Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

The income tax provision from continuing operations consisted of the following amounts:



	Year Ended December 31,
	2017			2016			2015
	(In millions, except percentages)
Current
State	$	19		$	6		$	9
Total — current	19			6			9
Deferred
U.S. Federal	(6		)	3			1,020
State	(7		)	(6		)	315
Foreign	2			2			1
Total — deferred	(11		)	(1		)	1,336
Total income tax expense	$	8		$	5		$	1,345
Effective tax rate	(0.5		)%	(0.5		)%	(27.0		)%

The following represents the domestic and foreign components of loss before income tax expense:

A reconciliation of the U.S. federal statutory rate of 35% to NRG's effective rate is as follows:



	Year Ended December 31,
	2017			2016			2015
	(In millions, except percentages)
Loss before income taxes	$	(1,540	)	$	(978	)	$	(4,986	)
Tax at 35%	(539		)	(342		)	(1,745		)
State taxes	19			—			(215		)
Foreign operations	2			10			1
Federal and state tax credits, excluding PTCs	—			—			(5		)
Tax Act - corporate income tax rate change	733			—			—
Valuation allowance due to corporate income tax rate change	(660		)	—			—
Valuation allowance - current period activities	482			398			3,023
Impact of non-taxable equity earnings	(5		)	22			(10		)
Book goodwill impairment	30			—			340
Net interest accrued on uncertain tax positions	—			1			(3		)
Production tax credits	(20		)	(26		)	(33		)
Recognition of uncertain tax benefits	(5		)	2			(15		)
Tax expense attributable to consolidated partnerships	4			(1		)	12
State rate change including true-up to current period activity	18			(59		)	(7		)
AMT refundable credit	(64		)	—			—
Other	13			—			2
Income tax expense	$	8		$	5		$	1,345
Effective income tax rate	(0.5		)%	(0.5		)%	(27.0		)%

The temporary differences, which gave rise to the Company's deferred tax assets and liabilities consisted of the following:



	As of December 31,
	2017			2016
	(In millions)
Deferred tax liabilities:
Emissions allowances	$	15		$	31
Derivatives, net	15			—
Cumulative translation adjustments	—			11
Investment in projects	231			378
Discount/premium on notes	2			5
Deferred financing costs	2			2
Discontinued operations	—			6
Total deferred tax liabilities	265			433
Deferred tax assets:
Deferred compensation, accrued vacation and other reserves	141			256
Difference between book and tax basis of property	596			530
Goodwill	38			83
Differences between book and tax basis of contracts	68			60
Pension and other postretirement benefits	74			122
Equity compensation	10			11
Bad debt reserve	14			12
U.S. capital loss carryforwards	1			1
U.S. Federal net operating loss carryforwards	596			728
Foreign net operating loss carryforwards	66			63
State net operating loss carryforwards	140			106
Foreign capital loss carryforwards	1			1
Federal and state tax credit carryforwards	376			446
Federal benefit on state uncertain tax positions	7			12
Intangibles amortization (excluding goodwill)	101			115
Derivatives, net	—			106
Inventory obsolescence	12			5
Other	—			7
Discontinued operations	—			2,093
Total deferred tax assets	2,241			4,757
Valuation allowance	(1,863		)	(2,032		)
Discontinued operations	—			(2,087		)
Total deferred tax assets, net of valuation allowance	378			638
Net deferred tax asset	$	113		$	205

The following table summarizes NRG's net deferred tax position:



	As of December 31,
	2017			2016
	(In millions)
Net deferred tax asset — noncurrent	$	134		$	225
Net deferred tax liability — noncurrent	(21		)	(20		)
Net deferred tax asset	$	113		$	205

The following table reconciles the total amounts of uncertain tax benefits:



	As of December 31,
	2017			2016
	(In millions)
Balance as of January 1	$	34		$	32
Increase due to current year positions	4			8
Decrease due to prior year positions	(8		)	—
Decrease due to settlements and payments	—			(6		)
Uncertain tax benefits as of December 31	$	30		$	34