CenterPoint Energy 2012 Annual Report Download - page 111

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89
CenterPoint Energy believes will be recovered through the regulatory process, or approximately $11 million, was recorded as an
adjustment to regulatory assets. The remaining $21 million of the reduction in CenterPoint Energy's deferred tax asset was recorded
as a charge to income tax expense in the first quarter of 2010.
In December 2010, certain subsidiaries of CenterPoint Energy were restructured in order to achieve a more tax-efficient
reporting structure. As a result of the restructuring, CenterPoint Energy recorded a net reduction in income tax expense of
approximately $24 million related to the remeasurement of accumulated deferred income taxes. The net reduction in income tax
expense is comprised of a decrease in state income tax expense, net of federal income tax, totaling approximately $29 million and
an increase in income tax expense of approximately $5 million related to uncertain income tax positions.
The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities were as
follows:
December 31,
2011 2012
(in millions)
Deferred tax assets:
Current:
Allowance for doubtful accounts......................................................................................... $ 10 $ 10
Other.................................................................................................................................... 7 1
Total current deferred tax assets........................................................................................ 17 11
Non-current:
Loss and credit carryforwards ............................................................................................. 214 90
Employee benefits ............................................................................................................... 363 383
Other.................................................................................................................................... 68 64
Total non-current deferred tax assets before valuation allowance.................................... 645 537
Valuation allowance............................................................................................................. (4)(2)
Total non-current deferred tax assets, net of valuation allowance.................................... 641 535
Total deferred tax assets, net of valuation allowance........................................................ 658 546
Deferred tax liabilities:
Current:
Unrealized gain on indexed debt securities......................................................................... 427 439
Unrealized gain on TW securities ....................................................................................... 97 151
Deferred gas costs................................................................................................................ — 25
Total current deferred tax liabilities.................................................................................. 524 615
Non-current:
Depreciation ........................................................................................................................ 2,849 3,279
Regulatory assets, net.......................................................................................................... 1,499 1,278
Other.................................................................................................................................... 125 131
Total non-current deferred tax liabilities........................................................................... 4,473 4,688
Total deferred tax liabilities.............................................................................................. 4,997 5,303
Accumulated deferred income taxes, net ..................................................................... $ 4,339 $ 4,757
Tax Attribute Carryforwards and Valuation Allowance. At December 31, 2012, CenterPoint Energy has approximately
$93 million of federal net operating loss carryforwards which begin to expire in 2031, and approximately $378 million of state
net operating loss carryforwards which expire in various years between 2013 and 2032. CenterPoint Energy has approximately
$7 million of federal capital loss carryforwards, $15 million of federal charitable contribution carryforwards and $2 million of
general business credit carryforwards which expire in various years between 2013 and 2032.
CenterPoint Energy has approximately $244 million of state capital loss carryforwards which expire in 2017 for which
management established a full valuation allowance of $3 million state tax effect ($2 million net of federal tax). The valuation
allowance was established based upon management's evaluation that loss carryforwards may not be fully realized.