(Mark One)
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2011
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE TRANSITION PERIOD FROM
TO
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Texas
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74-0694415
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1111 Louisiana
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Houston, Texas 77002
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(713) 207-1111
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(Address and zip code of principal executive offices)
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(Registrant’s telephone number, including area code
)
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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PART I.
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FINANCIAL INFORMATION
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Item 1.
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1
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Three Months Ended March 31, 2010 and 2011 (unaudited)
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1
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December 31, 2010 and March 31, 2011 (unaudited)
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2
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Three Months Ended March 31, 2010 and 2011 (unaudited)
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4
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5
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Item 2.
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24
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Item 3.
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39
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Item 4.
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40
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PART II.
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OTHER INFORMATION
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Item 1.
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41
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Item 1A.
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41
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Item 5.
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42
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Item 6.
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42
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•
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the resolution of the true-up proceedings, including the outcome of requests to the Texas Supreme Court for rehearing, future actions by the Public Utility Commission of Texas (Texas Utility Commission) in response to the decisions by the Texas Supreme Court and the Texas Third Court of Appeals, and any further appeals thereof;
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state and federal legislative and regulatory actions or developments relating to the environment, including those related to global climate change;
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other state and federal legislative and regulatory actions or developments affecting various aspects of our business, including, among others, energy deregulation or re-regulation, pipeline safety, health care reform, financial reform and tax legislation;
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timely and appropriate rate actions and increases, allowing recovery of costs and a reasonable return on investment;
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the timing and outcome of any audits, disputes and other proceedings related to taxes;
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problems with construction, implementation of necessary technology or other issues with respect to major capital projects that result in delays or in cost overruns that cannot be recouped in rates;
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industrial, commercial and residential growth in our service territory and changes in market demand, including the effects of energy efficiency measures and demographic patterns;
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the timing and extent of changes in commodity prices, particularly natural gas and natural gas liquids, and the effects of geographic and seasonal commodity price differentials;
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the timing and extent of changes in the supply of natural gas, including supplies available for gathering by our field services business and transporting by our interstate pipelines;
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weather variations and other natural phenomena;
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the impact of unplanned facility outages;
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timely and appropriate regulatory actions allowing securitization or other recovery of costs associated with any future hurricanes or natural disasters;
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changes in interest rates or rates of inflation;
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commercial bank and financial market conditions, our access to capital, the cost of such capital, and the results of our financing and refinancing efforts, including availability of funds in the debt capital markets;
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actions by credit rating agencies;
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effectiveness of our risk management activities;
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inability of various counterparties to meet their obligations to us;
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non-payment for our services due to financial distress of our customers;
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the ability of GenOn Energy, Inc. (GenOn) (formerly known as RRI Energy, Inc., Reliant Energy, Inc. and Reliant Resources, Inc.) and its subsidiaries to satisfy their obligations to us, including indemnity obligations, or in connection with the contractual arrangements pursuant to which we are their guarantor;
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the ability of retail electric providers (REPs), including REP subsidiaries of NRG Retail LLC and REP subsidiaries of TXU Energy Retail Company LLC, which are CenterPoint Houston’s two largest customers, to satisfy their obligations to us and our subsidiaries;
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the outcome of litigation brought by or against us;
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our ability to control costs;
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the investment performance of our pension and postretirement benefit plans;
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our potential business strategies, including restructurings, acquisitions or dispositions of assets or businesses, which we cannot assure will be completed or will have the anticipated benefits to us;
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acquisition and merger activities involving us or our competitors; and
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other factors we discuss in “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2010, which is incorporated herein by reference, and in Item 1A of Part II of this Quarterly Report on Form 10-Q, and other reports we file from time to time with the Securities and Exchange Commission.
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Three Months Ended
March 31,
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||||||||
2010
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2011
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Revenues
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$ | 3,023 | $ | 2,587 | ||||
Expenses:
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||||||||
Natural gas
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1,935 | 1,476 | ||||||
Operation and maintenance
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414 | 439 | ||||||
Depreciation and amortization
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200 | 201 | ||||||
Taxes other than income taxes
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117 | 107 | ||||||
Total
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2,666 | 2,223 | ||||||
Operating Income
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357 | 364 | ||||||
Other Income (Expense):
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Gain on marketable securities
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38 | 32 | ||||||
Loss on indexed debt securities
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(27 | ) | (23 | ) | ||||
Interest and other finance charges
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(122 | ) | (116 | ) | ||||
Interest on transition and system restoration bonds
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(36 | ) | (33 | ) | ||||
Equity in earnings of unconsolidated affiliates
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5 | 6 | ||||||
Other, net
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1 | 5 | ||||||
Total
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(141 | ) | (129 | ) | ||||
Income Before Income Taxes
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216 | 235 | ||||||
Income tax expense
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102 | 87 | ||||||
Net Income
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$ | 114 | $ | 148 | ||||
Basic Earnings Per Share
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$ | 0.29 | $ | 0.35 | ||||
Diluted Earnings Per Share
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$ | 0.29 | $ | 0.35 | ||||
Dividends Declared Per Share
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$ | 0.1950 | $ | 0.1975 | ||||
Weighted Average Shares Outstanding, Basic
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393 | 425 | ||||||
Weighted Average Shares Outstanding, Diluted
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395 | 427 |
December 31,
2010
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March 31,
2011
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Current Assets:
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||||||||
Cash and cash equivalents ($198 and $82 related to VIEs at December 31,
2010 and March 31, 2011, respectively)
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$ | 199 | $ | 95 | ||||
Investment in marketable securities
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367 | 399 | ||||||
Accounts receivable, net ($49 and $46 related to VIEs at December 31,
2010 and March 31, 2011, respectively)
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835 | 852 | ||||||
Accrued unbilled revenues
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340 | 232 | ||||||
Natural gas inventory
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164 | 48 | ||||||
Materials and supplies
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211 | 146 | ||||||
Non-trading derivative assets
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54 | 39 | ||||||
Taxes receivable
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138 | 4 | ||||||
Prepaid expenses and other current assets ($39 related to VIEs at both
December 31, 2010 and March 31, 2011)
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274 | 199 | ||||||
Total current assets
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2,582 | 2,014 | ||||||
Property, Plant and Equipment:
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Property, plant and equipment
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16,005 | 16,235 | ||||||
Less accumulated depreciation and amortization
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4,273 | 4,378 | ||||||
Property, plant and equipment, net
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11,732 | 11,857 | ||||||
Other Assets:
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Goodwill
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1,696 | 1,696 | ||||||
Regulatory assets ($2,597 and $2,542 related to VIEs at December 31,
2010 and March 31, 2011, respectively)
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3,446 | 3,385 | ||||||
Non-trading derivative assets
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15 | 11 | ||||||
Investment in unconsolidated affiliates
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468 | 474 | ||||||
Other
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172 | 157 | ||||||
Total other assets
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5,797 | 5,723 | ||||||
Total Assets
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$ | 20,111 | $ | 19,594 |
December 31,
2010
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March 31,
2011
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Current Liabilities:
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Short-term borrowings
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$ | 53 | $ | — | ||||
Current portion of VIE transition and system restoration bonds long-term
debt
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283 | 294 | ||||||
Current portion of indexed debt
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126 | 127 | ||||||
Current portion of other long-term debt
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19 | — | ||||||
Indexed debt securities derivative
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232 | 255 | ||||||
Accounts payable
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667 | 449 | ||||||
Taxes accrued
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156 | 140 | ||||||
Interest accrued
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171 | 128 | ||||||
Non-trading derivative liabilities
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68 | 50 | ||||||
Accumulated deferred income taxes, net
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407 | 408 | ||||||
Other
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438 | 350 | ||||||
Total current liabilities
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2,620 | 2,201 | ||||||
Other Liabilities:
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Accumulated deferred income taxes, net
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2,934 | 2,998 | ||||||
Non-trading derivative liabilities
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16 | 4 | ||||||
Benefit obligations
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906 | 905 | ||||||
Regulatory liabilities
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989 | 1,015 | ||||||
Other
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447 | 473 | ||||||
Total other liabilities
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5,292 | 5,395 | ||||||
Long-term Debt:
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VIE transition and system restoration bonds
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2,522 | 2,371 | ||||||
Other
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6,479 | 6,361 | ||||||
Total long-term debt
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9,001 | 8,732 | ||||||
Commitments and Contingencies (Note 12)
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Shareholders’ Equity:
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Common stock (424,746,177 shares and 425,377,257 shares outstanding
at December 31, 2010 and March 31, 2011, respectively)
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4 | 4 | ||||||
Additional paid-in capital
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4,100 | 4,102 | ||||||
Accumulated deficit
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(789 | ) | (725 | ) | ||||
Accumulated other comprehensive loss
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(117 | ) | (115 | ) | ||||
Total shareholders’ equity
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3,198 | 3,266 | ||||||
Total Liabilities and Shareholders’ Equity
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$ | 20,111 | $ | 19,594 |
Three Months Ended March 31,
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2010
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2011
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Cash Flows from Operating Activities:
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Net income
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$ | 114 | $ | 148 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
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Depreciation and amortization
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200 | 201 | ||||||
Amortization of deferred financing costs
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7 | 7 | ||||||
Deferred income taxes
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(34 | ) | 80 | |||||
Unrealized gain on marketable securities
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(38 | ) | (32 | ) | ||||
Unrealized loss on indexed debt securities
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27 | 23 | ||||||
Equity in earnings of unconsolidated affiliates, net of distributions
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5 | (3 | ) | |||||
Changes in other assets and liabilities:
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Accounts receivable and unbilled revenues, net
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(2 | ) | 48 | |||||
Inventory
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161 | 181 | ||||||
Taxes receivable
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— | 134 | ||||||
Accounts payable
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(125 | ) | (168 | ) | ||||
Fuel cost over recovery
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126 | 13 | ||||||
Non-trading derivatives, net
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(6 | ) | — | |||||
Margin deposits, net
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(67 | ) | 36 | |||||
Interest and taxes accrued
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44 | (59 | ) | |||||
Net regulatory assets and liabilities
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19 | 17 | ||||||
Other current assets
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10 | 23 | ||||||
Other current liabilities
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(16 | ) | (32 | ) | ||||
Other assets
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(5 | ) | 2 | |||||
Other liabilities
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13 | 7 | ||||||
Other, net
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2 | 1 | ||||||
Net cash provided by operating activities
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435 | 627 | ||||||
Cash Flows from Investing Activities:
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Capital expenditures
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(258 | ) | (333 | ) | ||||
Decrease in restricted cash of transition and system restoration bonds companies
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1 | — | ||||||
Investment in unconsolidated affiliates
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(20 | ) | (3 | ) | ||||
Cash received from U.S Department of Energy grant
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— | 32 | ||||||
Other, net
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(26 | ) | (4 | ) | ||||
Net cash used in investing activities
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(303 | ) | (308 | ) | ||||
Cash Flows from Financing Activities:
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Decrease in short-term borrowings, net
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(53 | ) | (53 | ) | ||||
Proceeds from commercial paper, net
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— | (5 | ) | |||||
Proceeds from long-term debt
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— | 550 | ||||||
Payments of long-term debt
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(441 | ) | (766 | ) | ||||
Cash paid for debt exchange
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— | (58 | ) | |||||
Debt issuance costs
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(2 | ) | (9 | ) | ||||
Payment of common stock dividends
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(77 | ) | (84 | ) | ||||
Proceeds from issuance of common stock, net
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29 | 2 | ||||||
Other, net
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1 | — | ||||||
Net cash used in financing activities
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(543 | ) | (423 | ) | ||||
Net Decrease in Cash and Cash Equivalents
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(411 | ) | (104 | ) | ||||
Cash and Cash Equivalents at Beginning of Period
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740 | 199 | ||||||
Cash and Cash Equivalents at End of Period
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$ | 329 | $ | 95 | ||||
Supplemental Disclosure of Cash Flow Information:
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Cash Payments:
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Interest, net of capitalized interest
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$ | 191 | $ | 186 | ||||
Income tax refunds, net
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(8 | ) | (160 | ) | ||||
Non-cash transactions:
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Accounts payable related to capital expenditures
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83 | 87 |
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•
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CenterPoint Energy Houston Electric, LLC (CenterPoint Houston), which engages in the electric transmission and distribution business in the Texas Gulf Coast area that includes the city of Houston; and
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CenterPoint Energy Resources Corp. (CERC Corp. and, together with its subsidiaries, CERC), which owns and operates natural gas distribution systems. Subsidiaries of CERC Corp. own interstate natural gas pipelines and gas gathering systems and provide various ancillary services. A wholly owned subsidiary of CERC Corp. offers variable and fixed-price physical natural gas supplies primarily to commercial and industrial customers and electric and gas utilities.
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Three Months Ended March 31,
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2010
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2011
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Pension
Benefits
(1)
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Postretirement
Benefits
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Pension
Benefits
(1)
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Postretirement
Benefits
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(in millions)
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Service cost
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$ | 8 | $ | — | $ | 8 | $ | — | ||||||||
Interest cost
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25 | 6 | 25 | 6 | ||||||||||||
Expected return on plan assets
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(27 | ) | (2 | ) | (29 | ) | (2 | ) | ||||||||
Amortization of prior service credit
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1 | 1 | 1 | 1 | ||||||||||||
Amortization of net loss
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15 | — | 14 | — | ||||||||||||
Amortization of transition obligation
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— | 2 | — | 2 | ||||||||||||
Net periodic cost
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$ | 22 | $ | 7 | $ | 19 | $ | 7 |
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(1)
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Net periodic cost in these tables is before considering amounts subject to overhead allocations for capital expenditure projects or for amounts subject to deferral for regulatory purposes. CenterPoint Houston’s actuarially determined pension expense for 2011 in excess of the 2007 base year amount is being deferred for rate making purposes. CenterPoint Houston deferred as a regulatory asset $6 million in pension expense during both the three months ended March 31, 2010 and 2011.
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The method used by the Texas Utility Commission to calculate the market value of CenterPoint Energy’s former generating assets was overturned. In its decision, the Texas Utility Commission had rejected the partial stock valuation method CenterPoint Houston utilized to establish the market value of the generating assets, and the Texas Utility Commission had fashioned its own valuation. The Texas Supreme Court ruled that the Texas Utility Commission had no authority to craft an alternative valuation methodology but instead should have valued the generating assets at the value established when CenterPoint Energy later sold its Texas Genco subsidiary. This portion of the decision requires that the valuation question be remanded to the Texas Utility Commission for a determination. CenterPoint Energy currently estimates that
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application of the sale of assets methodology would reduce stranded costs by approximately $252 million, less selling costs, with the amount ultimately determined (plus interest) subtracted from the amounts eligible for recovery in the remand proceeding. This portion of the decision is unfavorable to CenterPoint Energy.
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The Texas Utility Commission’s order denying recovery of approximately $440 million in capacity auction true-up amounts was reversed. This portion of the decision is favorable to CenterPoint Energy. These sums plus interest are eligible for recovery in the remand proceeding.
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The Texas Utility Commission’s refusal to include approximately $378 million related to depreciation in the calculation of stranded costs was reversed. This portion of the decision is favorable to CenterPoint Energy. These sums plus interest are eligible for recovery in the remand proceeding.
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•
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The Texas Utility Commission’s order allowing recovery of excess mitigation credits (EMCs) that CenterPoint Energy had been ordered to pay its former affiliate was upheld. This portion of the decision is favorable to CenterPoint Energy. These sums have already been recovered and will not be addressed in the remand proceeding.
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The Texas Utility Commission decisions allowing recovery of construction work in progress balances and interest on the capacity auction true-up amounts were upheld. These decisions are favorable to CenterPoint Energy. These sums have already been recovered and will not be addressed in the remand proceeding.
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Fair Value of Derivative Instruments
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||||||||||
December 31, 2010
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Total derivatives not designated
as hedging instruments
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Balance Sheet
Location
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Derivative
Assets
Fair Value (2) (3)
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Derivative
Liabilities
Fair Value (2) (3)
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(in millions)
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Natural gas contracts (1)
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Current Assets
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$ | 55 | $ | 1 | |||||
Natural gas contracts
(1)
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Other Assets
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15 | — | |||||||
Natural gas contracts (1)
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Current Liabilities
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10 | 143 | |||||||
Natural gas contracts (1)
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Other Liabilities
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— | 35 | |||||||
Indexed debt securities derivative
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Current Liabilities
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— | 232 | |||||||
Total
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$ | 80 | $ | 411 |
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(1)
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Natural gas contracts are subject to master netting arrangements and are presented on a net basis in the Condensed Consolidated Balance Sheets. This netting causes derivative assets (liabilities) to be ultimately presented net in a liability (asset) account within the Condensed Consolidated Balance Sheets.
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(2)
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The fair value shown for natural gas contracts is comprised of derivative gross volumes totaling 626 billion cubic feet (Bcf) or a net 72 Bcf long position. Of the net long position, basis swaps constitute 63 Bcf and volumes associated with price stabilization activities of the Natural Gas Distribution business segment comprise 26 Bcf.
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(3)
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The net of total non-trading derivative assets and liabilities is a $15 million liability as shown on CenterPoint Energy’s Condensed Consolidated Balance Sheets, and is comprised of the natural gas contracts derivative assets and liabilities separately shown above offset by collateral netting of $84 million.
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Fair Value of Derivative Instruments
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March 31, 2011
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Total derivatives not designated
as hedging instruments
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Balance Sheet
Location
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Derivative
Assets
Fair Value (2) (3)
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Derivative
Liabilities
Fair Value (2) (3)
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(in millions)
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Natural gas contracts (1)
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Current Assets
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$ | 39 | $ | — | |||||
Natural gas contracts
(1)
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Other Assets
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11 | — | |||||||
Natural gas contracts (1)
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Current Liabilities
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9 | 112 | |||||||
Natural gas contracts (1)
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Other Liabilities
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1 | 7 | |||||||
Indexed debt securities derivative
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Current Liabilities
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— | 255 | |||||||
Total
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$ | 60 | $ | 374 |
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(1)
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Natural gas contracts are subject to master netting arrangements and are presented on a net basis in the Condensed Consolidated Balance Sheets. This netting causes derivative assets (liabilities) to be ultimately presented net in a liability (asset) account within the Condensed Consolidated Balance Sheets.
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(2)
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The fair value shown for natural gas contracts is comprised of derivative gross volumes totaling 624 Bcf or a net 139 Bcf long position. Of the net long position, basis swaps constitute 79 Bcf and volumes associated with price stabilization activities of the Natural Gas Distribution business segment comprise 17 Bcf.
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(3)
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The net of total non-trading derivative assets and liabilities is a $4 million liability as shown on CenterPoint Energy’s Condensed Consolidated Balance Sheets, and is comprised of the natural gas contracts derivative assets and liabilities separately shown above offset by collateral netting of $55 million.
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(1)
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The Gains (Losses) in Expense: Natural Gas includes $(25) million and $(45) million of costs in 2010 and 2011, respectively, associated with price stabilization activities of the Natural Gas Distribution business segment that will be ultimately recovered through purchased gas adjustments.
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Quoted Prices in
Active Markets
for Identical Assets
(Level 1)
|
Significant Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Netting
Adjustments
(1)
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Balance
as of
December 31,
2010
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(in millions)
|
||||||||||||||||||||
Assets
|
||||||||||||||||||||
Corporate equities
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$ | 368 | $ | — | $ | — | $ | — | $ | 368 | ||||||||||
Investments, including money
market funds
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54 | — | — | — | 54 | |||||||||||||||
Natural gas derivatives
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— | 73 | 7 | (11 | ) | 69 | ||||||||||||||
Total assets
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$ | 422 | $ | 73 | $ | 7 | $ | (11 | ) | $ | 491 | |||||||||
Liabilities
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||||||||||||||||||||
Indexed debt securities
derivative
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$ | — | $ | 232 | $ | — | $ | — | $ | 232 | ||||||||||
Natural gas derivatives
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8 | 167 | 4 | (95 | ) | 84 | ||||||||||||||
Total liabilities
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$ | 8 | $ | 399 | $ | 4 | $ | (95 | ) | $ | 316 |
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(1)
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Amounts represent the impact of legally enforceable master netting agreements that allow CenterPoint Energy to settle positive and negative positions and also include cash collateral of $84 million posted with the same counterparties.
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Quoted Prices in
Active Markets
for Identical Assets
(Level 1)
|
Significant Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Netting
Adjustments (1)
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Balance
as of
March 31,
2011
|
||||||||||||||||
(in millions)
|
||||||||||||||||||||
Assets
|
||||||||||||||||||||
Corporate equities
|
$ | 401 | $ | — | $ | — | $ | — | $ | 401 | ||||||||||
Investments in money
market funds
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54 | — | — | — | 54 | |||||||||||||||
Natural gas derivatives
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1 | 51 | 8 | (10 | ) | 50 | ||||||||||||||
Total assets
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$ | 456 | $ | 51 | $ | 8 | $ | (10 | ) | $ | 505 | |||||||||
Liabilities
|
||||||||||||||||||||
Indexed debt securities
derivative
|
$ | — | $ | 255 | $ | — | $ | — | $ | 255 | ||||||||||
Natural gas derivatives
|
5 | 112 | 2 | (65 | ) | 54 | ||||||||||||||
Total liabilities
|
$ | 5 | $ | 367 | $ | 2 | $ | (65 | ) | $ | 309 |
|
(1)
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Amounts represent the impact of legally enforceable master netting agreements that allow CenterPoint Energy to settle positive and negative positions and also include cash collateral of $55 million posted with the same counterparties.
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Fair Value Measurements Using Significant
Unobservable Inputs (Level 3)
|
||||||||
Derivative assets and liabilities, net
|
||||||||
Three Months Ended March 31,
|
||||||||
2010
|
2011
|
|||||||
(in millions)
|
||||||||
Beginning balance
|
$ | (6 | ) | $ | 3 | |||
Total unrealized gains (losses):
|
||||||||
Included in earnings
|
2 | 3 | ||||||
Included in regulatory assets
|
(1 | ) | — | |||||
Total settlements, gross
(1)
:
|
||||||||
Included in regulatory assets
|
9 | — | ||||||
Ending balance
|
$ | 4 | $ | 6 | ||||
The amount of total gains for the period included in earnings
attributable to the change in unrealized gains or losses relating to
assets still held at the reporting date
|
$ | 2 | $ | 4 |
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(1)
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As of both March 31, 2010 and 2011, CenterPoint Energy did not have Level 3 purchases or sales.
|
December 31, 2010
|
March 31, 2011
|
|||||||||||||||
Carrying
Amount
|
Fair
Value
|
Carrying
Amount
|
Fair
Value
|
|||||||||||||
(in millions)
|
||||||||||||||||
Financial liabilities:
|
||||||||||||||||
Long-term debt
|
$ | 9,303 | $ | 10,071 | $ | 9,026 | $ | 9,704 |
Natural Gas Distribution
|
$ | 746 | ||
Interstate Pipelines
|
579 | |||
Competitive Natural Gas Sales and Services
|
335 | |||
Field Services
|
25 | |||
Other Operations
|
11 | |||
Total
|
$ | 1,696 |
For the Three Months Ended
March 31,
|
||||||||
2010
|
2011
|
|||||||
(in millions)
|
||||||||
Net income
|
$ | 114 | $ | 148 | ||||
Other comprehensive income:
|
||||||||
Adjustment related to pension and other postretirement
plans (net of tax of $1 and $2)
|
3 | 2 | ||||||
Total
|
3 | 2 | ||||||
Comprehensive income
|
$ | 117 | $ | 150 |
December 31,
2010
|
March 31,
2011
|
|||||||
(in millions)
|
||||||||
Adjustment related to pension and postretirement plans
|
$ | (114 | ) | $ | (112 | ) | ||
Net deferred loss from cash flow hedges
|
(3 | ) | (3 | ) | ||||
Total accumulated other comprehensive loss
|
$ | (117 | ) | $ | (115 | ) |
December 31,
2010
|
March 31,
2011
|
|||||||
(in millions)
|
||||||||
Unrecognized tax benefits
|
$ | 252 | $ | 295 | ||||
Portion of unrecognized tax benefits that, if recognized,
would reduce the effective income tax rate
|
17 | 18 | ||||||
Interest accrued on unrecognized tax benefits
|
12 | 14 |
Three Months Ended March 31,
|
||||||||
2010
|
2011
|
|||||||
(in millions, except share
and per share amounts)
|
||||||||
Basic earnings per share calculation:
|
||||||||
Net income
|
$ | 114 | $ | 148 | ||||
Weighted average shares outstanding
|
392,855,000 | 425,018,000 | ||||||
Basic earnings per share:
|
||||||||
Net income
|
$ | 0.29 | $ | 0.35 | ||||
Diluted earnings per share calculation:
|
||||||||
Net income
|
$ | 114 | $ | 148 | ||||
Weighted average shares outstanding
|
392,855,000 | 425,018,000 | ||||||
Plus: Incremental shares from assumed conversions:
|
||||||||
Stock options (1)
|
582,000 | 461,000 | ||||||
Restricted stock
|
1,641,000 | 1,936,000 | ||||||
Weighted average shares assuming dilution
|
395,078,000 | 427,415,000 | ||||||
Diluted earnings per share:
|
||||||||
Net income
|
$ | 0.29 | $ | 0.35 |
|
(1)
|
Options to purchase 1,753,239 and 111,760 shares were outstanding for the three months ended March 31, 2010 and 2011, respectively, but were not included in the computation of diluted earnings per share because the options’ exercise price was greater than the average market price of the common shares for the respective periods.
|
|
(1)
|
Sales to subsidiaries of NRG Retail LLC, the successor to RRI's Texas retail business, in the three months ended March 31, 2010 and 2011 represented approximately $135 million and $126 million, respectively, of CenterPoint Houston’s transmission and distribution revenues. Sales to subsidiaries of TXU Energy Retail Company LLC in the three months ended March 31, 2010 and 2011 represented approximately $42 million and $40 million, respectively, of CenterPoint Houston’s transmission and distribution revenues.
|
|
(2)
|
Included in total assets of Other Operations as of December 31, 2010 and March 31, 2011 are pension and other postemployment related regulatory assets of $704 million and $692 million, respectively.
|
|
•
|
The method used by the Texas Utility Commission to calculate the market value of our former generating assets was overturned. In its decision, the Texas Utility Commission had rejected the partial stock valuation method CenterPoint Houston utilized to establish the market value of the generating assets, and the Texas Utility Commission had fashioned its own valuation. The Texas Supreme Court ruled that the Texas Utility Commission had no authority to craft an alternative valuation methodology but instead should have valued the generating assets at the value established when we later sold our Texas Genco subsidiary. This portion of the decision requires that the valuation question be remanded to the Texas Utility Commission for a determination. We currently estimate that application of the sale of assets methodology would reduce stranded costs by approximately $252 million, less selling costs, with the amount ultimately determined (plus interest) subtracted from the amounts eligible for recovery in the remand proceeding. This portion of the decision is unfavorable to us.
|
|
•
|
The Texas Utility Commission’s order denying recovery of approximately $440 million in capacity auction true-up amounts was reversed. This portion of the decision is favorable to us. These sums plus interest are eligible for recovery in the remand proceeding.
|
|
•
|
The Texas Utility Commission’s refusal to include approximately $378 million related to depreciation in the calculation of stranded costs was reversed. This portion of the decision is favorable to us. These sums plus interest are eligible for recovery in the remand proceeding.
|
|
•
|
The Texas Utility Commission’s order allowing recovery of excess mitigation credits (EMCs) that we had been ordered to pay our former affiliate was upheld. This portion of the decision is favorable to us. These sums have already been recovered and will not be addressed in the remand proceeding.
|
|
•
|
The Texas Utility Commission decisions allowing recovery of construction work in progress balances and interest on the capacity auction true-up amounts were upheld. These decisions are favorable to us. These sums have already been recovered and will not be addressed in the remand proceeding.
|
Three Months Ended March 31,
|
||||||||
2010
|
2011
|
|||||||
Revenues
|
$ | 3,023 | $ | 2,587 | ||||
Expenses
|
2,666 | 2,223 | ||||||
Operating Income
|
357 | 364 | ||||||
Gain on Marketable Securities
|
38 | 32 | ||||||
Loss on Indexed Debt Securities
|
(27 | ) | (23 | ) | ||||
Interest and Other Finance Charges
|
(122 | ) | (116 | ) | ||||
Interest on Transition and System Restoration Bonds
|
(36 | ) | (33 | ) | ||||
Equity in Earnings of Unconsolidated Affiliates
|
5 | 6 | ||||||
Other Income, net
|
1 | 5 | ||||||
Income Before Income Taxes
|
216 | 235 | ||||||
Income Tax Expense
|
102 | 87 | ||||||
Net Income
|
$ | 114 | $ | 148 | ||||
Basic Earnings Per Share
|
$ | 0.29 | $ | 0.35 | ||||
Diluted Earnings Per Share
|
$ | 0.29 | $ | 0.35 |
Three Months Ended March 31,
|
||||||||
2010
|
2011
|
|||||||
Electric Transmission & Distribution
|
$ | 107 | $ | 101 | ||||
Natural Gas Distribution
|
139 | 142 | ||||||
Competitive Natural Gas Sales and Services
|
15 | 10 | ||||||
Interstate Pipelines
|
72 | 76 | ||||||
Field Services
|
23 | 36 | ||||||
Other Operations
|
1 | (1 | ) | |||||
Total Consolidated Operating Income
|
$ | 357 | $ | 364 |
Three Months Ended March 31,
|
||||||||
2010
|
2011
|
|||||||
Revenues:
|
||||||||
Electric transmission and distribution utility
|
$ | 386 | $ | 400 | ||||
Transition and system restoration bond companies
|
96 | 89 | ||||||
Total revenues
|
482 | 489 | ||||||
Expenses:
|
||||||||
Operation and maintenance, excluding transition and system
restoration bond companies
|
190 | 208 | ||||||
Depreciation and amortization, excluding transition and system
restoration bond companies
|
73 | 71 | ||||||
Taxes other than income taxes
|
52 | 53 | ||||||
Transition and system restoration bond companies
|
60 | 56 | ||||||
Total expenses
|
375 | 388 | ||||||
Operating Income
|
$ | 107 | $ | 101 | ||||
Operating Income:
|
||||||||
Electric transmission and distribution utility
|
$ | 71 | $ | 68 | ||||
Transition and system restoration bond companies
(1)
|
36 | 33 | ||||||
Total segment operating income
|
$ | 107 | $ | 101 | ||||
Throughput (in gigawatt-hours (GWh)):
|
||||||||
Residential
|
5,173 | 4,871 | ||||||
Total
|
16,436 | 16,768 | ||||||
Number of metered customers at period end:
|
||||||||
Residential
|
1,858,403 | 1,885,691 | ||||||
Total
|
2,104,786 | 2,134,285 |
|
(1)
|
Represents the amount necessary to pay interest on the transition and system restoration bonds.
|
Three Months Ended March 31,
|
||||||||
2010
|
2011
|
|||||||
Revenues
|
$ | 1,537 | $ | 1,212 | ||||
Expenses:
|
||||||||
Natural gas
|
1,139 | 818 | ||||||
Operation and maintenance
|
167 | 168 | ||||||
Depreciation and amortization
|
40 | 42 | ||||||
Taxes other than income taxes
|
52 | 42 | ||||||
Total expenses
|
1,398 | 1,070 | ||||||
Operating Income
|
$ | 139 | $ | 142 | ||||
Throughput (in Bcf):
|
||||||||
Residential
|
96 | 90 | ||||||
Commercial and industrial
|
87 | 88 | ||||||
Total Throughput
|
183 | 178 | ||||||
Number of customers at period end:
|
||||||||
Residential
|
3,012,856 | 3,029,079 | ||||||
Commercial and industrial
|
246,676 | 246,987 | ||||||
Total
|
3,259,532 | 3,276,066 |
Three Months Ended March 31,
|
||||||||
2010
|
2011
|
|||||||
Revenues
|
$ | 852 | $ | 706 | ||||
Expenses:
|
||||||||
Natural gas
|
826 | 685 | ||||||
Operation and maintenance
|
9 | 10 | ||||||
Depreciation and amortization
|
1 | 1 | ||||||
Taxes other than income taxes
|
1 | — | ||||||
Total expenses
|
837 | 696 | ||||||
Operating Income
|
$ | 15 | $ | 10 | ||||
Throughput (in Bcf):
|
141 | 155 | ||||||
Number of customers at period end
|
11,369 | 11,942 |
Three Months Ended March 31,
|
||||||||
2010
|
2011
|
|||||||
Revenues
|
$ | 138 | $ | 147 | ||||
Expenses:
|
||||||||
Natural gas
|
10 | 18 | ||||||
Operation and maintenance
|
35 | 31 | ||||||
Depreciation and amortization
|
13 | 13 | ||||||
Taxes other than income taxes
|
8 | 9 | ||||||
Total expenses
|
66 | 71 | ||||||
Operating Income
|
$ | 72 | $ | 76 | ||||
Equity in earnings of unconsolidated affiliates
|
$ | 3 | $ | 4 | ||||
Transportation throughput (in Bcf)
|
438 | 461 |
Three Months Ended March 31,
|
||||||||
2010
|
2011
|
|||||||
Revenues
|
$ | 68 | $ | 90 | ||||
Expenses:
|
||||||||
Natural gas
|
16 | 15 | ||||||
Operation and maintenance
|
21 | 29 | ||||||
Depreciation and amortization
|
6 | 9 | ||||||
Taxes other than income taxes
|
2 | 1 | ||||||
Total expenses
|
45 | 54 | ||||||
Operating Income
|
$ | 23 | $ | 36 | ||||
Equity in earnings of unconsolidated affiliates
|
$ | 2 | $ | 2 | ||||
Gathering throughput (in Bcf)
|
128 | 183 |
Three Months Ended March 31,
|
||||||||
2010
|
2011
|
|||||||
Revenues
|
$ | 3 | $ | 3 | ||||
Expenses
|
2 | 4 | ||||||
Operating Income
|
$ | 1 | $ | (1 | ) |
Three Months Ended March 31,
|
||||||||
2010
|
2011
|
|||||||
(in millions)
|
||||||||
Cash provided by (used in):
|
||||||||
Operating activities
|
$ | 435 | $ | 627 | ||||
Investing activities
|
(303 | ) | (308 | ) | ||||
Financing activities
|
(543 | ) | (423 | ) |
|
•
|
capital expenditures of approximately $1.1 billion;
|
|
•
|
$143 million of scheduled principal payments on transition and system restoration bonds; and
|
|
•
|
dividend payments on CenterPoint Energy common stock and interest payments on debt.
|
Date Executed
|
Company
|
Type of
Facility
|
Size of
Facility
|
Amount
Utilized at
April 15,
2011
(1)
|
Termination Date
|
||||||||
June 29, 2007
|
CenterPoint Energy
|
Revolver
|
$ | 1,156 | $ | 17 | (2) |
June 29, 2012
|
|||||
June 29, 2007
|
CenterPoint Houston
|
Revolver
|
289 | 4 | (2) |
June 29, 2012
|
|||||||
June 29, 2007
|
CERC Corp.
|
Revolver
|
915 | 52 | (3) |
June 29, 2012
|
|||||||
September 15, 2010
|
CERC
|
Receivables
|
375 | — |
September 14, 2011
|
|
(1)
|
Based on the debt (excluding transition and system restoration bonds) to earnings before interest, taxes, depreciation and amortization (EBITDA) covenant contained in our $1.2 billion credit facility, we would have been permitted to utilize the full capacity of our credit facilities of $2.4 billion at March 31, 2011. Amounts advanced under CERC’s receivables facility are not treated as outstanding indebtedness in the debt to EBITDA covenant calculation.
|
|
(2)
|
Represents outstanding letters of credit.
|
|
(3)
|
Represents commercial paper that is backstopped by CERC Corp.’s revolving credit facility.
|
Moody’s
|
S&P
|
Fitch
|
||||||||||
Company/Instrument
|
Rating
|
Review (1)
|
Rating
|
Outlook(2)
|
Rating
|
Outlook(3)
|
||||||
CenterPoint Energy Senior
Unsecured Debt
|
Ba1
|
Upgrade Review
|
BBB-
|
Positive
|
BBB-
|
Stable
|
||||||
CenterPoint Houston Senior
Secured Debt
|
A3
|
Upgrade Review
|
BBB+
|
Positive
|
A-
|
Stable
|
||||||
CERC Corp. Senior
Unsecured Debt
|
Baa3
|
Upgrade Review
|
BBB
|
Positive
|
BBB
|
Stable
|
|
(1)
|
A Moody’s review for possible upgrade indicates the rating is under review for possible change in the short term, usually within 90 days.
|
|
(2)
|
An S&P rating outlook assesses the potential direction of a long-term credit rating over the intermediate to longer term.
|
|
(3)
|
A “stable” outlook from Fitch encompasses a one- to two-year horizon as to the likely ratings direction.
|
|
•
|
cash collateral requirements that could exist in connection with certain contracts, including our weather hedging arrangements, and gas purchases, gas price and gas storage activities of our Natural Gas Distribution and Competitive Natural Gas Sales and Services business segments;
|
|
•
|
acceleration of payment dates on certain gas supply contracts, under certain circumstances, as a result of increased gas prices and concentration of natural gas suppliers;
|
|
•
|
increased costs related to the acquisition of natural gas;
|
|
•
|
increases in interest expense in connection with debt refinancings and borrowings under credit facilities;
|
|
•
|
various legislative or regulatory actions;
|
|
•
|
incremental collateral, if any, that may be required due to regulation of derivatives;
|
|
•
|
the ability of GenOn and its subsidiaries to satisfy their obligations in respect of GenOn’s indemnity obligations to us and our subsidiaries or in connection with the contractual obligations to a third party pursuant to which CERC is a guarantor;
|
|
•
|
the ability of retail electric providers (REPs), including REP subsidiaries of NRG Retail LLC and REP subsidiaries of TXU Energy Retail Company LLC, which are CenterPoint Houston’s two largest customers, to satisfy their obligations to us and our subsidiaries;
|
|
•
|
slower customer payments and increased write-offs of receivables due to higher gas prices or changing economic conditions;
|
|
•
|
the outcome of litigation brought by and against us;
|
|
•
|
contributions to pension and postretirement benefit plans;
|
|
•
|
restoration costs and revenue losses resulting from future natural disasters such as hurricanes and the timing of recovery of such restoration costs; and
|
|
•
|
various other risks identified in “Risk Factors” in Item 1A of Part I of our 2010 Form 10-K.
|
Exhibit
Number
|
Description
|
Report or Registration
Statement
|
SEC File or
Registration
Number
|
Exhibit
Reference
|
||||
3.1
|
Restated Articles of Incorporation of CenterPoint Energy
|
CenterPoint Energy’s Form 8-K dated July 24, 2008
|
1-31447
|
3.2
|
||||
3.2
|
Amended and Restated Bylaws of CenterPoint Energy
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2010
|
1-31447
|
3(b)
|
||||
4.1
|
Form of CenterPoint Energy Stock Certificate
|
CenterPoint Energy’s Registration Statement on Form S-4
|
3-69502
|
4.1
|
Exhibit
Number
|
Description
|
Report or Registration
Statement
|
SEC File or
Registration
Number
|
Exhibit
Reference
|
||||
4.2
|
Rights Agreement dated January 1, 2002, between CenterPoint Energy and JPMorgan Chase Bank, as Rights Agent
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2001
|
1-31447
|
4.2
|
||||
4.3.1
|
$1,200,000,000 Second Amended and Restated Credit Agreement, dated as of June 29, 2007, among CenterPoint Energy, as Borrower, and the banks named therein
|
CenterPoint Energy’s Form 10-Q for the quarter ended June 30, 2007
|
1-31447
|
4.3
|
||||
4.3.2
|
First Amendment to Exhibit 4.3.1, dated as of August 20, 2008, among CenterPoint Energy, as Borrower, and the banks named therein
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2008
|
1-31447
|
4.4
|
||||
4.3.3
|
Second Amendment to Exhibit 4.3.1, dated as of November 18, 2008, among CenterPoint Energy, as Borrower, and the banks named therein
|
CenterPoint Energy’s Form 8-K dated November 18, 2008
|
1-31447
|
4.1
|
||||
4.3.4
|
Third Amendment to Exhibit 4.3.1, dated as of February 5, 2010, among CenterPoint Energy, as Borrower, and the banks named therein
|
CenterPoint Energy’s Form 8-K dated February 5, 2010
|
1-31447
|
4.1
|
||||
4.4.1
|
$300,000,000 Second Amended and Restated Credit Agreement, dated as of June 29, 2007, among CenterPoint Houston, as Borrower, and the banks named therein
|
CenterPoint Energy’s Form 10-Q for the quarter ended June 30, 2007
|
1-31447
|
4.4
|
||||
4.4.2
|
First Amendment to Exhibit 4.4.1, dated as of November 18, 2008, among CenterPoint Houston, as Borrower, and the banks named therein
|
CenterPoint Energy’s Form 8-K dated November 18, 2008
|
1-31447
|
4.2
|
||||
4.5
|
$950,000,000 Second Amended and Restated Credit Agreement, dated as of June 29, 2007 among CERC Corp., as Borrower, and the banks named therein
|
CenterPoint Energy’s Form 10-Q for the quarter ended June 30, 2007
|
1-31447
|
4.5
|
||||
10.1
|
CenterPoint Energy, Inc. Stock Plan for Outside Directors (including the First Amendment thereto)
|
CenterPoint Energy’s Definitive Proxy Statement on Schedule 14A filed on March 11, 2011
|
1-31447
|
Appendix A
|
||||
10.2
|
Second Amendment to CenterPoint Energy, Inc. Stock Plan for Outside Directors
|
CenterPoint Energy’s Registration Statement on Form S-8
|
333-173660
|
4.6
|
||||
+10.3
|
CenterPoint Energy, Inc. 1991 Benefit Restoration Plan, amended and restated effective as of February 25, 2011
|
|||||||
+10.4
|
First Amendment to
CenterPoint Energy Benefit Restoration Plan, effective as of February 25, 2011
|
Exhibit
Number
|
Description
|
Report or Registration
Statement
|
SEC File or
Registration
Number
|
Exhibit
Reference
|
||||
+10.5
|
First Amendment to Amended and Restated
CenterPoint Energy, Inc. 1991 Savings Restoration Plan, effective as of February 25, 2011
|
|||||||
+10.6
|
First Amendment to CenterPoint Energy Savings Restoration Plan, effective as of February 25, 2011
|
|||||||
+12
|
Computation of Ratios of Earnings to Fixed Charges
|
|||||||
+31.1
|
Rule 13a-14(a)/15d-14(a) Certification of David M. McClanahan
|
|||||||
+31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Gary L. Whitlock
|
|||||||
+32.1
|
Section 1350 Certification of David M. McClanahan
|
|||||||
+32.2
|
Section 1350 Certification of Gary L. Whitlock
|
|||||||
+101.INS
|
XBRL Instance Document (1)
|
|||||||
+101.SCH
|
XBRL Taxonomy Extension Schema Document (1)
|
|||||||
+101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document (1)
|
|||||||
+101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document (1)
|
|||||||
+101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document (1)
|
|
(1)
|
Furnished, not filed.
|
CENTERPOINT ENERGY, INC.
|
|
By:
|
/s/ Walter L. Fitzgerald
|
Walter L. Fitzgerald
|
|
Senior Vice President and Chief Accounting Officer
|
|
Exhibit
Number
|
Description
|
Report or Registration
Statement
|
SEC File or
Registration
Number
|
Exhibit
Reference
|
||||
3.1
|
Restated Articles of Incorporation of CenterPoint Energy
|
CenterPoint Energy’s Form 8-K dated July 24, 2008
|
1-31447
|
3.2
|
||||
3.2
|
Amended and Restated Bylaws of CenterPoint Energy
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2010
|
1-31447
|
3(b)
|
||||
4.1
|
Form of CenterPoint Energy Stock Certificate
|
CenterPoint Energy’s Registration Statement on Form S-4
|
3-69502
|
4.1
|
||||
4.2
|
Rights Agreement dated January 1, 2002, between CenterPoint Energy and JPMorgan Chase Bank, as Rights Agent
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2001
|
1-31447
|
4.2
|
||||
4.3.1
|
$1,200,000,000 Second Amended and Restated Credit Agreement, dated as of June 29, 2007, among CenterPoint Energy, as Borrower, and the banks named therein
|
CenterPoint Energy’s Form 10-Q for the quarter ended June 30, 2007
|
1-31447
|
4.3
|
||||
4.3.2
|
First Amendment to Exhibit 4.3.1, dated as of August 20, 2008, among CenterPoint Energy, as Borrower, and the banks named therein
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2008
|
1-31447
|
4.4
|
||||
4.3.3
|
Second Amendment to Exhibit 4.3.1, dated as of November 18, 2008, among CenterPoint Energy, as Borrower, and the banks named therein
|
CenterPoint Energy’s Form 8-K dated November 18, 2008
|
1-31447
|
4.1
|
||||
4.3.4
|
Third Amendment to Exhibit 4.3.1, dated as of February 5, 2010, among CenterPoint Energy, as Borrower, and the banks named therein
|
CenterPoint Energy’s Form 8-K dated February 5, 2010
|
1-31447
|
4.1
|
||||
4.4.1
|
$300,000,000 Second Amended and Restated Credit Agreement, dated as of June 29, 2007, among CenterPoint Houston, as Borrower, and the banks named therein
|
CenterPoint Energy’s Form 10-Q for the quarter ended June 30, 2007
|
1-31447
|
4.4
|
||||
4.4.2
|
First Amendment to Exhibit 4.4.1, dated as of November 18, 2008, among CenterPoint Houston, as Borrower, and the banks named therein
|
CenterPoint Energy’s Form 8-K dated November 18, 2008
|
1-31447
|
4.2
|
Exhibit
Number
|
Description
|
Report or Registration
Statement
|
SEC File or
Registration
Number
|
Exhibit
Reference
|
||||
4.5
|
$950,000,000 Second Amended and Restated Credit Agreement, dated as of June 29, 2007 among CERC Corp., as Borrower, and the banks named therein
|
CenterPoint Energy’s Form 10-Q for the quarter ended June 30, 2007
|
1-31447
|
4.5
|
||||
10.1
|
CenterPoint Energy, Inc. Stock Plan for Outside Directors (including the First Amendment thereto)
|
CenterPoint Energy’s Definitive Proxy Statement on Schedule 14A filed on March 11, 2011
|
1-31447
|
Appendix A
|
||||
10.2
|
Second Amendment to CenterPoint Energy, Inc. Stock Plan for Outside Directors
|
CenterPoint Energy’s Registration Statement on Form S-8
|
333-173660
|
4.6
|
||||
+10.3
|
CenterPoint Energy, Inc. 1991 Benefit Restoration Plan, amended and restated effective as of February 25, 2011
|
|||||||
+10.4
|
First Amendment to
CenterPoint Energy Benefit Restoration Plan, effective as of February 25, 2011
|
|||||||
+10.5
|
First Amendment to Amended and Restated
CenterPoint Energy, Inc. 1991 Savings Restoration Plan, effective as of February 25, 2011
|
|||||||
+10.6
|
First Amendment to CenterPoint Energy Savings Restoration Plan, effective as of February 25, 2011
|
|||||||
+12
|
Computation of Ratios of Earnings to Fixed Charges
|
|||||||
+31.1
|
Rule 13a-14(a)/15d-14(a) Certification of David M. McClanahan
|
|||||||
+31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Gary L. Whitlock
|
|||||||
+32.1
|
Section 1350 Certification of David M. McClanahan
|
|||||||
+32.2
|
Section 1350 Certification of Gary L. Whitlock
|
|||||||
+101.INS
|
XBRL Instance Document (1)
|
|||||||
+101.SCH
|
XBRL Taxonomy Extension Schema Document (1)
|
|||||||
+101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document (1)
|
|||||||
+101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document (1)
|
|||||||
+101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document (1)
|
|
(1)
|
Furnished, not filed.
|
CENTERPOINT ENERGY, INC.
|
||
By /s/ David M. McClanahan
|
||
David M. McClanahan
|
||
President and Chief Executive Officer
|
||
ATTEST
:
|
||
/s/ Richard Dauphin | ||
Richard Dauphin
|
||
Assistant Corporate Secretary
|
CENTERPOINT ENERGY, INC.
|
||
By /s/ David M. McClanahan
|
||
David M. McClanahan
|
||
President and Chief Executive Officer
|
||
ATTEST
:
|
||
/s/ Richard Dauphin | ||
Richard Dauphin
|
||
Assistant Corporate Secretary
|
CENTERPOINT ENERGY, INC.
|
||
By /s/ David M. McClanahan
|
||
David M. McClanahan
|
||
President and Chief Executive Officer
|
||
ATTEST
:
|
||
/s/ Richard Dauphin | ||
Richard Dauphin
|
||
Assistant Corporate Secretary
|
CENTERPOINT ENERGY, INC.
|
||
By /s/ David M. McClanahan
|
||
David M. McClanahan
|
||
President and Chief Executive Officer
|
||
ATTEST
:
|
||
/s/ Richard Dauphin | ||
Richard Dauphin
|
||
Assistant Corporate Secretary
|
Three Months Ended March 31,
|
||||||||
2010 (1)
|
2011 (1)
|
|||||||
Net Income
|
$ | 114 | $ | 148 | ||||
Equity in earnings of unconsolidated affiliates, net of distributions
|
5 | (3 | ) | |||||
Income taxes
|
102 | 87 | ||||||
Capitalized interest
|
(1 | ) | (2 | ) | ||||
220 | 230 | |||||||
Fixed charges, as defined:
|
||||||||
Interest
|
158 | 149 | ||||||
Capitalized interest
|
1 | 2 | ||||||
Interest component of rentals charged to operating expense
|
6 | 4 | ||||||
Total fixed charges
|
165 | 155 | ||||||
Earnings, as defined
|
$ | 385 | $ | 385 | ||||
Ratio of earnings to fixed charges
|
2.33 | 2.48 |
|
(1)
|
Excluded from the computation of fixed charges for the three months ended March 31, 2010 and 2011 is interest expense of $2 million and $1 million, which is included in income tax expense.
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ David M. McClanahan
|
|
David M. McClanahan
|
|
President and Chief Executive Officer
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Gary L. Whitlock
|
|
Gary L. Whitlock
|
|
Executive Vice President and Chief Financial Officer
|
/s/ David M. McClanahan
|
|
David M. McClanahan
|
|
President and Chief Executive Officer
|
|
May 5, 2011
|
/s/ Gary L. Whitlock
|
|
Gary L. Whitlock
|
|
Executive Vice President and Chief Financial Officer
|
|
May 5, 2011
|