CenterPoint Energy 2013 Annual Report Download - page 69

47
CONSOLIDATED RESULTS OF OPERATIONS
All dollar amounts in the tables that follow are in millions, except for per share amounts.
Year Ended December 31,
2013 2012 2011
Revenues ......................................................................................................... $ 8,106 $ 7,452 $ 8,450
Expenses.......................................................................................................... 7,096 6,414 7,152
Operating Income............................................................................................ 1,010 1,038 1,298
Gain on Marketable Securities........................................................................ 236 154 19
Gain (Loss) on Indexed Debt Securities ......................................................... (193)(71)35
Interest and Other Finance Charges ................................................................ (351)(422)(456)
Interest on Transition and System Restoration Bonds .................................... (133)(147)(127)
Equity in Earnings of Unconsolidated Affiliates ............................................ 188 31 30
Return on True-Up Balance ............................................................................ — — 352
Step acquisition gain ....................................................................................... — 136 —
Other Income, net............................................................................................ 24 38 23
Income Before Income Taxes and Extraordinary Item................................... 781 757 1,174
Income Tax Expense....................................................................................... 470 340 404
Income Before Extraordinary Item ................................................................. 311 417 770
Extraordinary Item, net of tax ......................................................................... — — 587
Net Income...................................................................................................... $ 311 $ 417 $ 1,357
Basic Earnings Per Share:
Income Before Extraordinary Item ................................................................. $ 0.73 $ 0.98 $ 1.81
Extraordinary Item, net of tax ......................................................................... — — 1.38
Net Income.................................................................................................... $ 0.73 $ 0.98 $ 3.19
Diluted Earnings Per Share:
Income Before Extraordinary Item ................................................................. $ 0.72 $ 0.97 $ 1.80
Extraordinary Item, net of tax ......................................................................... — — 1.37
Net Income.................................................................................................... $ 0.72 $ 0.97 $ 3.17
2013 Compared to 2012
Net Income. We reported net income of $311 million ($0.72 per diluted share) for 2013 compared to $417 million ($0.97 per
diluted share) for the same period in 2012. The decrease in net income of $106 million was primarily due to a $136 million non-
cash step acquisition gain related to the acquisition of an additional 50% interest in Waskom in 2012, a $130 million increase in
income tax expense discussed below, a $122 million increase in the loss on our indexed debt securities and a $28 million decrease
in operating income (discussed below by segment). Operating income in 2012 included a $252 million non-cash goodwill
impairment charge. These decreases were partially offset by a $157 million increase in equity earnings of unconsolidated affiliates,
a $85 million decrease in interest expense and a $82 million increase in the gain on our marketable securities.
Income Tax Expense. We reported an effective tax rate of 60.2% for 2013 compared to 44.9% for the same period in 2012.
Our effective tax rate for 2013 increased by 15.3% primarily as a result of the formation of Enable with deferred tax expense of
$225 million related to the book-to-tax basis difference for contributed non-tax deductible goodwill and a tax benefit of $29 million
associated with the remeasurement of state deferred taxes at formation. In addition, we 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 audit cycles.
Our effective tax rate for 2013 was approximately 36.2% excluding the tax effects from the adjustments described above.