousands)
Current:
Federal		$90,061			$88,291			($47,851	)
Foreign	90			101			143
State	(12,637		)	20,584			(41,516		)
Total	77,514			108,976			(89,224		)
Deferred and non-current - net	528,326			126,935			131,130
Investment tax credit adjustments - net	(16,243		)	(9,930		)	(11,051		)
Income tax expense from continuing operations		$589,597			$225,981			$30,855

Income taxes for 2014, 2013, and 2012 for Entergy’s Registrant Subsidiaries consist of the following:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		($34,258	)		($3,857	)		($41,052	)		$8,103			($1,924	)		$48,610			$19,908
State	(678		)	(769		)	(422		)	7,474			520			4,877			15,379
Total	(34,936		)	(4,626		)	(41,474		)	15,577			(1,404		)	53,487			35,287
Deferred and non-current - net	119,841			96,446			140,348			42,305			13,952			(2,418		)	53,501
Investment tax credit adjustments - net	(1,276		)	(3,038		)	(2,604		)	(2,172		)	(224		)	(1,425		)	(5,478		)
Income taxes		$83,629			$88,782			$96,270			$55,710			$12,324			$49,644			$83,310

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi		Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		($13,574	)		$12,176			($30,973	)		$2,498		$15,017			$37,199			($6,199	)
State	6,122			(9,939		)	(5,692		)	4,849		(1,221		)	(843		)	15,845
Total	(7,452		)	2,237			(36,665		)	7,347		13,796			36,356			9,646
Deferred and non-current - net	101,253			57,620			121,416			41,150		(11,952		)	(4,639		)	60,614
Investment tax credit adjustments - net	(2,014		)	(3,038		)	(2,874		)	1,260		(225		)	(1,609		)	(1,407		)
Income taxes		$91,787			$56,819			$81,877			$49,757		$1,619			$30,108			$68,853

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		$64,069			($66,081	)		($132,999	)		$3,188			($9,484	)		($114,677	)		($50,491	)
State	6,712			9,535			(1,269		)	(4,425		)	(1,617		)	4,933			(8,544		)
Total	70,781			(56,546		)	(134,268		)	(1,237		)	(11,101		)	(109,744		)	(59,035		)
Deferred and non-current - net	26,042			112,390			8,463			59,045			18,586			144,471			137,832
Investment tax credit adjustments - net	(2,017		)	(3,228		)	(3,117		)	871			(245		)	(1,609		)	(1,682		)
Income taxes		$94,806			$52,616			($128,922	)		$58,679			$7,240			$33,118			$77,115

Total income taxes for Entergy Corporation and Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before income taxes.  The reasons for the differences for the years 2014, 2013, and 2012 are:

	2014			2013			2012
	(In Thousands)
Net income attributable to Entergy Corporation		$940,721			$711,902			$846,673
Preferred dividend requirements of subsidiaries	19,536			18,670			21,690
Consolidated net income	960,257			730,572			868,363
Income taxes	589,597			225,981			30,855
Income before income taxes		$1,549,854			$956,553			$899,218
Computed at statutory rate (35%)		$542,449			$334,794			$314,726
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	44,708			13,599			40,699
Regulatory differences - utility plant items	39,321			32,324			35,527
Equity component of AFUDC	(21,108		)	(22,356		)	(30,838		)
Amortization of investment tax credits	(12,211		)	(13,535		)	(14,000		)
Flow-through / permanent differences	(18,003		)	(301		)	(14,801		)
Net-of-tax regulatory liability	—			(2,899		)	(4,356		)
New York tax law change	(21,500		)	—			—
Deferred tax asset on additional depreciation (a)	—			—			(155,300		)
Termination of business reorganization	—			(27,192		)	—
Write-off of regulatory asset for income taxes	—			—			42,159
Capital losses	—			—			(20,188		)
Provision for uncertain tax positions (b)	32,573			(59,249		)	(159,957		)
Valuation allowance	—			(31,573		)	—
Other - net	3,368			2,369			(2,816		)
Total income taxes as reported		$589,597			$225,981			$30,855
Effective Income Tax Rate	38.0		%	23.6		%	3.4		%

(a) See “Income Tax Audits- 2004-2005 IRS Audit” below for discussion of this item.

(b) See “Income Tax Audits- 2008-2009 IRS Audit” below for discussion of the most significant items in 2013 and 2012.

In March 2014, New York enacted legislation that substantially modifies various aspects of New York tax law. The most significant effect of the legislation for Entergy is the adoption of full water's-edge unitary combined reporting, meaning that all of Entergy's domestic entities will be included in New York's combined filing group. The effect of the tax law change resulted in a deferred state income tax reduction of approximately $21.5 million as shown in the table above.

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 2014, 2013, and 2012 are:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$121,392			$162,491			$283,531			$74,821			$28,707			$74,804			$96,334
Income taxes	83,629			88,782			96,270			55,710			12,324			49,644			83,310
Pretax income		$205,021			$251,273			$379,801			$130,531			$41,031			$124,448			$179,644
Computed at statutory rate (35%)		$71,757			$87,946			$132,930			$45,686			$14,361			$43,557			$62,875
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	9,591			6,532			5,134			5,180			1,643			3,221			6,877
Regulatory differences - utility plant items	8,653			4,618			2,869			4,448			777			4,165			13,791
Equity component of AFUDC	(2,533		)	(2,602		)	(12,010		)	(833		)	(320		)	(1,035		)	(1,774		)
Amortization of investment tax credits	(1,251		)	(3,018		)	(2,576		)	(260		)	(218		)	(1,412		)	(3,476		)
Flow-through / permanent differences	(5,082		)	799			(1,024		)	555			(4,458		)	393			(327		)
Non-taxable dividend income	—			(10,590		)	(30,665		)	—			—			—			—
Provision for uncertain tax positions	1,881			4,108			1,228			718			405			522			5,235
Other - net	613			989			384			216			134			233			109
Total income taxes		$83,629			$88,782			$96,270			$55,710			$12,324			$49,644			$83,310
Effective Income Tax Rate	40.8		%	35.3		%	25.3		%	42.7		%	30.0		%	39.9		%	46.4		%

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$161,948			$161,662			$252,464			$82,159			$11,683			$57,881			$113,664
Income taxes	91,787			56,819			81,877			49,757			1,619			30,108			68,853
Pretax income		$253,735			$218,481			$334,341			$131,916			$13,302			$87,989			$182,517
Computed at statutory rate (35%)		$88,807			$76,468			$117,019			$46,171			$4,656			$30,796			$63,881
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	10,954			7,719			11,365			4,564			1,012			(897		)	5,900
Regulatory differences - utility plant items	7,938			4,865			2,140			2,603			453			3,256			11,070
Equity component of AFUDC	(3,820		)	(2,822		)	(10,278		)	(764		)	(322		)	(1,626		)	(2,724		)
Amortization of investment tax credits	(1,989		)	(3,018		)	(2,846		)	(260		)	(216		)	(1,596		)	(3,476		)
Flow-through / permanent differences	2,540			2,377			1,269			1,702			(4,402		)	2,467			(491		)
Net-of-tax regulatory liability	—			—			(2,899		)	—			—			—			—
Termination of business reorganization	(6,753		)	(3,619		)	(3,834		)	(4,177		)	(501		)	(3,542		)	(13		)
Non-taxable dividend income	—			(9,612		)	(27,341		)	—			—			—			—
Provision for uncertain tax positions	(6,527		)	(15,557		)	(3,088		)	(326		)	795			1,027			(5,353		)
Other - net	637			18			370			244			144			223			59
Total income taxes		$91,787			$56,819			$81,877			$49,757			$1,619			$30,108			$68,853
Effective Income Tax Rate	36.2		%	26.0		%	24.5		%	37.7		%	12.2		%	34.2		%	37.7		%

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$152,365			$158,977			$281,081			$46,768			$17,065			$41,971			$111,866
Income taxes (benefit)	94,806			52,616			(128,922		)	58,679			7,240			33,118			77,115
Pretax income		$247,171			$211,593			$152,159			$105,447			$24,305			$75,089			$188,981
Computed at statutory rate (35%)		$86,510			$74,058			$53,256			$36,906			$8,507			$26,281			$66,143
Increases (reductions) resulting from:
State income taxes net of federal income tax effect	11,282			5,087			1,976			3,944			505			3,115			6,652
Regulatory differences - utility plant items	6,778			8,472			312			2,619			2,289			3,668			11,389
Equity component of AFUDC	(2,495		)	(3,042		)	(12,919		)	(1,383		)	(276		)	(1,587		)	(9,136		)
Amortization of investment tax credits	(1,992		)	(3,204		)	(3,089		)	(264		)	(240		)	(1,596		)	(3,480		)
Net-of-tax regulatory liability	—			—			(4,356		)	—			—			—			—
Flow-through / permanent differences	3,427			(7,646		)	1,397			1,961			(4,385		)	1,585			(357		)
Non-taxable dividend income	—			(9,836		)	(27,336		)	—			—			—			—
Expense (benefit) of Entergy Corporation expenses	(19,403		)	(17,703		)	—			14,449			2,758			—			(10,241		)
Provision for uncertain tax positions	11,227			8,745			(143,583		)	870			(2,095		)	1,651			17,966
Change in regulatory recovery	—			(553		)	7,854			—			—			—			—
Other - net	(528		)	(1,762		)	(2,434		)	(423		)	177			1			(1,821		)
Total income taxes		$94,806			$52,616			($128,922	)		$58,679			$7,240			$33,118			$77,115
Effective Income Tax Rate	38.4		%	24.9		%	(84.7		%)	55.6		%	29.8		%	44.1		%	40.8		%

Significant components of accumulated deferred income taxes and taxes accrued for Entergy Corporation and Subsidiaries as of December 31, 2014 and 2013 are as follows:

	2014			2013
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($8,128,096	)		($7,941,319	)
Regulatory assets	(922,161		)	(922,312		)
Nuclear decommissioning trusts	(1,248,737		)	(1,100,439		)
Pension, net funding	(324,881		)	(299,951		)
Combined unitary state taxes	(162,340		)	(183,934		)
Power purchase agreements	(110,889		)	(8,096		)
Other	(500,424		)	(404,749		)
Total	(11,397,528		)	(10,860,800		)
Deferred tax assets:
Nuclear decommissioning liabilities	874,493			754,828
Regulatory liabilities	458,230			403,370
Pension and other post-employment benefits	586,455			469,190
Sale and leaseback	153,308			176,119
Compensation	74,692			125,552
Accumulated deferred investment tax credit	100,442			106,777
Provision for allowances and contingencies	160,551			66,026
Net operating loss carryforwards	457,758			548,756
Capital losses and miscellaneous tax credits	12,146			13,140
Valuation allowance	(27,387		)	(28,146		)
Other	58,334			109,606
Total	2,909,022			2,745,218
Noncurrent accrued taxes (including unrecognized tax benefits)	(606,560		)	(400,276		)
Accumulated deferred income taxes and taxes accrued		($9,095,066	)		($8,515,858	)

Entergy’s estimated tax attributes carryovers and their expiration dates as of December 31, 2014 are as follows:

Carryover Description	Carryover Amount	Year(s) of expiration
Federal net operating losses	$12.3 billion	2023-2034
State net operating losses	$10.2 billion	2015-2033
Miscellaneous federal and state credits	$97.6 million	2015-2034

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers, tax credit carryovers, and other tax attributes reflected on income tax returns. Because it is more likely than not that the benefit from certain state net operating loss carryovers will not be utilized, a valuation allowance of $21.2 million has been provided on the deferred tax assets relating to these state net operating loss carryovers.

In the third quarter 2013, Entergy reduced a valuation allowance by $44 million ($28 million net of the federal income tax effect) that had been provided on a state net operating loss carryover due to the prospective utilization of such loss carryover.

Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2014 and 2013 are as follows:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($1,657,503	)		($1,233,761	)		($1,515,091	)		($753,576	)		($186,153	)		($771,135	)		($668,779	)
Regulatory assets	(198,662		)	(106,287		)	(274,432		)	(30,114		)	—			(202,402		)	(110,087		)
Nuclear decommissioning trusts	(130,524		)	(43,611		)	(62,551		)	—			—			—			(74,063		)
Pension, net funding	(93,355		)	(46,403		)	(53,190		)	(27,861		)	(13,285		)	(25,616		)	(23,440		)
Deferred fuel	(82,050		)	(3,034		)	(500		)	(5,303		)	(407		)	2,045			(120		)
Power purchase agreements	(17,073		)	(67,083		)	—			2,129			13			847			—
Other	(33,827		)	(8,850		)	(75,432		)	(11,423		)	(11,500		)	(22,546		)	(19,802		)
Total	(2,212,994		)	(1,509,029		)	(1,981,196		)	(826,148		)	(211,332		)	(1,018,807		)	(896,291		)
Deferred tax assets:
Regulatory liabilities	145,466			70,068			111,533			7,214			29,580			4,079			90,290
Nuclear decommissioning liabilities	(43,134		)	48,815			97,323			—			—			—			(62,571		)
Pension and other post-employment benefits	(17,534		)	88,606			70,055			(7,288		)	(7,504		)	(15,053		)	(1,413		)
Sale and leaseback	—			—			45,136			—			—			—			108,172
Accumulated deferred investment tax credit	14,791			33,941			24,922			2,436			332			5,158			18,862
Provision for allowances and contingencies	(7,149		)	43,512			82,293			19,590			10,986			8,017			133
Unbilled/deferred revenues	12,322			(18,553		)	(6,463		)	12,956			3,395			11,573			—
Compensation	2,085			641			(483		)	(846		)	475			4,155			—
Net operating loss carryforwards	105,063			—			241,803			—			—			—			—
Capital losses and miscellaneous tax credits	—			—			—			3,504			—			—			—
Other	258			8,102			7,406			5,887			2,891			3,850			2,000
Total	212,168			275,132			673,525			43,453			40,155			21,779			155,473
Noncurrent accrued taxes (including unrecognized tax benefits)	9,367			(388,230		)	(24,278		)	(12,481		)	(19,502		)	(48,921		)	(81,528		)
Accumulated deferred income taxes and taxes accrued		($1,991,459	)		($1,622,127	)		($1,331,949	)		($795,176	)		($190,679	)		($1,045,949	)		($822,346	)

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($1,613,195	)		($1,259,173	)		($1,347,534	)		($727,545	)		($196,726	)		($759,263	)		($698,151	)
Regulatory assets	(212,339		)	(102,362		)	(255,068		)	(33,277		)	—			(205,402		)	(113,849		)
Nuclear decommissioning trusts	(110,004		)	(32,574		)	(50,248		)	—			—			—			(58,308		)
Pension, net funding	(79,589		)	(45,342		)	(50,630		)	(24,392		)	(11,606		)	(23,598		)	(21,187		)
Deferred fuel	(26,946		)	(4,361		)	(512		)	(21,823		)	63			(470		)	(129		)
Power purchase agreements	(7,053		)	(20,234		)	—			—			13			1,269			—
Other	(62,046		)	(25,694		)	(69,194		)	(10,732		)	(13,446		)	(58,963		)	(8,969		)
Total	(2,111,172		)	(1,489,740		)	(1,773,186		)	(817,769		)	(221,702		)	(1,046,427		)	(900,593		)
Deferred tax assets:
Regulatory liabilities	120,966			60,176			94,019			8,357			35,764			7,952			76,135
Nuclear decommissioning liabilities	(64,571		)	49,439			92,206			—			—			—			(71,898		)
Pension and other post-employment benefits	(12,132		)	73,136			62,999			(1,345		)	1,532			(13,417		)	(2,073		)
Sale and leaseback	—			—			52,054			—			—			—			124,065
Accumulated deferred investment tax credit	15,281			35,297			25,913			3,263			416			5,651			20,956
Provision for allowances and contingencies	12,313			14,784			3,347			13,066			8,535			5,980			—
Unbilled/deferred revenues	37,825			(22,340		)	3,026			6,791			4,226			10,655			—
Compensation	7,131			4,701			3,470			1,778			1,696			6,774			822
Net operating loss carryforwards	85,875			—			230,592			19,400			—			—			—
Capital losses and miscellaneous tax credits	—			—			—			6,173			—			—			—
Other	3,682			4,939			4,148			4,224			2,930			3,807			2,001
Total	206,370			220,132			571,774			61,707			55,099			27,402			150,008
Noncurrent accrued taxes (including unrecognized tax benefits)	22,565			(279,269		)	25,512			(6,290		)	(5,015		)	(37,777		)	10,302
Accumulated deferred income taxes and taxes accrued		($1,882,237	)		($1,548,877	)		($1,175,900	)		($762,352	)		($171,618	)		($1,056,802	)		($740,283	)

The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2014 are as follows:

	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
Federal net operating losses		$1.3	billion		$151	million		$2.1	billion	—				$55	million	—				$392	million
Year(s) of expiration	2029-2034			2029-2032			2029-2034			N/A			2031-2034			N/A			2030-2032
State net operating losses		$235	million		$580	million		$3	billion	—				$24	million	—			—
Year(s) of expiration	2015-2028			2024-2027			2024-2029			N/A			2026-2029			N/A			N/A
Misc. federal credits		$1	million		$6	million		$13	million		$1	million	—			—				$10	million
Year(s) of expiration	2029-2033			2029-2033			2026-2033			2029-2033			N/A			N/A			2029-2033
State credits	—			—			—				$9.5	million	—				$3.4	million		$15.7	million
Year(s) of expiration	N/A			N/A			N/A			2015-2019			N/A			2026			2015-2019

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers and tax credit carryovers.

Unrecognized tax benefits

Accounting standards establish a “more-likely-than-not” recognition threshold that must be met before a tax benefit can be recognized in the financial statements.  If a tax deduction is taken on a tax return, but does not meet the more-likely-than-not recognition threshold, an increase in income tax liability, above what is payable on the tax return, is required to be recorded.  A reconciliation of Entergy’s beginning and ending amount of unrecognized tax benefits is as follows:

	2014			2013			2012
	(In Thousands)
Gross balance at January 1		$4,593,224			$4,170,403			$4,387,780
Additions based on tax positions related to the current year	348,543			162,338			163,612
Additions for tax positions of prior years	11,637			410,108			1,517,797
Reductions for tax positions of prior years	(213,401		)	(103,360		)	(476,873		)
Settlements	—			(43,620		)	(1,421,913		)
Lapse of statute of limitations	(3,218		)	(2,645		)	—
Gross balance at December 31	4,736,785			4,593,224			4,170,403
Offsets to gross unrecognized tax benefits:
Credit and loss carryovers	(4,295,643		)	(4,400,498		)	(4,022,535		)
Unrecognized tax benefits net of unused tax attributes and payments (a)		$441,142			$192,726			$147,868

(a) Potential tax liability above what is payable on tax returns

The balances of unrecognized tax benefits include $516 million, $176 million, and $203 million as of December 31, 2014, 2013, and 2012, respectively, which, if recognized, would lower the effective income tax rates.  Because of the effect of deferred tax accounting, the remaining balances of unrecognized tax benefits of $4.221 billion, $4.417 billion, and $3.968 billion as of December 31, 2014, 2013, and 2012, respectively, if disallowed, would not affect the annual effective income tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

Entergy accrues interest expense, if any, related to unrecognized tax benefits in income tax expense.  Entergy’s December 31, 2014, 2013, and 2012 accrued balance for the possible payment of interest is approximately $127 million, $96.4 million, and $146.3 million, respectively.

A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2014, 2013, and 2012 is as follows:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2014		$347,713			$465,075			$611,605			$16,186			$51,679			$13,017			$265,185
Additions based on tax positions related to the current year	14,511			55,053			96,196			3,928			2,235			4,225			2,744
Additions for tax positions of prior years	1,767			5,204			1,720			319			37			303			566
Reductions for tax positions of prior years	(1,079		)	(7,995		)	(20,929		)	(289		)	(188		)	(267		)	(10,253		)
Settlements	—			—			—			—			—			(14		)	—
Gross balance at December 31, 2014	362,912			517,337			688,592			20,144			53,763			17,264			258,242
Offsets to gross unrecognized tax benefits:
Loss carryovers	(361,043		)	(89,448		)	(650,540		)	(6,992		)	(20,735		)	(241		)	(163,124		)
Unrecognized tax benefits net of unused tax attributes and payments		$1,869			$427,889			$38,052			$13,152			$33,028			$17,023			$95,118

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2013		$344,669			$465,721			$536,673			$16,841			$52,018			$13,954			$260,346
Additions based on tax positions related to the current year	6,427			7,276			10,611			957			583			2,170			4,170
Additions for tax positions of prior years	1,228			7,189			118,025			401			3,506			587			8,391
Reductions for tax positions of prior years	(3,943		)	(15,045		)	(38,428		)	(1,941		)	(962		)	(4,186		)	(967		)
Settlements	(668		)	(66		)	(15,276		)	(72		)	(3,466		)	492			(6,755		)
Gross balance at December 31, 2013	347,713			465,075			611,605			16,186			51,679			13,017			265,185
Offsets to gross unrecognized tax benefits:
Loss carryovers	(345,674		)	(136,151		)	(611,605		)	(16,186		)	(22,078		)	(266		)	(225,286		)
Unrecognized tax benefits net of unused tax attributes and payments		$2,039			$328,924			$—			$—			$29,601			$12,751			$39,899

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2012		$335,493			$390,493			$446,187			$11,052			$56,052			$19,225			$281,183
Additions based on tax positions related to the current year	10,409			8,974			67,721			8,401			497			1,656			8,715
Additions for tax positions of prior years	429,232			392,548			331,432			4,057			445			4,834			271,172
Reductions for tax positions of prior years	(39,534		)	(50,518		)	(169,465		)	(5,703		)	(2,506		)	(11,649		)	(20,934		)
Settlements	(390,931		)	(275,776		)	(139,202		)	(966		)	(2,470		)	(112		)	(279,790		)
Gross balance at December 31, 2012	344,669			465,721			536,673			16,841			52,018			13,954			260,346
Offsets to gross unrecognized tax benefits:
Loss carryovers	(342,127		)	(160,955		)	(536,673		)	(16,841		)	(35,511		)	(1,593		)	(249,424		)
Unrecognized tax benefits net of unused tax attributes and payments		$2,542			$304,766			$—			$—			$16,507			$12,361			$10,922

The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:

	December 31,
	2014		2013		2012
	(In Millions)
Entergy Arkansas		$2.6		$0.6		$0.6
Entergy Gulf States Louisiana		$91.9		$44.0		$44.0
Entergy Louisiana		$175.4		$87.9		$92.4
Entergy Mississippi		$3.9		$3.9		$3.9
Entergy New Orleans		$50.7		$—		$—
Entergy Texas		$10.5		$10.1		$8.6
System Energy		$3.7		$3.3		$3.5

The Registrant Subsidiaries accrue interest and penalties related to unrecognized tax benefits in income tax expense.  Penalties have not been accrued.  Accrued balances for the possible payment of interest are as follows:

	December 31,
	2014		2013		2012
	(In Millions)
Entergy Arkansas		$17.0		$15.2		$21.8
Entergy Gulf States Louisiana		$21.0		$17.0		$33.1
Entergy Louisiana		$1.2		$1.0		$0.9
Entergy Mississippi		$2.8		$2.1		$2.4
Entergy New Orleans		$1.3		$0.9		$0.1
Entergy Texas		$1.0		$0.8		$0.7
System Energy		$23.8		$19.0		$33.2

Income Tax Litigation

In October 2010 the U.S. Tax Court entered a decision in favor of Entergy regarding the ability to credit the U.K. Windfall Tax against U.S. income tax as a foreign tax credit.  The U.K. Windfall Tax relates to Entergy’s former investment in London Electricity.

The IRS filed an appeal of the U.K. Windfall Tax decision with the U.S. Court of Appeals for the Fifth Circuit in December 2010.  Oral arguments were heard in November 2011.  In June 2012 the U.S. Court of Appeals for the Fifth Circuit unanimously affirmed the U.S. Tax Court decision.  As a result of this decision, Entergy reversed its liability for uncertain tax positions associated with this issue.  On September 4, 2012, the U.S. Solicitor General, on behalf of the Commissioner of Internal Revenue, petitioned the U.S. Supreme Court for a writ of certiorari to review the Fifth Circuit judgment.

Concurrent with the Tax Court’s issuance of a favorable decision regarding the above issues, the Tax Court issued a favorable decision in a separate proceeding, PPL Corp. v. Commissioner, regarding the creditability of the U.K. Windfall Tax.  The IRS appealed the PPL decision to the United States Court of Appeals for the Third Circuit.  In December 2011 the Third Circuit reversed the Tax Court’s holding in PPL Corp. v. Commissioner, stating that the U.K. tax was not eligible for the foreign tax credit.  PPL Corp. petitioned the U.S. Supreme Court for a writ of certiorari to review the U.S. Court of Appeals for the Third Circuit decision.  On October 29, 2012, the U.S. Supreme Court granted PPL Corp.’s petition for certiorari.  The Solicitor General’s petition for writ of certiorari in Entergy’s case was held pending the disposition of the PPL case.

    On May 20, 2013, the U.S. Supreme Court issued a unanimous decision in PPL’s favor, holding that the U.K. Windfall Tax is a creditable tax for U.S. federal income tax purposes. On May 28, 2013, the Supreme Court denied the petition for certiorari filed by the Commissioner of Internal Revenue in Entergy’s U.K. Windfall Tax case, allowing the decision in Entergy’s favor from the United States Court of Appeals for the Fifth Circuit to become final.

Income Tax Audits

Entergy and its subsidiaries file U.S. federal and various state and foreign income tax returns.  IRS examinations are substantially completed for years before 2009. All state taxing authorities’ examinations are completed for years before 2005.

2004-2005 IRS Audit

In June 2009, Entergy filed a formal protest with the IRS Appeals Division indicating disagreement with certain issues contained in the 2004-2005 Revenue Agent’s Report (RAR).  The most significant issue disputed was the inclusion of nuclear decommissioning liabilities in cost of goods sold for the nuclear power plants owned by the Utility resulting from an Application for Change in Accounting Method for tax purposes (the “2004 CAM”).

During the fourth quarter 2012, Entergy settled the position relating to the 2004 CAM.   Under the settlement Entergy conceded its tax position, resulting in an increase in taxable income of approximately $2.97 billion for the tax years 2004 - 2007.  The settlement provides that Entergy Louisiana is entitled to additional tax depreciation of approximately $547 million for years 2006 and beyond.  The deferred tax asset net of interest charges associated with the settlement is $155 million for Entergy.  There was a related increase to Entergy Louisiana’s member’s equity account.

2008-2009 IRS Audit

In the third quarter 2008, Entergy Louisiana and Entergy Gulf States Louisiana received $679 million and $274.7 million, respectively, from the Louisiana Utilities Restoration Corporation (“LURC”).  These receipts from LURC were from the proceeds of a Louisiana Act 55 financing of the costs incurred to restore service following Hurricane Katrina and Hurricane Rita.  See Note 2 to the financial statements for further details regarding the financings.

In June 2012, Entergy effectively settled the tax treatment of the storm restoration, which resulted in an increase to 2008 taxable income of $129 million for Entergy Louisiana and $104 million for Entergy Gulf States Louisiana and a reduction of income tax expense of $172 million, including $143 million for Entergy Louisiana and $20 million for Entergy Gulf States Louisiana. Under the terms of an LPSC-approved settlement related to the Louisiana Act 55 financings, Entergy Louisiana and Entergy Gulf States Louisiana recorded, respectively, a $137 million ($84 million net-of-tax) and a $28 million ($17 million net-of-tax) regulatory charge and a corresponding regulatory liability to reflect their obligations to customers with respect to the settlement.  

In the fourth quarter 2009, Entergy filed Applications for Change in Accounting Method (the “2009 CAM”) for tax purposes with the IRS for certain costs under Section 263A of the Internal Revenue Code.  In the Applications, Entergy proposed to treat the nuclear decommissioning liability associated with the operation of its nuclear power plants as a production cost properly includable in cost of goods sold.  The effect of the 2009 CAM  was a $5.7 billion reduction in 2009 taxable income.  The 2009 CAM was adjusted to $9.3 billion in 2012.

In the fourth quarter 2012 the IRS disallowed the reduction to 2009 taxable income related to the 2009 CAM.  In the third quarter 2013, the Internal Revenue Service issued its RAR for the tax years 2008-2009. As a result of the issuance of this RAR, Entergy and the IRS resolved all of the 2008-2009 issues described above except for the 2009 CAM. Entergy disagrees with the IRS’s disallowance of the 2009 CAM and filed a protest with the IRS Appeals Division on October 24, 2013. Two conferences with the Appeals Division have taken place during 2014. The resolution of this issue is in process. The issuance of the RAR by the IRS effectively settled all other issues, which resulted in an adjustment to the provision for uncertain tax positions.

Other Tax Matters

Entergy regularly negotiates with the IRS to achieve settlements.  The resolution of the nuclear decommissioning liability audit issue, discussed above, could result in significant changes to the amounts of unrecognized tax benefits in the next twelve months.

In September 2013 the U.S. Treasury Department and the IRS issued final regulations that provide guidance on the deductibility and capitalization of costs incurred associated with tangible property. Entergy and the Registrant Subsidiaries filed with the IRS an automatic application for change in accounting method which is in compliance with the final regulations and the safe harbor provisions of the relevant IRS Revenue Procedures. Entergy estimates that the effect of this accounting method change will result in a net increase to Entergy’s taxable income of approximately $548 million, which will be recognized over a four year period beginning with the tax year ended 2014. The adoption of the final regulations and safe harbor method results in approximate changes in the Registrant Subsidiaries taxable income as follows: an increase of $157 million for Entergy Arkansas, an increase of $42 million for Entergy Gulf States Louisiana, an increase of $49 million for Entergy Louisiana, an increase of $23 million for Entergy Mississippi, an increase of $169 million for Entergy Texas, a decrease of $11 million for Entergy New Orleans, and an increase of $34 million for System Energy.

In March 2013, Entergy Louisiana distributed to its parent, Entergy Louisiana Holdings, Inc., Louisiana income tax credits of $20.6 million, which resulted in a decrease in Entergy Louisiana’s member’s equity account.

The Tax Increase Prevention Act of 2014 was enacted in December 2014. The most significant provisions affecting Entergy and the Registrant Subsidiaries were a one-year extension of 50% bonus depreciation and the research and experimentation tax credit. These provisions do not result in an immediate cash flow benefit but will result in cash flow benefits for Entergy in a future period.

Entergy Arkansas [Member]

Income Taxes

INCOME TAXES (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Income taxes from continuing operations for 2014, 2013, and 2012 for Entergy Corporation and Subsidiaries consist of the following:

	2014			2013			2012
	(In Thousands)
Current:
Federal		$90,061			$88,291			($47,851	)
Foreign	90			101			143
State	(12,637		)	20,584			(41,516		)
Total	77,514			108,976			(89,224		)
Deferred and non-current - net	528,326			126,935			131,130
Investment tax credit adjustments - net	(16,243		)	(9,930		)	(11,051		)
Income tax expense from continuing operations		$589,597			$225,981			$30,855

Income taxes for 2014, 2013, and 2012 for Entergy’s Registrant Subsidiaries consist of the following:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		($34,258	)		($3,857	)		($41,052	)		$8,103			($1,924	)		$48,610			$19,908
State	(678		)	(769		)	(422		)	7,474			520			4,877			15,379
Total	(34,936		)	(4,626		)	(41,474		)	15,577			(1,404		)	53,487			35,287
Deferred and non-current - net	119,841			96,446			140,348			42,305			13,952			(2,418		)	53,501
Investment tax credit adjustments - net	(1,276		)	(3,038		)	(2,604		)	(2,172		)	(224		)	(1,425		)	(5,478		)
Income taxes		$83,629			$88,782			$96,270			$55,710			$12,324			$49,644			$83,310

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi		Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		($13,574	)		$12,176			($30,973	)		$2,498		$15,017			$37,199			($6,199	)
State	6,122			(9,939		)	(5,692		)	4,849		(1,221		)	(843		)	15,845
Total	(7,452		)	2,237			(36,665		)	7,347		13,796			36,356			9,646
Deferred and non-current - net	101,253			57,620			121,416			41,150		(11,952		)	(4,639		)	60,614
Investment tax credit adjustments - net	(2,014		)	(3,038		)	(2,874		)	1,260		(225		)	(1,609		)	(1,407		)
Income taxes		$91,787			$56,819			$81,877			$49,757		$1,619			$30,108			$68,853

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		$64,069			($66,081	)		($132,999	)		$3,188			($9,484	)		($114,677	)		($50,491	)
State	6,712			9,535			(1,269		)	(4,425		)	(1,617		)	4,933			(8,544		)
Total	70,781			(56,546		)	(134,268		)	(1,237		)	(11,101		)	(109,744		)	(59,035		)
Deferred and non-current - net	26,042			112,390			8,463			59,045			18,586			144,471			137,832
Investment tax credit adjustments - net	(2,017		)	(3,228		)	(3,117		)	871			(245		)	(1,609		)	(1,682		)
Income taxes		$94,806			$52,616			($128,922	)		$58,679			$7,240			$33,118			$77,115

Total income taxes for Entergy Corporation and Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before income taxes.  The reasons for the differences for the years 2014, 2013, and 2012 are:

	2014			2013			2012
	(In Thousands)
Net income attributable to Entergy Corporation		$940,721			$711,902			$846,673
Preferred dividend requirements of subsidiaries	19,536			18,670			21,690
Consolidated net income	960,257			730,572			868,363
Income taxes	589,597			225,981			30,855
Income before income taxes		$1,549,854			$956,553			$899,218
Computed at statutory rate (35%)		$542,449			$334,794			$314,726
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	44,708			13,599			40,699
Regulatory differences - utility plant items	39,321			32,324			35,527
Equity component of AFUDC	(21,108		)	(22,356		)	(30,838		)
Amortization of investment tax credits	(12,211		)	(13,535		)	(14,000		)
Flow-through / permanent differences	(18,003		)	(301		)	(14,801		)
Net-of-tax regulatory liability	—			(2,899		)	(4,356		)
New York tax law change	(21,500		)	—			—
Deferred tax asset on additional depreciation (a)	—			—			(155,300		)
Termination of business reorganization	—			(27,192		)	—
Write-off of regulatory asset for income taxes	—			—			42,159
Capital losses	—			—			(20,188		)
Provision for uncertain tax positions (b)	32,573			(59,249		)	(159,957		)
Valuation allowance	—			(31,573		)	—
Other - net	3,368			2,369			(2,816		)
Total income taxes as reported		$589,597			$225,981			$30,855
Effective Income Tax Rate	38.0		%	23.6		%	3.4		%

(a) See “Income Tax Audits- 2004-2005 IRS Audit” below for discussion of this item.

(b) See “Income Tax Audits- 2008-2009 IRS Audit” below for discussion of the most significant items in 2013 and 2012.

In March 2014, New York enacted legislation that substantially modifies various aspects of New York tax law. The most significant effect of the legislation for Entergy is the adoption of full water's-edge unitary combined reporting, meaning that all of Entergy's domestic entities will be included in New York's combined filing group. The effect of the tax law change resulted in a deferred state income tax reduction of approximately $21.5 million as shown in the table above.

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 2014, 2013, and 2012 are:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$121,392			$162,491			$283,531			$74,821			$28,707			$74,804			$96,334
Income taxes	83,629			88,782			96,270			55,710			12,324			49,644			83,310
Pretax income		$205,021			$251,273			$379,801			$130,531			$41,031			$124,448			$179,644
Computed at statutory rate (35%)		$71,757			$87,946			$132,930			$45,686			$14,361			$43,557			$62,875
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	9,591			6,532			5,134			5,180			1,643			3,221			6,877
Regulatory differences - utility plant items	8,653			4,618			2,869			4,448			777			4,165			13,791
Equity component of AFUDC	(2,533		)	(2,602		)	(12,010		)	(833		)	(320		)	(1,035		)	(1,774		)
Amortization of investment tax credits	(1,251		)	(3,018		)	(2,576		)	(260		)	(218		)	(1,412		)	(3,476		)
Flow-through / permanent differences	(5,082		)	799			(1,024		)	555			(4,458		)	393			(327		)
Non-taxable dividend income	—			(10,590		)	(30,665		)	—			—			—			—
Provision for uncertain tax positions	1,881			4,108			1,228			718			405			522			5,235
Other - net	613			989			384			216			134			233			109
Total income taxes		$83,629			$88,782			$96,270			$55,710			$12,324			$49,644			$83,310
Effective Income Tax Rate	40.8		%	35.3		%	25.3		%	42.7		%	30.0		%	39.9		%	46.4		%

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$161,948			$161,662			$252,464			$82,159			$11,683			$57,881			$113,664
Income taxes	91,787			56,819			81,877			49,757			1,619			30,108			68,853
Pretax income		$253,735			$218,481			$334,341			$131,916			$13,302			$87,989			$182,517
Computed at statutory rate (35%)		$88,807			$76,468			$117,019			$46,171			$4,656			$30,796			$63,881
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	10,954			7,719			11,365			4,564			1,012			(897		)	5,900
Regulatory differences - utility plant items	7,938			4,865			2,140			2,603			453			3,256			11,070
Equity component of AFUDC	(3,820		)	(2,822		)	(10,278		)	(764		)	(322		)	(1,626		)	(2,724		)
Amortization of investment tax credits	(1,989		)	(3,018		)	(2,846		)	(260		)	(216		)	(1,596		)	(3,476		)
Flow-through / permanent differences	2,540			2,377			1,269			1,702			(4,402		)	2,467			(491		)
Net-of-tax regulatory liability	—			—			(2,899		)	—			—			—			—
Termination of business reorganization	(6,753		)	(3,619		)	(3,834		)	(4,177		)	(501		)	(3,542		)	(13		)
Non-taxable dividend income	—			(9,612		)	(27,341		)	—			—			—			—
Provision for uncertain tax positions	(6,527		)	(15,557		)	(3,088		)	(326		)	795			1,027			(5,353		)
Other - net	637			18			370			244			144			223			59
Total income taxes		$91,787			$56,819			$81,877			$49,757			$1,619			$30,108			$68,853
Effective Income Tax Rate	36.2		%	26.0		%	24.5		%	37.7		%	12.2		%	34.2		%	37.7		%

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$152,365			$158,977			$281,081			$46,768			$17,065			$41,971			$111,866
Income taxes (benefit)	94,806			52,616			(128,922		)	58,679			7,240			33,118			77,115
Pretax income		$247,171			$211,593			$152,159			$105,447			$24,305			$75,089			$188,981
Computed at statutory rate (35%)		$86,510			$74,058			$53,256			$36,906			$8,507			$26,281			$66,143
Increases (reductions) resulting from:
State income taxes net of federal income tax effect	11,282			5,087			1,976			3,944			505			3,115			6,652
Regulatory differences - utility plant items	6,778			8,472			312			2,619			2,289			3,668			11,389
Equity component of AFUDC	(2,495		)	(3,042		)	(12,919		)	(1,383		)	(276		)	(1,587		)	(9,136		)
Amortization of investment tax credits	(1,992		)	(3,204		)	(3,089		)	(264		)	(240		)	(1,596		)	(3,480		)
Net-of-tax regulatory liability	—			—			(4,356		)	—			—			—			—
Flow-through / permanent differences	3,427			(7,646		)	1,397			1,961			(4,385		)	1,585			(357		)
Non-taxable dividend income	—			(9,836		)	(27,336		)	—			—			—			—
Expense (benefit) of Entergy Corporation expenses	(19,403		)	(17,703		)	—			14,449			2,758			—			(10,241		)
Provision for uncertain tax positions	11,227			8,745			(143,583		)	870			(2,095		)	1,651			17,966
Change in regulatory recovery	—			(553		)	7,854			—			—			—			—
Other - net	(528		)	(1,762		)	(2,434		)	(423		)	177			1			(1,821		)
Total income taxes		$94,806			$52,616			($128,922	)		$58,679			$7,240			$33,118			$77,115
Effective Income Tax Rate	38.4		%	24.9		%	(84.7		%)	55.6		%	29.8		%	44.1		%	40.8		%

Significant components of accumulated deferred income taxes and taxes accrued for Entergy Corporation and Subsidiaries as of December 31, 2014 and 2013 are as follows:

	2014			2013
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($8,128,096	)		($7,941,319	)
Regulatory assets	(922,161		)	(922,312		)
Nuclear decommissioning trusts	(1,248,737		)	(1,100,439		)
Pension, net funding	(324,881		)	(299,951		)
Combined unitary state taxes	(162,340		)	(183,934		)
Power purchase agreements	(110,889		)	(8,096		)
Other	(500,424		)	(404,749		)
Total	(11,397,528		)	(10,860,800		)
Deferred tax assets:
Nuclear decommissioning liabilities	874,493			754,828
Regulatory liabilities	458,230			403,370
Pension and other post-employment benefits	586,455			469,190
Sale and leaseback	153,308			176,119
Compensation	74,692			125,552
Accumulated deferred investment tax credit	100,442			106,777
Provision for allowances and contingencies	160,551			66,026
Net operating loss carryforwards	457,758			548,756
Capital losses and miscellaneous tax credits	12,146			13,140
Valuation allowance	(27,387		)	(28,146		)
Other	58,334			109,606
Total	2,909,022			2,745,218
Noncurrent accrued taxes (including unrecognized tax benefits)	(606,560		)	(400,276		)
Accumulated deferred income taxes and taxes accrued		($9,095,066	)		($8,515,858	)

Entergy’s estimated tax attributes carryovers and their expiration dates as of December 31, 2014 are as follows:

Carryover Description	Carryover Amount	Year(s) of expiration
Federal net operating losses	$12.3 billion	2023-2034
State net operating losses	$10.2 billion	2015-2033
Miscellaneous federal and state credits	$97.6 million	2015-2034

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers, tax credit carryovers, and other tax attributes reflected on income tax returns. Because it is more likely than not that the benefit from certain state net operating loss carryovers will not be utilized, a valuation allowance of $21.2 million has been provided on the deferred tax assets relating to these state net operating loss carryovers.

In the third quarter 2013, Entergy reduced a valuation allowance by $44 million ($28 million net of the federal income tax effect) that had been provided on a state net operating loss carryover due to the prospective utilization of such loss carryover.

Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2014 and 2013 are as follows:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($1,657,503	)		($1,233,761	)		($1,515,091	)		($753,576	)		($186,153	)		($771,135	)		($668,779	)
Regulatory assets	(198,662		)	(106,287		)	(274,432		)	(30,114		)	—			(202,402		)	(110,087		)
Nuclear decommissioning trusts	(130,524		)	(43,611		)	(62,551		)	—			—			—			(74,063		)
Pension, net funding	(93,355		)	(46,403		)	(53,190		)	(27,861		)	(13,285		)	(25,616		)	(23,440		)
Deferred fuel	(82,050		)	(3,034		)	(500		)	(5,303		)	(407		)	2,045			(120		)
Power purchase agreements	(17,073		)	(67,083		)	—			2,129			13			847			—
Other	(33,827		)	(8,850		)	(75,432		)	(11,423		)	(11,500		)	(22,546		)	(19,802		)
Total	(2,212,994		)	(1,509,029		)	(1,981,196		)	(826,148		)	(211,332		)	(1,018,807		)	(896,291		)
Deferred tax assets:
Regulatory liabilities	145,466			70,068			111,533			7,214			29,580			4,079			90,290
Nuclear decommissioning liabilities	(43,134		)	48,815			97,323			—			—			—			(62,571		)
Pension and other post-employment benefits	(17,534		)	88,606			70,055			(7,288		)	(7,504		)	(15,053		)	(1,413		)
Sale and leaseback	—			—			45,136			—			—			—			108,172
Accumulated deferred investment tax credit	14,791			33,941			24,922			2,436			332			5,158			18,862
Provision for allowances and contingencies	(7,149		)	43,512			82,293			19,590			10,986			8,017			133
Unbilled/deferred revenues	12,322			(18,553		)	(6,463		)	12,956			3,395			11,573			—
Compensation	2,085			641			(483		)	(846		)	475			4,155			—
Net operating loss carryforwards	105,063			—			241,803			—			—			—			—
Capital losses and miscellaneous tax credits	—			—			—			3,504			—			—			—
Other	258			8,102			7,406			5,887			2,891			3,850			2,000
Total	212,168			275,132			673,525			43,453			40,155			21,779			155,473
Noncurrent accrued taxes (including unrecognized tax benefits)	9,367			(388,230		)	(24,278		)	(12,481		)	(19,502		)	(48,921		)	(81,528		)
Accumulated deferred income taxes and taxes accrued		($1,991,459	)		($1,622,127	)		($1,331,949	)		($795,176	)		($190,679	)		($1,045,949	)		($822,346	)

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($1,613,195	)		($1,259,173	)		($1,347,534	)		($727,545	)		($196,726	)		($759,263	)		($698,151	)
Regulatory assets	(212,339		)	(102,362		)	(255,068		)	(33,277		)	—			(205,402		)	(113,849		)
Nuclear decommissioning trusts	(110,004		)	(32,574		)	(50,248		)	—			—			—			(58,308		)
Pension, net funding	(79,589		)	(45,342		)	(50,630		)	(24,392		)	(11,606		)	(23,598		)	(21,187		)
Deferred fuel	(26,946		)	(4,361		)	(512		)	(21,823		)	63			(470		)	(129		)
Power purchase agreements	(7,053		)	(20,234		)	—			—			13			1,269			—
Other	(62,046		)	(25,694		)	(69,194		)	(10,732		)	(13,446		)	(58,963		)	(8,969		)
Total	(2,111,172		)	(1,489,740		)	(1,773,186		)	(817,769		)	(221,702		)	(1,046,427		)	(900,593		)
Deferred tax assets:
Regulatory liabilities	120,966			60,176			94,019			8,357			35,764			7,952			76,135
Nuclear decommissioning liabilities	(64,571		)	49,439			92,206			—			—			—			(71,898		)
Pension and other post-employment benefits	(12,132		)	73,136			62,999			(1,345		)	1,532			(13,417		)	(2,073		)
Sale and leaseback	—			—			52,054			—			—			—			124,065
Accumulated deferred investment tax credit	15,281			35,297			25,913			3,263			416			5,651			20,956
Provision for allowances and contingencies	12,313			14,784			3,347			13,066			8,535			5,980			—
Unbilled/deferred revenues	37,825			(22,340		)	3,026			6,791			4,226			10,655			—
Compensation	7,131			4,701			3,470			1,778			1,696			6,774			822
Net operating loss carryforwards	85,875			—			230,592			19,400			—			—			—
Capital losses and miscellaneous tax credits	—			—			—			6,173			—			—			—
Other	3,682			4,939			4,148			4,224			2,930			3,807			2,001
Total	206,370			220,132			571,774			61,707			55,099			27,402			150,008
Noncurrent accrued taxes (including unrecognized tax benefits)	22,565			(279,269		)	25,512			(6,290		)	(5,015		)	(37,777		)	10,302
Accumulated deferred income taxes and taxes accrued		($1,882,237	)		($1,548,877	)		($1,175,900	)		($762,352	)		($171,618	)		($1,056,802	)		($740,283	)

The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2014 are as follows:

	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
Federal net operating losses		$1.3	billion		$151	million		$2.1	billion	—				$55	million	—				$392	million
Year(s) of expiration	2029-2034			2029-2032			2029-2034			N/A			2031-2034			N/A			2030-2032
State net operating losses		$235	million		$580	million		$3	billion	—				$24	million	—			—
Year(s) of expiration	2015-2028			2024-2027			2024-2029			N/A			2026-2029			N/A			N/A
Misc. federal credits		$1	million		$6	million		$13	million		$1	million	—			—				$10	million
Year(s) of expiration	2029-2033			2029-2033			2026-2033			2029-2033			N/A			N/A			2029-2033
State credits	—			—			—				$9.5	million	—				$3.4	million		$15.7	million
Year(s) of expiration	N/A			N/A			N/A			2015-2019			N/A			2026			2015-2019

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers and tax credit carryovers.

Unrecognized tax benefits

Accounting standards establish a “more-likely-than-not” recognition threshold that must be met before a tax benefit can be recognized in the financial statements.  If a tax deduction is taken on a tax return, but does not meet the more-likely-than-not recognition threshold, an increase in income tax liability, above what is payable on the tax return, is required to be recorded.  A reconciliation of Entergy’s beginning and ending amount of unrecognized tax benefits is as follows:

	2014			2013			2012
	(In Thousands)
Gross balance at January 1		$4,593,224			$4,170,403			$4,387,780
Additions based on tax positions related to the current year	348,543			162,338			163,612
Additions for tax positions of prior years	11,637			410,108			1,517,797
Reductions for tax positions of prior years	(213,401		)	(103,360		)	(476,873		)
Settlements	—			(43,620		)	(1,421,913		)
Lapse of statute of limitations	(3,218		)	(2,645		)	—
Gross balance at December 31	4,736,785			4,593,224			4,170,403
Offsets to gross unrecognized tax benefits:
Credit and loss carryovers	(4,295,643		)	(4,400,498		)	(4,022,535		)
Unrecognized tax benefits net of unused tax attributes and payments (a)		$441,142			$192,726			$147,868

(a) Potential tax liability above what is payable on tax returns

The balances of unrecognized tax benefits include $516 million, $176 million, and $203 million as of December 31, 2014, 2013, and 2012, respectively, which, if recognized, would lower the effective income tax rates.  Because of the effect of deferred tax accounting, the remaining balances of unrecognized tax benefits of $4.221 billion, $4.417 billion, and $3.968 billion as of December 31, 2014, 2013, and 2012, respectively, if disallowed, would not affect the annual effective income tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

Entergy accrues interest expense, if any, related to unrecognized tax benefits in income tax expense.  Entergy’s December 31, 2014, 2013, and 2012 accrued balance for the possible payment of interest is approximately $127 million, $96.4 million, and $146.3 million, respectively.

A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2014, 2013, and 2012 is as follows:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2014		$347,713			$465,075			$611,605			$16,186			$51,679			$13,017			$265,185
Additions based on tax positions related to the current year	14,511			55,053			96,196			3,928			2,235			4,225			2,744
Additions for tax positions of prior years	1,767			5,204			1,720			319			37			303			566
Reductions for tax positions of prior years	(1,079		)	(7,995		)	(20,929		)	(289		)	(188		)	(267		)	(10,253		)
Settlements	—			—			—			—			—			(14		)	—
Gross balance at December 31, 2014	362,912			517,337			688,592			20,144			53,763			17,264			258,242
Offsets to gross unrecognized tax benefits:
Loss carryovers	(361,043		)	(89,448		)	(650,540		)	(6,992		)	(20,735		)	(241		)	(163,124		)
Unrecognized tax benefits net of unused tax attributes and payments		$1,869			$427,889			$38,052			$13,152			$33,028			$17,023			$95,118

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2013		$344,669			$465,721			$536,673			$16,841			$52,018			$13,954			$260,346
Additions based on tax positions related to the current year	6,427			7,276			10,611			957			583			2,170			4,170
Additions for tax positions of prior years	1,228			7,189			118,025			401			3,506			587			8,391
Reductions for tax positions of prior years	(3,943		)	(15,045		)	(38,428		)	(1,941		)	(962		)	(4,186		)	(967		)
Settlements	(668		)	(66		)	(15,276		)	(72		)	(3,466		)	492			(6,755		)
Gross balance at December 31, 2013	347,713			465,075			611,605			16,186			51,679			13,017			265,185
Offsets to gross unrecognized tax benefits:
Loss carryovers	(345,674		)	(136,151		)	(611,605		)	(16,186		)	(22,078		)	(266		)	(225,286		)
Unrecognized tax benefits net of unused tax attributes and payments		$2,039			$328,924			$—			$—			$29,601			$12,751			$39,899

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2012		$335,493			$390,493			$446,187			$11,052			$56,052			$19,225			$281,183
Additions based on tax positions related to the current year	10,409			8,974			67,721			8,401			497			1,656			8,715
Additions for tax positions of prior years	429,232			392,548			331,432			4,057			445			4,834			271,172
Reductions for tax positions of prior years	(39,534		)	(50,518		)	(169,465		)	(5,703		)	(2,506		)	(11,649		)	(20,934		)
Settlements	(390,931		)	(275,776		)	(139,202		)	(966		)	(2,470		)	(112		)	(279,790		)
Gross balance at December 31, 2012	344,669			465,721			536,673			16,841			52,018			13,954			260,346
Offsets to gross unrecognized tax benefits:
Loss carryovers	(342,127		)	(160,955		)	(536,673		)	(16,841		)	(35,511		)	(1,593		)	(249,424		)
Unrecognized tax benefits net of unused tax attributes and payments		$2,542			$304,766			$—			$—			$16,507			$12,361			$10,922

The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:

	December 31,
	2014		2013		2012
	(In Millions)
Entergy Arkansas		$2.6		$0.6		$0.6
Entergy Gulf States Louisiana		$91.9		$44.0		$44.0
Entergy Louisiana		$175.4		$87.9		$92.4
Entergy Mississippi		$3.9		$3.9		$3.9
Entergy New Orleans		$50.7		$—		$—
Entergy Texas		$10.5		$10.1		$8.6
System Energy		$3.7		$3.3		$3.5

The Registrant Subsidiaries accrue interest and penalties related to unrecognized tax benefits in income tax expense.  Penalties have not been accrued.  Accrued balances for the possible payment of interest are as follows:

	December 31,
	2014		2013		2012
	(In Millions)
Entergy Arkansas		$17.0		$15.2		$21.8
Entergy Gulf States Louisiana		$21.0		$17.0		$33.1
Entergy Louisiana		$1.2		$1.0		$0.9
Entergy Mississippi		$2.8		$2.1		$2.4
Entergy New Orleans		$1.3		$0.9		$0.1
Entergy Texas		$1.0		$0.8		$0.7
System Energy		$23.8		$19.0		$33.2

Income Tax Litigation

In October 2010 the U.S. Tax Court entered a decision in favor of Entergy regarding the ability to credit the U.K. Windfall Tax against U.S. income tax as a foreign tax credit.  The U.K. Windfall Tax relates to Entergy’s former investment in London Electricity.

The IRS filed an appeal of the U.K. Windfall Tax decision with the U.S. Court of Appeals for the Fifth Circuit in December 2010.  Oral arguments were heard in November 2011.  In June 2012 the U.S. Court of Appeals for the Fifth Circuit unanimously affirmed the U.S. Tax Court decision.  As a result of this decision, Entergy reversed its liability for uncertain tax positions associated with this issue.  On September 4, 2012, the U.S. Solicitor General, on behalf of the Commissioner of Internal Revenue, petitioned the U.S. Supreme Court for a writ of certiorari to review the Fifth Circuit judgment.

Concurrent with the Tax Court’s issuance of a favorable decision regarding the above issues, the Tax Court issued a favorable decision in a separate proceeding, PPL Corp. v. Commissioner, regarding the creditability of the U.K. Windfall Tax.  The IRS appealed the PPL decision to the United States Court of Appeals for the Third Circuit.  In December 2011 the Third Circuit reversed the Tax Court’s holding in PPL Corp. v. Commissioner, stating that the U.K. tax was not eligible for the foreign tax credit.  PPL Corp. petitioned the U.S. Supreme Court for a writ of certiorari to review the U.S. Court of Appeals for the Third Circuit decision.  On October 29, 2012, the U.S. Supreme Court granted PPL Corp.’s petition for certiorari.  The Solicitor General’s petition for writ of certiorari in Entergy’s case was held pending the disposition of the PPL case.

    On May 20, 2013, the U.S. Supreme Court issued a unanimous decision in PPL’s favor, holding that the U.K. Windfall Tax is a creditable tax for U.S. federal income tax purposes. On May 28, 2013, the Supreme Court denied the petition for certiorari filed by the Commissioner of Internal Revenue in Entergy’s U.K. Windfall Tax case, allowing the decision in Entergy’s favor from the United States Court of Appeals for the Fifth Circuit to become final.

Income Tax Audits

Entergy and its subsidiaries file U.S. federal and various state and foreign income tax returns.  IRS examinations are substantially completed for years before 2009. All state taxing authorities’ examinations are completed for years before 2005.

2004-2005 IRS Audit

In June 2009, Entergy filed a formal protest with the IRS Appeals Division indicating disagreement with certain issues contained in the 2004-2005 Revenue Agent’s Report (RAR).  The most significant issue disputed was the inclusion of nuclear decommissioning liabilities in cost of goods sold for the nuclear power plants owned by the Utility resulting from an Application for Change in Accounting Method for tax purposes (the “2004 CAM”).

During the fourth quarter 2012, Entergy settled the position relating to the 2004 CAM.   Under the settlement Entergy conceded its tax position, resulting in an increase in taxable income of approximately $2.97 billion for the tax years 2004 - 2007.  The settlement provides that Entergy Louisiana is entitled to additional tax depreciation of approximately $547 million for years 2006 and beyond.  The deferred tax asset net of interest charges associated with the settlement is $155 million for Entergy.  There was a related increase to Entergy Louisiana’s member’s equity account.

2008-2009 IRS Audit

In the third quarter 2008, Entergy Louisiana and Entergy Gulf States Louisiana received $679 million and $274.7 million, respectively, from the Louisiana Utilities Restoration Corporation (“LURC”).  These receipts from LURC were from the proceeds of a Louisiana Act 55 financing of the costs incurred to restore service following Hurricane Katrina and Hurricane Rita.  See Note 2 to the financial statements for further details regarding the financings.

In June 2012, Entergy effectively settled the tax treatment of the storm restoration, which resulted in an increase to 2008 taxable income of $129 million for Entergy Louisiana and $104 million for Entergy Gulf States Louisiana and a reduction of income tax expense of $172 million, including $143 million for Entergy Louisiana and $20 million for Entergy Gulf States Louisiana. Under the terms of an LPSC-approved settlement related to the Louisiana Act 55 financings, Entergy Louisiana and Entergy Gulf States Louisiana recorded, respectively, a $137 million ($84 million net-of-tax) and a $28 million ($17 million net-of-tax) regulatory charge and a corresponding regulatory liability to reflect their obligations to customers with respect to the settlement.  

In the fourth quarter 2009, Entergy filed Applications for Change in Accounting Method (the “2009 CAM”) for tax purposes with the IRS for certain costs under Section 263A of the Internal Revenue Code.  In the Applications, Entergy proposed to treat the nuclear decommissioning liability associated with the operation of its nuclear power plants as a production cost properly includable in cost of goods sold.  The effect of the 2009 CAM  was a $5.7 billion reduction in 2009 taxable income.  The 2009 CAM was adjusted to $9.3 billion in 2012.

In the fourth quarter 2012 the IRS disallowed the reduction to 2009 taxable income related to the 2009 CAM.  In the third quarter 2013, the Internal Revenue Service issued its RAR for the tax years 2008-2009. As a result of the issuance of this RAR, Entergy and the IRS resolved all of the 2008-2009 issues described above except for the 2009 CAM. Entergy disagrees with the IRS’s disallowance of the 2009 CAM and filed a protest with the IRS Appeals Division on October 24, 2013. Two conferences with the Appeals Division have taken place during 2014. The resolution of this issue is in process. The issuance of the RAR by the IRS effectively settled all other issues, which resulted in an adjustment to the provision for uncertain tax positions.

Other Tax Matters

Entergy regularly negotiates with the IRS to achieve settlements.  The resolution of the nuclear decommissioning liability audit issue, discussed above, could result in significant changes to the amounts of unrecognized tax benefits in the next twelve months.

In September 2013 the U.S. Treasury Department and the IRS issued final regulations that provide guidance on the deductibility and capitalization of costs incurred associated with tangible property. Entergy and the Registrant Subsidiaries filed with the IRS an automatic application for change in accounting method which is in compliance with the final regulations and the safe harbor provisions of the relevant IRS Revenue Procedures. Entergy estimates that the effect of this accounting method change will result in a net increase to Entergy’s taxable income of approximately $548 million, which will be recognized over a four year period beginning with the tax year ended 2014. The adoption of the final regulations and safe harbor method results in approximate changes in the Registrant Subsidiaries taxable income as follows: an increase of $157 million for Entergy Arkansas, an increase of $42 million for Entergy Gulf States Louisiana, an increase of $49 million for Entergy Louisiana, an increase of $23 million for Entergy Mississippi, an increase of $169 million for Entergy Texas, a decrease of $11 million for Entergy New Orleans, and an increase of $34 million for System Energy.

In March 2013, Entergy Louisiana distributed to its parent, Entergy Louisiana Holdings, Inc., Louisiana income tax credits of $20.6 million, which resulted in a decrease in Entergy Louisiana’s member’s equity account.

The Tax Increase Prevention Act of 2014 was enacted in December 2014. The most significant provisions affecting Entergy and the Registrant Subsidiaries were a one-year extension of 50% bonus depreciation and the research and experimentation tax credit. These provisions do not result in an immediate cash flow benefit but will result in cash flow benefits for Entergy in a future period.

Entergy Gulf States Louisiana [Member]

Income Taxes

INCOME TAXES (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Income taxes from continuing operations for 2014, 2013, and 2012 for Entergy Corporation and Subsidiaries consist of the following:

	2014			2013			2012
	(In Thousands)
Current:
Federal		$90,061			$88,291			($47,851	)
Foreign	90			101			143
State	(12,637		)	20,584			(41,516		)
Total	77,514			108,976			(89,224		)
Deferred and non-current - net	528,326			126,935			131,130
Investment tax credit adjustments - net	(16,243		)	(9,930		)	(11,051		)
Income tax expense from continuing operations		$589,597			$225,981			$30,855

Income taxes for 2014, 2013, and 2012 for Entergy’s Registrant Subsidiaries consist of the following:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		($34,258	)		($3,857	)		($41,052	)		$8,103			($1,924	)		$48,610			$19,908
State	(678		)	(769		)	(422		)	7,474			520			4,877			15,379
Total	(34,936		)	(4,626		)	(41,474		)	15,577			(1,404		)	53,487			35,287
Deferred and non-current - net	119,841			96,446			140,348			42,305			13,952			(2,418		)	53,501
Investment tax credit adjustments - net	(1,276		)	(3,038		)	(2,604		)	(2,172		)	(224		)	(1,425		)	(5,478		)
Income taxes		$83,629			$88,782			$96,270			$55,710			$12,324			$49,644			$83,310

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi		Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		($13,574	)		$12,176			($30,973	)		$2,498		$15,017			$37,199			($6,199	)
State	6,122			(9,939		)	(5,692		)	4,849		(1,221		)	(843		)	15,845
Total	(7,452		)	2,237			(36,665		)	7,347		13,796			36,356			9,646
Deferred and non-current - net	101,253			57,620			121,416			41,150		(11,952		)	(4,639		)	60,614
Investment tax credit adjustments - net	(2,014		)	(3,038		)	(2,874		)	1,260		(225		)	(1,609		)	(1,407		)
Income taxes		$91,787			$56,819			$81,877			$49,757		$1,619			$30,108			$68,853

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		$64,069			($66,081	)		($132,999	)		$3,188			($9,484	)		($114,677	)		($50,491	)
State	6,712			9,535			(1,269		)	(4,425		)	(1,617		)	4,933			(8,544		)
Total	70,781			(56,546		)	(134,268		)	(1,237		)	(11,101		)	(109,744		)	(59,035		)
Deferred and non-current - net	26,042			112,390			8,463			59,045			18,586			144,471			137,832
Investment tax credit adjustments - net	(2,017		)	(3,228		)	(3,117		)	871			(245		)	(1,609		)	(1,682		)
Income taxes		$94,806			$52,616			($128,922	)		$58,679			$7,240			$33,118			$77,115

Total income taxes for Entergy Corporation and Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before income taxes.  The reasons for the differences for the years 2014, 2013, and 2012 are:

	2014			2013			2012
	(In Thousands)
Net income attributable to Entergy Corporation		$940,721			$711,902			$846,673
Preferred dividend requirements of subsidiaries	19,536			18,670			21,690
Consolidated net income	960,257			730,572			868,363
Income taxes	589,597			225,981			30,855
Income before income taxes		$1,549,854			$956,553			$899,218
Computed at statutory rate (35%)		$542,449			$334,794			$314,726
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	44,708			13,599			40,699
Regulatory differences - utility plant items	39,321			32,324			35,527
Equity component of AFUDC	(21,108		)	(22,356		)	(30,838		)
Amortization of investment tax credits	(12,211		)	(13,535		)	(14,000		)
Flow-through / permanent differences	(18,003		)	(301		)	(14,801		)
Net-of-tax regulatory liability	—			(2,899		)	(4,356		)
New York tax law change	(21,500		)	—			—
Deferred tax asset on additional depreciation (a)	—			—			(155,300		)
Termination of business reorganization	—			(27,192		)	—
Write-off of regulatory asset for income taxes	—			—			42,159
Capital losses	—			—			(20,188		)
Provision for uncertain tax positions (b)	32,573			(59,249		)	(159,957		)
Valuation allowance	—			(31,573		)	—
Other - net	3,368			2,369			(2,816		)
Total income taxes as reported		$589,597			$225,981			$30,855
Effective Income Tax Rate	38.0		%	23.6		%	3.4		%

(a) See “Income Tax Audits- 2004-2005 IRS Audit” below for discussion of this item.

(b) See “Income Tax Audits- 2008-2009 IRS Audit” below for discussion of the most significant items in 2013 and 2012.

In March 2014, New York enacted legislation that substantially modifies various aspects of New York tax law. The most significant effect of the legislation for Entergy is the adoption of full water's-edge unitary combined reporting, meaning that all of Entergy's domestic entities will be included in New York's combined filing group. The effect of the tax law change resulted in a deferred state income tax reduction of approximately $21.5 million as shown in the table above.

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 2014, 2013, and 2012 are:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$121,392			$162,491			$283,531			$74,821			$28,707			$74,804			$96,334
Income taxes	83,629			88,782			96,270			55,710			12,324			49,644			83,310
Pretax income		$205,021			$251,273			$379,801			$130,531			$41,031			$124,448			$179,644
Computed at statutory rate (35%)		$71,757			$87,946			$132,930			$45,686			$14,361			$43,557			$62,875
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	9,591			6,532			5,134			5,180			1,643			3,221			6,877
Regulatory differences - utility plant items	8,653			4,618			2,869			4,448			777			4,165			13,791
Equity component of AFUDC	(2,533		)	(2,602		)	(12,010		)	(833		)	(320		)	(1,035		)	(1,774		)
Amortization of investment tax credits	(1,251		)	(3,018		)	(2,576		)	(260		)	(218		)	(1,412		)	(3,476		)
Flow-through / permanent differences	(5,082		)	799			(1,024		)	555			(4,458		)	393			(327		)
Non-taxable dividend income	—			(10,590		)	(30,665		)	—			—			—			—
Provision for uncertain tax positions	1,881			4,108			1,228			718			405			522			5,235
Other - net	613			989			384			216			134			233			109
Total income taxes		$83,629			$88,782			$96,270			$55,710			$12,324			$49,644			$83,310
Effective Income Tax Rate	40.8		%	35.3		%	25.3		%	42.7		%	30.0		%	39.9		%	46.4		%

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$161,948			$161,662			$252,464			$82,159			$11,683			$57,881			$113,664
Income taxes	91,787			56,819			81,877			49,757			1,619			30,108			68,853
Pretax income		$253,735			$218,481			$334,341			$131,916			$13,302			$87,989			$182,517
Computed at statutory rate (35%)		$88,807			$76,468			$117,019			$46,171			$4,656			$30,796			$63,881
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	10,954			7,719			11,365			4,564			1,012			(897		)	5,900
Regulatory differences - utility plant items	7,938			4,865			2,140			2,603			453			3,256			11,070
Equity component of AFUDC	(3,820		)	(2,822		)	(10,278		)	(764		)	(322		)	(1,626		)	(2,724		)
Amortization of investment tax credits	(1,989		)	(3,018		)	(2,846		)	(260		)	(216		)	(1,596		)	(3,476		)
Flow-through / permanent differences	2,540			2,377			1,269			1,702			(4,402		)	2,467			(491		)
Net-of-tax regulatory liability	—			—			(2,899		)	—			—			—			—
Termination of business reorganization	(6,753		)	(3,619		)	(3,834		)	(4,177		)	(501		)	(3,542		)	(13		)
Non-taxable dividend income	—			(9,612		)	(27,341		)	—			—			—			—
Provision for uncertain tax positions	(6,527		)	(15,557		)	(3,088		)	(326		)	795			1,027			(5,353		)
Other - net	637			18			370			244			144			223			59
Total income taxes		$91,787			$56,819			$81,877			$49,757			$1,619			$30,108			$68,853
Effective Income Tax Rate	36.2		%	26.0		%	24.5		%	37.7		%	12.2		%	34.2		%	37.7		%

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$152,365			$158,977			$281,081			$46,768			$17,065			$41,971			$111,866
Income taxes (benefit)	94,806			52,616			(128,922		)	58,679			7,240			33,118			77,115
Pretax income		$247,171			$211,593			$152,159			$105,447			$24,305			$75,089			$188,981
Computed at statutory rate (35%)		$86,510			$74,058			$53,256			$36,906			$8,507			$26,281			$66,143
Increases (reductions) resulting from:
State income taxes net of federal income tax effect	11,282			5,087			1,976			3,944			505			3,115			6,652
Regulatory differences - utility plant items	6,778			8,472			312			2,619			2,289			3,668			11,389
Equity component of AFUDC	(2,495		)	(3,042		)	(12,919		)	(1,383		)	(276		)	(1,587		)	(9,136		)
Amortization of investment tax credits	(1,992		)	(3,204		)	(3,089		)	(264		)	(240		)	(1,596		)	(3,480		)
Net-of-tax regulatory liability	—			—			(4,356		)	—			—			—			—
Flow-through / permanent differences	3,427			(7,646		)	1,397			1,961			(4,385		)	1,585			(357		)
Non-taxable dividend income	—			(9,836		)	(27,336		)	—			—			—			—
Expense (benefit) of Entergy Corporation expenses	(19,403		)	(17,703		)	—			14,449			2,758			—			(10,241		)
Provision for uncertain tax positions	11,227			8,745			(143,583		)	870			(2,095		)	1,651			17,966
Change in regulatory recovery	—			(553		)	7,854			—			—			—			—
Other - net	(528		)	(1,762		)	(2,434		)	(423		)	177			1			(1,821		)
Total income taxes		$94,806			$52,616			($128,922	)		$58,679			$7,240			$33,118			$77,115
Effective Income Tax Rate	38.4		%	24.9		%	(84.7		%)	55.6		%	29.8		%	44.1		%	40.8		%

Significant components of accumulated deferred income taxes and taxes accrued for Entergy Corporation and Subsidiaries as of December 31, 2014 and 2013 are as follows:

	2014			2013
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($8,128,096	)		($7,941,319	)
Regulatory assets	(922,161		)	(922,312		)
Nuclear decommissioning trusts	(1,248,737		)	(1,100,439		)
Pension, net funding	(324,881		)	(299,951		)
Combined unitary state taxes	(162,340		)	(183,934		)
Power purchase agreements	(110,889		)	(8,096		)
Other	(500,424		)	(404,749		)
Total	(11,397,528		)	(10,860,800		)
Deferred tax assets:
Nuclear decommissioning liabilities	874,493			754,828
Regulatory liabilities	458,230			403,370
Pension and other post-employment benefits	586,455			469,190
Sale and leaseback	153,308			176,119
Compensation	74,692			125,552
Accumulated deferred investment tax credit	100,442			106,777
Provision for allowances and contingencies	160,551			66,026
Net operating loss carryforwards	457,758			548,756
Capital losses and miscellaneous tax credits	12,146			13,140
Valuation allowance	(27,387		)	(28,146		)
Other	58,334			109,606
Total	2,909,022			2,745,218
Noncurrent accrued taxes (including unrecognized tax benefits)	(606,560		)	(400,276		)
Accumulated deferred income taxes and taxes accrued		($9,095,066	)		($8,515,858	)

Entergy’s estimated tax attributes carryovers and their expiration dates as of December 31, 2014 are as follows:

Carryover Description	Carryover Amount	Year(s) of expiration
Federal net operating losses	$12.3 billion	2023-2034
State net operating losses	$10.2 billion	2015-2033
Miscellaneous federal and state credits	$97.6 million	2015-2034

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers, tax credit carryovers, and other tax attributes reflected on income tax returns. Because it is more likely than not that the benefit from certain state net operating loss carryovers will not be utilized, a valuation allowance of $21.2 million has been provided on the deferred tax assets relating to these state net operating loss carryovers.

In the third quarter 2013, Entergy reduced a valuation allowance by $44 million ($28 million net of the federal income tax effect) that had been provided on a state net operating loss carryover due to the prospective utilization of such loss carryover.

Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2014 and 2013 are as follows:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($1,657,503	)		($1,233,761	)		($1,515,091	)		($753,576	)		($186,153	)		($771,135	)		($668,779	)
Regulatory assets	(198,662		)	(106,287		)	(274,432		)	(30,114		)	—			(202,402		)	(110,087		)
Nuclear decommissioning trusts	(130,524		)	(43,611		)	(62,551		)	—			—			—			(74,063		)
Pension, net funding	(93,355		)	(46,403		)	(53,190		)	(27,861		)	(13,285		)	(25,616		)	(23,440		)
Deferred fuel	(82,050		)	(3,034		)	(500		)	(5,303		)	(407		)	2,045			(120		)
Power purchase agreements	(17,073		)	(67,083		)	—			2,129			13			847			—
Other	(33,827		)	(8,850		)	(75,432		)	(11,423		)	(11,500		)	(22,546		)	(19,802		)
Total	(2,212,994		)	(1,509,029		)	(1,981,196		)	(826,148		)	(211,332		)	(1,018,807		)	(896,291		)
Deferred tax assets:
Regulatory liabilities	145,466			70,068			111,533			7,214			29,580			4,079			90,290
Nuclear decommissioning liabilities	(43,134		)	48,815			97,323			—			—			—			(62,571		)
Pension and other post-employment benefits	(17,534		)	88,606			70,055			(7,288		)	(7,504		)	(15,053		)	(1,413		)
Sale and leaseback	—			—			45,136			—			—			—			108,172
Accumulated deferred investment tax credit	14,791			33,941			24,922			2,436			332			5,158			18,862
Provision for allowances and contingencies	(7,149		)	43,512			82,293			19,590			10,986			8,017			133
Unbilled/deferred revenues	12,322			(18,553		)	(6,463		)	12,956			3,395			11,573			—
Compensation	2,085			641			(483		)	(846		)	475			4,155			—
Net operating loss carryforwards	105,063			—			241,803			—			—			—			—
Capital losses and miscellaneous tax credits	—			—			—			3,504			—			—			—
Other	258			8,102			7,406			5,887			2,891			3,850			2,000
Total	212,168			275,132			673,525			43,453			40,155			21,779			155,473
Noncurrent accrued taxes (including unrecognized tax benefits)	9,367			(388,230		)	(24,278		)	(12,481		)	(19,502		)	(48,921		)	(81,528		)
Accumulated deferred income taxes and taxes accrued		($1,991,459	)		($1,622,127	)		($1,331,949	)		($795,176	)		($190,679	)		($1,045,949	)		($822,346	)

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($1,613,195	)		($1,259,173	)		($1,347,534	)		($727,545	)		($196,726	)		($759,263	)		($698,151	)
Regulatory assets	(212,339		)	(102,362		)	(255,068		)	(33,277		)	—			(205,402		)	(113,849		)
Nuclear decommissioning trusts	(110,004		)	(32,574		)	(50,248		)	—			—			—			(58,308		)
Pension, net funding	(79,589		)	(45,342		)	(50,630		)	(24,392		)	(11,606		)	(23,598		)	(21,187		)
Deferred fuel	(26,946		)	(4,361		)	(512		)	(21,823		)	63			(470		)	(129		)
Power purchase agreements	(7,053		)	(20,234		)	—			—			13			1,269			—
Other	(62,046		)	(25,694		)	(69,194		)	(10,732		)	(13,446		)	(58,963		)	(8,969		)
Total	(2,111,172		)	(1,489,740		)	(1,773,186		)	(817,769		)	(221,702		)	(1,046,427		)	(900,593		)
Deferred tax assets:
Regulatory liabilities	120,966			60,176			94,019			8,357			35,764			7,952			76,135
Nuclear decommissioning liabilities	(64,571		)	49,439			92,206			—			—			—			(71,898		)
Pension and other post-employment benefits	(12,132		)	73,136			62,999			(1,345		)	1,532			(13,417		)	(2,073		)
Sale and leaseback	—			—			52,054			—			—			—			124,065
Accumulated deferred investment tax credit	15,281			35,297			25,913			3,263			416			5,651			20,956
Provision for allowances and contingencies	12,313			14,784			3,347			13,066			8,535			5,980			—
Unbilled/deferred revenues	37,825			(22,340		)	3,026			6,791			4,226			10,655			—
Compensation	7,131			4,701			3,470			1,778			1,696			6,774			822
Net operating loss carryforwards	85,875			—			230,592			19,400			—			—			—
Capital losses and miscellaneous tax credits	—			—			—			6,173			—			—			—
Other	3,682			4,939			4,148			4,224			2,930			3,807			2,001
Total	206,370			220,132			571,774			61,707			55,099			27,402			150,008
Noncurrent accrued taxes (including unrecognized tax benefits)	22,565			(279,269		)	25,512			(6,290		)	(5,015		)	(37,777		)	10,302
Accumulated deferred income taxes and taxes accrued		($1,882,237	)		($1,548,877	)		($1,175,900	)		($762,352	)		($171,618	)		($1,056,802	)		($740,283	)

The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2014 are as follows:

	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
Federal net operating losses		$1.3	billion		$151	million		$2.1	billion	—				$55	million	—				$392	million
Year(s) of expiration	2029-2034			2029-2032			2029-2034			N/A			2031-2034			N/A			2030-2032
State net operating losses		$235	million		$580	million		$3	billion	—				$24	million	—			—
Year(s) of expiration	2015-2028			2024-2027			2024-2029			N/A			2026-2029			N/A			N/A
Misc. federal credits		$1	million		$6	million		$13	million		$1	million	—			—				$10	million
Year(s) of expiration	2029-2033			2029-2033			2026-2033			2029-2033			N/A			N/A			2029-2033
State credits	—			—			—				$9.5	million	—				$3.4	million		$15.7	million
Year(s) of expiration	N/A			N/A			N/A			2015-2019			N/A			2026			2015-2019

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers and tax credit carryovers.

Unrecognized tax benefits

Accounting standards establish a “more-likely-than-not” recognition threshold that must be met before a tax benefit can be recognized in the financial statements.  If a tax deduction is taken on a tax return, but does not meet the more-likely-than-not recognition threshold, an increase in income tax liability, above what is payable on the tax return, is required to be recorded.  A reconciliation of Entergy’s beginning and ending amount of unrecognized tax benefits is as follows:

	2014			2013			2012
	(In Thousands)
Gross balance at January 1		$4,593,224			$4,170,403			$4,387,780
Additions based on tax positions related to the current year	348,543			162,338			163,612
Additions for tax positions of prior years	11,637			410,108			1,517,797
Reductions for tax positions of prior years	(213,401		)	(103,360		)	(476,873		)
Settlements	—			(43,620		)	(1,421,913		)
Lapse of statute of limitations	(3,218		)	(2,645		)	—
Gross balance at December 31	4,736,785			4,593,224			4,170,403
Offsets to gross unrecognized tax benefits:
Credit and loss carryovers	(4,295,643		)	(4,400,498		)	(4,022,535		)
Unrecognized tax benefits net of unused tax attributes and payments (a)		$441,142			$192,726			$147,868

(a) Potential tax liability above what is payable on tax returns

The balances of unrecognized tax benefits include $516 million, $176 million, and $203 million as of December 31, 2014, 2013, and 2012, respectively, which, if recognized, would lower the effective income tax rates.  Because of the effect of deferred tax accounting, the remaining balances of unrecognized tax benefits of $4.221 billion, $4.417 billion, and $3.968 billion as of December 31, 2014, 2013, and 2012, respectively, if disallowed, would not affect the annual effective income tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

Entergy accrues interest expense, if any, related to unrecognized tax benefits in income tax expense.  Entergy’s December 31, 2014, 2013, and 2012 accrued balance for the possible payment of interest is approximately $127 million, $96.4 million, and $146.3 million, respectively.

A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2014, 2013, and 2012 is as follows:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2014		$347,713			$465,075			$611,605			$16,186			$51,679			$13,017			$265,185
Additions based on tax positions related to the current year	14,511			55,053			96,196			3,928			2,235			4,225			2,744
Additions for tax positions of prior years	1,767			5,204			1,720			319			37			303			566
Reductions for tax positions of prior years	(1,079		)	(7,995		)	(20,929		)	(289		)	(188		)	(267		)	(10,253		)
Settlements	—			—			—			—			—			(14		)	—
Gross balance at December 31, 2014	362,912			517,337			688,592			20,144			53,763			17,264			258,242
Offsets to gross unrecognized tax benefits:
Loss carryovers	(361,043		)	(89,448		)	(650,540		)	(6,992		)	(20,735		)	(241		)	(163,124		)
Unrecognized tax benefits net of unused tax attributes and payments		$1,869			$427,889			$38,052			$13,152			$33,028			$17,023			$95,118

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2013		$344,669			$465,721			$536,673			$16,841			$52,018			$13,954			$260,346
Additions based on tax positions related to the current year	6,427			7,276			10,611			957			583			2,170			4,170
Additions for tax positions of prior years	1,228			7,189			118,025			401			3,506			587			8,391
Reductions for tax positions of prior years	(3,943		)	(15,045		)	(38,428		)	(1,941		)	(962		)	(4,186		)	(967		)
Settlements	(668		)	(66		)	(15,276		)	(72		)	(3,466		)	492			(6,755		)
Gross balance at December 31, 2013	347,713			465,075			611,605			16,186			51,679			13,017			265,185
Offsets to gross unrecognized tax benefits:
Loss carryovers	(345,674		)	(136,151		)	(611,605		)	(16,186		)	(22,078		)	(266		)	(225,286		)
Unrecognized tax benefits net of unused tax attributes and payments		$2,039			$328,924			$—			$—			$29,601			$12,751			$39,899

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2012		$335,493			$390,493			$446,187			$11,052			$56,052			$19,225			$281,183
Additions based on tax positions related to the current year	10,409			8,974			67,721			8,401			497			1,656			8,715
Additions for tax positions of prior years	429,232			392,548			331,432			4,057			445			4,834			271,172
Reductions for tax positions of prior years	(39,534		)	(50,518		)	(169,465		)	(5,703		)	(2,506		)	(11,649		)	(20,934		)
Settlements	(390,931		)	(275,776		)	(139,202		)	(966		)	(2,470		)	(112		)	(279,790		)
Gross balance at December 31, 2012	344,669			465,721			536,673			16,841			52,018			13,954			260,346
Offsets to gross unrecognized tax benefits:
Loss carryovers	(342,127		)	(160,955		)	(536,673		)	(16,841		)	(35,511		)	(1,593		)	(249,424		)
Unrecognized tax benefits net of unused tax attributes and payments		$2,542			$304,766			$—			$—			$16,507			$12,361			$10,922

The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:

	December 31,
	2014		2013		2012
	(In Millions)
Entergy Arkansas		$2.6		$0.6		$0.6
Entergy Gulf States Louisiana		$91.9		$44.0		$44.0
Entergy Louisiana		$175.4		$87.9		$92.4
Entergy Mississippi		$3.9		$3.9		$3.9
Entergy New Orleans		$50.7		$—		$—
Entergy Texas		$10.5		$10.1		$8.6
System Energy		$3.7		$3.3		$3.5

The Registrant Subsidiaries accrue interest and penalties related to unrecognized tax benefits in income tax expense.  Penalties have not been accrued.  Accrued balances for the possible payment of interest are as follows:

	December 31,
	2014		2013		2012
	(In Millions)
Entergy Arkansas		$17.0		$15.2		$21.8
Entergy Gulf States Louisiana		$21.0		$17.0		$33.1
Entergy Louisiana		$1.2		$1.0		$0.9
Entergy Mississippi		$2.8		$2.1		$2.4
Entergy New Orleans		$1.3		$0.9		$0.1
Entergy Texas		$1.0		$0.8		$0.7
System Energy		$23.8		$19.0		$33.2

Income Tax Litigation

In October 2010 the U.S. Tax Court entered a decision in favor of Entergy regarding the ability to credit the U.K. Windfall Tax against U.S. income tax as a foreign tax credit.  The U.K. Windfall Tax relates to Entergy’s former investment in London Electricity.

The IRS filed an appeal of the U.K. Windfall Tax decision with the U.S. Court of Appeals for the Fifth Circuit in December 2010.  Oral arguments were heard in November 2011.  In June 2012 the U.S. Court of Appeals for the Fifth Circuit unanimously affirmed the U.S. Tax Court decision.  As a result of this decision, Entergy reversed its liability for uncertain tax positions associated with this issue.  On September 4, 2012, the U.S. Solicitor General, on behalf of the Commissioner of Internal Revenue, petitioned the U.S. Supreme Court for a writ of certiorari to review the Fifth Circuit judgment.

Concurrent with the Tax Court’s issuance of a favorable decision regarding the above issues, the Tax Court issued a favorable decision in a separate proceeding, PPL Corp. v. Commissioner, regarding the creditability of the U.K. Windfall Tax.  The IRS appealed the PPL decision to the United States Court of Appeals for the Third Circuit.  In December 2011 the Third Circuit reversed the Tax Court’s holding in PPL Corp. v. Commissioner, stating that the U.K. tax was not eligible for the foreign tax credit.  PPL Corp. petitioned the U.S. Supreme Court for a writ of certiorari to review the U.S. Court of Appeals for the Third Circuit decision.  On October 29, 2012, the U.S. Supreme Court granted PPL Corp.’s petition for certiorari.  The Solicitor General’s petition for writ of certiorari in Entergy’s case was held pending the disposition of the PPL case.

    On May 20, 2013, the U.S. Supreme Court issued a unanimous decision in PPL’s favor, holding that the U.K. Windfall Tax is a creditable tax for U.S. federal income tax purposes. On May 28, 2013, the Supreme Court denied the petition for certiorari filed by the Commissioner of Internal Revenue in Entergy’s U.K. Windfall Tax case, allowing the decision in Entergy’s favor from the United States Court of Appeals for the Fifth Circuit to become final.

Income Tax Audits

Entergy and its subsidiaries file U.S. federal and various state and foreign income tax returns.  IRS examinations are substantially completed for years before 2009. All state taxing authorities’ examinations are completed for years before 2005.

2004-2005 IRS Audit

In June 2009, Entergy filed a formal protest with the IRS Appeals Division indicating disagreement with certain issues contained in the 2004-2005 Revenue Agent’s Report (RAR).  The most significant issue disputed was the inclusion of nuclear decommissioning liabilities in cost of goods sold for the nuclear power plants owned by the Utility resulting from an Application for Change in Accounting Method for tax purposes (the “2004 CAM”).

During the fourth quarter 2012, Entergy settled the position relating to the 2004 CAM.   Under the settlement Entergy conceded its tax position, resulting in an increase in taxable income of approximately $2.97 billion for the tax years 2004 - 2007.  The settlement provides that Entergy Louisiana is entitled to additional tax depreciation of approximately $547 million for years 2006 and beyond.  The deferred tax asset net of interest charges associated with the settlement is $155 million for Entergy.  There was a related increase to Entergy Louisiana’s member’s equity account.

2008-2009 IRS Audit

In the third quarter 2008, Entergy Louisiana and Entergy Gulf States Louisiana received $679 million and $274.7 million, respectively, from the Louisiana Utilities Restoration Corporation (“LURC”).  These receipts from LURC were from the proceeds of a Louisiana Act 55 financing of the costs incurred to restore service following Hurricane Katrina and Hurricane Rita.  See Note 2 to the financial statements for further details regarding the financings.

In June 2012, Entergy effectively settled the tax treatment of the storm restoration, which resulted in an increase to 2008 taxable income of $129 million for Entergy Louisiana and $104 million for Entergy Gulf States Louisiana and a reduction of income tax expense of $172 million, including $143 million for Entergy Louisiana and $20 million for Entergy Gulf States Louisiana. Under the terms of an LPSC-approved settlement related to the Louisiana Act 55 financings, Entergy Louisiana and Entergy Gulf States Louisiana recorded, respectively, a $137 million ($84 million net-of-tax) and a $28 million ($17 million net-of-tax) regulatory charge and a corresponding regulatory liability to reflect their obligations to customers with respect to the settlement.  

In the fourth quarter 2009, Entergy filed Applications for Change in Accounting Method (the “2009 CAM”) for tax purposes with the IRS for certain costs under Section 263A of the Internal Revenue Code.  In the Applications, Entergy proposed to treat the nuclear decommissioning liability associated with the operation of its nuclear power plants as a production cost properly includable in cost of goods sold.  The effect of the 2009 CAM  was a $5.7 billion reduction in 2009 taxable income.  The 2009 CAM was adjusted to $9.3 billion in 2012.

In the fourth quarter 2012 the IRS disallowed the reduction to 2009 taxable income related to the 2009 CAM.  In the third quarter 2013, the Internal Revenue Service issued its RAR for the tax years 2008-2009. As a result of the issuance of this RAR, Entergy and the IRS resolved all of the 2008-2009 issues described above except for the 2009 CAM. Entergy disagrees with the IRS’s disallowance of the 2009 CAM and filed a protest with the IRS Appeals Division on October 24, 2013. Two conferences with the Appeals Division have taken place during 2014. The resolution of this issue is in process. The issuance of the RAR by the IRS effectively settled all other issues, which resulted in an adjustment to the provision for uncertain tax positions.

Other Tax Matters

Entergy regularly negotiates with the IRS to achieve settlements.  The resolution of the nuclear decommissioning liability audit issue, discussed above, could result in significant changes to the amounts of unrecognized tax benefits in the next twelve months.

In September 2013 the U.S. Treasury Department and the IRS issued final regulations that provide guidance on the deductibility and capitalization of costs incurred associated with tangible property. Entergy and the Registrant Subsidiaries filed with the IRS an automatic application for change in accounting method which is in compliance with the final regulations and the safe harbor provisions of the relevant IRS Revenue Procedures. Entergy estimates that the effect of this accounting method change will result in a net increase to Entergy’s taxable income of approximately $548 million, which will be recognized over a four year period beginning with the tax year ended 2014. The adoption of the final regulations and safe harbor method results in approximate changes in the Registrant Subsidiaries taxable income as follows: an increase of $157 million for Entergy Arkansas, an increase of $42 million for Entergy Gulf States Louisiana, an increase of $49 million for Entergy Louisiana, an increase of $23 million for Entergy Mississippi, an increase of $169 million for Entergy Texas, a decrease of $11 million for Entergy New Orleans, and an increase of $34 million for System Energy.

In March 2013, Entergy Louisiana distributed to its parent, Entergy Louisiana Holdings, Inc., Louisiana income tax credits of $20.6 million, which resulted in a decrease in Entergy Louisiana’s member’s equity account.

The Tax Increase Prevention Act of 2014 was enacted in December 2014. The most significant provisions affecting Entergy and the Registrant Subsidiaries were a one-year extension of 50% bonus depreciation and the research and experimentation tax credit. These provisions do not result in an immediate cash flow benefit but will result in cash flow benefits for Entergy in a future period.

Entergy Louisiana [Member]

Income Taxes

INCOME TAXES (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Income taxes from continuing operations for 2014, 2013, and 2012 for Entergy Corporation and Subsidiaries consist of the following:

	2014			2013			2012
	(In Thousands)
Current:
Federal		$90,061			$88,291			($47,851	)
Foreign	90			101			143
State	(12,637		)	20,584			(41,516		)
Total	77,514			108,976			(89,224		)
Deferred and non-current - net	528,326			126,935			131,130
Investment tax credit adjustments - net	(16,243		)	(9,930		)	(11,051		)
Income tax expense from continuing operations		$589,597			$225,981			$30,855

Income taxes for 2014, 2013, and 2012 for Entergy’s Registrant Subsidiaries consist of the following:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		($34,258	)		($3,857	)		($41,052	)		$8,103			($1,924	)		$48,610			$19,908
State	(678		)	(769		)	(422		)	7,474			520			4,877			15,379
Total	(34,936		)	(4,626		)	(41,474		)	15,577			(1,404		)	53,487			35,287
Deferred and non-current - net	119,841			96,446			140,348			42,305			13,952			(2,418		)	53,501
Investment tax credit adjustments - net	(1,276		)	(3,038		)	(2,604		)	(2,172		)	(224		)	(1,425		)	(5,478		)
Income taxes		$83,629			$88,782			$96,270			$55,710			$12,324			$49,644			$83,310

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi		Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		($13,574	)		$12,176			($30,973	)		$2,498		$15,017			$37,199			($6,199	)
State	6,122			(9,939		)	(5,692		)	4,849		(1,221		)	(843		)	15,845
Total	(7,452		)	2,237			(36,665		)	7,347		13,796			36,356			9,646
Deferred and non-current - net	101,253			57,620			121,416			41,150		(11,952		)	(4,639		)	60,614
Investment tax credit adjustments - net	(2,014		)	(3,038		)	(2,874		)	1,260		(225		)	(1,609		)	(1,407		)
Income taxes		$91,787			$56,819			$81,877			$49,757		$1,619			$30,108			$68,853

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		$64,069			($66,081	)		($132,999	)		$3,188			($9,484	)		($114,677	)		($50,491	)
State	6,712			9,535			(1,269		)	(4,425		)	(1,617		)	4,933			(8,544		)
Total	70,781			(56,546		)	(134,268		)	(1,237		)	(11,101		)	(109,744		)	(59,035		)
Deferred and non-current - net	26,042			112,390			8,463			59,045			18,586			144,471			137,832
Investment tax credit adjustments - net	(2,017		)	(3,228		)	(3,117		)	871			(245		)	(1,609		)	(1,682		)
Income taxes		$94,806			$52,616			($128,922	)		$58,679			$7,240			$33,118			$77,115

Total income taxes for Entergy Corporation and Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before income taxes.  The reasons for the differences for the years 2014, 2013, and 2012 are:

	2014			2013			2012
	(In Thousands)
Net income attributable to Entergy Corporation		$940,721			$711,902			$846,673
Preferred dividend requirements of subsidiaries	19,536			18,670			21,690
Consolidated net income	960,257			730,572			868,363
Income taxes	589,597			225,981			30,855
Income before income taxes		$1,549,854			$956,553			$899,218
Computed at statutory rate (35%)		$542,449			$334,794			$314,726
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	44,708			13,599			40,699
Regulatory differences - utility plant items	39,321			32,324			35,527
Equity component of AFUDC	(21,108		)	(22,356		)	(30,838		)
Amortization of investment tax credits	(12,211		)	(13,535		)	(14,000		)
Flow-through / permanent differences	(18,003		)	(301		)	(14,801		)
Net-of-tax regulatory liability	—			(2,899		)	(4,356		)
New York tax law change	(21,500		)	—			—
Deferred tax asset on additional depreciation (a)	—			—			(155,300		)
Termination of business reorganization	—			(27,192		)	—
Write-off of regulatory asset for income taxes	—			—			42,159
Capital losses	—			—			(20,188		)
Provision for uncertain tax positions (b)	32,573			(59,249		)	(159,957		)
Valuation allowance	—			(31,573		)	—
Other - net	3,368			2,369			(2,816		)
Total income taxes as reported		$589,597			$225,981			$30,855
Effective Income Tax Rate	38.0		%	23.6		%	3.4		%

(a) See “Income Tax Audits- 2004-2005 IRS Audit” below for discussion of this item.

(b) See “Income Tax Audits- 2008-2009 IRS Audit” below for discussion of the most significant items in 2013 and 2012.

In March 2014, New York enacted legislation that substantially modifies various aspects of New York tax law. The most significant effect of the legislation for Entergy is the adoption of full water's-edge unitary combined reporting, meaning that all of Entergy's domestic entities will be included in New York's combined filing group. The effect of the tax law change resulted in a deferred state income tax reduction of approximately $21.5 million as shown in the table above.

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 2014, 2013, and 2012 are:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$121,392			$162,491			$283,531			$74,821			$28,707			$74,804			$96,334
Income taxes	83,629			88,782			96,270			55,710			12,324			49,644			83,310
Pretax income		$205,021			$251,273			$379,801			$130,531			$41,031			$124,448			$179,644
Computed at statutory rate (35%)		$71,757			$87,946			$132,930			$45,686			$14,361			$43,557			$62,875
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	9,591			6,532			5,134			5,180			1,643			3,221			6,877
Regulatory differences - utility plant items	8,653			4,618			2,869			4,448			777			4,165			13,791
Equity component of AFUDC	(2,533		)	(2,602		)	(12,010		)	(833		)	(320		)	(1,035		)	(1,774		)
Amortization of investment tax credits	(1,251		)	(3,018		)	(2,576		)	(260		)	(218		)	(1,412		)	(3,476		)
Flow-through / permanent differences	(5,082		)	799			(1,024		)	555			(4,458		)	393			(327		)
Non-taxable dividend income	—			(10,590		)	(30,665		)	—			—			—			—
Provision for uncertain tax positions	1,881			4,108			1,228			718			405			522			5,235
Other - net	613			989			384			216			134			233			109
Total income taxes		$83,629			$88,782			$96,270			$55,710			$12,324			$49,644			$83,310
Effective Income Tax Rate	40.8		%	35.3		%	25.3		%	42.7		%	30.0		%	39.9		%	46.4		%

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$161,948			$161,662			$252,464			$82,159			$11,683			$57,881			$113,664
Income taxes	91,787			56,819			81,877			49,757			1,619			30,108			68,853
Pretax income		$253,735			$218,481			$334,341			$131,916			$13,302			$87,989			$182,517
Computed at statutory rate (35%)		$88,807			$76,468			$117,019			$46,171			$4,656			$30,796			$63,881
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	10,954			7,719			11,365			4,564			1,012			(897		)	5,900
Regulatory differences - utility plant items	7,938			4,865			2,140			2,603			453			3,256			11,070
Equity component of AFUDC	(3,820		)	(2,822		)	(10,278		)	(764		)	(322		)	(1,626		)	(2,724		)
Amortization of investment tax credits	(1,989		)	(3,018		)	(2,846		)	(260		)	(216		)	(1,596		)	(3,476		)
Flow-through / permanent differences	2,540			2,377			1,269			1,702			(4,402		)	2,467			(491		)
Net-of-tax regulatory liability	—			—			(2,899		)	—			—			—			—
Termination of business reorganization	(6,753		)	(3,619		)	(3,834		)	(4,177		)	(501		)	(3,542		)	(13		)
Non-taxable dividend income	—			(9,612		)	(27,341		)	—			—			—			—
Provision for uncertain tax positions	(6,527		)	(15,557		)	(3,088		)	(326		)	795			1,027			(5,353		)
Other - net	637			18			370			244			144			223			59
Total income taxes		$91,787			$56,819			$81,877			$49,757			$1,619			$30,108			$68,853
Effective Income Tax Rate	36.2		%	26.0		%	24.5		%	37.7		%	12.2		%	34.2		%	37.7		%

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$152,365			$158,977			$281,081			$46,768			$17,065			$41,971			$111,866
Income taxes (benefit)	94,806			52,616			(128,922		)	58,679			7,240			33,118			77,115
Pretax income		$247,171			$211,593			$152,159			$105,447			$24,305			$75,089			$188,981
Computed at statutory rate (35%)		$86,510			$74,058			$53,256			$36,906			$8,507			$26,281			$66,143
Increases (reductions) resulting from:
State income taxes net of federal income tax effect	11,282			5,087			1,976			3,944			505			3,115			6,652
Regulatory differences - utility plant items	6,778			8,472			312			2,619			2,289			3,668			11,389
Equity component of AFUDC	(2,495		)	(3,042		)	(12,919		)	(1,383		)	(276		)	(1,587		)	(9,136		)
Amortization of investment tax credits	(1,992		)	(3,204		)	(3,089		)	(264		)	(240		)	(1,596		)	(3,480		)
Net-of-tax regulatory liability	—			—			(4,356		)	—			—			—			—
Flow-through / permanent differences	3,427			(7,646		)	1,397			1,961			(4,385		)	1,585			(357		)
Non-taxable dividend income	—			(9,836		)	(27,336		)	—			—			—			—
Expense (benefit) of Entergy Corporation expenses	(19,403		)	(17,703		)	—			14,449			2,758			—			(10,241		)
Provision for uncertain tax positions	11,227			8,745			(143,583		)	870			(2,095		)	1,651			17,966
Change in regulatory recovery	—			(553		)	7,854			—			—			—			—
Other - net	(528		)	(1,762		)	(2,434		)	(423		)	177			1			(1,821		)
Total income taxes		$94,806			$52,616			($128,922	)		$58,679			$7,240			$33,118			$77,115
Effective Income Tax Rate	38.4		%	24.9		%	(84.7		%)	55.6		%	29.8		%	44.1		%	40.8		%

Significant components of accumulated deferred income taxes and taxes accrued for Entergy Corporation and Subsidiaries as of December 31, 2014 and 2013 are as follows:

	2014			2013
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($8,128,096	)		($7,941,319	)
Regulatory assets	(922,161		)	(922,312		)
Nuclear decommissioning trusts	(1,248,737		)	(1,100,439		)
Pension, net funding	(324,881		)	(299,951		)
Combined unitary state taxes	(162,340		)	(183,934		)
Power purchase agreements	(110,889		)	(8,096		)
Other	(500,424		)	(404,749		)
Total	(11,397,528		)	(10,860,800		)
Deferred tax assets:
Nuclear decommissioning liabilities	874,493			754,828
Regulatory liabilities	458,230			403,370
Pension and other post-employment benefits	586,455			469,190
Sale and leaseback	153,308			176,119
Compensation	74,692			125,552
Accumulated deferred investment tax credit	100,442			106,777
Provision for allowances and contingencies	160,551			66,026
Net operating loss carryforwards	457,758			548,756
Capital losses and miscellaneous tax credits	12,146			13,140
Valuation allowance	(27,387		)	(28,146		)
Other	58,334			109,606
Total	2,909,022			2,745,218
Noncurrent accrued taxes (including unrecognized tax benefits)	(606,560		)	(400,276		)
Accumulated deferred income taxes and taxes accrued		($9,095,066	)		($8,515,858	)

Entergy’s estimated tax attributes carryovers and their expiration dates as of December 31, 2014 are as follows:

Carryover Description	Carryover Amount	Year(s) of expiration
Federal net operating losses	$12.3 billion	2023-2034
State net operating losses	$10.2 billion	2015-2033
Miscellaneous federal and state credits	$97.6 million	2015-2034

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers, tax credit carryovers, and other tax attributes reflected on income tax returns. Because it is more likely than not that the benefit from certain state net operating loss carryovers will not be utilized, a valuation allowance of $21.2 million has been provided on the deferred tax assets relating to these state net operating loss carryovers.

In the third quarter 2013, Entergy reduced a valuation allowance by $44 million ($28 million net of the federal income tax effect) that had been provided on a state net operating loss carryover due to the prospective utilization of such loss carryover.

Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2014 and 2013 are as follows:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($1,657,503	)		($1,233,761	)		($1,515,091	)		($753,576	)		($186,153	)		($771,135	)		($668,779	)
Regulatory assets	(198,662		)	(106,287		)	(274,432		)	(30,114		)	—			(202,402		)	(110,087		)
Nuclear decommissioning trusts	(130,524		)	(43,611		)	(62,551		)	—			—			—			(74,063		)
Pension, net funding	(93,355		)	(46,403		)	(53,190		)	(27,861		)	(13,285		)	(25,616		)	(23,440		)
Deferred fuel	(82,050		)	(3,034		)	(500		)	(5,303		)	(407		)	2,045			(120		)
Power purchase agreements	(17,073		)	(67,083		)	—			2,129			13			847			—
Other	(33,827		)	(8,850		)	(75,432		)	(11,423		)	(11,500		)	(22,546		)	(19,802		)
Total	(2,212,994		)	(1,509,029		)	(1,981,196		)	(826,148		)	(211,332		)	(1,018,807		)	(896,291		)
Deferred tax assets:
Regulatory liabilities	145,466			70,068			111,533			7,214			29,580			4,079			90,290
Nuclear decommissioning liabilities	(43,134		)	48,815			97,323			—			—			—			(62,571		)
Pension and other post-employment benefits	(17,534		)	88,606			70,055			(7,288		)	(7,504		)	(15,053		)	(1,413		)
Sale and leaseback	—			—			45,136			—			—			—			108,172
Accumulated deferred investment tax credit	14,791			33,941			24,922			2,436			332			5,158			18,862
Provision for allowances and contingencies	(7,149		)	43,512			82,293			19,590			10,986			8,017			133
Unbilled/deferred revenues	12,322			(18,553		)	(6,463		)	12,956			3,395			11,573			—
Compensation	2,085			641			(483		)	(846		)	475			4,155			—
Net operating loss carryforwards	105,063			—			241,803			—			—			—			—
Capital losses and miscellaneous tax credits	—			—			—			3,504			—			—			—
Other	258			8,102			7,406			5,887			2,891			3,850			2,000
Total	212,168			275,132			673,525			43,453			40,155			21,779			155,473
Noncurrent accrued taxes (including unrecognized tax benefits)	9,367			(388,230		)	(24,278		)	(12,481		)	(19,502		)	(48,921		)	(81,528		)
Accumulated deferred income taxes and taxes accrued		($1,991,459	)		($1,622,127	)		($1,331,949	)		($795,176	)		($190,679	)		($1,045,949	)		($822,346	)

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($1,613,195	)		($1,259,173	)		($1,347,534	)		($727,545	)		($196,726	)		($759,263	)		($698,151	)
Regulatory assets	(212,339		)	(102,362		)	(255,068		)	(33,277		)	—			(205,402		)	(113,849		)
Nuclear decommissioning trusts	(110,004		)	(32,574		)	(50,248		)	—			—			—			(58,308		)
Pension, net funding	(79,589		)	(45,342		)	(50,630		)	(24,392		)	(11,606		)	(23,598		)	(21,187		)
Deferred fuel	(26,946		)	(4,361		)	(512		)	(21,823		)	63			(470		)	(129		)
Power purchase agreements	(7,053		)	(20,234		)	—			—			13			1,269			—
Other	(62,046		)	(25,694		)	(69,194		)	(10,732		)	(13,446		)	(58,963		)	(8,969		)
Total	(2,111,172		)	(1,489,740		)	(1,773,186		)	(817,769		)	(221,702		)	(1,046,427		)	(900,593		)
Deferred tax assets:
Regulatory liabilities	120,966			60,176			94,019			8,357			35,764			7,952			76,135
Nuclear decommissioning liabilities	(64,571		)	49,439			92,206			—			—			—			(71,898		)
Pension and other post-employment benefits	(12,132		)	73,136			62,999			(1,345		)	1,532			(13,417		)	(2,073		)
Sale and leaseback	—			—			52,054			—			—			—			124,065
Accumulated deferred investment tax credit	15,281			35,297			25,913			3,263			416			5,651			20,956
Provision for allowances and contingencies	12,313			14,784			3,347			13,066			8,535			5,980			—
Unbilled/deferred revenues	37,825			(22,340		)	3,026			6,791			4,226			10,655			—
Compensation	7,131			4,701			3,470			1,778			1,696			6,774			822
Net operating loss carryforwards	85,875			—			230,592			19,400			—			—			—
Capital losses and miscellaneous tax credits	—			—			—			6,173			—			—			—
Other	3,682			4,939			4,148			4,224			2,930			3,807			2,001
Total	206,370			220,132			571,774			61,707			55,099			27,402			150,008
Noncurrent accrued taxes (including unrecognized tax benefits)	22,565			(279,269		)	25,512			(6,290		)	(5,015		)	(37,777		)	10,302
Accumulated deferred income taxes and taxes accrued		($1,882,237	)		($1,548,877	)		($1,175,900	)		($762,352	)		($171,618	)		($1,056,802	)		($740,283	)

The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2014 are as follows:

	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
Federal net operating losses		$1.3	billion		$151	million		$2.1	billion	—				$55	million	—				$392	million
Year(s) of expiration	2029-2034			2029-2032			2029-2034			N/A			2031-2034			N/A			2030-2032
State net operating losses		$235	million		$580	million		$3	billion	—				$24	million	—			—
Year(s) of expiration	2015-2028			2024-2027			2024-2029			N/A			2026-2029			N/A			N/A
Misc. federal credits		$1	million		$6	million		$13	million		$1	million	—			—				$10	million
Year(s) of expiration	2029-2033			2029-2033			2026-2033			2029-2033			N/A			N/A			2029-2033
State credits	—			—			—				$9.5	million	—				$3.4	million		$15.7	million
Year(s) of expiration	N/A			N/A			N/A			2015-2019			N/A			2026			2015-2019

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers and tax credit carryovers.

Unrecognized tax benefits

Accounting standards establish a “more-likely-than-not” recognition threshold that must be met before a tax benefit can be recognized in the financial statements.  If a tax deduction is taken on a tax return, but does not meet the more-likely-than-not recognition threshold, an increase in income tax liability, above what is payable on the tax return, is required to be recorded.  A reconciliation of Entergy’s beginning and ending amount of unrecognized tax benefits is as follows:

	2014			2013			2012
	(In Thousands)
Gross balance at January 1		$4,593,224			$4,170,403			$4,387,780
Additions based on tax positions related to the current year	348,543			162,338			163,612
Additions for tax positions of prior years	11,637			410,108			1,517,797
Reductions for tax positions of prior years	(213,401		)	(103,360		)	(476,873		)
Settlements	—			(43,620		)	(1,421,913		)
Lapse of statute of limitations	(3,218		)	(2,645		)	—
Gross balance at December 31	4,736,785			4,593,224			4,170,403
Offsets to gross unrecognized tax benefits:
Credit and loss carryovers	(4,295,643		)	(4,400,498		)	(4,022,535		)
Unrecognized tax benefits net of unused tax attributes and payments (a)		$441,142			$192,726			$147,868

(a) Potential tax liability above what is payable on tax returns

The balances of unrecognized tax benefits include $516 million, $176 million, and $203 million as of December 31, 2014, 2013, and 2012, respectively, which, if recognized, would lower the effective income tax rates.  Because of the effect of deferred tax accounting, the remaining balances of unrecognized tax benefits of $4.221 billion, $4.417 billion, and $3.968 billion as of December 31, 2014, 2013, and 2012, respectively, if disallowed, would not affect the annual effective income tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

Entergy accrues interest expense, if any, related to unrecognized tax benefits in income tax expense.  Entergy’s December 31, 2014, 2013, and 2012 accrued balance for the possible payment of interest is approximately $127 million, $96.4 million, and $146.3 million, respectively.

A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2014, 2013, and 2012 is as follows:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2014		$347,713			$465,075			$611,605			$16,186			$51,679			$13,017			$265,185
Additions based on tax positions related to the current year	14,511			55,053			96,196			3,928			2,235			4,225			2,744
Additions for tax positions of prior years	1,767			5,204			1,720			319			37			303			566
Reductions for tax positions of prior years	(1,079		)	(7,995		)	(20,929		)	(289		)	(188		)	(267		)	(10,253		)
Settlements	—			—			—			—			—			(14		)	—
Gross balance at December 31, 2014	362,912			517,337			688,592			20,144			53,763			17,264			258,242
Offsets to gross unrecognized tax benefits:
Loss carryovers	(361,043		)	(89,448		)	(650,540		)	(6,992		)	(20,735		)	(241		)	(163,124		)
Unrecognized tax benefits net of unused tax attributes and payments		$1,869			$427,889			$38,052			$13,152			$33,028			$17,023			$95,118

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2013		$344,669			$465,721			$536,673			$16,841			$52,018			$13,954			$260,346
Additions based on tax positions related to the current year	6,427			7,276			10,611			957			583			2,170			4,170
Additions for tax positions of prior years	1,228			7,189			118,025			401			3,506			587			8,391
Reductions for tax positions of prior years	(3,943		)	(15,045		)	(38,428		)	(1,941		)	(962		)	(4,186		)	(967		)
Settlements	(668		)	(66		)	(15,276		)	(72		)	(3,466		)	492			(6,755		)
Gross balance at December 31, 2013	347,713			465,075			611,605			16,186			51,679			13,017			265,185
Offsets to gross unrecognized tax benefits:
Loss carryovers	(345,674		)	(136,151		)	(611,605		)	(16,186		)	(22,078		)	(266		)	(225,286		)
Unrecognized tax benefits net of unused tax attributes and payments		$2,039			$328,924			$—			$—			$29,601			$12,751			$39,899

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2012		$335,493			$390,493			$446,187			$11,052			$56,052			$19,225			$281,183
Additions based on tax positions related to the current year	10,409			8,974			67,721			8,401			497			1,656			8,715
Additions for tax positions of prior years	429,232			392,548			331,432			4,057			445			4,834			271,172
Reductions for tax positions of prior years	(39,534		)	(50,518		)	(169,465		)	(5,703		)	(2,506		)	(11,649		)	(20,934		)
Settlements	(390,931		)	(275,776		)	(139,202		)	(966		)	(2,470		)	(112		)	(279,790		)
Gross balance at December 31, 2012	344,669			465,721			536,673			16,841			52,018			13,954			260,346
Offsets to gross unrecognized tax benefits:
Loss carryovers	(342,127		)	(160,955		)	(536,673		)	(16,841		)	(35,511		)	(1,593		)	(249,424		)
Unrecognized tax benefits net of unused tax attributes and payments		$2,542			$304,766			$—			$—			$16,507			$12,361			$10,922

The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:

	December 31,
	2014		2013		2012
	(In Millions)
Entergy Arkansas		$2.6		$0.6		$0.6
Entergy Gulf States Louisiana		$91.9		$44.0		$44.0
Entergy Louisiana		$175.4		$87.9		$92.4
Entergy Mississippi		$3.9		$3.9		$3.9
Entergy New Orleans		$50.7		$—		$—
Entergy Texas		$10.5		$10.1		$8.6
System Energy		$3.7		$3.3		$3.5

The Registrant Subsidiaries accrue interest and penalties related to unrecognized tax benefits in income tax expense.  Penalties have not been accrued.  Accrued balances for the possible payment of interest are as follows:

	December 31,
	2014		2013		2012
	(In Millions)
Entergy Arkansas		$17.0		$15.2		$21.8
Entergy Gulf States Louisiana		$21.0		$17.0		$33.1
Entergy Louisiana		$1.2		$1.0		$0.9
Entergy Mississippi		$2.8		$2.1		$2.4
Entergy New Orleans		$1.3		$0.9		$0.1
Entergy Texas		$1.0		$0.8		$0.7
System Energy		$23.8		$19.0		$33.2

Income Tax Litigation

In October 2010 the U.S. Tax Court entered a decision in favor of Entergy regarding the ability to credit the U.K. Windfall Tax against U.S. income tax as a foreign tax credit.  The U.K. Windfall Tax relates to Entergy’s former investment in London Electricity.

The IRS filed an appeal of the U.K. Windfall Tax decision with the U.S. Court of Appeals for the Fifth Circuit in December 2010.  Oral arguments were heard in November 2011.  In June 2012 the U.S. Court of Appeals for the Fifth Circuit unanimously affirmed the U.S. Tax Court decision.  As a result of this decision, Entergy reversed its liability for uncertain tax positions associated with this issue.  On September 4, 2012, the U.S. Solicitor General, on behalf of the Commissioner of Internal Revenue, petitioned the U.S. Supreme Court for a writ of certiorari to review the Fifth Circuit judgment.

Concurrent with the Tax Court’s issuance of a favorable decision regarding the above issues, the Tax Court issued a favorable decision in a separate proceeding, PPL Corp. v. Commissioner, regarding the creditability of the U.K. Windfall Tax.  The IRS appealed the PPL decision to the United States Court of Appeals for the Third Circuit.  In December 2011 the Third Circuit reversed the Tax Court’s holding in PPL Corp. v. Commissioner, stating that the U.K. tax was not eligible for the foreign tax credit.  PPL Corp. petitioned the U.S. Supreme Court for a writ of certiorari to review the U.S. Court of Appeals for the Third Circuit decision.  On October 29, 2012, the U.S. Supreme Court granted PPL Corp.’s petition for certiorari.  The Solicitor General’s petition for writ of certiorari in Entergy’s case was held pending the disposition of the PPL case.

    On May 20, 2013, the U.S. Supreme Court issued a unanimous decision in PPL’s favor, holding that the U.K. Windfall Tax is a creditable tax for U.S. federal income tax purposes. On May 28, 2013, the Supreme Court denied the petition for certiorari filed by the Commissioner of Internal Revenue in Entergy’s U.K. Windfall Tax case, allowing the decision in Entergy’s favor from the United States Court of Appeals for the Fifth Circuit to become final.

Income Tax Audits

Entergy and its subsidiaries file U.S. federal and various state and foreign income tax returns.  IRS examinations are substantially completed for years before 2009. All state taxing authorities’ examinations are completed for years before 2005.

2004-2005 IRS Audit

In June 2009, Entergy filed a formal protest with the IRS Appeals Division indicating disagreement with certain issues contained in the 2004-2005 Revenue Agent’s Report (RAR).  The most significant issue disputed was the inclusion of nuclear decommissioning liabilities in cost of goods sold for the nuclear power plants owned by the Utility resulting from an Application for Change in Accounting Method for tax purposes (the “2004 CAM”).

During the fourth quarter 2012, Entergy settled the position relating to the 2004 CAM.   Under the settlement Entergy conceded its tax position, resulting in an increase in taxable income of approximately $2.97 billion for the tax years 2004 - 2007.  The settlement provides that Entergy Louisiana is entitled to additional tax depreciation of approximately $547 million for years 2006 and beyond.  The deferred tax asset net of interest charges associated with the settlement is $155 million for Entergy.  There was a related increase to Entergy Louisiana’s member’s equity account.

2008-2009 IRS Audit

In the third quarter 2008, Entergy Louisiana and Entergy Gulf States Louisiana received $679 million and $274.7 million, respectively, from the Louisiana Utilities Restoration Corporation (“LURC”).  These receipts from LURC were from the proceeds of a Louisiana Act 55 financing of the costs incurred to restore service following Hurricane Katrina and Hurricane Rita.  See Note 2 to the financial statements for further details regarding the financings.

In June 2012, Entergy effectively settled the tax treatment of the storm restoration, which resulted in an increase to 2008 taxable income of $129 million for Entergy Louisiana and $104 million for Entergy Gulf States Louisiana and a reduction of income tax expense of $172 million, including $143 million for Entergy Louisiana and $20 million for Entergy Gulf States Louisiana. Under the terms of an LPSC-approved settlement related to the Louisiana Act 55 financings, Entergy Louisiana and Entergy Gulf States Louisiana recorded, respectively, a $137 million ($84 million net-of-tax) and a $28 million ($17 million net-of-tax) regulatory charge and a corresponding regulatory liability to reflect their obligations to customers with respect to the settlement.  

In the fourth quarter 2009, Entergy filed Applications for Change in Accounting Method (the “2009 CAM”) for tax purposes with the IRS for certain costs under Section 263A of the Internal Revenue Code.  In the Applications, Entergy proposed to treat the nuclear decommissioning liability associated with the operation of its nuclear power plants as a production cost properly includable in cost of goods sold.  The effect of the 2009 CAM  was a $5.7 billion reduction in 2009 taxable income.  The 2009 CAM was adjusted to $9.3 billion in 2012.

In the fourth quarter 2012 the IRS disallowed the reduction to 2009 taxable income related to the 2009 CAM.  In the third quarter 2013, the Internal Revenue Service issued its RAR for the tax years 2008-2009. As a result of the issuance of this RAR, Entergy and the IRS resolved all of the 2008-2009 issues described above except for the 2009 CAM. Entergy disagrees with the IRS’s disallowance of the 2009 CAM and filed a protest with the IRS Appeals Division on October 24, 2013. Two conferences with the Appeals Division have taken place during 2014. The resolution of this issue is in process. The issuance of the RAR by the IRS effectively settled all other issues, which resulted in an adjustment to the provision for uncertain tax positions.

Other Tax Matters

Entergy regularly negotiates with the IRS to achieve settlements.  The resolution of the nuclear decommissioning liability audit issue, discussed above, could result in significant changes to the amounts of unrecognized tax benefits in the next twelve months.

In September 2013 the U.S. Treasury Department and the IRS issued final regulations that provide guidance on the deductibility and capitalization of costs incurred associated with tangible property. Entergy and the Registrant Subsidiaries filed with the IRS an automatic application for change in accounting method which is in compliance with the final regulations and the safe harbor provisions of the relevant IRS Revenue Procedures. Entergy estimates that the effect of this accounting method change will result in a net increase to Entergy’s taxable income of approximately $548 million, which will be recognized over a four year period beginning with the tax year ended 2014. The adoption of the final regulations and safe harbor method results in approximate changes in the Registrant Subsidiaries taxable income as follows: an increase of $157 million for Entergy Arkansas, an increase of $42 million for Entergy Gulf States Louisiana, an increase of $49 million for Entergy Louisiana, an increase of $23 million for Entergy Mississippi, an increase of $169 million for Entergy Texas, a decrease of $11 million for Entergy New Orleans, and an increase of $34 million for System Energy.

In March 2013, Entergy Louisiana distributed to its parent, Entergy Louisiana Holdings, Inc., Louisiana income tax credits of $20.6 million, which resulted in a decrease in Entergy Louisiana’s member’s equity account.

The Tax Increase Prevention Act of 2014 was enacted in December 2014. The most significant provisions affecting Entergy and the Registrant Subsidiaries were a one-year extension of 50% bonus depreciation and the research and experimentation tax credit. These provisions do not result in an immediate cash flow benefit but will result in cash flow benefits for Entergy in a future period.

Entergy Mississippi [Member]

Income Taxes

INCOME TAXES (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Income taxes from continuing operations for 2014, 2013, and 2012 for Entergy Corporation and Subsidiaries consist of the following:

	2014			2013			2012
	(In Thousands)
Current:
Federal		$90,061			$88,291			($47,851	)
Foreign	90			101			143
State	(12,637		)	20,584			(41,516		)
Total	77,514			108,976			(89,224		)
Deferred and non-current - net	528,326			126,935			131,130
Investment tax credit adjustments - net	(16,243		)	(9,930		)	(11,051		)
Income tax expense from continuing operations		$589,597			$225,981			$30,855

Income taxes for 2014, 2013, and 2012 for Entergy’s Registrant Subsidiaries consist of the following:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		($34,258	)		($3,857	)		($41,052	)		$8,103			($1,924	)		$48,610			$19,908
State	(678		)	(769		)	(422		)	7,474			520			4,877			15,379
Total	(34,936		)	(4,626		)	(41,474		)	15,577			(1,404		)	53,487			35,287
Deferred and non-current - net	119,841			96,446			140,348			42,305			13,952			(2,418		)	53,501
Investment tax credit adjustments - net	(1,276		)	(3,038		)	(2,604		)	(2,172		)	(224		)	(1,425		)	(5,478		)
Income taxes		$83,629			$88,782			$96,270			$55,710			$12,324			$49,644			$83,310

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi		Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		($13,574	)		$12,176			($30,973	)		$2,498		$15,017			$37,199			($6,199	)
State	6,122			(9,939		)	(5,692		)	4,849		(1,221		)	(843		)	15,845
Total	(7,452		)	2,237			(36,665		)	7,347		13,796			36,356			9,646
Deferred and non-current - net	101,253			57,620			121,416			41,150		(11,952		)	(4,639		)	60,614
Investment tax credit adjustments - net	(2,014		)	(3,038		)	(2,874		)	1,260		(225		)	(1,609		)	(1,407		)
Income taxes		$91,787			$56,819			$81,877			$49,757		$1,619			$30,108			$68,853

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		$64,069			($66,081	)		($132,999	)		$3,188			($9,484	)		($114,677	)		($50,491	)
State	6,712			9,535			(1,269		)	(4,425		)	(1,617		)	4,933			(8,544		)
Total	70,781			(56,546		)	(134,268		)	(1,237		)	(11,101		)	(109,744		)	(59,035		)
Deferred and non-current - net	26,042			112,390			8,463			59,045			18,586			144,471			137,832
Investment tax credit adjustments - net	(2,017		)	(3,228		)	(3,117		)	871			(245		)	(1,609		)	(1,682		)
Income taxes		$94,806			$52,616			($128,922	)		$58,679			$7,240			$33,118			$77,115

Total income taxes for Entergy Corporation and Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before income taxes.  The reasons for the differences for the years 2014, 2013, and 2012 are:

	2014			2013			2012
	(In Thousands)
Net income attributable to Entergy Corporation		$940,721			$711,902			$846,673
Preferred dividend requirements of subsidiaries	19,536			18,670			21,690
Consolidated net income	960,257			730,572			868,363
Income taxes	589,597			225,981			30,855
Income before income taxes		$1,549,854			$956,553			$899,218
Computed at statutory rate (35%)		$542,449			$334,794			$314,726
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	44,708			13,599			40,699
Regulatory differences - utility plant items	39,321			32,324			35,527
Equity component of AFUDC	(21,108		)	(22,356		)	(30,838		)
Amortization of investment tax credits	(12,211		)	(13,535		)	(14,000		)
Flow-through / permanent differences	(18,003		)	(301		)	(14,801		)
Net-of-tax regulatory liability	—			(2,899		)	(4,356		)
New York tax law change	(21,500		)	—			—
Deferred tax asset on additional depreciation (a)	—			—			(155,300		)
Termination of business reorganization	—			(27,192		)	—
Write-off of regulatory asset for income taxes	—			—			42,159
Capital losses	—			—			(20,188		)
Provision for uncertain tax positions (b)	32,573			(59,249		)	(159,957		)
Valuation allowance	—			(31,573		)	—
Other - net	3,368			2,369			(2,816		)
Total income taxes as reported		$589,597			$225,981			$30,855
Effective Income Tax Rate	38.0		%	23.6		%	3.4		%

(a) See “Income Tax Audits- 2004-2005 IRS Audit” below for discussion of this item.

(b) See “Income Tax Audits- 2008-2009 IRS Audit” below for discussion of the most significant items in 2013 and 2012.

In March 2014, New York enacted legislation that substantially modifies various aspects of New York tax law. The most significant effect of the legislation for Entergy is the adoption of full water's-edge unitary combined reporting, meaning that all of Entergy's domestic entities will be included in New York's combined filing group. The effect of the tax law change resulted in a deferred state income tax reduction of approximately $21.5 million as shown in the table above.

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 2014, 2013, and 2012 are:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$121,392			$162,491			$283,531			$74,821			$28,707			$74,804			$96,334
Income taxes	83,629			88,782			96,270			55,710			12,324			49,644			83,310
Pretax income		$205,021			$251,273			$379,801			$130,531			$41,031			$124,448			$179,644
Computed at statutory rate (35%)		$71,757			$87,946			$132,930			$45,686			$14,361			$43,557			$62,875
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	9,591			6,532			5,134			5,180			1,643			3,221			6,877
Regulatory differences - utility plant items	8,653			4,618			2,869			4,448			777			4,165			13,791
Equity component of AFUDC	(2,533		)	(2,602		)	(12,010		)	(833		)	(320		)	(1,035		)	(1,774		)
Amortization of investment tax credits	(1,251		)	(3,018		)	(2,576		)	(260		)	(218		)	(1,412		)	(3,476		)
Flow-through / permanent differences	(5,082		)	799			(1,024		)	555			(4,458		)	393			(327		)
Non-taxable dividend income	—			(10,590		)	(30,665		)	—			—			—			—
Provision for uncertain tax positions	1,881			4,108			1,228			718			405			522			5,235
Other - net	613			989			384			216			134			233			109
Total income taxes		$83,629			$88,782			$96,270			$55,710			$12,324			$49,644			$83,310
Effective Income Tax Rate	40.8		%	35.3		%	25.3		%	42.7		%	30.0		%	39.9		%	46.4		%

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$161,948			$161,662			$252,464			$82,159			$11,683			$57,881			$113,664
Income taxes	91,787			56,819			81,877			49,757			1,619			30,108			68,853
Pretax income		$253,735			$218,481			$334,341			$131,916			$13,302			$87,989			$182,517
Computed at statutory rate (35%)		$88,807			$76,468			$117,019			$46,171			$4,656			$30,796			$63,881
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	10,954			7,719			11,365			4,564			1,012			(897		)	5,900
Regulatory differences - utility plant items	7,938			4,865			2,140			2,603			453			3,256			11,070
Equity component of AFUDC	(3,820		)	(2,822		)	(10,278		)	(764		)	(322		)	(1,626		)	(2,724		)
Amortization of investment tax credits	(1,989		)	(3,018		)	(2,846		)	(260		)	(216		)	(1,596		)	(3,476		)
Flow-through / permanent differences	2,540			2,377			1,269			1,702			(4,402		)	2,467			(491		)
Net-of-tax regulatory liability	—			—			(2,899		)	—			—			—			—
Termination of business reorganization	(6,753		)	(3,619		)	(3,834		)	(4,177		)	(501		)	(3,542		)	(13		)
Non-taxable dividend income	—			(9,612		)	(27,341		)	—			—			—			—
Provision for uncertain tax positions	(6,527		)	(15,557		)	(3,088		)	(326		)	795			1,027			(5,353		)
Other - net	637			18			370			244			144			223			59
Total income taxes		$91,787			$56,819			$81,877			$49,757			$1,619			$30,108			$68,853
Effective Income Tax Rate	36.2		%	26.0		%	24.5		%	37.7		%	12.2		%	34.2		%	37.7		%

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$152,365			$158,977			$281,081			$46,768			$17,065			$41,971			$111,866
Income taxes (benefit)	94,806			52,616			(128,922		)	58,679			7,240			33,118			77,115
Pretax income		$247,171			$211,593			$152,159			$105,447			$24,305			$75,089			$188,981
Computed at statutory rate (35%)		$86,510			$74,058			$53,256			$36,906			$8,507			$26,281			$66,143
Increases (reductions) resulting from:
State income taxes net of federal income tax effect	11,282			5,087			1,976			3,944			505			3,115			6,652
Regulatory differences - utility plant items	6,778			8,472			312			2,619			2,289			3,668			11,389
Equity component of AFUDC	(2,495		)	(3,042		)	(12,919		)	(1,383		)	(276		)	(1,587		)	(9,136		)
Amortization of investment tax credits	(1,992		)	(3,204		)	(3,089		)	(264		)	(240		)	(1,596		)	(3,480		)
Net-of-tax regulatory liability	—			—			(4,356		)	—			—			—			—
Flow-through / permanent differences	3,427			(7,646		)	1,397			1,961			(4,385		)	1,585			(357		)
Non-taxable dividend income	—			(9,836		)	(27,336		)	—			—			—			—
Expense (benefit) of Entergy Corporation expenses	(19,403		)	(17,703		)	—			14,449			2,758			—			(10,241		)
Provision for uncertain tax positions	11,227			8,745			(143,583		)	870			(2,095		)	1,651			17,966
Change in regulatory recovery	—			(553		)	7,854			—			—			—			—
Other - net	(528		)	(1,762		)	(2,434		)	(423		)	177			1			(1,821		)
Total income taxes		$94,806			$52,616			($128,922	)		$58,679			$7,240			$33,118			$77,115
Effective Income Tax Rate	38.4		%	24.9		%	(84.7		%)	55.6		%	29.8		%	44.1		%	40.8		%

Significant components of accumulated deferred income taxes and taxes accrued for Entergy Corporation and Subsidiaries as of December 31, 2014 and 2013 are as follows:

	2014			2013
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($8,128,096	)		($7,941,319	)
Regulatory assets	(922,161		)	(922,312		)
Nuclear decommissioning trusts	(1,248,737		)	(1,100,439		)
Pension, net funding	(324,881		)	(299,951		)
Combined unitary state taxes	(162,340		)	(183,934		)
Power purchase agreements	(110,889		)	(8,096		)
Other	(500,424		)	(404,749		)
Total	(11,397,528		)	(10,860,800		)
Deferred tax assets:
Nuclear decommissioning liabilities	874,493			754,828
Regulatory liabilities	458,230			403,370
Pension and other post-employment benefits	586,455			469,190
Sale and leaseback	153,308			176,119
Compensation	74,692			125,552
Accumulated deferred investment tax credit	100,442			106,777
Provision for allowances and contingencies	160,551			66,026
Net operating loss carryforwards	457,758			548,756
Capital losses and miscellaneous tax credits	12,146			13,140
Valuation allowance	(27,387		)	(28,146		)
Other	58,334			109,606
Total	2,909,022			2,745,218
Noncurrent accrued taxes (including unrecognized tax benefits)	(606,560		)	(400,276		)
Accumulated deferred income taxes and taxes accrued		($9,095,066	)		($8,515,858	)

Entergy’s estimated tax attributes carryovers and their expiration dates as of December 31, 2014 are as follows:

Carryover Description	Carryover Amount	Year(s) of expiration
Federal net operating losses	$12.3 billion	2023-2034
State net operating losses	$10.2 billion	2015-2033
Miscellaneous federal and state credits	$97.6 million	2015-2034

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers, tax credit carryovers, and other tax attributes reflected on income tax returns. Because it is more likely than not that the benefit from certain state net operating loss carryovers will not be utilized, a valuation allowance of $21.2 million has been provided on the deferred tax assets relating to these state net operating loss carryovers.

In the third quarter 2013, Entergy reduced a valuation allowance by $44 million ($28 million net of the federal income tax effect) that had been provided on a state net operating loss carryover due to the prospective utilization of such loss carryover.

Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2014 and 2013 are as follows:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($1,657,503	)		($1,233,761	)		($1,515,091	)		($753,576	)		($186,153	)		($771,135	)		($668,779	)
Regulatory assets	(198,662		)	(106,287		)	(274,432		)	(30,114		)	—			(202,402		)	(110,087		)
Nuclear decommissioning trusts	(130,524		)	(43,611		)	(62,551		)	—			—			—			(74,063		)
Pension, net funding	(93,355		)	(46,403		)	(53,190		)	(27,861		)	(13,285		)	(25,616		)	(23,440		)
Deferred fuel	(82,050		)	(3,034		)	(500		)	(5,303		)	(407		)	2,045			(120		)
Power purchase agreements	(17,073		)	(67,083		)	—			2,129			13			847			—
Other	(33,827		)	(8,850		)	(75,432		)	(11,423		)	(11,500		)	(22,546		)	(19,802		)
Total	(2,212,994		)	(1,509,029		)	(1,981,196		)	(826,148		)	(211,332		)	(1,018,807		)	(896,291		)
Deferred tax assets:
Regulatory liabilities	145,466			70,068			111,533			7,214			29,580			4,079			90,290
Nuclear decommissioning liabilities	(43,134		)	48,815			97,323			—			—			—			(62,571		)
Pension and other post-employment benefits	(17,534		)	88,606			70,055			(7,288		)	(7,504		)	(15,053		)	(1,413		)
Sale and leaseback	—			—			45,136			—			—			—			108,172
Accumulated deferred investment tax credit	14,791			33,941			24,922			2,436			332			5,158			18,862
Provision for allowances and contingencies	(7,149		)	43,512			82,293			19,590			10,986			8,017			133
Unbilled/deferred revenues	12,322			(18,553		)	(6,463		)	12,956			3,395			11,573			—
Compensation	2,085			641			(483		)	(846		)	475			4,155			—
Net operating loss carryforwards	105,063			—			241,803			—			—			—			—
Capital losses and miscellaneous tax credits	—			—			—			3,504			—			—			—
Other	258			8,102			7,406			5,887			2,891			3,850			2,000
Total	212,168			275,132			673,525			43,453			40,155			21,779			155,473
Noncurrent accrued taxes (including unrecognized tax benefits)	9,367			(388,230		)	(24,278		)	(12,481		)	(19,502		)	(48,921		)	(81,528		)
Accumulated deferred income taxes and taxes accrued		($1,991,459	)		($1,622,127	)		($1,331,949	)		($795,176	)		($190,679	)		($1,045,949	)		($822,346	)

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($1,613,195	)		($1,259,173	)		($1,347,534	)		($727,545	)		($196,726	)		($759,263	)		($698,151	)
Regulatory assets	(212,339		)	(102,362		)	(255,068		)	(33,277		)	—			(205,402		)	(113,849		)
Nuclear decommissioning trusts	(110,004		)	(32,574		)	(50,248		)	—			—			—			(58,308		)
Pension, net funding	(79,589		)	(45,342		)	(50,630		)	(24,392		)	(11,606		)	(23,598		)	(21,187		)
Deferred fuel	(26,946		)	(4,361		)	(512		)	(21,823		)	63			(470		)	(129		)
Power purchase agreements	(7,053		)	(20,234		)	—			—			13			1,269			—
Other	(62,046		)	(25,694		)	(69,194		)	(10,732		)	(13,446		)	(58,963		)	(8,969		)
Total	(2,111,172		)	(1,489,740		)	(1,773,186		)	(817,769		)	(221,702		)	(1,046,427		)	(900,593		)
Deferred tax assets:
Regulatory liabilities	120,966			60,176			94,019			8,357			35,764			7,952			76,135
Nuclear decommissioning liabilities	(64,571		)	49,439			92,206			—			—			—			(71,898		)
Pension and other post-employment benefits	(12,132		)	73,136			62,999			(1,345		)	1,532			(13,417		)	(2,073		)
Sale and leaseback	—			—			52,054			—			—			—			124,065
Accumulated deferred investment tax credit	15,281			35,297			25,913			3,263			416			5,651			20,956
Provision for allowances and contingencies	12,313			14,784			3,347			13,066			8,535			5,980			—
Unbilled/deferred revenues	37,825			(22,340		)	3,026			6,791			4,226			10,655			—
Compensation	7,131			4,701			3,470			1,778			1,696			6,774			822
Net operating loss carryforwards	85,875			—			230,592			19,400			—			—			—
Capital losses and miscellaneous tax credits	—			—			—			6,173			—			—			—
Other	3,682			4,939			4,148			4,224			2,930			3,807			2,001
Total	206,370			220,132			571,774			61,707			55,099			27,402			150,008
Noncurrent accrued taxes (including unrecognized tax benefits)	22,565			(279,269		)	25,512			(6,290		)	(5,015		)	(37,777		)	10,302
Accumulated deferred income taxes and taxes accrued		($1,882,237	)		($1,548,877	)		($1,175,900	)		($762,352	)		($171,618	)		($1,056,802	)		($740,283	)

The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2014 are as follows:

	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
Federal net operating losses		$1.3	billion		$151	million		$2.1	billion	—				$55	million	—				$392	million
Year(s) of expiration	2029-2034			2029-2032			2029-2034			N/A			2031-2034			N/A			2030-2032
State net operating losses		$235	million		$580	million		$3	billion	—				$24	million	—			—
Year(s) of expiration	2015-2028			2024-2027			2024-2029			N/A			2026-2029			N/A			N/A
Misc. federal credits		$1	million		$6	million		$13	million		$1	million	—			—				$10	million
Year(s) of expiration	2029-2033			2029-2033			2026-2033			2029-2033			N/A			N/A			2029-2033
State credits	—			—			—				$9.5	million	—				$3.4	million		$15.7	million
Year(s) of expiration	N/A			N/A			N/A			2015-2019			N/A			2026			2015-2019

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers and tax credit carryovers.

Unrecognized tax benefits

Accounting standards establish a “more-likely-than-not” recognition threshold that must be met before a tax benefit can be recognized in the financial statements.  If a tax deduction is taken on a tax return, but does not meet the more-likely-than-not recognition threshold, an increase in income tax liability, above what is payable on the tax return, is required to be recorded.  A reconciliation of Entergy’s beginning and ending amount of unrecognized tax benefits is as follows:

	2014			2013			2012
	(In Thousands)
Gross balance at January 1		$4,593,224			$4,170,403			$4,387,780
Additions based on tax positions related to the current year	348,543			162,338			163,612
Additions for tax positions of prior years	11,637			410,108			1,517,797
Reductions for tax positions of prior years	(213,401		)	(103,360		)	(476,873		)
Settlements	—			(43,620		)	(1,421,913		)
Lapse of statute of limitations	(3,218		)	(2,645		)	—
Gross balance at December 31	4,736,785			4,593,224			4,170,403
Offsets to gross unrecognized tax benefits:
Credit and loss carryovers	(4,295,643		)	(4,400,498		)	(4,022,535		)
Unrecognized tax benefits net of unused tax attributes and payments (a)		$441,142			$192,726			$147,868

(a) Potential tax liability above what is payable on tax returns

The balances of unrecognized tax benefits include $516 million, $176 million, and $203 million as of December 31, 2014, 2013, and 2012, respectively, which, if recognized, would lower the effective income tax rates.  Because of the effect of deferred tax accounting, the remaining balances of unrecognized tax benefits of $4.221 billion, $4.417 billion, and $3.968 billion as of December 31, 2014, 2013, and 2012, respectively, if disallowed, would not affect the annual effective income tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

Entergy accrues interest expense, if any, related to unrecognized tax benefits in income tax expense.  Entergy’s December 31, 2014, 2013, and 2012 accrued balance for the possible payment of interest is approximately $127 million, $96.4 million, and $146.3 million, respectively.

A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2014, 2013, and 2012 is as follows:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2014		$347,713			$465,075			$611,605			$16,186			$51,679			$13,017			$265,185
Additions based on tax positions related to the current year	14,511			55,053			96,196			3,928			2,235			4,225			2,744
Additions for tax positions of prior years	1,767			5,204			1,720			319			37			303			566
Reductions for tax positions of prior years	(1,079		)	(7,995		)	(20,929		)	(289		)	(188		)	(267		)	(10,253		)
Settlements	—			—			—			—			—			(14		)	—
Gross balance at December 31, 2014	362,912			517,337			688,592			20,144			53,763			17,264			258,242
Offsets to gross unrecognized tax benefits:
Loss carryovers	(361,043		)	(89,448		)	(650,540		)	(6,992		)	(20,735		)	(241		)	(163,124		)
Unrecognized tax benefits net of unused tax attributes and payments		$1,869			$427,889			$38,052			$13,152			$33,028			$17,023			$95,118

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2013		$344,669			$465,721			$536,673			$16,841			$52,018			$13,954			$260,346
Additions based on tax positions related to the current year	6,427			7,276			10,611			957			583			2,170			4,170
Additions for tax positions of prior years	1,228			7,189			118,025			401			3,506			587			8,391
Reductions for tax positions of prior years	(3,943		)	(15,045		)	(38,428		)	(1,941		)	(962		)	(4,186		)	(967		)
Settlements	(668		)	(66		)	(15,276		)	(72		)	(3,466		)	492			(6,755		)
Gross balance at December 31, 2013	347,713			465,075			611,605			16,186			51,679			13,017			265,185
Offsets to gross unrecognized tax benefits:
Loss carryovers	(345,674		)	(136,151		)	(611,605		)	(16,186		)	(22,078		)	(266		)	(225,286		)
Unrecognized tax benefits net of unused tax attributes and payments		$2,039			$328,924			$—			$—			$29,601			$12,751			$39,899

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2012		$335,493			$390,493			$446,187			$11,052			$56,052			$19,225			$281,183
Additions based on tax positions related to the current year	10,409			8,974			67,721			8,401			497			1,656			8,715
Additions for tax positions of prior years	429,232			392,548			331,432			4,057			445			4,834			271,172
Reductions for tax positions of prior years	(39,534		)	(50,518		)	(169,465		)	(5,703		)	(2,506		)	(11,649		)	(20,934		)
Settlements	(390,931		)	(275,776		)	(139,202		)	(966		)	(2,470		)	(112		)	(279,790		)
Gross balance at December 31, 2012	344,669			465,721			536,673			16,841			52,018			13,954			260,346
Offsets to gross unrecognized tax benefits:
Loss carryovers	(342,127		)	(160,955		)	(536,673		)	(16,841		)	(35,511		)	(1,593		)	(249,424		)
Unrecognized tax benefits net of unused tax attributes and payments		$2,542			$304,766			$—			$—			$16,507			$12,361			$10,922

The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:

	December 31,
	2014		2013		2012
	(In Millions)
Entergy Arkansas		$2.6		$0.6		$0.6
Entergy Gulf States Louisiana		$91.9		$44.0		$44.0
Entergy Louisiana		$175.4		$87.9		$92.4
Entergy Mississippi		$3.9		$3.9		$3.9
Entergy New Orleans		$50.7		$—		$—
Entergy Texas		$10.5		$10.1		$8.6
System Energy		$3.7		$3.3		$3.5

The Registrant Subsidiaries accrue interest and penalties related to unrecognized tax benefits in income tax expense.  Penalties have not been accrued.  Accrued balances for the possible payment of interest are as follows:

	December 31,
	2014		2013		2012
	(In Millions)
Entergy Arkansas		$17.0		$15.2		$21.8
Entergy Gulf States Louisiana		$21.0		$17.0		$33.1
Entergy Louisiana		$1.2		$1.0		$0.9
Entergy Mississippi		$2.8		$2.1		$2.4
Entergy New Orleans		$1.3		$0.9		$0.1
Entergy Texas		$1.0		$0.8		$0.7
System Energy		$23.8		$19.0		$33.2

Income Tax Litigation

In October 2010 the U.S. Tax Court entered a decision in favor of Entergy regarding the ability to credit the U.K. Windfall Tax against U.S. income tax as a foreign tax credit.  The U.K. Windfall Tax relates to Entergy’s former investment in London Electricity.

The IRS filed an appeal of the U.K. Windfall Tax decision with the U.S. Court of Appeals for the Fifth Circuit in December 2010.  Oral arguments were heard in November 2011.  In June 2012 the U.S. Court of Appeals for the Fifth Circuit unanimously affirmed the U.S. Tax Court decision.  As a result of this decision, Entergy reversed its liability for uncertain tax positions associated with this issue.  On September 4, 2012, the U.S. Solicitor General, on behalf of the Commissioner of Internal Revenue, petitioned the U.S. Supreme Court for a writ of certiorari to review the Fifth Circuit judgment.

Concurrent with the Tax Court’s issuance of a favorable decision regarding the above issues, the Tax Court issued a favorable decision in a separate proceeding, PPL Corp. v. Commissioner, regarding the creditability of the U.K. Windfall Tax.  The IRS appealed the PPL decision to the United States Court of Appeals for the Third Circuit.  In December 2011 the Third Circuit reversed the Tax Court’s holding in PPL Corp. v. Commissioner, stating that the U.K. tax was not eligible for the foreign tax credit.  PPL Corp. petitioned the U.S. Supreme Court for a writ of certiorari to review the U.S. Court of Appeals for the Third Circuit decision.  On October 29, 2012, the U.S. Supreme Court granted PPL Corp.’s petition for certiorari.  The Solicitor General’s petition for writ of certiorari in Entergy’s case was held pending the disposition of the PPL case.

    On May 20, 2013, the U.S. Supreme Court issued a unanimous decision in PPL’s favor, holding that the U.K. Windfall Tax is a creditable tax for U.S. federal income tax purposes. On May 28, 2013, the Supreme Court denied the petition for certiorari filed by the Commissioner of Internal Revenue in Entergy’s U.K. Windfall Tax case, allowing the decision in Entergy’s favor from the United States Court of Appeals for the Fifth Circuit to become final.

Income Tax Audits

Entergy and its subsidiaries file U.S. federal and various state and foreign income tax returns.  IRS examinations are substantially completed for years before 2009. All state taxing authorities’ examinations are completed for years before 2005.

2004-2005 IRS Audit

In June 2009, Entergy filed a formal protest with the IRS Appeals Division indicating disagreement with certain issues contained in the 2004-2005 Revenue Agent’s Report (RAR).  The most significant issue disputed was the inclusion of nuclear decommissioning liabilities in cost of goods sold for the nuclear power plants owned by the Utility resulting from an Application for Change in Accounting Method for tax purposes (the “2004 CAM”).

During the fourth quarter 2012, Entergy settled the position relating to the 2004 CAM.   Under the settlement Entergy conceded its tax position, resulting in an increase in taxable income of approximately $2.97 billion for the tax years 2004 - 2007.  The settlement provides that Entergy Louisiana is entitled to additional tax depreciation of approximately $547 million for years 2006 and beyond.  The deferred tax asset net of interest charges associated with the settlement is $155 million for Entergy.  There was a related increase to Entergy Louisiana’s member’s equity account.

2008-2009 IRS Audit

In the third quarter 2008, Entergy Louisiana and Entergy Gulf States Louisiana received $679 million and $274.7 million, respectively, from the Louisiana Utilities Restoration Corporation (“LURC”).  These receipts from LURC were from the proceeds of a Louisiana Act 55 financing of the costs incurred to restore service following Hurricane Katrina and Hurricane Rita.  See Note 2 to the financial statements for further details regarding the financings.

In June 2012, Entergy effectively settled the tax treatment of the storm restoration, which resulted in an increase to 2008 taxable income of $129 million for Entergy Louisiana and $104 million for Entergy Gulf States Louisiana and a reduction of income tax expense of $172 million, including $143 million for Entergy Louisiana and $20 million for Entergy Gulf States Louisiana. Under the terms of an LPSC-approved settlement related to the Louisiana Act 55 financings, Entergy Louisiana and Entergy Gulf States Louisiana recorded, respectively, a $137 million ($84 million net-of-tax) and a $28 million ($17 million net-of-tax) regulatory charge and a corresponding regulatory liability to reflect their obligations to customers with respect to the settlement.  

In the fourth quarter 2009, Entergy filed Applications for Change in Accounting Method (the “2009 CAM”) for tax purposes with the IRS for certain costs under Section 263A of the Internal Revenue Code.  In the Applications, Entergy proposed to treat the nuclear decommissioning liability associated with the operation of its nuclear power plants as a production cost properly includable in cost of goods sold.  The effect of the 2009 CAM  was a $5.7 billion reduction in 2009 taxable income.  The 2009 CAM was adjusted to $9.3 billion in 2012.

In the fourth quarter 2012 the IRS disallowed the reduction to 2009 taxable income related to the 2009 CAM.  In the third quarter 2013, the Internal Revenue Service issued its RAR for the tax years 2008-2009. As a result of the issuance of this RAR, Entergy and the IRS resolved all of the 2008-2009 issues described above except for the 2009 CAM. Entergy disagrees with the IRS’s disallowance of the 2009 CAM and filed a protest with the IRS Appeals Division on October 24, 2013. Two conferences with the Appeals Division have taken place during 2014. The resolution of this issue is in process. The issuance of the RAR by the IRS effectively settled all other issues, which resulted in an adjustment to the provision for uncertain tax positions.

Other Tax Matters

Entergy regularly negotiates with the IRS to achieve settlements.  The resolution of the nuclear decommissioning liability audit issue, discussed above, could result in significant changes to the amounts of unrecognized tax benefits in the next twelve months.

In September 2013 the U.S. Treasury Department and the IRS issued final regulations that provide guidance on the deductibility and capitalization of costs incurred associated with tangible property. Entergy and the Registrant Subsidiaries filed with the IRS an automatic application for change in accounting method which is in compliance with the final regulations and the safe harbor provisions of the relevant IRS Revenue Procedures. Entergy estimates that the effect of this accounting method change will result in a net increase to Entergy’s taxable income of approximately $548 million, which will be recognized over a four year period beginning with the tax year ended 2014. The adoption of the final regulations and safe harbor method results in approximate changes in the Registrant Subsidiaries taxable income as follows: an increase of $157 million for Entergy Arkansas, an increase of $42 million for Entergy Gulf States Louisiana, an increase of $49 million for Entergy Louisiana, an increase of $23 million for Entergy Mississippi, an increase of $169 million for Entergy Texas, a decrease of $11 million for Entergy New Orleans, and an increase of $34 million for System Energy.

In March 2013, Entergy Louisiana distributed to its parent, Entergy Louisiana Holdings, Inc., Louisiana income tax credits of $20.6 million, which resulted in a decrease in Entergy Louisiana’s member’s equity account.

The Tax Increase Prevention Act of 2014 was enacted in December 2014. The most significant provisions affecting Entergy and the Registrant Subsidiaries were a one-year extension of 50% bonus depreciation and the research and experimentation tax credit. These provisions do not result in an immediate cash flow benefit but will result in cash flow benefits for Entergy in a future period.

Entergy New Orleans [Member]

Income Taxes

INCOME TAXES (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Income taxes from continuing operations for 2014, 2013, and 2012 for Entergy Corporation and Subsidiaries consist of the following:

	2014			2013			2012
	(In Thousands)
Current:
Federal		$90,061			$88,291			($47,851	)
Foreign	90			101			143
State	(12,637		)	20,584			(41,516		)
Total	77,514			108,976			(89,224		)
Deferred and non-current - net	528,326			126,935			131,130
Investment tax credit adjustments - net	(16,243		)	(9,930		)	(11,051		)
Income tax expense from continuing operations		$589,597			$225,981			$30,855

Income taxes for 2014, 2013, and 2012 for Entergy’s Registrant Subsidiaries consist of the following:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		($34,258	)		($3,857	)		($41,052	)		$8,103			($1,924	)		$48,610			$19,908
State	(678		)	(769		)	(422		)	7,474			520			4,877			15,379
Total	(34,936		)	(4,626		)	(41,474		)	15,577			(1,404		)	53,487			35,287
Deferred and non-current - net	119,841			96,446			140,348			42,305			13,952			(2,418		)	53,501
Investment tax credit adjustments - net	(1,276		)	(3,038		)	(2,604		)	(2,172		)	(224		)	(1,425		)	(5,478		)
Income taxes		$83,629			$88,782			$96,270			$55,710			$12,324			$49,644			$83,310

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi		Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		($13,574	)		$12,176			($30,973	)		$2,498		$15,017			$37,199			($6,199	)
State	6,122			(9,939		)	(5,692		)	4,849		(1,221		)	(843		)	15,845
Total	(7,452		)	2,237			(36,665		)	7,347		13,796			36,356			9,646
Deferred and non-current - net	101,253			57,620			121,416			41,150		(11,952		)	(4,639		)	60,614
Investment tax credit adjustments - net	(2,014		)	(3,038		)	(2,874		)	1,260		(225		)	(1,609		)	(1,407		)
Income taxes		$91,787			$56,819			$81,877			$49,757		$1,619			$30,108			$68,853

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		$64,069			($66,081	)		($132,999	)		$3,188			($9,484	)		($114,677	)		($50,491	)
State	6,712			9,535			(1,269		)	(4,425		)	(1,617		)	4,933			(8,544		)
Total	70,781			(56,546		)	(134,268		)	(1,237		)	(11,101		)	(109,744		)	(59,035		)
Deferred and non-current - net	26,042			112,390			8,463			59,045			18,586			144,471			137,832
Investment tax credit adjustments - net	(2,017		)	(3,228		)	(3,117		)	871			(245		)	(1,609		)	(1,682		)
Income taxes		$94,806			$52,616			($128,922	)		$58,679			$7,240			$33,118			$77,115

Total income taxes for Entergy Corporation and Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before income taxes.  The reasons for the differences for the years 2014, 2013, and 2012 are:

	2014			2013			2012
	(In Thousands)
Net income attributable to Entergy Corporation		$940,721			$711,902			$846,673
Preferred dividend requirements of subsidiaries	19,536			18,670			21,690
Consolidated net income	960,257			730,572			868,363
Income taxes	589,597			225,981			30,855
Income before income taxes		$1,549,854			$956,553			$899,218
Computed at statutory rate (35%)		$542,449			$334,794			$314,726
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	44,708			13,599			40,699
Regulatory differences - utility plant items	39,321			32,324			35,527
Equity component of AFUDC	(21,108		)	(22,356		)	(30,838		)
Amortization of investment tax credits	(12,211		)	(13,535		)	(14,000		)
Flow-through / permanent differences	(18,003		)	(301		)	(14,801		)
Net-of-tax regulatory liability	—			(2,899		)	(4,356		)
New York tax law change	(21,500		)	—			—
Deferred tax asset on additional depreciation (a)	—			—			(155,300		)
Termination of business reorganization	—			(27,192		)	—
Write-off of regulatory asset for income taxes	—			—			42,159
Capital losses	—			—			(20,188		)
Provision for uncertain tax positions (b)	32,573			(59,249		)	(159,957		)
Valuation allowance	—			(31,573		)	—
Other - net	3,368			2,369			(2,816		)
Total income taxes as reported		$589,597			$225,981			$30,855
Effective Income Tax Rate	38.0		%	23.6		%	3.4		%

(a) See “Income Tax Audits- 2004-2005 IRS Audit” below for discussion of this item.

(b) See “Income Tax Audits- 2008-2009 IRS Audit” below for discussion of the most significant items in 2013 and 2012.

In March 2014, New York enacted legislation that substantially modifies various aspects of New York tax law. The most significant effect of the legislation for Entergy is the adoption of full water's-edge unitary combined reporting, meaning that all of Entergy's domestic entities will be included in New York's combined filing group. The effect of the tax law change resulted in a deferred state income tax reduction of approximately $21.5 million as shown in the table above.

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 2014, 2013, and 2012 are:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$121,392			$162,491			$283,531			$74,821			$28,707			$74,804			$96,334
Income taxes	83,629			88,782			96,270			55,710			12,324			49,644			83,310
Pretax income		$205,021			$251,273			$379,801			$130,531			$41,031			$124,448			$179,644
Computed at statutory rate (35%)		$71,757			$87,946			$132,930			$45,686			$14,361			$43,557			$62,875
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	9,591			6,532			5,134			5,180			1,643			3,221			6,877
Regulatory differences - utility plant items	8,653			4,618			2,869			4,448			777			4,165			13,791
Equity component of AFUDC	(2,533		)	(2,602		)	(12,010		)	(833		)	(320		)	(1,035		)	(1,774		)
Amortization of investment tax credits	(1,251		)	(3,018		)	(2,576		)	(260		)	(218		)	(1,412		)	(3,476		)
Flow-through / permanent differences	(5,082		)	799			(1,024		)	555			(4,458		)	393			(327		)
Non-taxable dividend income	—			(10,590		)	(30,665		)	—			—			—			—
Provision for uncertain tax positions	1,881			4,108			1,228			718			405			522			5,235
Other - net	613			989			384			216			134			233			109
Total income taxes		$83,629			$88,782			$96,270			$55,710			$12,324			$49,644			$83,310
Effective Income Tax Rate	40.8		%	35.3		%	25.3		%	42.7		%	30.0		%	39.9		%	46.4		%

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$161,948			$161,662			$252,464			$82,159			$11,683			$57,881			$113,664
Income taxes	91,787			56,819			81,877			49,757			1,619			30,108			68,853
Pretax income		$253,735			$218,481			$334,341			$131,916			$13,302			$87,989			$182,517
Computed at statutory rate (35%)		$88,807			$76,468			$117,019			$46,171			$4,656			$30,796			$63,881
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	10,954			7,719			11,365			4,564			1,012			(897		)	5,900
Regulatory differences - utility plant items	7,938			4,865			2,140			2,603			453			3,256			11,070
Equity component of AFUDC	(3,820		)	(2,822		)	(10,278		)	(764		)	(322		)	(1,626		)	(2,724		)
Amortization of investment tax credits	(1,989		)	(3,018		)	(2,846		)	(260		)	(216		)	(1,596		)	(3,476		)
Flow-through / permanent differences	2,540			2,377			1,269			1,702			(4,402		)	2,467			(491		)
Net-of-tax regulatory liability	—			—			(2,899		)	—			—			—			—
Termination of business reorganization	(6,753		)	(3,619		)	(3,834		)	(4,177		)	(501		)	(3,542		)	(13		)
Non-taxable dividend income	—			(9,612		)	(27,341		)	—			—			—			—
Provision for uncertain tax positions	(6,527		)	(15,557		)	(3,088		)	(326		)	795			1,027			(5,353		)
Other - net	637			18			370			244			144			223			59
Total income taxes		$91,787			$56,819			$81,877			$49,757			$1,619			$30,108			$68,853
Effective Income Tax Rate	36.2		%	26.0		%	24.5		%	37.7		%	12.2		%	34.2		%	37.7		%

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$152,365			$158,977			$281,081			$46,768			$17,065			$41,971			$111,866
Income taxes (benefit)	94,806			52,616			(128,922		)	58,679			7,240			33,118			77,115
Pretax income		$247,171			$211,593			$152,159			$105,447			$24,305			$75,089			$188,981
Computed at statutory rate (35%)		$86,510			$74,058			$53,256			$36,906			$8,507			$26,281			$66,143
Increases (reductions) resulting from:
State income taxes net of federal income tax effect	11,282			5,087			1,976			3,944			505			3,115			6,652
Regulatory differences - utility plant items	6,778			8,472			312			2,619			2,289			3,668			11,389
Equity component of AFUDC	(2,495		)	(3,042		)	(12,919		)	(1,383		)	(276		)	(1,587		)	(9,136		)
Amortization of investment tax credits	(1,992		)	(3,204		)	(3,089		)	(264		)	(240		)	(1,596		)	(3,480		)
Net-of-tax regulatory liability	—			—			(4,356		)	—			—			—			—
Flow-through / permanent differences	3,427			(7,646		)	1,397			1,961			(4,385		)	1,585			(357		)
Non-taxable dividend income	—			(9,836		)	(27,336		)	—			—			—			—
Expense (benefit) of Entergy Corporation expenses	(19,403		)	(17,703		)	—			14,449			2,758			—			(10,241		)
Provision for uncertain tax positions	11,227			8,745			(143,583		)	870			(2,095		)	1,651			17,966
Change in regulatory recovery	—			(553		)	7,854			—			—			—			—
Other - net	(528		)	(1,762		)	(2,434		)	(423		)	177			1			(1,821		)
Total income taxes		$94,806			$52,616			($128,922	)		$58,679			$7,240			$33,118			$77,115
Effective Income Tax Rate	38.4		%	24.9		%	(84.7		%)	55.6		%	29.8		%	44.1		%	40.8		%

Significant components of accumulated deferred income taxes and taxes accrued for Entergy Corporation and Subsidiaries as of December 31, 2014 and 2013 are as follows:

	2014			2013
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($8,128,096	)		($7,941,319	)
Regulatory assets	(922,161		)	(922,312		)
Nuclear decommissioning trusts	(1,248,737		)	(1,100,439		)
Pension, net funding	(324,881		)	(299,951		)
Combined unitary state taxes	(162,340		)	(183,934		)
Power purchase agreements	(110,889		)	(8,096		)
Other	(500,424		)	(404,749		)
Total	(11,397,528		)	(10,860,800		)
Deferred tax assets:
Nuclear decommissioning liabilities	874,493			754,828
Regulatory liabilities	458,230			403,370
Pension and other post-employment benefits	586,455			469,190
Sale and leaseback	153,308			176,119
Compensation	74,692			125,552
Accumulated deferred investment tax credit	100,442			106,777
Provision for allowances and contingencies	160,551			66,026
Net operating loss carryforwards	457,758			548,756
Capital losses and miscellaneous tax credits	12,146			13,140
Valuation allowance	(27,387		)	(28,146		)
Other	58,334			109,606
Total	2,909,022			2,745,218
Noncurrent accrued taxes (including unrecognized tax benefits)	(606,560		)	(400,276		)
Accumulated deferred income taxes and taxes accrued		($9,095,066	)		($8,515,858	)

Entergy’s estimated tax attributes carryovers and their expiration dates as of December 31, 2014 are as follows:

Carryover Description	Carryover Amount	Year(s) of expiration
Federal net operating losses	$12.3 billion	2023-2034
State net operating losses	$10.2 billion	2015-2033
Miscellaneous federal and state credits	$97.6 million	2015-2034

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers, tax credit carryovers, and other tax attributes reflected on income tax returns. Because it is more likely than not that the benefit from certain state net operating loss carryovers will not be utilized, a valuation allowance of $21.2 million has been provided on the deferred tax assets relating to these state net operating loss carryovers.

In the third quarter 2013, Entergy reduced a valuation allowance by $44 million ($28 million net of the federal income tax effect) that had been provided on a state net operating loss carryover due to the prospective utilization of such loss carryover.

Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2014 and 2013 are as follows:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($1,657,503	)		($1,233,761	)		($1,515,091	)		($753,576	)		($186,153	)		($771,135	)		($668,779	)
Regulatory assets	(198,662		)	(106,287		)	(274,432		)	(30,114		)	—			(202,402		)	(110,087		)
Nuclear decommissioning trusts	(130,524		)	(43,611		)	(62,551		)	—			—			—			(74,063		)
Pension, net funding	(93,355		)	(46,403		)	(53,190		)	(27,861		)	(13,285		)	(25,616		)	(23,440		)
Deferred fuel	(82,050		)	(3,034		)	(500		)	(5,303		)	(407		)	2,045			(120		)
Power purchase agreements	(17,073		)	(67,083		)	—			2,129			13			847			—
Other	(33,827		)	(8,850		)	(75,432		)	(11,423		)	(11,500		)	(22,546		)	(19,802		)
Total	(2,212,994		)	(1,509,029		)	(1,981,196		)	(826,148		)	(211,332		)	(1,018,807		)	(896,291		)
Deferred tax assets:
Regulatory liabilities	145,466			70,068			111,533			7,214			29,580			4,079			90,290
Nuclear decommissioning liabilities	(43,134		)	48,815			97,323			—			—			—			(62,571		)
Pension and other post-employment benefits	(17,534		)	88,606			70,055			(7,288		)	(7,504		)	(15,053		)	(1,413		)
Sale and leaseback	—			—			45,136			—			—			—			108,172
Accumulated deferred investment tax credit	14,791			33,941			24,922			2,436			332			5,158			18,862
Provision for allowances and contingencies	(7,149		)	43,512			82,293			19,590			10,986			8,017			133
Unbilled/deferred revenues	12,322			(18,553		)	(6,463		)	12,956			3,395			11,573			—
Compensation	2,085			641			(483		)	(846		)	475			4,155			—
Net operating loss carryforwards	105,063			—			241,803			—			—			—			—
Capital losses and miscellaneous tax credits	—			—			—			3,504			—			—			—
Other	258			8,102			7,406			5,887			2,891			3,850			2,000
Total	212,168			275,132			673,525			43,453			40,155			21,779			155,473
Noncurrent accrued taxes (including unrecognized tax benefits)	9,367			(388,230		)	(24,278		)	(12,481		)	(19,502		)	(48,921		)	(81,528		)
Accumulated deferred income taxes and taxes accrued		($1,991,459	)		($1,622,127	)		($1,331,949	)		($795,176	)		($190,679	)		($1,045,949	)		($822,346	)

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($1,613,195	)		($1,259,173	)		($1,347,534	)		($727,545	)		($196,726	)		($759,263	)		($698,151	)
Regulatory assets	(212,339		)	(102,362		)	(255,068		)	(33,277		)	—			(205,402		)	(113,849		)
Nuclear decommissioning trusts	(110,004		)	(32,574		)	(50,248		)	—			—			—			(58,308		)
Pension, net funding	(79,589		)	(45,342		)	(50,630		)	(24,392		)	(11,606		)	(23,598		)	(21,187		)
Deferred fuel	(26,946		)	(4,361		)	(512		)	(21,823		)	63			(470		)	(129		)
Power purchase agreements	(7,053		)	(20,234		)	—			—			13			1,269			—
Other	(62,046		)	(25,694		)	(69,194		)	(10,732		)	(13,446		)	(58,963		)	(8,969		)
Total	(2,111,172		)	(1,489,740		)	(1,773,186		)	(817,769		)	(221,702		)	(1,046,427		)	(900,593		)
Deferred tax assets:
Regulatory liabilities	120,966			60,176			94,019			8,357			35,764			7,952			76,135
Nuclear decommissioning liabilities	(64,571		)	49,439			92,206			—			—			—			(71,898		)
Pension and other post-employment benefits	(12,132		)	73,136			62,999			(1,345		)	1,532			(13,417		)	(2,073		)
Sale and leaseback	—			—			52,054			—			—			—			124,065
Accumulated deferred investment tax credit	15,281			35,297			25,913			3,263			416			5,651			20,956
Provision for allowances and contingencies	12,313			14,784			3,347			13,066			8,535			5,980			—
Unbilled/deferred revenues	37,825			(22,340		)	3,026			6,791			4,226			10,655			—
Compensation	7,131			4,701			3,470			1,778			1,696			6,774			822
Net operating loss carryforwards	85,875			—			230,592			19,400			—			—			—
Capital losses and miscellaneous tax credits	—			—			—			6,173			—			—			—
Other	3,682			4,939			4,148			4,224			2,930			3,807			2,001
Total	206,370			220,132			571,774			61,707			55,099			27,402			150,008
Noncurrent accrued taxes (including unrecognized tax benefits)	22,565			(279,269		)	25,512			(6,290		)	(5,015		)	(37,777		)	10,302
Accumulated deferred income taxes and taxes accrued		($1,882,237	)		($1,548,877	)		($1,175,900	)		($762,352	)		($171,618	)		($1,056,802	)		($740,283	)

The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2014 are as follows:

	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
Federal net operating losses		$1.3	billion		$151	million		$2.1	billion	—				$55	million	—				$392	million
Year(s) of expiration	2029-2034			2029-2032			2029-2034			N/A			2031-2034			N/A			2030-2032
State net operating losses		$235	million		$580	million		$3	billion	—				$24	million	—			—
Year(s) of expiration	2015-2028			2024-2027			2024-2029			N/A			2026-2029			N/A			N/A
Misc. federal credits		$1	million		$6	million		$13	million		$1	million	—			—				$10	million
Year(s) of expiration	2029-2033			2029-2033			2026-2033			2029-2033			N/A			N/A			2029-2033
State credits	—			—			—				$9.5	million	—				$3.4	million		$15.7	million
Year(s) of expiration	N/A			N/A			N/A			2015-2019			N/A			2026			2015-2019

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers and tax credit carryovers.

Unrecognized tax benefits

Accounting standards establish a “more-likely-than-not” recognition threshold that must be met before a tax benefit can be recognized in the financial statements.  If a tax deduction is taken on a tax return, but does not meet the more-likely-than-not recognition threshold, an increase in income tax liability, above what is payable on the tax return, is required to be recorded.  A reconciliation of Entergy’s beginning and ending amount of unrecognized tax benefits is as follows:

	2014			2013			2012
	(In Thousands)
Gross balance at January 1		$4,593,224			$4,170,403			$4,387,780
Additions based on tax positions related to the current year	348,543			162,338			163,612
Additions for tax positions of prior years	11,637			410,108			1,517,797
Reductions for tax positions of prior years	(213,401		)	(103,360		)	(476,873		)
Settlements	—			(43,620		)	(1,421,913		)
Lapse of statute of limitations	(3,218		)	(2,645		)	—
Gross balance at December 31	4,736,785			4,593,224			4,170,403
Offsets to gross unrecognized tax benefits:
Credit and loss carryovers	(4,295,643		)	(4,400,498		)	(4,022,535		)
Unrecognized tax benefits net of unused tax attributes and payments (a)		$441,142			$192,726			$147,868

(a) Potential tax liability above what is payable on tax returns

The balances of unrecognized tax benefits include $516 million, $176 million, and $203 million as of December 31, 2014, 2013, and 2012, respectively, which, if recognized, would lower the effective income tax rates.  Because of the effect of deferred tax accounting, the remaining balances of unrecognized tax benefits of $4.221 billion, $4.417 billion, and $3.968 billion as of December 31, 2014, 2013, and 2012, respectively, if disallowed, would not affect the annual effective income tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

Entergy accrues interest expense, if any, related to unrecognized tax benefits in income tax expense.  Entergy’s December 31, 2014, 2013, and 2012 accrued balance for the possible payment of interest is approximately $127 million, $96.4 million, and $146.3 million, respectively.

A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2014, 2013, and 2012 is as follows:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2014		$347,713			$465,075			$611,605			$16,186			$51,679			$13,017			$265,185
Additions based on tax positions related to the current year	14,511			55,053			96,196			3,928			2,235			4,225			2,744
Additions for tax positions of prior years	1,767			5,204			1,720			319			37			303			566
Reductions for tax positions of prior years	(1,079		)	(7,995		)	(20,929		)	(289		)	(188		)	(267		)	(10,253		)
Settlements	—			—			—			—			—			(14		)	—
Gross balance at December 31, 2014	362,912			517,337			688,592			20,144			53,763			17,264			258,242
Offsets to gross unrecognized tax benefits:
Loss carryovers	(361,043		)	(89,448		)	(650,540		)	(6,992		)	(20,735		)	(241		)	(163,124		)
Unrecognized tax benefits net of unused tax attributes and payments		$1,869			$427,889			$38,052			$13,152			$33,028			$17,023			$95,118

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2013		$344,669			$465,721			$536,673			$16,841			$52,018			$13,954			$260,346
Additions based on tax positions related to the current year	6,427			7,276			10,611			957			583			2,170			4,170
Additions for tax positions of prior years	1,228			7,189			118,025			401			3,506			587			8,391
Reductions for tax positions of prior years	(3,943		)	(15,045		)	(38,428		)	(1,941		)	(962		)	(4,186		)	(967		)
Settlements	(668		)	(66		)	(15,276		)	(72		)	(3,466		)	492			(6,755		)
Gross balance at December 31, 2013	347,713			465,075			611,605			16,186			51,679			13,017			265,185
Offsets to gross unrecognized tax benefits:
Loss carryovers	(345,674		)	(136,151		)	(611,605		)	(16,186		)	(22,078		)	(266		)	(225,286		)
Unrecognized tax benefits net of unused tax attributes and payments		$2,039			$328,924			$—			$—			$29,601			$12,751			$39,899

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2012		$335,493			$390,493			$446,187			$11,052			$56,052			$19,225			$281,183
Additions based on tax positions related to the current year	10,409			8,974			67,721			8,401			497			1,656			8,715
Additions for tax positions of prior years	429,232			392,548			331,432			4,057			445			4,834			271,172
Reductions for tax positions of prior years	(39,534		)	(50,518		)	(169,465		)	(5,703		)	(2,506		)	(11,649		)	(20,934		)
Settlements	(390,931		)	(275,776		)	(139,202		)	(966		)	(2,470		)	(112		)	(279,790		)
Gross balance at December 31, 2012	344,669			465,721			536,673			16,841			52,018			13,954			260,346
Offsets to gross unrecognized tax benefits:
Loss carryovers	(342,127		)	(160,955		)	(536,673		)	(16,841		)	(35,511		)	(1,593		)	(249,424		)
Unrecognized tax benefits net of unused tax attributes and payments		$2,542			$304,766			$—			$—			$16,507			$12,361			$10,922

The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:

	December 31,
	2014		2013		2012
	(In Millions)
Entergy Arkansas		$2.6		$0.6		$0.6
Entergy Gulf States Louisiana		$91.9		$44.0		$44.0
Entergy Louisiana		$175.4		$87.9		$92.4
Entergy Mississippi		$3.9		$3.9		$3.9
Entergy New Orleans		$50.7		$—		$—
Entergy Texas		$10.5		$10.1		$8.6
System Energy		$3.7		$3.3		$3.5

The Registrant Subsidiaries accrue interest and penalties related to unrecognized tax benefits in income tax expense.  Penalties have not been accrued.  Accrued balances for the possible payment of interest are as follows:

	December 31,
	2014		2013		2012
	(In Millions)
Entergy Arkansas		$17.0		$15.2		$21.8
Entergy Gulf States Louisiana		$21.0		$17.0		$33.1
Entergy Louisiana		$1.2		$1.0		$0.9
Entergy Mississippi		$2.8		$2.1		$2.4
Entergy New Orleans		$1.3		$0.9		$0.1
Entergy Texas		$1.0		$0.8		$0.7
System Energy		$23.8		$19.0		$33.2

Income Tax Litigation

In October 2010 the U.S. Tax Court entered a decision in favor of Entergy regarding the ability to credit the U.K. Windfall Tax against U.S. income tax as a foreign tax credit.  The U.K. Windfall Tax relates to Entergy’s former investment in London Electricity.

The IRS filed an appeal of the U.K. Windfall Tax decision with the U.S. Court of Appeals for the Fifth Circuit in December 2010.  Oral arguments were heard in November 2011.  In June 2012 the U.S. Court of Appeals for the Fifth Circuit unanimously affirmed the U.S. Tax Court decision.  As a result of this decision, Entergy reversed its liability for uncertain tax positions associated with this issue.  On September 4, 2012, the U.S. Solicitor General, on behalf of the Commissioner of Internal Revenue, petitioned the U.S. Supreme Court for a writ of certiorari to review the Fifth Circuit judgment.

Concurrent with the Tax Court’s issuance of a favorable decision regarding the above issues, the Tax Court issued a favorable decision in a separate proceeding, PPL Corp. v. Commissioner, regarding the creditability of the U.K. Windfall Tax.  The IRS appealed the PPL decision to the United States Court of Appeals for the Third Circuit.  In December 2011 the Third Circuit reversed the Tax Court’s holding in PPL Corp. v. Commissioner, stating that the U.K. tax was not eligible for the foreign tax credit.  PPL Corp. petitioned the U.S. Supreme Court for a writ of certiorari to review the U.S. Court of Appeals for the Third Circuit decision.  On October 29, 2012, the U.S. Supreme Court granted PPL Corp.’s petition for certiorari.  The Solicitor General’s petition for writ of certiorari in Entergy’s case was held pending the disposition of the PPL case.

    On May 20, 2013, the U.S. Supreme Court issued a unanimous decision in PPL’s favor, holding that the U.K. Windfall Tax is a creditable tax for U.S. federal income tax purposes. On May 28, 2013, the Supreme Court denied the petition for certiorari filed by the Commissioner of Internal Revenue in Entergy’s U.K. Windfall Tax case, allowing the decision in Entergy’s favor from the United States Court of Appeals for the Fifth Circuit to become final.

Income Tax Audits

Entergy and its subsidiaries file U.S. federal and various state and foreign income tax returns.  IRS examinations are substantially completed for years before 2009. All state taxing authorities’ examinations are completed for years before 2005.

2004-2005 IRS Audit

In June 2009, Entergy filed a formal protest with the IRS Appeals Division indicating disagreement with certain issues contained in the 2004-2005 Revenue Agent’s Report (RAR).  The most significant issue disputed was the inclusion of nuclear decommissioning liabilities in cost of goods sold for the nuclear power plants owned by the Utility resulting from an Application for Change in Accounting Method for tax purposes (the “2004 CAM”).

During the fourth quarter 2012, Entergy settled the position relating to the 2004 CAM.   Under the settlement Entergy conceded its tax position, resulting in an increase in taxable income of approximately $2.97 billion for the tax years 2004 - 2007.  The settlement provides that Entergy Louisiana is entitled to additional tax depreciation of approximately $547 million for years 2006 and beyond.  The deferred tax asset net of interest charges associated with the settlement is $155 million for Entergy.  There was a related increase to Entergy Louisiana’s member’s equity account.

2008-2009 IRS Audit

In the third quarter 2008, Entergy Louisiana and Entergy Gulf States Louisiana received $679 million and $274.7 million, respectively, from the Louisiana Utilities Restoration Corporation (“LURC”).  These receipts from LURC were from the proceeds of a Louisiana Act 55 financing of the costs incurred to restore service following Hurricane Katrina and Hurricane Rita.  See Note 2 to the financial statements for further details regarding the financings.

In June 2012, Entergy effectively settled the tax treatment of the storm restoration, which resulted in an increase to 2008 taxable income of $129 million for Entergy Louisiana and $104 million for Entergy Gulf States Louisiana and a reduction of income tax expense of $172 million, including $143 million for Entergy Louisiana and $20 million for Entergy Gulf States Louisiana. Under the terms of an LPSC-approved settlement related to the Louisiana Act 55 financings, Entergy Louisiana and Entergy Gulf States Louisiana recorded, respectively, a $137 million ($84 million net-of-tax) and a $28 million ($17 million net-of-tax) regulatory charge and a corresponding regulatory liability to reflect their obligations to customers with respect to the settlement.  

In the fourth quarter 2009, Entergy filed Applications for Change in Accounting Method (the “2009 CAM”) for tax purposes with the IRS for certain costs under Section 263A of the Internal Revenue Code.  In the Applications, Entergy proposed to treat the nuclear decommissioning liability associated with the operation of its nuclear power plants as a production cost properly includable in cost of goods sold.  The effect of the 2009 CAM  was a $5.7 billion reduction in 2009 taxable income.  The 2009 CAM was adjusted to $9.3 billion in 2012.

In the fourth quarter 2012 the IRS disallowed the reduction to 2009 taxable income related to the 2009 CAM.  In the third quarter 2013, the Internal Revenue Service issued its RAR for the tax years 2008-2009. As a result of the issuance of this RAR, Entergy and the IRS resolved all of the 2008-2009 issues described above except for the 2009 CAM. Entergy disagrees with the IRS’s disallowance of the 2009 CAM and filed a protest with the IRS Appeals Division on October 24, 2013. Two conferences with the Appeals Division have taken place during 2014. The resolution of this issue is in process. The issuance of the RAR by the IRS effectively settled all other issues, which resulted in an adjustment to the provision for uncertain tax positions.

Other Tax Matters

Entergy regularly negotiates with the IRS to achieve settlements.  The resolution of the nuclear decommissioning liability audit issue, discussed above, could result in significant changes to the amounts of unrecognized tax benefits in the next twelve months.

In September 2013 the U.S. Treasury Department and the IRS issued final regulations that provide guidance on the deductibility and capitalization of costs incurred associated with tangible property. Entergy and the Registrant Subsidiaries filed with the IRS an automatic application for change in accounting method which is in compliance with the final regulations and the safe harbor provisions of the relevant IRS Revenue Procedures. Entergy estimates that the effect of this accounting method change will result in a net increase to Entergy’s taxable income of approximately $548 million, which will be recognized over a four year period beginning with the tax year ended 2014. The adoption of the final regulations and safe harbor method results in approximate changes in the Registrant Subsidiaries taxable income as follows: an increase of $157 million for Entergy Arkansas, an increase of $42 million for Entergy Gulf States Louisiana, an increase of $49 million for Entergy Louisiana, an increase of $23 million for Entergy Mississippi, an increase of $169 million for Entergy Texas, a decrease of $11 million for Entergy New Orleans, and an increase of $34 million for System Energy.

In March 2013, Entergy Louisiana distributed to its parent, Entergy Louisiana Holdings, Inc., Louisiana income tax credits of $20.6 million, which resulted in a decrease in Entergy Louisiana’s member’s equity account.

The Tax Increase Prevention Act of 2014 was enacted in December 2014. The most significant provisions affecting Entergy and the Registrant Subsidiaries were a one-year extension of 50% bonus depreciation and the research and experimentation tax credit. These provisions do not result in an immediate cash flow benefit but will result in cash flow benefits for Entergy in a future period.

Entergy Texas [Member]

Income Taxes

INCOME TAXES (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Income taxes from continuing operations for 2014, 2013, and 2012 for Entergy Corporation and Subsidiaries consist of the following:

	2014			2013			2012
	(In Thousands)
Current:
Federal		$90,061			$88,291			($47,851	)
Foreign	90			101			143
State	(12,637		)	20,584			(41,516		)
Total	77,514			108,976			(89,224		)
Deferred and non-current - net	528,326			126,935			131,130
Investment tax credit adjustments - net	(16,243		)	(9,930		)	(11,051		)
Income tax expense from continuing operations		$589,597			$225,981			$30,855

Income taxes for 2014, 2013, and 2012 for Entergy’s Registrant Subsidiaries consist of the following:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		($34,258	)		($3,857	)		($41,052	)		$8,103			($1,924	)		$48,610			$19,908
State	(678		)	(769		)	(422		)	7,474			520			4,877			15,379
Total	(34,936		)	(4,626		)	(41,474		)	15,577			(1,404		)	53,487			35,287
Deferred and non-current - net	119,841			96,446			140,348			42,305			13,952			(2,418		)	53,501
Investment tax credit adjustments - net	(1,276		)	(3,038		)	(2,604		)	(2,172		)	(224		)	(1,425		)	(5,478		)
Income taxes		$83,629			$88,782			$96,270			$55,710			$12,324			$49,644			$83,310

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi		Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		($13,574	)		$12,176			($30,973	)		$2,498		$15,017			$37,199			($6,199	)
State	6,122			(9,939		)	(5,692		)	4,849		(1,221		)	(843		)	15,845
Total	(7,452		)	2,237			(36,665		)	7,347		13,796			36,356			9,646
Deferred and non-current - net	101,253			57,620			121,416			41,150		(11,952		)	(4,639		)	60,614
Investment tax credit adjustments - net	(2,014		)	(3,038		)	(2,874		)	1,260		(225		)	(1,609		)	(1,407		)
Income taxes		$91,787			$56,819			$81,877			$49,757		$1,619			$30,108			$68,853

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		$64,069			($66,081	)		($132,999	)		$3,188			($9,484	)		($114,677	)		($50,491	)
State	6,712			9,535			(1,269		)	(4,425		)	(1,617		)	4,933			(8,544		)
Total	70,781			(56,546		)	(134,268		)	(1,237		)	(11,101		)	(109,744		)	(59,035		)
Deferred and non-current - net	26,042			112,390			8,463			59,045			18,586			144,471			137,832
Investment tax credit adjustments - net	(2,017		)	(3,228		)	(3,117		)	871			(245		)	(1,609		)	(1,682		)
Income taxes		$94,806			$52,616			($128,922	)		$58,679			$7,240			$33,118			$77,115

Total income taxes for Entergy Corporation and Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before income taxes.  The reasons for the differences for the years 2014, 2013, and 2012 are:

	2014			2013			2012
	(In Thousands)
Net income attributable to Entergy Corporation		$940,721			$711,902			$846,673
Preferred dividend requirements of subsidiaries	19,536			18,670			21,690
Consolidated net income	960,257			730,572			868,363
Income taxes	589,597			225,981			30,855
Income before income taxes		$1,549,854			$956,553			$899,218
Computed at statutory rate (35%)		$542,449			$334,794			$314,726
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	44,708			13,599			40,699
Regulatory differences - utility plant items	39,321			32,324			35,527
Equity component of AFUDC	(21,108		)	(22,356		)	(30,838		)
Amortization of investment tax credits	(12,211		)	(13,535		)	(14,000		)
Flow-through / permanent differences	(18,003		)	(301		)	(14,801		)
Net-of-tax regulatory liability	—			(2,899		)	(4,356		)
New York tax law change	(21,500		)	—			—
Deferred tax asset on additional depreciation (a)	—			—			(155,300		)
Termination of business reorganization	—			(27,192		)	—
Write-off of regulatory asset for income taxes	—			—			42,159
Capital losses	—			—			(20,188		)
Provision for uncertain tax positions (b)	32,573			(59,249		)	(159,957		)
Valuation allowance	—			(31,573		)	—
Other - net	3,368			2,369			(2,816		)
Total income taxes as reported		$589,597			$225,981			$30,855
Effective Income Tax Rate	38.0		%	23.6		%	3.4		%

(a) See “Income Tax Audits- 2004-2005 IRS Audit” below for discussion of this item.

(b) See “Income Tax Audits- 2008-2009 IRS Audit” below for discussion of the most significant items in 2013 and 2012.

In March 2014, New York enacted legislation that substantially modifies various aspects of New York tax law. The most significant effect of the legislation for Entergy is the adoption of full water's-edge unitary combined reporting, meaning that all of Entergy's domestic entities will be included in New York's combined filing group. The effect of the tax law change resulted in a deferred state income tax reduction of approximately $21.5 million as shown in the table above.

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 2014, 2013, and 2012 are:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$121,392			$162,491			$283,531			$74,821			$28,707			$74,804			$96,334
Income taxes	83,629			88,782			96,270			55,710			12,324			49,644			83,310
Pretax income		$205,021			$251,273			$379,801			$130,531			$41,031			$124,448			$179,644
Computed at statutory rate (35%)		$71,757			$87,946			$132,930			$45,686			$14,361			$43,557			$62,875
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	9,591			6,532			5,134			5,180			1,643			3,221			6,877
Regulatory differences - utility plant items	8,653			4,618			2,869			4,448			777			4,165			13,791
Equity component of AFUDC	(2,533		)	(2,602		)	(12,010		)	(833		)	(320		)	(1,035		)	(1,774		)
Amortization of investment tax credits	(1,251		)	(3,018		)	(2,576		)	(260		)	(218		)	(1,412		)	(3,476		)
Flow-through / permanent differences	(5,082		)	799			(1,024		)	555			(4,458		)	393			(327		)
Non-taxable dividend income	—			(10,590		)	(30,665		)	—			—			—			—
Provision for uncertain tax positions	1,881			4,108			1,228			718			405			522			5,235
Other - net	613			989			384			216			134			233			109
Total income taxes		$83,629			$88,782			$96,270			$55,710			$12,324			$49,644			$83,310
Effective Income Tax Rate	40.8		%	35.3		%	25.3		%	42.7		%	30.0		%	39.9		%	46.4		%

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$161,948			$161,662			$252,464			$82,159			$11,683			$57,881			$113,664
Income taxes	91,787			56,819			81,877			49,757			1,619			30,108			68,853
Pretax income		$253,735			$218,481			$334,341			$131,916			$13,302			$87,989			$182,517
Computed at statutory rate (35%)		$88,807			$76,468			$117,019			$46,171			$4,656			$30,796			$63,881
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	10,954			7,719			11,365			4,564			1,012			(897		)	5,900
Regulatory differences - utility plant items	7,938			4,865			2,140			2,603			453			3,256			11,070
Equity component of AFUDC	(3,820		)	(2,822		)	(10,278		)	(764		)	(322		)	(1,626		)	(2,724		)
Amortization of investment tax credits	(1,989		)	(3,018		)	(2,846		)	(260		)	(216		)	(1,596		)	(3,476		)
Flow-through / permanent differences	2,540			2,377			1,269			1,702			(4,402		)	2,467			(491		)
Net-of-tax regulatory liability	—			—			(2,899		)	—			—			—			—
Termination of business reorganization	(6,753		)	(3,619		)	(3,834		)	(4,177		)	(501		)	(3,542		)	(13		)
Non-taxable dividend income	—			(9,612		)	(27,341		)	—			—			—			—
Provision for uncertain tax positions	(6,527		)	(15,557		)	(3,088		)	(326		)	795			1,027			(5,353		)
Other - net	637			18			370			244			144			223			59
Total income taxes		$91,787			$56,819			$81,877			$49,757			$1,619			$30,108			$68,853
Effective Income Tax Rate	36.2		%	26.0		%	24.5		%	37.7		%	12.2		%	34.2		%	37.7		%

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$152,365			$158,977			$281,081			$46,768			$17,065			$41,971			$111,866
Income taxes (benefit)	94,806			52,616			(128,922		)	58,679			7,240			33,118			77,115
Pretax income		$247,171			$211,593			$152,159			$105,447			$24,305			$75,089			$188,981
Computed at statutory rate (35%)		$86,510			$74,058			$53,256			$36,906			$8,507			$26,281			$66,143
Increases (reductions) resulting from:
State income taxes net of federal income tax effect	11,282			5,087			1,976			3,944			505			3,115			6,652
Regulatory differences - utility plant items	6,778			8,472			312			2,619			2,289			3,668			11,389
Equity component of AFUDC	(2,495		)	(3,042		)	(12,919		)	(1,383		)	(276		)	(1,587		)	(9,136		)
Amortization of investment tax credits	(1,992		)	(3,204		)	(3,089		)	(264		)	(240		)	(1,596		)	(3,480		)
Net-of-tax regulatory liability	—			—			(4,356		)	—			—			—			—
Flow-through / permanent differences	3,427			(7,646		)	1,397			1,961			(4,385		)	1,585			(357		)
Non-taxable dividend income	—			(9,836		)	(27,336		)	—			—			—			—
Expense (benefit) of Entergy Corporation expenses	(19,403		)	(17,703		)	—			14,449			2,758			—			(10,241		)
Provision for uncertain tax positions	11,227			8,745			(143,583		)	870			(2,095		)	1,651			17,966
Change in regulatory recovery	—			(553		)	7,854			—			—			—			—
Other - net	(528		)	(1,762		)	(2,434		)	(423		)	177			1			(1,821		)
Total income taxes		$94,806			$52,616			($128,922	)		$58,679			$7,240			$33,118			$77,115
Effective Income Tax Rate	38.4		%	24.9		%	(84.7		%)	55.6		%	29.8		%	44.1		%	40.8		%

Significant components of accumulated deferred income taxes and taxes accrued for Entergy Corporation and Subsidiaries as of December 31, 2014 and 2013 are as follows:

	2014			2013
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($8,128,096	)		($7,941,319	)
Regulatory assets	(922,161		)	(922,312		)
Nuclear decommissioning trusts	(1,248,737		)	(1,100,439		)
Pension, net funding	(324,881		)	(299,951		)
Combined unitary state taxes	(162,340		)	(183,934		)
Power purchase agreements	(110,889		)	(8,096		)
Other	(500,424		)	(404,749		)
Total	(11,397,528		)	(10,860,800		)
Deferred tax assets:
Nuclear decommissioning liabilities	874,493			754,828
Regulatory liabilities	458,230			403,370
Pension and other post-employment benefits	586,455			469,190
Sale and leaseback	153,308			176,119
Compensation	74,692			125,552
Accumulated deferred investment tax credit	100,442			106,777
Provision for allowances and contingencies	160,551			66,026
Net operating loss carryforwards	457,758			548,756
Capital losses and miscellaneous tax credits	12,146			13,140
Valuation allowance	(27,387		)	(28,146		)
Other	58,334			109,606
Total	2,909,022			2,745,218
Noncurrent accrued taxes (including unrecognized tax benefits)	(606,560		)	(400,276		)
Accumulated deferred income taxes and taxes accrued		($9,095,066	)		($8,515,858	)

Entergy’s estimated tax attributes carryovers and their expiration dates as of December 31, 2014 are as follows:

Carryover Description	Carryover Amount	Year(s) of expiration
Federal net operating losses	$12.3 billion	2023-2034
State net operating losses	$10.2 billion	2015-2033
Miscellaneous federal and state credits	$97.6 million	2015-2034

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers, tax credit carryovers, and other tax attributes reflected on income tax returns. Because it is more likely than not that the benefit from certain state net operating loss carryovers will not be utilized, a valuation allowance of $21.2 million has been provided on the deferred tax assets relating to these state net operating loss carryovers.

In the third quarter 2013, Entergy reduced a valuation allowance by $44 million ($28 million net of the federal income tax effect) that had been provided on a state net operating loss carryover due to the prospective utilization of such loss carryover.

Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2014 and 2013 are as follows:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($1,657,503	)		($1,233,761	)		($1,515,091	)		($753,576	)		($186,153	)		($771,135	)		($668,779	)
Regulatory assets	(198,662		)	(106,287		)	(274,432		)	(30,114		)	—			(202,402		)	(110,087		)
Nuclear decommissioning trusts	(130,524		)	(43,611		)	(62,551		)	—			—			—			(74,063		)
Pension, net funding	(93,355		)	(46,403		)	(53,190		)	(27,861		)	(13,285		)	(25,616		)	(23,440		)
Deferred fuel	(82,050		)	(3,034		)	(500		)	(5,303		)	(407		)	2,045			(120		)
Power purchase agreements	(17,073		)	(67,083		)	—			2,129			13			847			—
Other	(33,827		)	(8,850		)	(75,432		)	(11,423		)	(11,500		)	(22,546		)	(19,802		)
Total	(2,212,994		)	(1,509,029		)	(1,981,196		)	(826,148		)	(211,332		)	(1,018,807		)	(896,291		)
Deferred tax assets:
Regulatory liabilities	145,466			70,068			111,533			7,214			29,580			4,079			90,290
Nuclear decommissioning liabilities	(43,134		)	48,815			97,323			—			—			—			(62,571		)
Pension and other post-employment benefits	(17,534		)	88,606			70,055			(7,288		)	(7,504		)	(15,053		)	(1,413		)
Sale and leaseback	—			—			45,136			—			—			—			108,172
Accumulated deferred investment tax credit	14,791			33,941			24,922			2,436			332			5,158			18,862
Provision for allowances and contingencies	(7,149		)	43,512			82,293			19,590			10,986			8,017			133
Unbilled/deferred revenues	12,322			(18,553		)	(6,463		)	12,956			3,395			11,573			—
Compensation	2,085			641			(483		)	(846		)	475			4,155			—
Net operating loss carryforwards	105,063			—			241,803			—			—			—			—
Capital losses and miscellaneous tax credits	—			—			—			3,504			—			—			—
Other	258			8,102			7,406			5,887			2,891			3,850			2,000
Total	212,168			275,132			673,525			43,453			40,155			21,779			155,473
Noncurrent accrued taxes (including unrecognized tax benefits)	9,367			(388,230		)	(24,278		)	(12,481		)	(19,502		)	(48,921		)	(81,528		)
Accumulated deferred income taxes and taxes accrued		($1,991,459	)		($1,622,127	)		($1,331,949	)		($795,176	)		($190,679	)		($1,045,949	)		($822,346	)

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($1,613,195	)		($1,259,173	)		($1,347,534	)		($727,545	)		($196,726	)		($759,263	)		($698,151	)
Regulatory assets	(212,339		)	(102,362		)	(255,068		)	(33,277		)	—			(205,402		)	(113,849		)
Nuclear decommissioning trusts	(110,004		)	(32,574		)	(50,248		)	—			—			—			(58,308		)
Pension, net funding	(79,589		)	(45,342		)	(50,630		)	(24,392		)	(11,606		)	(23,598		)	(21,187		)
Deferred fuel	(26,946		)	(4,361		)	(512		)	(21,823		)	63			(470		)	(129		)
Power purchase agreements	(7,053		)	(20,234		)	—			—			13			1,269			—
Other	(62,046		)	(25,694		)	(69,194		)	(10,732		)	(13,446		)	(58,963		)	(8,969		)
Total	(2,111,172		)	(1,489,740		)	(1,773,186		)	(817,769		)	(221,702		)	(1,046,427		)	(900,593		)
Deferred tax assets:
Regulatory liabilities	120,966			60,176			94,019			8,357			35,764			7,952			76,135
Nuclear decommissioning liabilities	(64,571		)	49,439			92,206			—			—			—			(71,898		)
Pension and other post-employment benefits	(12,132		)	73,136			62,999			(1,345		)	1,532			(13,417		)	(2,073		)
Sale and leaseback	—			—			52,054			—			—			—			124,065
Accumulated deferred investment tax credit	15,281			35,297			25,913			3,263			416			5,651			20,956
Provision for allowances and contingencies	12,313			14,784			3,347			13,066			8,535			5,980			—
Unbilled/deferred revenues	37,825			(22,340		)	3,026			6,791			4,226			10,655			—
Compensation	7,131			4,701			3,470			1,778			1,696			6,774			822
Net operating loss carryforwards	85,875			—			230,592			19,400			—			—			—
Capital losses and miscellaneous tax credits	—			—			—			6,173			—			—			—
Other	3,682			4,939			4,148			4,224			2,930			3,807			2,001
Total	206,370			220,132			571,774			61,707			55,099			27,402			150,008
Noncurrent accrued taxes (including unrecognized tax benefits)	22,565			(279,269		)	25,512			(6,290		)	(5,015		)	(37,777		)	10,302
Accumulated deferred income taxes and taxes accrued		($1,882,237	)		($1,548,877	)		($1,175,900	)		($762,352	)		($171,618	)		($1,056,802	)		($740,283	)

The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2014 are as follows:

	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
Federal net operating losses		$1.3	billion		$151	million		$2.1	billion	—				$55	million	—				$392	million
Year(s) of expiration	2029-2034			2029-2032			2029-2034			N/A			2031-2034			N/A			2030-2032
State net operating losses		$235	million		$580	million		$3	billion	—				$24	million	—			—
Year(s) of expiration	2015-2028			2024-2027			2024-2029			N/A			2026-2029			N/A			N/A
Misc. federal credits		$1	million		$6	million		$13	million		$1	million	—			—				$10	million
Year(s) of expiration	2029-2033			2029-2033			2026-2033			2029-2033			N/A			N/A			2029-2033
State credits	—			—			—				$9.5	million	—				$3.4	million		$15.7	million
Year(s) of expiration	N/A			N/A			N/A			2015-2019			N/A			2026			2015-2019

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers and tax credit carryovers.

Unrecognized tax benefits

Accounting standards establish a “more-likely-than-not” recognition threshold that must be met before a tax benefit can be recognized in the financial statements.  If a tax deduction is taken on a tax return, but does not meet the more-likely-than-not recognition threshold, an increase in income tax liability, above what is payable on the tax return, is required to be recorded.  A reconciliation of Entergy’s beginning and ending amount of unrecognized tax benefits is as follows:

	2014			2013			2012
	(In Thousands)
Gross balance at January 1		$4,593,224			$4,170,403			$4,387,780
Additions based on tax positions related to the current year	348,543			162,338			163,612
Additions for tax positions of prior years	11,637			410,108			1,517,797
Reductions for tax positions of prior years	(213,401		)	(103,360		)	(476,873		)
Settlements	—			(43,620		)	(1,421,913		)
Lapse of statute of limitations	(3,218		)	(2,645		)	—
Gross balance at December 31	4,736,785			4,593,224			4,170,403
Offsets to gross unrecognized tax benefits:
Credit and loss carryovers	(4,295,643		)	(4,400,498		)	(4,022,535		)
Unrecognized tax benefits net of unused tax attributes and payments (a)		$441,142			$192,726			$147,868

(a) Potential tax liability above what is payable on tax returns

The balances of unrecognized tax benefits include $516 million, $176 million, and $203 million as of December 31, 2014, 2013, and 2012, respectively, which, if recognized, would lower the effective income tax rates.  Because of the effect of deferred tax accounting, the remaining balances of unrecognized tax benefits of $4.221 billion, $4.417 billion, and $3.968 billion as of December 31, 2014, 2013, and 2012, respectively, if disallowed, would not affect the annual effective income tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

Entergy accrues interest expense, if any, related to unrecognized tax benefits in income tax expense.  Entergy’s December 31, 2014, 2013, and 2012 accrued balance for the possible payment of interest is approximately $127 million, $96.4 million, and $146.3 million, respectively.

A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2014, 2013, and 2012 is as follows:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2014		$347,713			$465,075			$611,605			$16,186			$51,679			$13,017			$265,185
Additions based on tax positions related to the current year	14,511			55,053			96,196			3,928			2,235			4,225			2,744
Additions for tax positions of prior years	1,767			5,204			1,720			319			37			303			566
Reductions for tax positions of prior years	(1,079		)	(7,995		)	(20,929		)	(289		)	(188		)	(267		)	(10,253		)
Settlements	—			—			—			—			—			(14		)	—
Gross balance at December 31, 2014	362,912			517,337			688,592			20,144			53,763			17,264			258,242
Offsets to gross unrecognized tax benefits:
Loss carryovers	(361,043		)	(89,448		)	(650,540		)	(6,992		)	(20,735		)	(241		)	(163,124		)
Unrecognized tax benefits net of unused tax attributes and payments		$1,869			$427,889			$38,052			$13,152			$33,028			$17,023			$95,118

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2013		$344,669			$465,721			$536,673			$16,841			$52,018			$13,954			$260,346
Additions based on tax positions related to the current year	6,427			7,276			10,611			957			583			2,170			4,170
Additions for tax positions of prior years	1,228			7,189			118,025			401			3,506			587			8,391
Reductions for tax positions of prior years	(3,943		)	(15,045		)	(38,428		)	(1,941		)	(962		)	(4,186		)	(967		)
Settlements	(668		)	(66		)	(15,276		)	(72		)	(3,466		)	492			(6,755		)
Gross balance at December 31, 2013	347,713			465,075			611,605			16,186			51,679			13,017			265,185
Offsets to gross unrecognized tax benefits:
Loss carryovers	(345,674		)	(136,151		)	(611,605		)	(16,186		)	(22,078		)	(266		)	(225,286		)
Unrecognized tax benefits net of unused tax attributes and payments		$2,039			$328,924			$—			$—			$29,601			$12,751			$39,899

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2012		$335,493			$390,493			$446,187			$11,052			$56,052			$19,225			$281,183
Additions based on tax positions related to the current year	10,409			8,974			67,721			8,401			497			1,656			8,715
Additions for tax positions of prior years	429,232			392,548			331,432			4,057			445			4,834			271,172
Reductions for tax positions of prior years	(39,534		)	(50,518		)	(169,465		)	(5,703		)	(2,506		)	(11,649		)	(20,934		)
Settlements	(390,931		)	(275,776		)	(139,202		)	(966		)	(2,470		)	(112		)	(279,790		)
Gross balance at December 31, 2012	344,669			465,721			536,673			16,841			52,018			13,954			260,346
Offsets to gross unrecognized tax benefits:
Loss carryovers	(342,127		)	(160,955		)	(536,673		)	(16,841		)	(35,511		)	(1,593		)	(249,424		)
Unrecognized tax benefits net of unused tax attributes and payments		$2,542			$304,766			$—			$—			$16,507			$12,361			$10,922

The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:

	December 31,
	2014		2013		2012
	(In Millions)
Entergy Arkansas		$2.6		$0.6		$0.6
Entergy Gulf States Louisiana		$91.9		$44.0		$44.0
Entergy Louisiana		$175.4		$87.9		$92.4
Entergy Mississippi		$3.9		$3.9		$3.9
Entergy New Orleans		$50.7		$—		$—
Entergy Texas		$10.5		$10.1		$8.6
System Energy		$3.7		$3.3		$3.5

The Registrant Subsidiaries accrue interest and penalties related to unrecognized tax benefits in income tax expense.  Penalties have not been accrued.  Accrued balances for the possible payment of interest are as follows:

	December 31,
	2014		2013		2012
	(In Millions)
Entergy Arkansas		$17.0		$15.2		$21.8
Entergy Gulf States Louisiana		$21.0		$17.0		$33.1
Entergy Louisiana		$1.2		$1.0		$0.9
Entergy Mississippi		$2.8		$2.1		$2.4
Entergy New Orleans		$1.3		$0.9		$0.1
Entergy Texas		$1.0		$0.8		$0.7
System Energy		$23.8		$19.0		$33.2

Income Tax Litigation

In October 2010 the U.S. Tax Court entered a decision in favor of Entergy regarding the ability to credit the U.K. Windfall Tax against U.S. income tax as a foreign tax credit.  The U.K. Windfall Tax relates to Entergy’s former investment in London Electricity.

The IRS filed an appeal of the U.K. Windfall Tax decision with the U.S. Court of Appeals for the Fifth Circuit in December 2010.  Oral arguments were heard in November 2011.  In June 2012 the U.S. Court of Appeals for the Fifth Circuit unanimously affirmed the U.S. Tax Court decision.  As a result of this decision, Entergy reversed its liability for uncertain tax positions associated with this issue.  On September 4, 2012, the U.S. Solicitor General, on behalf of the Commissioner of Internal Revenue, petitioned the U.S. Supreme Court for a writ of certiorari to review the Fifth Circuit judgment.

Concurrent with the Tax Court’s issuance of a favorable decision regarding the above issues, the Tax Court issued a favorable decision in a separate proceeding, PPL Corp. v. Commissioner, regarding the creditability of the U.K. Windfall Tax.  The IRS appealed the PPL decision to the United States Court of Appeals for the Third Circuit.  In December 2011 the Third Circuit reversed the Tax Court’s holding in PPL Corp. v. Commissioner, stating that the U.K. tax was not eligible for the foreign tax credit.  PPL Corp. petitioned the U.S. Supreme Court for a writ of certiorari to review the U.S. Court of Appeals for the Third Circuit decision.  On October 29, 2012, the U.S. Supreme Court granted PPL Corp.’s petition for certiorari.  The Solicitor General’s petition for writ of certiorari in Entergy’s case was held pending the disposition of the PPL case.

    On May 20, 2013, the U.S. Supreme Court issued a unanimous decision in PPL’s favor, holding that the U.K. Windfall Tax is a creditable tax for U.S. federal income tax purposes. On May 28, 2013, the Supreme Court denied the petition for certiorari filed by the Commissioner of Internal Revenue in Entergy’s U.K. Windfall Tax case, allowing the decision in Entergy’s favor from the United States Court of Appeals for the Fifth Circuit to become final.

Income Tax Audits

Entergy and its subsidiaries file U.S. federal and various state and foreign income tax returns.  IRS examinations are substantially completed for years before 2009. All state taxing authorities’ examinations are completed for years before 2005.

2004-2005 IRS Audit

In June 2009, Entergy filed a formal protest with the IRS Appeals Division indicating disagreement with certain issues contained in the 2004-2005 Revenue Agent’s Report (RAR).  The most significant issue disputed was the inclusion of nuclear decommissioning liabilities in cost of goods sold for the nuclear power plants owned by the Utility resulting from an Application for Change in Accounting Method for tax purposes (the “2004 CAM”).

During the fourth quarter 2012, Entergy settled the position relating to the 2004 CAM.   Under the settlement Entergy conceded its tax position, resulting in an increase in taxable income of approximately $2.97 billion for the tax years 2004 - 2007.  The settlement provides that Entergy Louisiana is entitled to additional tax depreciation of approximately $547 million for years 2006 and beyond.  The deferred tax asset net of interest charges associated with the settlement is $155 million for Entergy.  There was a related increase to Entergy Louisiana’s member’s equity account.

2008-2009 IRS Audit

In the third quarter 2008, Entergy Louisiana and Entergy Gulf States Louisiana received $679 million and $274.7 million, respectively, from the Louisiana Utilities Restoration Corporation (“LURC”).  These receipts from LURC were from the proceeds of a Louisiana Act 55 financing of the costs incurred to restore service following Hurricane Katrina and Hurricane Rita.  See Note 2 to the financial statements for further details regarding the financings.

In June 2012, Entergy effectively settled the tax treatment of the storm restoration, which resulted in an increase to 2008 taxable income of $129 million for Entergy Louisiana and $104 million for Entergy Gulf States Louisiana and a reduction of income tax expense of $172 million, including $143 million for Entergy Louisiana and $20 million for Entergy Gulf States Louisiana. Under the terms of an LPSC-approved settlement related to the Louisiana Act 55 financings, Entergy Louisiana and Entergy Gulf States Louisiana recorded, respectively, a $137 million ($84 million net-of-tax) and a $28 million ($17 million net-of-tax) regulatory charge and a corresponding regulatory liability to reflect their obligations to customers with respect to the settlement.  

In the fourth quarter 2009, Entergy filed Applications for Change in Accounting Method (the “2009 CAM”) for tax purposes with the IRS for certain costs under Section 263A of the Internal Revenue Code.  In the Applications, Entergy proposed to treat the nuclear decommissioning liability associated with the operation of its nuclear power plants as a production cost properly includable in cost of goods sold.  The effect of the 2009 CAM  was a $5.7 billion reduction in 2009 taxable income.  The 2009 CAM was adjusted to $9.3 billion in 2012.

In the fourth quarter 2012 the IRS disallowed the reduction to 2009 taxable income related to the 2009 CAM.  In the third quarter 2013, the Internal Revenue Service issued its RAR for the tax years 2008-2009. As a result of the issuance of this RAR, Entergy and the IRS resolved all of the 2008-2009 issues described above except for the 2009 CAM. Entergy disagrees with the IRS’s disallowance of the 2009 CAM and filed a protest with the IRS Appeals Division on October 24, 2013. Two conferences with the Appeals Division have taken place during 2014. The resolution of this issue is in process. The issuance of the RAR by the IRS effectively settled all other issues, which resulted in an adjustment to the provision for uncertain tax positions.

Other Tax Matters

Entergy regularly negotiates with the IRS to achieve settlements.  The resolution of the nuclear decommissioning liability audit issue, discussed above, could result in significant changes to the amounts of unrecognized tax benefits in the next twelve months.

In September 2013 the U.S. Treasury Department and the IRS issued final regulations that provide guidance on the deductibility and capitalization of costs incurred associated with tangible property. Entergy and the Registrant Subsidiaries filed with the IRS an automatic application for change in accounting method which is in compliance with the final regulations and the safe harbor provisions of the relevant IRS Revenue Procedures. Entergy estimates that the effect of this accounting method change will result in a net increase to Entergy’s taxable income of approximately $548 million, which will be recognized over a four year period beginning with the tax year ended 2014. The adoption of the final regulations and safe harbor method results in approximate changes in the Registrant Subsidiaries taxable income as follows: an increase of $157 million for Entergy Arkansas, an increase of $42 million for Entergy Gulf States Louisiana, an increase of $49 million for Entergy Louisiana, an increase of $23 million for Entergy Mississippi, an increase of $169 million for Entergy Texas, a decrease of $11 million for Entergy New Orleans, and an increase of $34 million for System Energy.

In March 2013, Entergy Louisiana distributed to its parent, Entergy Louisiana Holdings, Inc., Louisiana income tax credits of $20.6 million, which resulted in a decrease in Entergy Louisiana’s member’s equity account.

The Tax Increase Prevention Act of 2014 was enacted in December 2014. The most significant provisions affecting Entergy and the Registrant Subsidiaries were a one-year extension of 50% bonus depreciation and the research and experimentation tax credit. These provisions do not result in an immediate cash flow benefit but will result in cash flow benefits for Entergy in a future period.

System Energy [Member]

Income Taxes

INCOME TAXES (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Income taxes from continuing operations for 2014, 2013, and 2012 for Entergy Corporation and Subsidiaries consist of the following:

	2014			2013			2012
	(In Thousands)
Current:
Federal		$90,061			$88,291			($47,851	)
Foreign	90			101			143
State	(12,637		)	20,584			(41,516		)
Total	77,514			108,976			(89,224		)
Deferred and non-current - net	528,326			126,935			131,130
Investment tax credit adjustments - net	(16,243		)	(9,930		)	(11,051		)
Income tax expense from continuing operations		$589,597			$225,981			$30,855

Income taxes for 2014, 2013, and 2012 for Entergy’s Registrant Subsidiaries consist of the following:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		($34,258	)		($3,857	)		($41,052	)		$8,103			($1,924	)		$48,610			$19,908
State	(678		)	(769		)	(422		)	7,474			520			4,877			15,379
Total	(34,936		)	(4,626		)	(41,474		)	15,577			(1,404		)	53,487			35,287
Deferred and non-current - net	119,841			96,446			140,348			42,305			13,952			(2,418		)	53,501
Investment tax credit adjustments - net	(1,276		)	(3,038		)	(2,604		)	(2,172		)	(224		)	(1,425		)	(5,478		)
Income taxes		$83,629			$88,782			$96,270			$55,710			$12,324			$49,644			$83,310

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi		Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		($13,574	)		$12,176			($30,973	)		$2,498		$15,017			$37,199			($6,199	)
State	6,122			(9,939		)	(5,692		)	4,849		(1,221		)	(843		)	15,845
Total	(7,452		)	2,237			(36,665		)	7,347		13,796			36,356			9,646
Deferred and non-current - net	101,253			57,620			121,416			41,150		(11,952		)	(4,639		)	60,614
Investment tax credit adjustments - net	(2,014		)	(3,038		)	(2,874		)	1,260		(225		)	(1,609		)	(1,407		)
Income taxes		$91,787			$56,819			$81,877			$49,757		$1,619			$30,108			$68,853

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Current:
Federal		$64,069			($66,081	)		($132,999	)		$3,188			($9,484	)		($114,677	)		($50,491	)
State	6,712			9,535			(1,269		)	(4,425		)	(1,617		)	4,933			(8,544		)
Total	70,781			(56,546		)	(134,268		)	(1,237		)	(11,101		)	(109,744		)	(59,035		)
Deferred and non-current - net	26,042			112,390			8,463			59,045			18,586			144,471			137,832
Investment tax credit adjustments - net	(2,017		)	(3,228		)	(3,117		)	871			(245		)	(1,609		)	(1,682		)
Income taxes		$94,806			$52,616			($128,922	)		$58,679			$7,240			$33,118			$77,115

Total income taxes for Entergy Corporation and Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before income taxes.  The reasons for the differences for the years 2014, 2013, and 2012 are:

	2014			2013			2012
	(In Thousands)
Net income attributable to Entergy Corporation		$940,721			$711,902			$846,673
Preferred dividend requirements of subsidiaries	19,536			18,670			21,690
Consolidated net income	960,257			730,572			868,363
Income taxes	589,597			225,981			30,855
Income before income taxes		$1,549,854			$956,553			$899,218
Computed at statutory rate (35%)		$542,449			$334,794			$314,726
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	44,708			13,599			40,699
Regulatory differences - utility plant items	39,321			32,324			35,527
Equity component of AFUDC	(21,108		)	(22,356		)	(30,838		)
Amortization of investment tax credits	(12,211		)	(13,535		)	(14,000		)
Flow-through / permanent differences	(18,003		)	(301		)	(14,801		)
Net-of-tax regulatory liability	—			(2,899		)	(4,356		)
New York tax law change	(21,500		)	—			—
Deferred tax asset on additional depreciation (a)	—			—			(155,300		)
Termination of business reorganization	—			(27,192		)	—
Write-off of regulatory asset for income taxes	—			—			42,159
Capital losses	—			—			(20,188		)
Provision for uncertain tax positions (b)	32,573			(59,249		)	(159,957		)
Valuation allowance	—			(31,573		)	—
Other - net	3,368			2,369			(2,816		)
Total income taxes as reported		$589,597			$225,981			$30,855
Effective Income Tax Rate	38.0		%	23.6		%	3.4		%

(a) See “Income Tax Audits- 2004-2005 IRS Audit” below for discussion of this item.

(b) See “Income Tax Audits- 2008-2009 IRS Audit” below for discussion of the most significant items in 2013 and 2012.

In March 2014, New York enacted legislation that substantially modifies various aspects of New York tax law. The most significant effect of the legislation for Entergy is the adoption of full water's-edge unitary combined reporting, meaning that all of Entergy's domestic entities will be included in New York's combined filing group. The effect of the tax law change resulted in a deferred state income tax reduction of approximately $21.5 million as shown in the table above.

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 2014, 2013, and 2012 are:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$121,392			$162,491			$283,531			$74,821			$28,707			$74,804			$96,334
Income taxes	83,629			88,782			96,270			55,710			12,324			49,644			83,310
Pretax income		$205,021			$251,273			$379,801			$130,531			$41,031			$124,448			$179,644
Computed at statutory rate (35%)		$71,757			$87,946			$132,930			$45,686			$14,361			$43,557			$62,875
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	9,591			6,532			5,134			5,180			1,643			3,221			6,877
Regulatory differences - utility plant items	8,653			4,618			2,869			4,448			777			4,165			13,791
Equity component of AFUDC	(2,533		)	(2,602		)	(12,010		)	(833		)	(320		)	(1,035		)	(1,774		)
Amortization of investment tax credits	(1,251		)	(3,018		)	(2,576		)	(260		)	(218		)	(1,412		)	(3,476		)
Flow-through / permanent differences	(5,082		)	799			(1,024		)	555			(4,458		)	393			(327		)
Non-taxable dividend income	—			(10,590		)	(30,665		)	—			—			—			—
Provision for uncertain tax positions	1,881			4,108			1,228			718			405			522			5,235
Other - net	613			989			384			216			134			233			109
Total income taxes		$83,629			$88,782			$96,270			$55,710			$12,324			$49,644			$83,310
Effective Income Tax Rate	40.8		%	35.3		%	25.3		%	42.7		%	30.0		%	39.9		%	46.4		%

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$161,948			$161,662			$252,464			$82,159			$11,683			$57,881			$113,664
Income taxes	91,787			56,819			81,877			49,757			1,619			30,108			68,853
Pretax income		$253,735			$218,481			$334,341			$131,916			$13,302			$87,989			$182,517
Computed at statutory rate (35%)		$88,807			$76,468			$117,019			$46,171			$4,656			$30,796			$63,881
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	10,954			7,719			11,365			4,564			1,012			(897		)	5,900
Regulatory differences - utility plant items	7,938			4,865			2,140			2,603			453			3,256			11,070
Equity component of AFUDC	(3,820		)	(2,822		)	(10,278		)	(764		)	(322		)	(1,626		)	(2,724		)
Amortization of investment tax credits	(1,989		)	(3,018		)	(2,846		)	(260		)	(216		)	(1,596		)	(3,476		)
Flow-through / permanent differences	2,540			2,377			1,269			1,702			(4,402		)	2,467			(491		)
Net-of-tax regulatory liability	—			—			(2,899		)	—			—			—			—
Termination of business reorganization	(6,753		)	(3,619		)	(3,834		)	(4,177		)	(501		)	(3,542		)	(13		)
Non-taxable dividend income	—			(9,612		)	(27,341		)	—			—			—			—
Provision for uncertain tax positions	(6,527		)	(15,557		)	(3,088		)	(326		)	795			1,027			(5,353		)
Other - net	637			18			370			244			144			223			59
Total income taxes		$91,787			$56,819			$81,877			$49,757			$1,619			$30,108			$68,853
Effective Income Tax Rate	36.2		%	26.0		%	24.5		%	37.7		%	12.2		%	34.2		%	37.7		%

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Net income		$152,365			$158,977			$281,081			$46,768			$17,065			$41,971			$111,866
Income taxes (benefit)	94,806			52,616			(128,922		)	58,679			7,240			33,118			77,115
Pretax income		$247,171			$211,593			$152,159			$105,447			$24,305			$75,089			$188,981
Computed at statutory rate (35%)		$86,510			$74,058			$53,256			$36,906			$8,507			$26,281			$66,143
Increases (reductions) resulting from:
State income taxes net of federal income tax effect	11,282			5,087			1,976			3,944			505			3,115			6,652
Regulatory differences - utility plant items	6,778			8,472			312			2,619			2,289			3,668			11,389
Equity component of AFUDC	(2,495		)	(3,042		)	(12,919		)	(1,383		)	(276		)	(1,587		)	(9,136		)
Amortization of investment tax credits	(1,992		)	(3,204		)	(3,089		)	(264		)	(240		)	(1,596		)	(3,480		)
Net-of-tax regulatory liability	—			—			(4,356		)	—			—			—			—
Flow-through / permanent differences	3,427			(7,646		)	1,397			1,961			(4,385		)	1,585			(357		)
Non-taxable dividend income	—			(9,836		)	(27,336		)	—			—			—			—
Expense (benefit) of Entergy Corporation expenses	(19,403		)	(17,703		)	—			14,449			2,758			—			(10,241		)
Provision for uncertain tax positions	11,227			8,745			(143,583		)	870			(2,095		)	1,651			17,966
Change in regulatory recovery	—			(553		)	7,854			—			—			—			—
Other - net	(528		)	(1,762		)	(2,434		)	(423		)	177			1			(1,821		)
Total income taxes		$94,806			$52,616			($128,922	)		$58,679			$7,240			$33,118			$77,115
Effective Income Tax Rate	38.4		%	24.9		%	(84.7		%)	55.6		%	29.8		%	44.1		%	40.8		%

Significant components of accumulated deferred income taxes and taxes accrued for Entergy Corporation and Subsidiaries as of December 31, 2014 and 2013 are as follows:

	2014			2013
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($8,128,096	)		($7,941,319	)
Regulatory assets	(922,161		)	(922,312		)
Nuclear decommissioning trusts	(1,248,737		)	(1,100,439		)
Pension, net funding	(324,881		)	(299,951		)
Combined unitary state taxes	(162,340		)	(183,934		)
Power purchase agreements	(110,889		)	(8,096		)
Other	(500,424		)	(404,749		)
Total	(11,397,528		)	(10,860,800		)
Deferred tax assets:
Nuclear decommissioning liabilities	874,493			754,828
Regulatory liabilities	458,230			403,370
Pension and other post-employment benefits	586,455			469,190
Sale and leaseback	153,308			176,119
Compensation	74,692			125,552
Accumulated deferred investment tax credit	100,442			106,777
Provision for allowances and contingencies	160,551			66,026
Net operating loss carryforwards	457,758			548,756
Capital losses and miscellaneous tax credits	12,146			13,140
Valuation allowance	(27,387		)	(28,146		)
Other	58,334			109,606
Total	2,909,022			2,745,218
Noncurrent accrued taxes (including unrecognized tax benefits)	(606,560		)	(400,276		)
Accumulated deferred income taxes and taxes accrued		($9,095,066	)		($8,515,858	)

Entergy’s estimated tax attributes carryovers and their expiration dates as of December 31, 2014 are as follows:

Carryover Description	Carryover Amount	Year(s) of expiration
Federal net operating losses	$12.3 billion	2023-2034
State net operating losses	$10.2 billion	2015-2033
Miscellaneous federal and state credits	$97.6 million	2015-2034

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers, tax credit carryovers, and other tax attributes reflected on income tax returns. Because it is more likely than not that the benefit from certain state net operating loss carryovers will not be utilized, a valuation allowance of $21.2 million has been provided on the deferred tax assets relating to these state net operating loss carryovers.

In the third quarter 2013, Entergy reduced a valuation allowance by $44 million ($28 million net of the federal income tax effect) that had been provided on a state net operating loss carryover due to the prospective utilization of such loss carryover.

Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2014 and 2013 are as follows:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($1,657,503	)		($1,233,761	)		($1,515,091	)		($753,576	)		($186,153	)		($771,135	)		($668,779	)
Regulatory assets	(198,662		)	(106,287		)	(274,432		)	(30,114		)	—			(202,402		)	(110,087		)
Nuclear decommissioning trusts	(130,524		)	(43,611		)	(62,551		)	—			—			—			(74,063		)
Pension, net funding	(93,355		)	(46,403		)	(53,190		)	(27,861		)	(13,285		)	(25,616		)	(23,440		)
Deferred fuel	(82,050		)	(3,034		)	(500		)	(5,303		)	(407		)	2,045			(120		)
Power purchase agreements	(17,073		)	(67,083		)	—			2,129			13			847			—
Other	(33,827		)	(8,850		)	(75,432		)	(11,423		)	(11,500		)	(22,546		)	(19,802		)
Total	(2,212,994		)	(1,509,029		)	(1,981,196		)	(826,148		)	(211,332		)	(1,018,807		)	(896,291		)
Deferred tax assets:
Regulatory liabilities	145,466			70,068			111,533			7,214			29,580			4,079			90,290
Nuclear decommissioning liabilities	(43,134		)	48,815			97,323			—			—			—			(62,571		)
Pension and other post-employment benefits	(17,534		)	88,606			70,055			(7,288		)	(7,504		)	(15,053		)	(1,413		)
Sale and leaseback	—			—			45,136			—			—			—			108,172
Accumulated deferred investment tax credit	14,791			33,941			24,922			2,436			332			5,158			18,862
Provision for allowances and contingencies	(7,149		)	43,512			82,293			19,590			10,986			8,017			133
Unbilled/deferred revenues	12,322			(18,553		)	(6,463		)	12,956			3,395			11,573			—
Compensation	2,085			641			(483		)	(846		)	475			4,155			—
Net operating loss carryforwards	105,063			—			241,803			—			—			—			—
Capital losses and miscellaneous tax credits	—			—			—			3,504			—			—			—
Other	258			8,102			7,406			5,887			2,891			3,850			2,000
Total	212,168			275,132			673,525			43,453			40,155			21,779			155,473
Noncurrent accrued taxes (including unrecognized tax benefits)	9,367			(388,230		)	(24,278		)	(12,481		)	(19,502		)	(48,921		)	(81,528		)
Accumulated deferred income taxes and taxes accrued		($1,991,459	)		($1,622,127	)		($1,331,949	)		($795,176	)		($190,679	)		($1,045,949	)		($822,346	)

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net		($1,613,195	)		($1,259,173	)		($1,347,534	)		($727,545	)		($196,726	)		($759,263	)		($698,151	)
Regulatory assets	(212,339		)	(102,362		)	(255,068		)	(33,277		)	—			(205,402		)	(113,849		)
Nuclear decommissioning trusts	(110,004		)	(32,574		)	(50,248		)	—			—			—			(58,308		)
Pension, net funding	(79,589		)	(45,342		)	(50,630		)	(24,392		)	(11,606		)	(23,598		)	(21,187		)
Deferred fuel	(26,946		)	(4,361		)	(512		)	(21,823		)	63			(470		)	(129		)
Power purchase agreements	(7,053		)	(20,234		)	—			—			13			1,269			—
Other	(62,046		)	(25,694		)	(69,194		)	(10,732		)	(13,446		)	(58,963		)	(8,969		)
Total	(2,111,172		)	(1,489,740		)	(1,773,186		)	(817,769		)	(221,702		)	(1,046,427		)	(900,593		)
Deferred tax assets:
Regulatory liabilities	120,966			60,176			94,019			8,357			35,764			7,952			76,135
Nuclear decommissioning liabilities	(64,571		)	49,439			92,206			—			—			—			(71,898		)
Pension and other post-employment benefits	(12,132		)	73,136			62,999			(1,345		)	1,532			(13,417		)	(2,073		)
Sale and leaseback	—			—			52,054			—			—			—			124,065
Accumulated deferred investment tax credit	15,281			35,297			25,913			3,263			416			5,651			20,956
Provision for allowances and contingencies	12,313			14,784			3,347			13,066			8,535			5,980			—
Unbilled/deferred revenues	37,825			(22,340		)	3,026			6,791			4,226			10,655			—
Compensation	7,131			4,701			3,470			1,778			1,696			6,774			822
Net operating loss carryforwards	85,875			—			230,592			19,400			—			—			—
Capital losses and miscellaneous tax credits	—			—			—			6,173			—			—			—
Other	3,682			4,939			4,148			4,224			2,930			3,807			2,001
Total	206,370			220,132			571,774			61,707			55,099			27,402			150,008
Noncurrent accrued taxes (including unrecognized tax benefits)	22,565			(279,269		)	25,512			(6,290		)	(5,015		)	(37,777		)	10,302
Accumulated deferred income taxes and taxes accrued		($1,882,237	)		($1,548,877	)		($1,175,900	)		($762,352	)		($171,618	)		($1,056,802	)		($740,283	)

The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2014 are as follows:

	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
Federal net operating losses		$1.3	billion		$151	million		$2.1	billion	—				$55	million	—				$392	million
Year(s) of expiration	2029-2034			2029-2032			2029-2034			N/A			2031-2034			N/A			2030-2032
State net operating losses		$235	million		$580	million		$3	billion	—				$24	million	—			—
Year(s) of expiration	2015-2028			2024-2027			2024-2029			N/A			2026-2029			N/A			N/A
Misc. federal credits		$1	million		$6	million		$13	million		$1	million	—			—				$10	million
Year(s) of expiration	2029-2033			2029-2033			2026-2033			2029-2033			N/A			N/A			2029-2033
State credits	—			—			—				$9.5	million	—				$3.4	million		$15.7	million
Year(s) of expiration	N/A			N/A			N/A			2015-2019			N/A			2026			2015-2019

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers and tax credit carryovers.

Unrecognized tax benefits

Accounting standards establish a “more-likely-than-not” recognition threshold that must be met before a tax benefit can be recognized in the financial statements.  If a tax deduction is taken on a tax return, but does not meet the more-likely-than-not recognition threshold, an increase in income tax liability, above what is payable on the tax return, is required to be recorded.  A reconciliation of Entergy’s beginning and ending amount of unrecognized tax benefits is as follows:

	2014			2013			2012
	(In Thousands)
Gross balance at January 1		$4,593,224			$4,170,403			$4,387,780
Additions based on tax positions related to the current year	348,543			162,338			163,612
Additions for tax positions of prior years	11,637			410,108			1,517,797
Reductions for tax positions of prior years	(213,401		)	(103,360		)	(476,873		)
Settlements	—			(43,620		)	(1,421,913		)
Lapse of statute of limitations	(3,218		)	(2,645		)	—
Gross balance at December 31	4,736,785			4,593,224			4,170,403
Offsets to gross unrecognized tax benefits:
Credit and loss carryovers	(4,295,643		)	(4,400,498		)	(4,022,535		)
Unrecognized tax benefits net of unused tax attributes and payments (a)		$441,142			$192,726			$147,868

(a) Potential tax liability above what is payable on tax returns

The balances of unrecognized tax benefits include $516 million, $176 million, and $203 million as of December 31, 2014, 2013, and 2012, respectively, which, if recognized, would lower the effective income tax rates.  Because of the effect of deferred tax accounting, the remaining balances of unrecognized tax benefits of $4.221 billion, $4.417 billion, and $3.968 billion as of December 31, 2014, 2013, and 2012, respectively, if disallowed, would not affect the annual effective income tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

Entergy accrues interest expense, if any, related to unrecognized tax benefits in income tax expense.  Entergy’s December 31, 2014, 2013, and 2012 accrued balance for the possible payment of interest is approximately $127 million, $96.4 million, and $146.3 million, respectively.

A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2014, 2013, and 2012 is as follows:

2014	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2014		$347,713			$465,075			$611,605			$16,186			$51,679			$13,017			$265,185
Additions based on tax positions related to the current year	14,511			55,053			96,196			3,928			2,235			4,225			2,744
Additions for tax positions of prior years	1,767			5,204			1,720			319			37			303			566
Reductions for tax positions of prior years	(1,079		)	(7,995		)	(20,929		)	(289		)	(188		)	(267		)	(10,253		)
Settlements	—			—			—			—			—			(14		)	—
Gross balance at December 31, 2014	362,912			517,337			688,592			20,144			53,763			17,264			258,242
Offsets to gross unrecognized tax benefits:
Loss carryovers	(361,043		)	(89,448		)	(650,540		)	(6,992		)	(20,735		)	(241		)	(163,124		)
Unrecognized tax benefits net of unused tax attributes and payments		$1,869			$427,889			$38,052			$13,152			$33,028			$17,023			$95,118

2013	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2013		$344,669			$465,721			$536,673			$16,841			$52,018			$13,954			$260,346
Additions based on tax positions related to the current year	6,427			7,276			10,611			957			583			2,170			4,170
Additions for tax positions of prior years	1,228			7,189			118,025			401			3,506			587			8,391
Reductions for tax positions of prior years	(3,943		)	(15,045		)	(38,428		)	(1,941		)	(962		)	(4,186		)	(967		)
Settlements	(668		)	(66		)	(15,276		)	(72		)	(3,466		)	492			(6,755		)
Gross balance at December 31, 2013	347,713			465,075			611,605			16,186			51,679			13,017			265,185
Offsets to gross unrecognized tax benefits:
Loss carryovers	(345,674		)	(136,151		)	(611,605		)	(16,186		)	(22,078		)	(266		)	(225,286		)
Unrecognized tax benefits net of unused tax attributes and payments		$2,039			$328,924			$—			$—			$29,601			$12,751			$39,899

2012	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Gross balance at January 1, 2012		$335,493			$390,493			$446,187			$11,052			$56,052			$19,225			$281,183
Additions based on tax positions related to the current year	10,409			8,974			67,721			8,401			497			1,656			8,715
Additions for tax positions of prior years	429,232			392,548			331,432			4,057			445			4,834			271,172
Reductions for tax positions of prior years	(39,534		)	(50,518		)	(169,465		)	(5,703		)	(2,506		)	(11,649		)	(20,934		)
Settlements	(390,931		)	(275,776		)	(139,202		)	(966		)	(2,470		)	(112		)	(279,790		)
Gross balance at December 31, 2012	344,669			465,721			536,673			16,841			52,018			13,954			260,346
Offsets to gross unrecognized tax benefits:
Loss carryovers	(342,127		)	(160,955		)	(536,673		)	(16,841		)	(35,511		)	(1,593		)	(249,424		)
Unrecognized tax benefits net of unused tax attributes and payments		$2,542			$304,766			$—			$—			$16,507			$12,361			$10,922

The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:

	December 31,
	2014		2013		2012
	(In Millions)
Entergy Arkansas		$2.6		$0.6		$0.6
Entergy Gulf States Louisiana		$91.9		$44.0		$44.0
Entergy Louisiana		$175.4		$87.9		$92.4
Entergy Mississippi		$3.9		$3.9		$3.9
Entergy New Orleans		$50.7		$—		$—
Entergy Texas		$10.5		$10.1		$8.6
System Energy		$3.7		$3.3		$3.5

The Registrant Subsidiaries accrue interest and penalties related to unrecognized tax benefits in income tax expense.  Penalties have not been accrued.  Accrued balances for the possible payment of interest are as follows:

	December 31,
	2014		2013		2012
	(In Millions)
Entergy Arkansas		$17.0		$15.2		$21.8
Entergy Gulf States Louisiana		$21.0		$17.0		$33.1
Entergy Louisiana		$1.2		$1.0		$0.9
Entergy Mississippi		$2.8		$2.1		$2.4
Entergy New Orleans		$1.3		$0.9		$0.1
Entergy Texas		$1.0		$0.8		$0.7
System Energy		$23.8		$19.0		$33.2

Income Tax Litigation

In October 2010 the U.S. Tax Court entered a decision in favor of Entergy regarding the ability to credit the U.K. Windfall Tax against U.S. income tax as a foreign tax credit.  The U.K. Windfall Tax relates to Entergy’s former investment in London Electricity.

The IRS filed an appeal of the U.K. Windfall Tax decision with the U.S. Court of Appeals for the Fifth Circuit in December 2010.  Oral arguments were heard in November 2011.  In June 2012 the U.S. Court of Appeals for the Fifth Circuit unanimously affirmed the U.S. Tax Court decision.  As a result of this decision, Entergy reversed its liability for uncertain tax positions associated with this issue.  On September 4, 2012, the U.S. Solicitor General, on behalf of the Commissioner of Internal Revenue, petitioned the U.S. Supreme Court for a writ of certiorari to review the Fifth Circuit judgment.

Concurrent with the Tax Court’s issuance of a favorable decision regarding the above issues, the Tax Court issued a favorable decision in a separate proceeding, PPL Corp. v. Commissioner, regarding the creditability of the U.K. Windfall Tax.  The IRS appealed the PPL decision to the United States Court of Appeals for the Third Circuit.  In December 2011 the Third Circuit reversed the Tax Court’s holding in PPL Corp. v. Commissioner, stating that the U.K. tax was not eligible for the foreign tax credit.  PPL Corp. petitioned the U.S. Supreme Court for a writ of certiorari to review the U.S. Court of Appeals for the Third Circuit decision.  On October 29, 2012, the U.S. Supreme Court granted PPL Corp.’s petition for certiorari.  The Solicitor General’s petition for writ of certiorari in Entergy’s case was held pending the disposition of the PPL case.

    On May 20, 2013, the U.S. Supreme Court issued a unanimous decision in PPL’s favor, holding that the U.K. Windfall Tax is a creditable tax for U.S. federal income tax purposes. On May 28, 2013, the Supreme Court denied the petition for certiorari filed by the Commissioner of Internal Revenue in Entergy’s U.K. Windfall Tax case, allowing the decision in Entergy’s favor from the United States Court of Appeals for the Fifth Circuit to become final.

Income Tax Audits

Entergy and its subsidiaries file U.S. federal and various state and foreign income tax returns.  IRS examinations are substantially completed for years before 2009. All state taxing authorities’ examinations are completed for years before 2005.

2004-2005 IRS Audit

In June 2009, Entergy filed a formal protest with the IRS Appeals Division indicating disagreement with certain issues contained in the 2004-2005 Revenue Agent’s Report (RAR).  The most significant issue disputed was the inclusion of nuclear decommissioning liabilities in cost of goods sold for the nuclear power plants owned by the Utility resulting from an Application for Change in Accounting Method for tax purposes (the “2004 CAM”).

During the fourth quarter 2012, Entergy settled the position relating to the 2004 CAM.   Under the settlement Entergy conceded its tax position, resulting in an increase in taxable income of approximately $2.97 billion for the tax years 2004 - 2007.  The settlement provides that Entergy Louisiana is entitled to additional tax depreciation of approximately $547 million for years 2006 and beyond.  The deferred tax asset net of interest charges associated with the settlement is $155 million for Entergy.  There was a related increase to Entergy Louisiana’s member’s equity account.

2008-2009 IRS Audit

In the third quarter 2008, Entergy Louisiana and Entergy Gulf States Louisiana received $679 million and $274.7 million, respectively, from the Louisiana Utilities Restoration Corporation (“LURC”).  These receipts from LURC were from the proceeds of a Louisiana Act 55 financing of the costs incurred to restore service following Hurricane Katrina and Hurricane Rita.  See Note 2 to the financial statements for further details regarding the financings.

In June 2012, Entergy effectively settled the tax treatment of the storm restoration, which resulted in an increase to 2008 taxable income of $129 million for Entergy Louisiana and $104 million for Entergy Gulf States Louisiana and a reduction of income tax expense of $172 million, including $143 million for Entergy Louisiana and $20 million for Entergy Gulf States Louisiana. Under the terms of an LPSC-approved settlement related to the Louisiana Act 55 financings, Entergy Louisiana and Entergy Gulf States Louisiana recorded, respectively, a $137 million ($84 million net-of-tax) and a $28 million ($17 million net-of-tax) regulatory charge and a corresponding regulatory liability to reflect their obligations to customers with respect to the settlement.  

In the fourth quarter 2009, Entergy filed Applications for Change in Accounting Method (the “2009 CAM”) for tax purposes with the IRS for certain costs under Section 263A of the Internal Revenue Code.  In the Applications, Entergy proposed to treat the nuclear decommissioning liability associated with the operation of its nuclear power plants as a production cost properly includable in cost of goods sold.  The effect of the 2009 CAM  was a $5.7 billion reduction in 2009 taxable income.  The 2009 CAM was adjusted to $9.3 billion in 2012.

In the fourth quarter 2012 the IRS disallowed the reduction to 2009 taxable income related to the 2009 CAM.  In the third quarter 2013, the Internal Revenue Service issued its RAR for the tax years 2008-2009. As a result of the issuance of this RAR, Entergy and the IRS resolved all of the 2008-2009 issues described above except for the 2009 CAM. Entergy disagrees with the IRS’s disallowance of the 2009 CAM and filed a protest with the IRS Appeals Division on October 24, 2013. Two conferences with the Appeals Division have taken place during 2014. The resolution of this issue is in process. The issuance of the RAR by the IRS effectively settled all other issues, which resulted in an adjustment to the provision for uncertain tax positions.

Other Tax Matters

Entergy regularly negotiates with the IRS to achieve settlements.  The resolution of the nuclear decommissioning liability audit issue, discussed above, could result in significant changes to the amounts of unrecognized tax benefits in the next twelve months.

In September 2013 the U.S. Treasury Department and the IRS issued final regulations that provide guidance on the deductibility and capitalization of costs incurred associated with tangible property. Entergy and the Registrant Subsidiaries filed with the IRS an automatic application for change in accounting method which is in compliance with the final regulations and the safe harbor provisions of the relevant IRS Revenue Procedures. Entergy estimates that the effect of this accounting method change will result in a net increase to Entergy’s taxable income of approximately $548 million, which will be recognized over a four year period beginning with the tax year ended 2014. The adoption of the final regulations and safe harbor method results in approximate changes in the Registrant Subsidiaries taxable income as follows: an increase of $157 million for Entergy Arkansas, an increase of $42 million for Entergy Gulf States Louisiana, an increase of $49 million for Entergy Louisiana, an increase of $23 million for Entergy Mississippi, an increase of $169 million for Entergy Texas, a decrease of $11 million for Entergy New Orleans, and an increase of $34 million for System Energy.

In March 2013, Entergy Louisiana distributed to its parent, Entergy Louisiana Holdings, Inc., Louisiana income tax credits of $20.6 million, which resulted in a decrease in Entergy Louisiana’s member’s equity account.

The Tax Increase Prevention Act of 2014 was enacted in December 2014. The most significant provisions affecting Entergy and the Registrant Subsidiaries were a one-year extension of 50% bonus depreciation and the research and experimentation tax credit. These provisions do not result in an immediate cash flow benefit but will result in cash flow benefits for Entergy in a future period.