CenterPoint Energy 2012 Annual Report Download - page 57

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35
CONSOLIDATED RESULTS OF OPERATIONS
All dollar amounts in the tables that follow are in millions, except for per share amounts.
Year Ended December 31,
2010 2011 2012
Revenues......................................................................................................... $ 8,785 $ 8,450 $ 7,452
Expenses.......................................................................................................... 7,536 7,152 6,414
Operating Income............................................................................................ 1,249 1,298 1,038
Gain on Marketable Securities........................................................................ 67 19 154
Gain (Loss) on Indexed Debt Securities ......................................................... (31) 35 (71)
Interest and Other Finance Charges................................................................ (481)(456)(422)
Interest on Transition and System Restoration Bonds.................................... (140)(127)(147)
Equity in Earnings of Unconsolidated Affiliates............................................ 29 30 31
Return on True-Up Balance............................................................................ — 352 —
Step acquisition gain....................................................................................... — — 136
Other Income, net............................................................................................ 12 23 38
Income Before Income Taxes and Extraordinary Item................................... 705 1,174 757
Income Tax Expense....................................................................................... 263 404 340
Income Before Extraordinary Item ................................................................. 442 770 417
Extraordinary Item, net of tax......................................................................... — 587 —
Net Income...................................................................................................... $ 442 $ 1,357 $ 417
Basic Earnings Per Share:
Income Before Extraordinary Item ................................................................. $ 1.08 $ 1.81 $ 0.98
Extraordinary Item, net of tax......................................................................... — 1.38 —
Net Income.................................................................................................... $ 1.08 $ 3.19 $ 0.98
Diluted Earnings Per Share:
Income Before Extraordinary Item ................................................................. $ 1.07 $ 1.80 $ 0.97
Extraordinary Item, net of tax......................................................................... — 1.37 —
Net Income.................................................................................................... $ 1.07 $ 3.17 $ 0.97
2012 Compared to 2011
Net Income. We reported net income of $417 million ($0.97 per diluted share) for 2012 compared to $1.357 billion ($3.17 per
diluted share) for the same period in 2011. The decrease in net income of $940 million was primarily due to the resolution in 2011
of the true-up appeal resulting in an after-tax extraordinary gain of $587 million and a $352 million return on the true-up balance,
a $260 million decrease in operating income (discussed by segment below), including a $252 million non-cash goodwill impairment
charge, and a $106 million increase in the loss on our indexed debt securities, which were partially offset by a $136 million step
acquisition gain related to the acquisition of an additional 50% interest in Waskom, a $135 million increase in the gain on our
marketable securities, a $64 million decrease in income tax expense and a $14 million decrease in interest expense due to lower
levels of debt.
Income Tax Expense. We reported an effective tax rate of 44.9% for 2012 compared to 34.4% for the same period in 2011.
The increase in the effective tax rate of 10.5% is due to goodwill impairment of $252 million which is non-deductible for tax
purposes. It is partially offset by favorable tax adjustments, including the re-measurement of certain unrecognized tax benefits of
$28 million related to the Internal Revenue Service (IRS) settlement of tax years 2006 through 2009.