Income Taxes (Table)

12 Months Ended

Sep. 30, 2020

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense from continuing operations for 2020, 2019 and 2018 were as follows:



	2020			2019		2018
	(In thousands)
Current
Federal	$	—		$	—	$	(10,099	)
State	14,193			8,412		11,075
Deferred
Federal	143,039			113,331		150,556
State ⁽¹⁾	(11,879		)	17,160		15,330
TCJA Impact	—			—		(158,782		)
Income tax expense	$	145,353		$	138,903	$	8,080

(1)

Includes a non-cash income tax benefit of $21.0 million resulting from the remeasurement of the rate at which state deferred taxes will reverse in the future as discussed below.

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 2020, 2019 and 2018 are set forth below:



	2020			2019			2018
	(In thousands)
Tax at statutory rate⁽¹⁾	$	156,827		$	136,565		$	149,730
Common stock dividends deductible for tax reporting	(1,419		)	(1,460		)	(1,745		)
State taxes (net of federal benefit)	22,791			20,202			19,826
Amortization of excess deferred taxes	(16,125		)	(14,085		)	(1,219		)
Remeasurement due to TCJA	—			—			(158,782		)
Remeasurement due to state deferred tax rate change	(20,962		)	—			—
Other, net	4,241			(2,319		)	270
Income tax expense	$	145,353		$	138,903		$	8,080


(1)	Tax expense is calculated at the statutory federal income tax rate of 21.0%, 21.0%, 24.5% for the year ended September 30, 2020, 2019 and 2018.

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, 2020 and 2019 are presented below:



	2020			2019
	(In thousands)
Deferred tax assets:
Employee benefit plans	$	66,991		$	70,929
Interest rate swaps	16,719			33,918
Net operating loss carryforwards	476,507			485,133
Charitable and other credit carryforwards	8,712			8,241
Regulatory excess deferred tax	161,565			165,701
Other	73,542			13,186
Total deferred tax assets	804,036			777,108
Valuation allowance	(1,102		)	(1,894		)
Net deferred tax assets	802,934			775,214
Deferred tax liabilities:
Difference in net book value and net tax value of assets⁽¹⁾	(2,138,966		)	(2,004,516		)
Pension funding	(484		)	(4,384		)
Gas cost adjustments	(23,209		)	(18,072		)
Other	(96,844		)	(48,257		)
Total deferred tax liabilities	(2,259,503		)	(2,075,229		)
Net deferred tax liabilities	$	(1,456,569	)	$	(1,300,015	)
Deferred credits for rate regulated entities	$	2,537		$	2,582

(1) Includes $129.0 million and $131.0 million of deferred tax liability related to goodwill as of September 30, 2020 and 2019.

Schedule of Unrecognized Tax Benefits Roll Forward

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



	2020			2019			2018
	(In thousands)
Unrecognized tax benefits - beginning balance	$	27,716		$	26,203		$	23,719
Increase (decrease) resulting from prior period tax positions	(26		)	(923		)	22
Increase resulting from current period tax positions	3,231			2,436			2,462
Unrecognized tax benefits - ending balance	30,921			27,716			26,203
Less: deferred federal and state income tax benefits	(6,493		)	(5,820		)	(5,503		)
Total unrecognized tax benefits that, if recognized, would impact the effective income tax rate as of the end of the year	$	24,428		$	21,896		$	20,700