CenterPoint to pay $64 million under tax agreement for 2%, 7% convertibles

By Angela McDaniels

Seattle, Jan. 24 - CenterPoint Energy, Inc. will pay $64 million and reduce future deductions under an agreement with the Internal Revenue Service Appeals Division over the tax treatment of its 2% Zero-Premium Exchangeable Subordinated Notes (ZENS) and former 7% Automatic Common Exchange Securities, according to an 8-K report filed with the Securities and Exchange Commission on Wednesday.

The company signed a closing agreement for the tax years 1999 through 2029 for the ZENS on July 17, 2006 after reaching an agreement with the Appeals Division of the IRS that it would reduce its accrued tax and related interest reserves by $119 million, or $0.38 cents per diluted share, in the second quarter of 2006.

The agreement was executed this month following approval of the agreement by the Joint Committee on Taxation of the U.S. Congress.

In the fourth quarter of 2006, the Houston-based energy delivery company will record an after-tax charge of about $12 million, or $0.04 per diluted share, to reflect the closing agreement, according to the filing.

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