Entergy 2009 Annual Report Download - page 19

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Entergy Corporation and Subsidiaries
Management's Financial Discussion and Analysis
15
settlements and agreements with taxing authorities resulting in a release $15.2 million of certain items
from the provision for uncertain tax positions;
an adjustment to state income taxes of $13.8 million for Non-Utility Nuclear to reflect the effect of a
change in the methodology of computing Massachusetts state income taxes as required by that state's
taxing authority; and
an additional deferred tax benefit of approximately $8 million associated with writedowns on nuclear
decommissioning qualified trust securities.
These reductions were partially offset by increases related to book and tax differences for utility plant items and state
income taxes at the Utility operating companies.
The effective income tax rate for 2008 was 32.7%. The reduction in the effective income tax rate versus the
federal statutory rate of 35% in 2008 is primarily due to:
a capital loss recognized for income tax purposes on the liquidation of Entergy Power Generation, LLC in
the third quarter 2008, which resulted in an income tax benefit of approximately $79.5 million. Entergy
Power Generation, LLC was a holding company in Entergy's non-nuclear wholesale assets business;
recognition of tax benefits of $44.3 million associated with the loss on sale of stock of Entergy Asset
Management, Inc., a non-nuclear wholesale subsidiary, as a result of a settlement with the IRS; and
an adjustment to state income taxes for Non-Utility Nuclear to reflect the effect of a change in the
methodology of computing Massachusetts state income taxes resulting from legislation passed in the third
quarter 2008, which resulted in an income tax benefit of approximately $18.8 million.
These factors were partially offset by:
income taxes recorded by Entergy Power Generation, LLC, prior to its liquidation, resulting from the
redemption payments it received in connection with its investment in Entergy Nuclear Power Marketing,
LLC during the third quarter 2008, which resulted in an income tax expense of approximately $16.1 million;
and
book and tax differences for utility plant items and state income taxes at the Utility operating companies,
including the flow-through treatment of the Entergy Arkansas write-offs discussed above.
See Note 3 to the financial statements for a reconciliation of the federal statutory rate of 35.0% to the
effective income tax rates, and for additional discussion regarding income taxes.
17