CenterPoint Energy 2015 Annual Report Download - page 119

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Areconciliationofincometaxexpense(benefit)usingthefederalstatutoryincometaxratetotheactualincometaxexpenseandresultingeffectiveincometax
rateisasfollows:
Year Ended December 31,
2015
2014
2013
(in millions)
Income(loss)beforeincometaxes $ (1,130)
$ 885
$ 781
Federalstatutoryincometaxrate 35.0%
35.0%
35.0%
Expectedfederalincometaxexpense(benefit) (396)
310
273
Increase(decrease)intaxexpenseresultingfrom:
Stateincometaxexpense,netoffederalincometax (27)
16
21
TaxeffectrelatedtotheformationofEnable —
—
196
Decreaseinsettledanduncertainincometaxpositions —
—
(9)
Taxbasisbalancesheetadjustments —
(29)
—
Other,net (15)
(23)
(11)
Total (42)
(36)
197
Totalincometaxexpense(benefit) $ (438)
$ 274
$ 470
Effectivetaxrate 38.8%
31.0%
60.2%
In 2015, CenterPoint Energy’s effective tax rate was higher than the statutory rate primarily due to lower earnings from the impairment of CenterPoint
Energy’sinvestmentinEnable.TheimpairmentlossreducedthedeferredtaxliabilityonCenterPointEnergy’sinvestmentinEnable.
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.
113