Income Taxes (Table)

12 Months Ended

Sep. 30, 2018

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense from continuing operations for 2018, 2017 and 2016 were as follows:



	2018			2017		2016
	(In thousands)
Current
Federal	$	(10,099	)	$	—	$	—
State	11,075			9,022		5,667
Deferred
Federal	150,556			197,013		178,630
State	15,330			15,348		12,350
TCJA Impact	(158,782		)	—		—
Investment tax credits	—			—		(5		)
	$	8,080		$	221,383	$	196,642

Schedule of Effective Income Tax Rate Reconciliation

Reconciliations of the provision for income taxes computed at the statutory rate to the reported provisions for income taxes from continuing operations for 2018, 2017 and 2016 are set forth below:



	2018			2017			2016
	(In thousands)
Tax at statutory rate⁽¹⁾	$	149,730		$	211,433		$	189,764
Common stock dividends deductible for tax reporting	(1,745		)	(2,584		)	(2,570		)
State taxes (net of federal benefit)	19,826			16,100			11,133
Change in valuation allowance	—			—			1,324
Amortization of excess deferred taxes	(1,219		)	—			—
Remeasurement due to TCJA	(158,782		)	—			—
Other, net	270			(3,566		)	(3,009		)
Income tax expense	$	8,080		$	221,383		$	196,642


(1)	Tax expense is calculated at the statutory federal income tax rate of 24.5% for the year ended September 30, 2018 and 35% for the years ended September 30, 2017 and 2016.

Schedule of Deferred Tax Assets and Liabilities

The tax effect of temporary differences that gave rise to significant components of the deferred tax liabilities and deferred tax assets at September 30, 2018 and 2017 are presented below:



	2018			2017
	(In thousands)
Deferred tax assets:
Employee benefit plans	$	72,745		$	121,288
Interest rate agreements	27,135			65,171
Net operating loss carryforwards	461,481			555,043
Charitable and other credit carryforwards	6,818			18,873
Regulatory excess deferred tax	169,947			—
Other	13,804			10,218
Total deferred tax assets	751,930			770,593
Valuation allowance	(1,465		)	(5,403		)
Net deferred tax assets	750,465			765,190
Deferred tax liabilities:
Difference in net book value and net tax value of assets	(1,859,787		)	(2,528,485		)
Pension funding	(6,986		)	(13,101		)
Gas cost adjustments	1,005			(60,376		)
Other	(38,764		)	(41,927		)
Total deferred tax liabilities	(1,904,532		)	(2,643,889		)
Net deferred tax liabilities	$	(1,154,067	)	$	(1,878,699	)
Deferred credits for rate regulated entities	$	762		$	985

Schedule of Unrecognized Tax Benefits Roll Forward

The following table reconciles the beginning and ending balance of our unrecognized tax benefits:



	2018			2017			2016
	(In thousands)
Unrecognized tax benefits - beginning balance	$	23,719		$	20,298		$	17,069
Increase (decrease) resulting from prior period tax positions	22			(366		)	(290		)
Increase resulting from current period tax positions	2,462			3,787			3,519
Unrecognized tax benefits - ending balance	26,203			23,719			20,298
Less: deferred federal and state income tax benefits	(5,503		)	(8,302		)	(7,104		)
Total unrecognized tax benefits that, if recognized, would impact the effective income tax rate as of the end of the year	$	20,700		$	15,417		$	13,194