CenterPoint Energy 2015 Annual Report Download - page 55

Income Tax Expense. We reported an effective tax rate of 38.8% and 31.0% for the years ended December 31, 2015 and 2014,respectively. The higher
effectivetaxrate of38.8%is primarily duetolower earnings fromtheimpairment of ourinvestmentinEnable. Theimpairmentlossreduced the deferredtax
liabilityonourinvestmentinEnable.Theeffectivetaxrateof31.0%for2014isprimarilyduetoa$29milliontaxbenefitrecognizeduponcompletionofatax
basisbalancesheetreviewanda$13millionreversalofpreviouslyaccruedtaxesasaresultoffinalpositionstakeninthe2013taxreturns.Wedeterminedthe
impactofthe$29millionadjustmentwasnotmaterialtoanypriorperiodortheyearendedDecember31,2014.
2014 Compared to 2013
Net Income. Wereportednetincomeof$611million($1.42perdilutedshare)for2014comparedto$311million($0.72perdilutedshare)forthesame
periodin2013.
Theincreaseinnetincomeof$300millionwasduetothefollowingkeyfactors:
• a$196milliondecreaseinincometaxexpensediscussedbelow;
• a$120millionincreaseinequityearningsofunconsolidatedaffiliates;
• a$107milliondecreaseinthelossonourindexeddebtsecurities;
• a$13milliondecreaseininterestexpense;and
• a$12millionincreaseinotherincome.
Theseincreaseswerepartiallyoffsetby:
• a$75milliondecreaseinoperatingincome(discussedbelowbysegment);and
• a$73milliondecreaseinthegainonourmarketablesecurities.
Income Tax Expense. Wereportedaneffectivetaxrateof31.0%and60.2%fortheyearsendedDecember31,2014and2013,respectively.Theeffectivetax
rateof31.0%for2014isprimarilyduetoa$29milliontaxbenefitrecognizeduponcompletionofataxbasisbalancesheetreviewanda$13millionreversalof
previouslyaccruedtaxesasaresultoffinalpositionstakeninthe2013taxreturns.Wedeterminedtheimpactofthe$29millionadjustmentwasnotmaterialto
anypriorperiodortheyearendedDecember31,2014.Theeffectivetaxrateof60.2%for2013isprimarilyattributabletoanet$196millionchargetodeferred
taxexpenseduetotheformationofEnable.Formoreinformation,seeNote13toourconsolidatedfinancialstatements.
RESULTS OF OPERATIONS BY BUSINESS SEGMENT
Thefollowingtablepresentsoperatingincome(loss)foreachofourbusinesssegmentsfor2015,2014and2013.Includedinrevenuesareintersegmentsales.
Weaccountforintersegmentsalesasifthesalesweretothirdparties,thatis,atcurrentmarketprices.
Operating Income (Loss) by Business Segment
Year Ended December 31,
2015

2014

2013

(in millions)
ElectricTransmission&Distribution $ 607

$ 595

$ 607
NaturalGasDistribution 273

287

263
EnergyServices 42

52

13
InterstatePipelines —

—

72
FieldServices —

—

73
OtherOperations 11

1

(18)
TotalConsolidatedOperatingIncome $ 933

$ 935

$ 1,010
51