CenterPoint Energy 2014 Annual Report Download - page 120
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A reconciliation of income tax expense using the federal statutory income tax rate to the actual income tax expense and resulting effective
income tax rate is as follows:
In 2014, CenterPoint Energy recognized a $29 million
deferred income tax benefit upon completion of its tax basis balance sheet review.
The adjustment resulted in a decrease to deferred tax liabilities of $32 million , a decrease to income taxes payable of $5 million
and a decrease
to income tax regulatory assets of $8 million . CenterPoint Energy determined the impact of the $29 million
adjustment was not material to any
prior period or the year ended December 31, 2014.
In 2013, CenterPoint Energy recorded a deferred tax expense of $225 million at the formation of Enable related to the book-to-
tax basis
difference for contributed non-tax deductible goodwill and recognized a tax benefit of $29 million
associated with the remeasurement of state
deferred taxes at formation. In addition, CenterPoint Energy recognized a tax benefit of $8 million
based on the settlement with the Internal
Revenue Service (IRS) of outstanding tax claims for the 2002 and 2003 tax years.
In 2012, CenterPoint Energy recorded a non-tax deductible impairment of goodwill of $252 million ( $88 million
tax effect) and a net
decrease in income tax expense of $33 million related to favorable audit settlements.
110
Year Ended December 31,
2014
2013
2012
(in millions)
Income before income taxes
$
885
$
781
$
757
Federal statutory income tax rate
35.0
%
35.0
%
35.0
%
Expected federal income tax expense
310
273
265
Increase (decrease) in tax expense resulting from:
State income tax expense, net of federal income tax
16
21
39
Amortization of investment tax credit —
—
(
2
)
Tax effect related to the formation of Enable —
196
—
Decrease in settled and uncertain income tax positions —
(
9
)
(33
)
Goodwill impairment —
—
88
Tax basis balance sheet adjustments
(29
)
—
—
Other, net
(23
)
(11
)
(17
)
Total
(36
)
197
75
Total income tax expense
$
274
$
470
$
340
Effective tax rate
31.0
%
60.2
%
44.9
%