Entergy Arkansas, Inc.  and Subsidiaries Management’s Financial Discussion and Analysis 310 stock restrict the amount of retained earnings available for the payment of cash dividends or other distributions on its common and preferred stock.
Sources of Capital Entergy Arkansas’s sources to meet its capital requirements include: ?
internally generated funds; ?
cash on hand; ?
debt or preferred stock issuances; and ?
bank financing under new or existing facilities.
Entergy Arkansas may refinance, redeem, or otherwise retire debt and preferred stock prior to maturity, to the extent market conditions and interest and dividend rates are favorable.
All debt and common and preferred stock issuances by Entergy Arkansas require prior regulatory approval.
Preferred stock and debt issuances are also subject to issuance tests set forth in Entergy Arkansas’s corporate charters, bond indentures, and other agreements.
Entergy Arkansas has sufficient capacity under these tests to meet its foreseeable capital needs.
Entergy Arkansas’s receivables from or (payables to) the money pool were as follows as of December 31 for each of the following years.
## Table 0 ##
See Note 4 to the financial statements for a description of the money pool.
Entergy Arkansas has a credit facility in the amount of $150 million scheduled to expire in August 2021.
Entergy Arkansas also has a $20 million credit facility scheduled to expire in April 2017.
The $150 million credit facility allows Entergy Arkansas to issue letters of credit against 50% of the borrowing capacity of the facility.
As of December 31, 2016, there were no cash borrowings and no letters of credit outstanding under the credit facilities.
In addition, Entergy Arkansas is a party to an uncommitted letter of credit facility as a means to post collateral to support its obligations under MISO.
As of December 31, 2016, a $1 million letter of credit was outstanding under Entergy Arkansas’s uncommitted letter of credit facility.
See Note 4 to the financial statements for additional discussion of the credit facilities.
The Entergy Arkansas nuclear fuel company variable interest entity has a credit facility in the amount of $80 million scheduled to expire in May 2019.
As of December 31, 2016, no letters of credit were outstanding under the credit facility to support commercial paper issued by the Entergy Arkansas nuclear fuel company variable interest entity.
See Note 4 to the financial statements for additional discussion of the nuclear fuel company variable interest entity credit facility.
Entergy Arkansas obtained authorizations from the FERC through October 2017 for short-term borrowings not to exceed an aggregate amount of $250 million at any time outstanding and long-term borrowings by its nuclear fuel company variable interest entity.
See Note 4 to the financial statements for further discussion of Entergy Arkansas’s short-term borrowing limits.
The long-term securities issuances of Entergy Arkansas are limited to amounts authorized by the APSC and the Tennessee Regulatory Authority; the current authorizations extend through December 2018.
PRUDENTIAL FINANCIAL, INC.  Notes to Consolidated Financial Statements The effective tax rate is the ratio of “Total income tax expense (benefit)” divided by “Income before income taxes and equity in earnings of operating joint ventures.
” The Company’s effective tax rate for fiscal years 2018, 2017 and 2016 was 17.0%, (22.2)% and 23.4%, respectively.
The following is a description of items that had the most significant impact on the difference between the Company’s statutory U. S.  federal income tax rate of 21% applicable for 2018 and 35% applicable for the periods prior to 2018, and the Company’s effective tax rate during the periods presented: Changes in Tax Law.
The following is a list of notable changes in tax law that impacted the Company’s effective tax rate for the periods presented: Tax Act of 2017 - On December 22, 2017, the Tax Act of 2017 was enacted into U. S.  law.
As a result, the Company recognized a $2,880 million tax benefit in “Total income tax expense (benefit)” in the Company’s Consolidated Statements of Operations for the year ended December 31, 2017.
In accordance with SEC Staff Accounting Bulletin 118, in 2017 the Company recorded the effects of the Tax Act of 2017 using reasonable estimates due to the need for further analysis of the provisions within the Tax Act of 2017 and collection, preparation and analysis of relevant data necessary to complete the accounting.
During 2018, the Company completed the collection, preparation and analysis of data relevant to the Tax Act of 2017, and interpreted any additional guidance issued by the IRS, U. S.  Department of the Treasury, or other standard-setting organizations, and recognized a $153 million reduction in income tax expense primarily related to refinements of our provisional estimates of earnings of affiliated foreign companies subject to the one-time toll charge.
The financial statement impact related to the adoption of Tax Act of 2017 for the twelve months ended December 31, 2017 and twelve months ended December 31, 2018 was as follows:
## Table 1 ##
2018 Industry Issue Resolution (IIR).
In August 2018, the IRS released a Directive to provide guidance on the tax reserving for guaranteed benefits within variable annuity contracts and principle-based reserves on certain life insurance contracts.
Adopting the methodology specified in the Directive resulted in an accelerated deduction for the Company’s 2017 tax return, that would have otherwise been deductible in future years.
Prior to the adoption of this Directive, the Company accounted for these future deductions as deferred tax assets measured using the current 21% corporate income tax rate.
Upon adoption of the Directive, the tax benefits were revalued using the 35% tax rate applicable for the 2017 tax year in which they will now be recognized resulting in a reduction in income tax expense of $198 million.
South Korea Tax Reform Bill.
On December 19, 2017, South Korea enacted a 2018 tax reform bill that adds a new 25% corporate income tax bracket for taxable income in excess of W300 billion for tax years beginning on or after January 1, 2018.
Taxable income in excess of W20 billion but less than W300 billion continues to be subject to a 22% corporate income tax.
In addition, corporations continue to be subject to a local income surtax of 10% of the computed corporate income tax before the application of tax credits and exemptions (i. e. , 2.5% for the tax base in excess of W300 billion, 2.2% for the tax base between W20 billion and W300 billion).
After taking into account this 10% local income tax surcharge on corporate tax, the 2018 tax reform bill increased the top corporate income tax rate in South Korea from 24.2% to 27.5%.
As a result, the Company recognized a $26 million tax expense in 2017 related to remeasuring Korea’s deferred tax assets and liabilities.
Non-Taxable Investment Income.
The U. S.  Dividends Received Deduction (“DRD”) reduces the amount of dividend income subject to U. S.  tax and accounts for most of the non-taxable investment income shown in the table above.
More specifically, the U. S.  DRD constitutes $127 million of the total $246 million of 2018 non-taxable investment income, $280 million of the total $369 million of 2017 non-taxable investment income, and $266 million of the total $352 million of 2016 non-taxable investment income.
The DRD for the current period was estimated using information from 2017, current year investment results, and current year’s equity market performance.
The actual current year DRD can vary based on factors such as, but not limited to, changes in the amount of dividends received that are eligible for the DRD, changes in the amount of distributions received from fund investments, changes in the account balances of variable life and annuity contracts, and the Company’s taxable income before the DRD.
Foreign Taxes at Other Than U. S.  Rates.
The statutory income tax rate in the Company’s two largest non-U.
S.  tax jurisdictions is approximately 28% in Japan and 24.2% in Korea as compared to the U. S.  federal income tax rate of 21% applicable for 2018 and 35% applicable for the periods prior to 2018.
Operating Results The following table sets forth the Individual Annuities segment’s operating results for the periods indicated.
## Table 2 ##
Adjusted Operating Income 2018 to 2017 Annual Comparison.
Adjusted operating income decreased $273 million.
Excluding the impacts of changes in the estimated profitability of the business, discussed below, adjusted operating income decreased $56 million.
The decrease was primarily driven by lower net investment spread results reflecting lower investment income on non-coupon investments, higher capital hedge costs, and higher distribution expenses due to increased sales.
Partially offsetting these decreases were lower amortization costs and reserve provisions as well as higher asset-based fee income, net of associated costs.
The increase in the net asset-based fee income reflected higher average variable annuity account values due to market appreciation and favorable impacts related to our living benefit guarantees, partially offset by negative net flows and the impact of certain products reaching contractual milestones for fee tier reduction.
The impacts of changes in the estimated profitability of the business include adjustments to the amortization of DAC and other costs as well as to the reserves for certain living and/or death benefit features of our variable annuity products.
These adjustments resulted in a net charge of $34 million and a net benefit of $183 million in 2018 and 2017, respectively, reflecting the net impact of hedge effectiveness relative to our assumptions, as well as a net benefit resulting from our annual reviews and update of assumptions and other refinements.
Additionally, the net benefit of $183 million also reflected the net impact of equity market performance on contractholder accounts.2017 to 2016 Annual Comparison.
Adjusted operating income increased $433 million.
Excluding the impacts of changes in the estimated profitability of the business, discussed below, adjusted operating income increased $388 million.
The increase was primarily driven by higher asset-based fee income, net of associated costs, lower amortization costs and reserve provisions, and higher net investment spread results.
The increase in asset-based fee income, net of a related increase in asset-based commissions, reflects higher average variable annuity account values due to market appreciation; and the impact of greater efficiencies in managing product risks associated with the Asset Liability Management strategy that was implemented in the third quarter of 2016.
The increase in net investment spread results reflects higher investment income on non-coupon investments as well as a higher level of invested assets.
The adjustments to the amortization of DAC and other costs and to the reserves for certain living and/or death benefit features of our variable annuity products resulted in a net benefit of $183 million in 2017, as discussed above, and a net benefit of $138 million in 2016 primarily reflecting the net impact of equity market performance on contractholder accounts, hedge effectiveness relative to our assumptions, and a net benefit resulting from our annual reviews and update of assumptions and other refinements.
Revenues, Benefits and Expenses 2018 to 2017 Annual Comparison.
Revenues decreased $144 million.
Excluding a $93 million net decrease related to the impacts of certain changes in our estimated profitability of the business, as discussed above, revenues decreased $51 million.
The decrease is primarily due to a decrease in net investment spread results reflecting lower investment income on non-coupon investments, as well as a decrease in asset management and services fees and other income attributable to higher capital hedge costs.
These decreases were partially offset by an increase in premiums reflecting an increase in annuitizations of our variable annuity contracts, with offsets in policyholders’ benefits, as discussed below.
Also contributing to the partial offset was an increase in policy charges and fee income reflecting higher average variable annuity account values due to market appreciation and favorable impacts related to our living benefit guarantees, partially offset by negative net flows and the impact of certain products reaching contractual milestones for fee tier reduction.
Benefits and expenses increased $129 million.
Excluding a $124 million net increase related to the impacts of certain changes in our estimated profitability of the business, as discussed above, benefits and expenses increased $5 million.
General and administrative expenses, net of capitalization, increased $27 million due to higher distribution expenses driven by higher sales, as well as higher technology costs.
Policyholders’ benefits, including changes in reserves, increased $9 million primarily due to higher reserve provisions and annuitizations, as discussed above.
These increases were partially offset by a decrease of $17 million in interest credited to policyholders’ account balance, and a decrease of $11 million in amortization of acquisition costs.2017 to 2016 Annual Comparison.
Revenues increased $444 million.
Excluding an $85 million net increase related to the impacts of certain changes in our estimated profitability of the business, as discussed above, revenues increased $359 million.
Higher average variable annuity account values and the impact from refinements to our risk management strategy drove increases in policy charges and fee income,
Asset-Backed and Commercial Mortgage-Backed Securities The following table sets forth information pertaining to asset-backed and commercial mortgage-backed securities within our fixed maturity available-for-sale portfolio attributable to PFI excluding the Closed Block division:
## Table 3 ##
(1) The table above provides ratings as assigned by nationally recognized rating agencies as of December 31, 2018, including S&P, Moody’s, Fitch Ratings Inc.  (“Fitch”) and Morningstar.
(2) Includes collateralized loan obligations, credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.
(3) As of December 31, 2018 and 2017, based on amortized cost, 96% and 95%, respectively, were securities with vintages of 2013 or later.
(4) Excludes fixed maturity securities classified as “Assets supporting experience-rated contractholder liabilities” and “Fixed maturities, trading”, as well as securities held outside the general account in other entities and operations.
Included in “Asset-backed securities” above are investments in collateralized loan obligations (“CLOs”).
The following table sets forth information pertaining to these investments in CLOs within our fixed maturity available-for-sale portfolio attributable to PFI excluding the Closed Block division:
## Table 4 ##
(1) The table above provides ratings as assigned by nationally recognized rating agencies as of December 31, 2018, including S&P, Moody’s, Fitch and Morningstar.
(2) Excludes fixed maturity securities classified as “Assets supporting experience-rated contractholder liabilities” and “Fixed maturities, trading”, as well as securities held outside the general account in other entities and operations.
Assets Supporting Experience-Rated Contractholder Liabilities For information regarding the composition of “Assets supporting experience-rated contractholder liabilities,” see Note 3 to the Consolidated Financial Statements.

<table><tr><td>2016</td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td>(In Thousands)</td></tr><tr><td>-$51,232</td><td>-$52,742</td><td>$2,218</td><td>$17,531</td></tr></table>
<table><tr><td></td><td>Twelve Months Ended December 31, 2017</td><td>Twelve Months Ended December 31, 2018</td><td>Total</td></tr><tr><td></td><td colspan="3">(in millions)</td></tr><tr><td>Deferred tax revaluation from tax law change</td><td>$-1,592</td><td>$7</td><td>$-1,585</td></tr><tr><td>Adoption of modified territorial system</td><td>-1,785</td><td>-24</td><td>-1,809</td></tr><tr><td>Deemed repatriation</td><td>497</td><td>-136</td><td>361</td></tr><tr><td>Total provision for income tax expense (benefit)</td><td>$-2,880</td><td>$-153</td><td>$-3,033</td></tr></table>
<table><tr><td></td><td colspan="3">Year ended December 31,</td></tr><tr><td></td><td>2018</td><td>2017</td><td>2016</td></tr><tr><td></td><td colspan="3">(in millions)</td></tr><tr><td>Operating results:</td><td></td><td></td><td></td></tr><tr><td>Revenues</td><td>$4,966</td><td>$5,110</td><td>$4,666</td></tr><tr><td>Benefits and expenses</td><td>3,041</td><td>2,912</td><td>2,901</td></tr><tr><td>Adjusted operating income</td><td>1,925</td><td>2,198</td><td>1,765</td></tr><tr><td>Realized investment gains (losses), net, and related adjustments</td><td>846</td><td>-1,157</td><td>2,031</td></tr><tr><td>Related charges</td><td>-407</td><td>577</td><td>68</td></tr><tr><td>Income (loss) before income taxes and equity in earnings of operating joint ventures</td><td>$2,364</td><td>$1,618</td><td>$3,864</td></tr></table>
<table><tr><td></td><td colspan="4">December 31, 2018</td><td colspan="4">December 31, 2017</td></tr><tr><td></td><td colspan="2">Asset-BackedSecurities-2</td><td colspan="2">Commercial Mortgage-Backed Securities-3</td><td colspan="2">Asset-BackedSecurities-2</td><td colspan="2">Commercial Mortgage-Backed Securities-3</td></tr><tr><td>Lowest Rating Agency Rating-1</td><td>Amortized Cost</td><td>Fair Value</td><td>Amortized Cost</td><td>Fair Value</td><td>Amortized Cost</td><td>Fair Value</td><td>Amortized Cost</td><td>Fair Value</td></tr><tr><td></td><td colspan="8">(in millions)</td></tr><tr><td>AAA</td><td>$9,188</td><td>$9,151</td><td>$7,523</td><td>$7,528</td><td>$7,613</td><td>$7,686</td><td>$8,002</td><td>$8,125</td></tr><tr><td>AA</td><td>405</td><td>430</td><td>1,415</td><td>1,410</td><td>419</td><td>442</td><td>816</td><td>818</td></tr><tr><td>A</td><td>30</td><td>36</td><td>6</td><td>7</td><td>40</td><td>46</td><td>23</td><td>22</td></tr><tr><td>BBB</td><td>15</td><td>15</td><td>9</td><td>9</td><td>42</td><td>43</td><td>9</td><td>9</td></tr><tr><td>BB and below</td><td>165</td><td>231</td><td>0</td><td>0</td><td>275</td><td>379</td><td>0</td><td>0</td></tr><tr><td>Total-4</td><td>$9,803</td><td>$9,863</td><td>$8,953</td><td>$8,954</td><td>$8,389</td><td>$8,596</td><td>$8,850</td><td>$8,974</td></tr></table>
<table><tr><td></td><td colspan="2">December 31, 2018</td><td colspan="2">December 31, 2017</td></tr><tr><td></td><td colspan="4">Collateralized Loan Obligations</td></tr><tr><td>Lowest Rating Agency Rating-1</td><td>Amortized Cost</td><td>Fair Value</td><td>Amortized Cost</td><td>Fair Value</td></tr><tr><td></td><td colspan="4">(in millions)</td></tr><tr><td>AAA</td><td>$7,355</td><td>$7,318</td><td>$6,609</td><td>$6,679</td></tr><tr><td>AA</td><td>0</td><td>0</td><td>0</td><td>0</td></tr><tr><td>A</td><td>0</td><td>0</td><td>0</td><td>0</td></tr><tr><td>BBB</td><td>0</td><td>0</td><td>0</td><td>0</td></tr><tr><td>BB and below</td><td>0</td><td>0</td><td>0</td><td>0</td></tr><tr><td>Total-2</td><td>$7,355</td><td>$7,318</td><td>$6,609</td><td>$6,679</td></tr></table>

Question: What's the increasing rate of AAA for Fair Value in 2018?
Answer: 0.09567