(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 JUNE 30, 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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22-3865106
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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
o
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Accelerated filer
o
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Non-accelerated filer
þ
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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 and Six Months Ended June 30, 2010 and 2011 (unaudited)
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1
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December 31, 2010 and June 30, 2011 (unaudited)
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2
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Six Months Ended June 30, 2010 and 2011 (unaudited)
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4
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5
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Item 2.
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14
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Item 4.
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22
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PART II.
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OTHER INFORMATION
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Item 1.
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23
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Item 1A.
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23
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Item 5.
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23
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Item 6.
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23
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•
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the resolution of the true-up proceedings, including 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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•
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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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•
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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, health care reform, financial reform and tax legislation;
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•
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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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•
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the timing and outcome of any audits, disputes and other proceedings related to taxes;
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•
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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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•
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weather variations and other natural phenomena;
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•
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the impact of unplanned facility outages;
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•
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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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•
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changes in interest rates or rates of inflation;
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•
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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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•
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actions by credit rating agencies;
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•
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inability of various counterparties to meet their obligations to us;
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•
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non-payment for our services due to financial distress of our customers;
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•
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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;
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•
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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 our two largest customers, to satisfy their obligations to us and our subsidiaries;
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•
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the outcome of litigation brought by or against us;
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•
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our ability to control costs;
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•
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the investment performance of CenterPoint Energy’s pension and postretirement benefit plans;
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•
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our potential business strategies, including restructurings, acquisitions or dispositions of assets or businesses, which we cannot assure you will be completed or will have the anticipated benefits to us;
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•
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acquisition and merger activities involving us or our competitors; and
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•
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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 and in Item 1A of Part II of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, each of which is incorporated herein by reference, and other reports we file from time to time with the Securities and Exchange Commission.
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Three Months Ended
June 30,
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Six Months Ended
June 30,
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|||||||||||||||
2010
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2011
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2010
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2011
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|||||||||||||
Revenues
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$ | 562 | $ | 606 | $ | 1,050 | $ | 1,095 | ||||||||
Expenses:
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||||||||||||||||
Operation and maintenance
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207 | 221 | 398 | 431 | ||||||||||||
Depreciation and amortization
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145 | 149 | 277 | 274 | ||||||||||||
Taxes other than income taxes
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52 | 51 | 104 | 104 | ||||||||||||
Total
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404 | 421 | 779 | 809 | ||||||||||||
Operating Income
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158 | 185 | 271 | 286 | ||||||||||||
Other Income (Expense):
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||||||||||||||||
Interest and other finance charges
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(37 | ) | (38 | ) | (74 | ) | (75 | ) | ||||||||
Interest on transition and system restoration bonds
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(36 | ) | (32 | ) | (72 | ) | (65 | ) | ||||||||
Other, net
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9 | 7 | 16 | 15 | ||||||||||||
Total
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(64 | ) | (63 | ) | (130 | ) | (125 | ) | ||||||||
Income Before Income Taxes
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94 | 122 | 141 | 161 | ||||||||||||
Income tax expense
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34 | 43 | 51 | 58 | ||||||||||||
Net Income
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$ | 60 | $ | 79 | $ | 90 | $ | 103 |
December 31,
2010
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June 30,
2011
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|||||||
Current Assets:
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||||||||
Cash and cash equivalents ($198 and $176 related to VIEs at December 31,
2010 and June 30, 2011, respectively)
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$ | 198 | $ | 176 | ||||
Accounts and notes receivable, net ($49 and $68 related to VIEs at
December 31, 2010 and June 30, 2011, respectively)
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203 | 267 | ||||||
Accounts and notes receivable – affiliated companies
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919 | 985 | ||||||
Accrued unbilled revenues
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70 | 82 | ||||||
Inventory
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71 | 74 | ||||||
Taxes receivable
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63 | — | ||||||
Deferred tax asset
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3 | 4 | ||||||
Other ($39 and $40 related to VIEs at December 31, 2010 and June 30, 2011, respectively)
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62 | 48 | ||||||
Total current assets
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1,589 | 1,636 | ||||||
Property, Plant and Equipment:
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||||||||
Property, plant and equipment
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7,586 | 7,742 | ||||||
Less accumulated depreciation and amortization
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2,805 | 2,866 | ||||||
Property, plant and equipment, net
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4,781 | 4,876 | ||||||
Other Assets:
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||||||||
Regulatory assets ($2,597 and $2,460 related to VIEs at December 31, 2010
and June 30, 2011, respectively)
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2,675 | 2,570 | ||||||
Notes receivable — affiliated companies
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750 | 750 | ||||||
Other
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37 | 45 | ||||||
Total other assets
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3,462 | 3,365 | ||||||
Total Assets
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$ | 9,832 | $ | 9,877 |
December 31,
2010
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June 30,
2011
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|||||||
Current Liabilities:
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||||||||
Current portion of VIE transition and system restoration bonds long-term
debt
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$ | 283 | $ | 294 | ||||
Current portion of other long-term debt
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— | 46 | ||||||
Accounts payable
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76 | 66 | ||||||
Accounts and notes payable — affiliated companies
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36 | 55 | ||||||
Taxes accrued
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92 | 76 | ||||||
Interest accrued
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101 | 108 | ||||||
Other
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74 | 79 | ||||||
Total current liabilities
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662 | 724 | ||||||
Other Liabilities:
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||||||||
Accumulated deferred income taxes, net
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1,428 | 1,428 | ||||||
Benefit obligations
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215 | 211 | ||||||
Regulatory liabilities
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417 | 432 | ||||||
Notes payable — affiliated companies
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151 | 151 | ||||||
Other
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297 | 362 | ||||||
Total other liabilities
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2,508 | 2,584 | ||||||
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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2,092 | 2,046 | ||||||
Total long-term debt
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4,614 | 4,417 | ||||||
Commitments and Contingencies (Note 8)
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||||||||
Member’s Equity:
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||||||||
Common stock
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— | — | ||||||
Paid-in capital
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1,230 | 1,231 | ||||||
Retained earnings
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818 | 921 | ||||||
Total member’s equity
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2,048 | 2,152 | ||||||
Total Liabilities and Member’s Equity
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$ | 9,832 | $ | 9,877 |
Six Months Ended June 30,
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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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$ | 90 | $ | 103 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
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Depreciation and amortization
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277 | 274 | ||||||
Amortization of deferred financing costs
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6 | 6 | ||||||
Deferred income taxes
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(46 | ) | 60 | |||||
Changes in other assets and liabilities:
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||||||||
Accounts and notes receivable, net
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(92 | ) | (87 | ) | ||||
Accounts receivable/payable, affiliates
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(13 | ) | 13 | |||||
Inventory
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1 | (3 | ) | |||||
Accounts payable
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(2 | ) | (8 | ) | ||||
Taxes receivable
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54 | 63 | ||||||
Interest and taxes accrued
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(7 | ) | (9 | ) | ||||
Net regulatory assets and liabilities
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(6 | ) | (20 | ) | ||||
Other current assets
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14 | 15 | ||||||
Other current liabilities
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(8 | ) | 5 | |||||
Other assets
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(2 | ) | — | |||||
Other liabilities
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(1 | ) | (2 | ) | ||||
Other, net
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(1 | ) | 1 | |||||
Net cash provided by operating activities
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264 | 411 | ||||||
Cash Flows from Investing Activities:
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||||||||
Capital expenditures
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(242 | ) | (298 | ) | ||||
Increase in notes receivable from affiliates, net
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(109 | ) | (60 | ) | ||||
Decrease (increase) in restricted cash of transition and system restoration bond companies
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1 | (1 | ) | |||||
Cash received from U.S. Department of Energy grant
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33 | 77 | ||||||
Other, net
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(3 | ) | (11 | ) | ||||
Net cash used in investing activities
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(320 | ) | (293 | ) | ||||
Cash Flows from Financing Activities:
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||||||||
Payments of long-term debt
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(106 | ) | (141 | ) | ||||
Other, net
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— | 1 | ||||||
Net cash used in financing activities
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(106 | ) | (140 | ) | ||||
Net Decrease in Cash and Cash Equivalents
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(162 | ) | (22 | ) | ||||
Cash and Cash Equivalents at Beginning of Period
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739 | 198 | ||||||
Cash and Cash Equivalents at End of Period
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$ | 577 | $ | 176 | ||||
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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$ | 129 | $ | 133 | ||||
Income taxes (refunds), net
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34 | (83 | ) | |||||
Non-cash transactions:
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||||||||
Accounts payable related to capital expenditures
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35 | 35 |
(1)
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Background and Basis of Presentation
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(2)
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New Accounting Pronouncements
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(3)
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Employee Benefit Plans
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Three Months Ended
June 30,
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Six Months Ended
June 30,
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|||||||||||||||
2010
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2011
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2010
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2011
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|||||||||||||
(in millions)
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||||||||||||||||
Interest cost
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$ | 4 | $ | 4 | $ | 8 | $ | 8 | ||||||||
Expected return on plan assets
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(3 | ) | (2 | ) | (5 | ) | (4 | ) | ||||||||
Amortization of transition obligation
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2 | 2 | 3 | 3 | ||||||||||||
Net periodic cost
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$ | 3 | $ | 4 | $ | 6 | $ | 7 |
(4)
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Regulatory Matters
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•
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The method used by the Texas Utility Commission to calculate the market value of CenterPoint Houston’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 Houston currently estimates that application of the sale of assets methodology would reduce stranded costs by an amount equal to approximately $252 million, less selling costs, plus the amount of debt assumed by the buyer of Texas Genco. This portion of the decision is unfavorable to CenterPoint Houston.
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•
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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 Houston. 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 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 Houston. 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 EMCs that CenterPoint Houston had been ordered to pay its former affiliate was upheld. This portion of the decision is favorable to CenterPoint Houston. These sums have already been recovered and will not be addressed in the remand proceeding.
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•
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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 Houston. These sums have already been recovered and will not be addressed in the remand proceeding.
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(5)
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Fair Value Measurements
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December 31, 2010
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June 30, 2011
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|||||||||||||||
Carrying
Amount
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Fair
Value
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Carrying
Amount
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Fair
Value
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|||||||||||||
(in millions)
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||||||||||||||||
Financial liabilities:
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||||||||||||||||
Long-term debt (including $151 million of long-
term notes payable to parent)
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$ | 5,048 | $ | 5,499 | $ | 4,908 | $ | 5,408 |
(6)
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Related Party Transactions and Major Customers
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(7)
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Long-term Debt
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(8)
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Commitments and Contingencies
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(9)
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Income Taxes
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December 31,
2010
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June 30,
2011
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|||||||
(in millions)
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||||||||
Unrecognized tax benefits
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$ | 232 | $ | 295 | ||||
Portion of unrecognized tax benefits that, if recognized,
would reduce the effective income tax rate
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14 | 15 | ||||||
Interest accrued on unrecognized tax benefits
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17 | 21 |
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•
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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 we 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, Inc. (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. We currently estimate that application of the sale of assets methodology would reduce stranded costs by an amount equal to approximately $252 million, less selling costs, plus the amount of debt assumed by the buyer of Texas Genco. This portion of the decision is unfavorable to us.
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•
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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 us. 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 refusal to include approximately $378 million related to depreciation in the calculation of stranded costs was reversed. This portion of the decision is favorable to us. These sums plus interest are eligible for recovery in the remand proceeding.
|
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•
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The Texas Utility Commission’s order allowing recovery of excess mitigation credits (EMCs) that we had been ordered to pay our former affiliate was upheld. This portion of the decision is favorable to us. These sums have already been recovered and will not be addressed in the remand proceeding.
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•
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The Texas Utility Commission decisions allowing recovery of construction work in progress balances and interest on the capacity auction true-up amounts were upheld. These decisions are favorable to us. These sums have already been recovered and will not be addressed in the remand proceeding.
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Three Months Ended
June 30,
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Six Months Ended
June 30,
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|||||||||||||||
2010
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2011
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2010
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2011
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|||||||||||||
(in millions, except customer data)
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||||||||||||||||
Revenues:
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||||||||||||||||
Electric transmission and distribution utility
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$ | 449 | $ | 489 | $ | 841 | $ | 889 | ||||||||
Transition and system restoration bond companies
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113 | 117 | 209 | 206 | ||||||||||||
Total revenues
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562 | 606 | 1,050 | 1,095 | ||||||||||||
Expenses:
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||||||||||||||||
Operation and maintenance, excluding transition and
system restoration bond companies
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204 | 219 | 394 | 427 | ||||||||||||
Depreciation and amortization, excluding transition
and system restoration bond companies
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71 | 66 | 144 | 137 | ||||||||||||
Taxes other than income taxes
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52 | 51 | 104 | 104 | ||||||||||||
Transition and system restoration bond companies
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77 | 85 | 137 | 141 | ||||||||||||
Total expenses
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404 | 421 | 779 | 809 | ||||||||||||
Operating income
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158 | 185 | 271 | 286 | ||||||||||||
Interest and other finance charges
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(37 | ) | (38 | ) | (74 | ) | (75 | ) | ||||||||
Interest on transition and system restoration bonds
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(36 | ) | (32 | ) | (72 | ) | (65 | ) | ||||||||
Other income, net
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9 | 7 | 16 | 15 | ||||||||||||
Income before income taxes
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94 | 122 | 141 | 161 | ||||||||||||
Income tax expense
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34 | 43 | 51 | 58 | ||||||||||||
Net income
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$ | 60 | $ | 79 | $ | 90 | $ | 103 | ||||||||
Operating Income:
|
||||||||||||||||
Electric transmission and distribution utility
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$ | 122 | $ | 153 | $ | 199 | $ | 221 | ||||||||
Transition and system restoration bond companies
(1)
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36 | 32 | 72 | 65 | ||||||||||||
Total operating income
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$ | 158 | $ | 185 | $ | 271 | $ | 286 | ||||||||
Throughput (in gigawatt-hours (GWh)):
|
||||||||||||||||
Residential
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7,064 | 7,785 | 12,237 | 12,656 | ||||||||||||
Total
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20,174 | 21,077 | 36,610 | 37,845 | ||||||||||||
Number of metered customers at period end:
|
||||||||||||||||
Residential
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1,866,699 | 1,895,852 | 1,866,699 | 1,895,852 | ||||||||||||
Total
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2,113,695 | 2,145,979 | 2,113,695 | 2,145,979 |
Date Executed
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Type of
Facility
|
Size of
Facility
|
Amount
Utilized at
July 15,
2011
|
Termination Date
|
|||||||
June 29, 2007
|
Revolver
|
$ | 289 | $ | 4 | (1) |
June 29, 2012
|
|
(1)
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Represents outstanding letters of credit.
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Year
|
Third-Party
|
Affiliate
|
Sub-Total
|
Transition and
System
Restoration
Bonds
|
Total
|
|||||||||||||||
2011
|
$ | — | $ | — | $ | — | $ | 143 | $ | 143 | ||||||||||
2012
|
46 | — | 46 | 307 | 353 | |||||||||||||||
2013
|
450 | — | 450 | 330 | 780 | |||||||||||||||
2014
|
800 | — | 800 | 235 | 1,035 | |||||||||||||||
2015
|
— | 151 | 151 | 249 | 400 | |||||||||||||||
2016
|
— | — | — | 266 | 266 | |||||||||||||||
2017
|
127 | — | 127 | 283 | 410 | |||||||||||||||
2018
|
— | — | — | 303 | 303 | |||||||||||||||
2019
|
— | — | — | 323 | 323 | |||||||||||||||
2020
|
— | — | — | 91 | 91 | |||||||||||||||
2021
|
102 | — | 102 | 66 | 168 | |||||||||||||||
2022
|
— | — | — | 69 | 69 | |||||||||||||||
2023
|
200 | — | 200 | — | 200 | |||||||||||||||
2027
|
56 | — | 56 | — | 56 | |||||||||||||||
2033
|
312 | — | 312 | — | 312 | |||||||||||||||
Total
|
$ | 2,093 | $ | 151 | $ | 2,244 | $ | 2,665 | $ | 4,909 |
Issued Directly
to Third Parties
|
Issued as
Collateral for Our
Debt
|
Issued as Collateral
for CenterPoint
Energy’s Debt
|
Total
|
|||||||||||||
First Mortgage Bonds
|
$ | 102 | $ | — | $ | 151 | $ | 253 | ||||||||
General Mortgage Bonds
|
1,762 | 229 | 508 | (1) | 2,499 | |||||||||||
Total
|
$ | 1,864 | $ | 229 | $ | 659 | $ | 2,752 |
|
(1)
|
Of such amount, $290 million collateralizes bonds purchased by CenterPoint Energy in January 2010, which may be remarketed by CenterPoint Energy.
|
Year
|
First
Mortgage Bonds
|
General
Mortgage Bonds
|
Total
|
|||||||||
2015
|
$ | 151 | $ | — | $ | 151 | ||||||
2018
|
— | 50 | 50 | |||||||||
2019
|
— | 200 | (1) | 200 | ||||||||
2020
|
— | 90 | (1) | 90 | ||||||||
2026
|
— | 100 | 100 | |||||||||
2028
|
— | 68 | 68 | |||||||||
Total
|
$ | 151 | $ | 508 | $ | 659 |
|
(1)
|
These mortgage bonds collateralize bonds purchased by CenterPoint Energy in January 2010, which may be remarketed by CenterPoint Energy.
|
Moody’s
|
S&P
|
Fitch
|
||||||||||
Instrument
|
Rating
|
Outlook
(1)
|
Rating
|
Outlook
(2)
|
Rating
|
Outlook
(3)
|
||||||
Senior Secured Debt
|
A3
|
Stable
|
BBB+
|
Positive
|
A-
|
Positive
|
|
(1)
|
A Moody’s rating outlook is an opinion regarding the likely direction of an issuer’s rating over the medium term.
|
|
(2)
|
An S&P rating outlook assesses the potential direction of a long-term credit rating over the intermediate to longer term.
|
|
(3)
|
A Fitch rating outlook encompasses a one- to two-year horizon as to the likely ratings direction.
|
|
•
|
increases in interest expense in connection with debt refinancings and borrowings under our credit facility;
|
|
•
|
various legislative or regulatory actions;
|
|
•
|
the ability of GenOn and its subsidiaries to satisfy their obligations in respect of GenOn’s indemnity obligations to us;
|
|
•
|
the ability of REPs, including REP subsidiaries of NRG Retail LLC and REP subsidiaries of TXU Energy Retail Company LLC, which are our two largest customers, to satisfy their obligations to us and our subsidiaries;
|
|
•
|
the outcome of litigation brought by and against us;
|
|
•
|
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 and in Item 1A of Part II of our First Quarter Form 10-Q.
|
Exhibit
Number
|
Description
|
Report or Registration
Statement
|
SEC File or
Registration
Number
|
Exhibit
References
|
||||
+3.1
|
Restated Certificate of Formation of CenterPoint Houston
|
|||||||
+3.2
|
Amended and Restated Limited Liability Company Agreement of CenterPoint Houston
|
|||||||
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 Houston’s Form 10-Q for the quarter ended June 30, 2007
|
1-3187
|
4.1
|
||||
4.2
|
First Amendment to Exhibit 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
|
||||
+12
|
|
Exhibit
Number
|
Description
|
Report or Registration
Statement
|
SEC File or
Registration
Number
|
Exhibit
References
|
||||
+31.1
|
|
|||||||
+31.2
|
|
|||||||
+32.1
|
|
|||||||
+32.2
|
|
|||||||
+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)
|
CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
|
|
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
References
|
||||
+3.1
|
Restated Certificate of Formation of CenterPoint Houston
|
|||||||
+3.2
|
Amended and Restated Limited Liability Company Agreement of CenterPoint Houston
|
|||||||
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 Houston’s Form 10-Q for the quarter ended June 30, 2007
|
1-3187
|
4.1
|
||||
4.2
|
First Amendment to Exhibit 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
|
||||
+12
|
|
|||||||
+31.1
|
|
|||||||
+31.2
|
|
|||||||
+32.1
|
|
|||||||
+32.2
|
|
|||||||
+101.INS
|
XBRL Instance Document (1)
|
|||||||
+101.SCH
|
XBRL Taxonomy Extension Schema Document (1)
|
|||||||
+101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document (1)
|
CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
|
|
By:
/s/ Richard B. Dauphin
__________________________
|
|
Richard B. Dauphin
|
|
Assistant Secretary
|
(i)
|
For issuances of additional Common Shares to any Person, this Agreement shall be deemed amended with regard to such issuance upon the completion and execution of the form attached hereto as Exhibit B by a Manager and each Person receiving the Common Shares.
|
(ii)
|
For issuances to any person of additional Shares or classes of Shares that are not Common Shares, this Agreement shall be deemed amended with regard to such issuance upon the completion and execution of the form attached hereto as Exhibit B by a Manager and each Person receiving such Shares, except that the form of this Agreement must in such case be further amended to set forth the rights, obligations and terms of such Shares.
|
(iii)
|
Whenever this Agreement is amended pursuant to Section 4.3(c)(i) or (ii) above, Exhibit A shall be accordingly amended to reflect the issuance of such Shares.
|
UTILITY HOLDING, LLC
|
|
By: /s/ David M. McClanahan
|
|
Name: David M. McClanahan
|
|
Title: Chairman and CEO and Sole Manager
|
Member
|
Shares Held
|
Class of Shares
|
Capital Percentage
|
|||
Utility Holding, LLC
1111 Louisiana
Houston, Texas 77002
|
1,000
|
Common
|
100.0%
|
|||
Capital Contribution
|
Shares Issued
|
||||
No.
|
Type
|
||||
ADDITIONAL MEMBER
|
|
Signature block for entities:
|
|
[print or type name of entity receiving Shares]
|
By:
|
|
Name:
|
|
Title:
|
Signature for individuals:
|
|
[print or type name of individual receiving Shares]
|
MANAGER, PURSUANT TO SECTION 4.3(c) OF THE AGREEMENT
|
|
Name:
|
Six Months Ended June 30,
|
||||||||
2010 (1)
|
2011 (1)
|
|||||||
Net Income
|
$ | 90 | $ | 103 | ||||
Income taxes
|
51 | 58 | ||||||
Capitalized interest
|
(1 | ) | (2 | ) | ||||
140 | 159 | |||||||
Fixed charges, as defined:
|
||||||||
Interest
|
146 | 140 | ||||||
Capitalized interest
|
1 | 2 | ||||||
Interest component of rentals charged to operating expense
|
— | — | ||||||
Total fixed charges
|
147 | 142 | ||||||
Earnings, as defined
|
$ | 287 | $ | 301 | ||||
Ratio of earnings to fixed charges
|
1.95 | 2.12 |
|
(1)
|
Excluded from the computation of fixed charges for the six months ended June 30, 2010 and 2011 is interest expense of $3 million and $4 million, respectively, 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
|
|
Chairman (Principal 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
|
|
Chairman (Principal Executive Officer)
|
|
August 4, 2011
|
/s/ Gary L. Whitlock
|
|
Gary L. Whitlock
|
|
Executive Vice President and Chief Financial Officer
|
|
August 4, 2011
|