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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
Houston, Texas 77002
(Address and zip code of principal executive offices)
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(713) 207-1111
(Registrant’s telephone number, including area code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $0.01 par value
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New York Stock Exchange
Chicago Stock Exchange
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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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Emerging growth company
o
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(Do not check if a smaller reporting company)
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PART I
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||||
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Page
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Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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PART II
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||||
Item 5.
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Market for Registrants’ Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART III
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||||
Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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PART IV
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||||
Item 15.
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Exhibits and Financial Statement Schedules
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Item 16.
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Form 10-K Summary
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GLOSSARY
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||
ADFIT
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Accumulated deferred federal income taxes
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ADMS
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Advanced Distribution Management System
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AEM
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Atmos Energy Marketing, LLC, previously a wholly-owned subsidiary of Atmos Energy Holdings, Inc., a wholly-owned subsidiary of Atmos Energy Corporation
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AFUDC
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Allowance for funds used during construction
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AMAs
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Asset Management Agreements
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AMS
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Advanced Metering System
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AOL
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AOL Inc.
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APSC
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Arkansas Public Service Commission
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ArcLight
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ArcLight Capital Partners, LLC
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ARO
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Asset retirement obligation
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ASC
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Accounting Standards Codification
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ASU
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Accounting Standards Update
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AT&T
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AT&T Inc.
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AT&T Common
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AT&T common stock
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Bcf
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Billion cubic feet
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Btu
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British thermal units
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BDA
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Billing Determinant Adjustment, which is a revenue stabilization mechanism used to adjust revenues impacted by declines in natural gas consumption which occurred after the most recent rate case
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Bond Companies
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Wholly-owned, bankruptcy remote entities formed solely for the purpose of purchasing and owning transition or system restoration property through the issuance of Securitization Bonds
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Brazos Valley Connection
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A portion of the Houston region transmission project between Houston Electric’s Zenith substation and the Gibbons Creek substation owned by the Texas Municipal Power Agency
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CEA
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Commodities Exchange Act of 1936
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CEIP
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CenterPoint Energy Intrastate Pipelines, LLC
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CenterPoint Energy
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CenterPoint Energy, Inc., and its subsidiaries
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CERC Corp.
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CenterPoint Energy Resources Corp.
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CERC
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CERC Corp., together with its subsidiaries
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CERCLA
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Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended
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CES
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CenterPoint Energy Services, Inc., a wholly-owned subsidiary of CERC Corp.
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CFTC
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Commodity Futures Trading Commission
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Charter Common
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Charter Communications, Inc. common stock
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Charter merger
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Merger of Charter Communications, Inc. and Time Warner Cable Inc.
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CIP
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Conservation Improvement Program
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COLI
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Corporate-owned life insurance
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Continuum
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The retail energy services business of Continuum Retail Energy Services, LLC, including its wholly-owned subsidiary Lakeshore Energy Services, LLC and the natural gas wholesale assets of Continuum Energy Services, LLC
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DCRF
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Distribution Cost Recovery Factor
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Dodd-Frank Act
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Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
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DOE
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U.S. Department of Energy
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DOT
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U.S. Department of Transportation
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Dth
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Dekatherms
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EBITDA
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Earnings before interest, taxes, depreciation and amortization
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EDIT
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Excess deferred income taxes
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Item 1.
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Business
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(1)
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Houston Electric engages in the electric transmission and distribution business in the Texas Gulf Coast area that includes the city of Houston.
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(2)
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Bond Companies are wholly-owned, bankruptcy remote entities formed solely for the purpose of purchasing and owning transition or system restoration property through the issuance of Securitization Bonds.
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(3)
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NGD operates natural gas distribution systems in six states.
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(4)
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CES obtains and offers competitive variable and fixed-price physical natural gas supplies and services primarily to commercial and industrial customers and electric and natural gas utilities in
33
states.
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(5)
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Represents limited partner interests in Enable, which owns, operates and develops natural gas and crude oil infrastructure assets. For additional information regarding our interest in Enable, see Note 10 to our consolidated financial statements.
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•
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our Code of Ethics for our Chief Executive Officer and Senior Financial Officers;
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•
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our Ethics and Compliance Code;
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•
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our Corporate Governance Guidelines; and
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•
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the charters of the audit, compensation, finance and governance committees of our Board of Directors.
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•
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the lien of a Mortgage and Deed of Trust (the Mortgage) dated November 1, 1944, as supplemented; and
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•
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the lien of a General Mortgage (the General Mortgage) dated October 10, 2002, as supplemented, which is junior to the lien of the Mortgage.
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Circuit Miles
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||||
Operating Voltage
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Overhead Lines
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Underground Lines
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69 kV
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271
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2
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138 kV
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2,198
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24
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345 kV
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1,219
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—
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3,688
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26
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Residential
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Commercial/
Industrial
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Total Customers
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|||
Arkansas
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378,429
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47,965
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426,394
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Louisiana
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230,084
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16,711
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246,795
|
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Minnesota
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788,832
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70,178
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859,010
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Mississippi
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113,752
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12,567
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126,319
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Oklahoma
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89,074
|
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10,758
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99,832
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Texas
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1,612,969
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98,472
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1,711,441
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Total NGD
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3,213,140
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256,651
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3,469,791
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Supplier
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Percent of Supply Volumes
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Tenaska Marketing Ventures
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18.0%
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Macquarie Energy, LLC
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12.5%
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BP Energy Company/BP Canada Energy Marketing
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12.1%
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Kinder Morgan Tejas Pipeline/Kinder Morgan Texas Pipeline
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7.4%
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CES
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5.4%
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Mieco, Inc.
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5.0%
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Spire Marketing, Inc.
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4.9%
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United Energy Trading, LLC
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4.7%
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Koch Energy Services, LLC
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4.0%
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Cargill
|
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2.8%
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•
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restricting the way we can handle or dispose of wastes;
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•
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limiting or prohibiting construction activities in sensitive areas such as wetlands, coastal regions or areas inhabited by endangered species;
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•
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requiring remedial action to mitigate environmental conditions caused by our operations or attributable to former operations;
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•
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enjoining the operations of facilities with permits issued pursuant to such environmental laws and regulations; and
|
•
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impacting the demand for our services by directly or indirectly affecting the use or price of natural gas.
|
•
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construct or acquire new facilities and equipment;
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•
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acquire permits for facility operations;
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•
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modify, upgrade or replace existing and proposed equipment; and
|
•
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clean or decommission waste management areas, fuel storage facilities and other locations.
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Business Segment
|
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Number
|
|
Number
Represented
by Collective
Bargaining Groups
|
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Electric Transmission & Distribution
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2,816
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1,452
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Natural Gas Distribution
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3,316
|
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1,200
|
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Energy Services
|
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297
|
|
|
—
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Other Operations
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1,548
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127
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Total
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7,977
|
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2,779
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Name
|
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Age
|
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Title
|
Milton Carroll
|
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67
|
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Executive Chairman
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Scott M. Prochazka
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51
|
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President and Chief Executive Officer and Director
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William D. Rogers
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57
|
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Executive Vice President and Chief Financial Officer
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Tracy B. Bridge
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59
|
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Executive Vice President and President, Electric Division
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Scott E. Doyle
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46
|
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Senior Vice President, Natural Gas Distribution
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Joseph J. Vortherms
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57
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Senior Vice President, Energy Services
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Dana C. O’Brien
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50
|
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Senior Vice President and General Counsel
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Sue B. Ortenstone
|
|
61
|
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Senior Vice President and Chief Human Resources Officer
|
Item 1A.
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Risk Factors
|
•
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general economic and capital market conditions;
|
•
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credit availability from financial institutions and other lenders;
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•
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volatility or fluctuations in distributions from Enable’s units or volatility in Enable’s unit price;
|
•
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investor confidence in us and the markets in which we operate;
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•
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maintenance of acceptable credit ratings;
|
•
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market expectations regarding our future earnings and cash flows;
|
•
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our ability to access capital markets on reasonable terms;
|
•
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our exposure to GenOn (formerly known as RRI Energy, Inc., Reliant Energy and RRI), a wholly-owned subsidiary of NRG and currently the subject of bankruptcy proceedings, in connection with certain indemnification obligations;
|
•
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incremental collateral that may be required due to regulation of derivatives; and
|
•
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provisions of relevant tax and securities laws.
|
•
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the fees and gross margins it realizes with respect to the volume of natural gas, NGLs and crude oil that it handles;
|
•
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the prices of, levels of production of, and demand for natural gas, NGLs and crude oil;
|
•
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the volume of natural gas, NGLs and crude oil it gathers, compresses, treats, dehydrates, processes, fractionates, transports and stores;
|
•
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the relationship among prices for natural gas, NGLs and crude oil;
|
•
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cash calls and settlements of hedging positions;
|
•
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margin requirements on open price risk management assets and liabilities;
|
•
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the level of competition from other companies offering midstream services;
|
•
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adverse effects of governmental and environmental regulation;
|
•
|
the level of its operation and maintenance expenses and general and administrative costs; and
|
•
|
prevailing economic conditions.
|
•
|
the level and timing of its capital expenditures;
|
•
|
the cost of acquisitions;
|
•
|
its debt service requirements and other liabilities;
|
•
|
fluctuations in its working capital needs;
|
•
|
its ability to borrow funds and access capital markets;
|
•
|
restrictions contained in its debt agreements;
|
•
|
the amount of cash reserves established by its general partner;
|
•
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distributions paid on its Series A Preferred Units;
|
•
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any impact on cash levels should any sale of our investment in Enable occur; and
|
•
|
other business risks affecting its cash levels.
|
•
|
the availability and cost of capital;
|
•
|
prevailing and projected commodity prices, including the prices of natural gas, NGLs and crude oil;
|
•
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demand for natural gas, NGLs and crude oil;
|
•
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levels of reserves;
|
•
|
geological considerations;
|
•
|
environmental or other governmental regulations, including the availability of drilling permits and the regulation of hydraulic fracturing; and
|
•
|
the availability of drilling rigs and other costs of production and equipment.
|
•
|
Enable’s joint venture partners may share certain approval rights over major decisions;
|
•
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Enable’s joint venture partners may not pay their share of the joint venture’s obligations, leaving Enable liable for their shares of joint venture liabilities;
|
•
|
Enable may be unable to control the amount of cash it will receive from the joint venture;
|
•
|
Enable may incur liabilities as a result of an action taken by its joint venture partners;
|
•
|
Enable may be required to devote significant management time to the requirements of and matters relating to the joint ventures;
|
•
|
Enable’s insurance policies may not fully cover loss or damage incurred by both Enable and its joint venture partners in certain circumstances;
|
•
|
Enable’s joint venture partners may be in a position to take actions contrary to its instructions or requests or contrary to its policies or objectives; and
|
•
|
disputes between Enable and its joint venture partners may result in delays, litigation or operational impasses.
|
•
|
the ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired or the financing may not be available on favorable terms, if at all;
|
•
|
a portion of cash flows will be required to make interest payments on the debt, reducing the funds that would otherwise be available for operations, future business opportunities and distributions;
|
•
|
Enable’s debt level will make it more vulnerable to competitive pressures or a downturn in its business or the economy generally; and
|
•
|
Enable’s debt level may limit its flexibility in responding to changing business and economic conditions.
|
•
|
permit its subsidiaries to incur or guarantee additional debt;
|
•
|
incur or permit to exist certain liens on assets;
|
•
|
dispose of assets;
|
•
|
merge or consolidate with another company or engage in a change of control;
|
•
|
enter into transactions with affiliates on non-arm’s length terms; and
|
•
|
change the nature of its business.
|
•
|
restricting the way we can handle or dispose of wastes;
|
•
|
limiting or prohibiting construction activities in sensitive areas such as wetlands, coastal regions, or areas inhabited by endangered species;
|
•
|
requiring remedial action to mitigate environmental conditions caused by our operations, or attributable to former operations;
|
•
|
enjoining the operations of facilities with permits issued pursuant to such environmental laws and regulations; and
|
•
|
impacting the demand for our services by directly or indirectly affecting the use or price of natural gas.
|
•
|
construct or acquire new facilities and equipment;
|
•
|
acquire permits for facility operations;
|
•
|
modify or replace existing and proposed equipment; and
|
•
|
clean or decommission waste management areas, fuel storage facilities and other locations.
|
•
|
damage to pipelines and plants, related equipment and surrounding properties caused by hurricanes, tornadoes, floods, fires, earthquakes and other natural disasters, acts of terrorism and actions by third parties;
|
•
|
inadvertent damage from construction, vehicles, farm and utility equipment;
|
•
|
leaks of natural gas, NGLs, crude oil and other hydrocarbons or losses of natural gas, NGLs and crude oil as a result of the malfunction of equipment or facilities;
|
•
|
ruptures, fires and explosions; and
|
•
|
other hazards that could also result in personal injury and loss of life, pollution and suspension of operations.
|
•
|
merchant energy, energy trading and REP businesses transferred to RRI or its subsidiaries in connection with the organization and capitalization of RRI prior to its initial public offering in 2001 and now owned by affiliates of NRG; and
|
•
|
Texas electric generating facilities transferred to a subsidiary of Texas Genco in 2002, later sold to a third party and now owned by an affiliate of NRG.
|
•
|
operator error or failure of equipment or processes, including failure to follow appropriate safety protocols;
|
•
|
the handling of hazardous equipment or materials that could result in serious personal injury, loss of life and environmental and property damage;
|
•
|
operating limitations that may be imposed by environmental or other regulatory requirements;
|
•
|
labor disputes;
|
•
|
information technology or financial system failures, including those due to the implementation and integration of new technology, that impair our information technology infrastructure, reporting systems or disrupt normal business operations;
|
•
|
information technology failure that affects our ability to access customer information or causes us to lose confidential or proprietary data that materially and adversely affects our reputation or exposes us to legal claims; and
|
•
|
catastrophic events such as fires, earthquakes, explosions, leaks, floods, droughts, hurricanes, terrorism, pandemic health events or other similar occurrences, which may require participation in mutual assistance efforts by us or other utilities to assist in power restoration efforts.
|
•
|
perform ongoing assessments of pipeline integrity;
|
•
|
develop a baseline plan to prioritize the assessment of a covered pipeline segment;
|
•
|
identify and characterize applicable threats that could impact a high consequence area;
|
•
|
improve data collection, integration, and analysis;
|
•
|
develop processes for performance management, record keeping, management of change and communication;
|
•
|
repair and remediate pipelines as necessary; and
|
•
|
implement preventive and mitigating action.
|
•
|
acquired businesses or assets may not produce revenues, earnings or cash flow at anticipated levels;
|
•
|
acquired businesses or assets could have environmental, permitting or other problems for which contractual protections prove inadequate;
|
•
|
we or Enable may assume liabilities that were not disclosed to us, that exceed our estimates, or for which our rights to indemnification from the seller are limited;
|
•
|
we or Enable may be unable to integrate acquired businesses successfully and realize anticipated economic, operational and other benefits in a timely manner, which could result in substantial costs and delays or other operational, technical or financial problems; and
|
•
|
acquisitions, or the pursuit of acquisitions, could disrupt ongoing businesses, distract management, divert resources and make it difficult to maintain current business standards, controls and procedures.
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
Market Price
|
|
Dividend
Declared
|
||||||||
|
High
|
|
Low
|
|
Per Share
|
||||||
2017
|
|
|
|
|
|
||||||
First Quarter
|
|
|
|
|
$
|
0.2675
|
|
||||
January 3
|
|
|
$
|
24.59
|
|
|
|
||||
March 15
|
$
|
28.09
|
|
|
|
|
|
||||
Second Quarter
|
|
|
|
|
$
|
0.2675
|
|
||||
May 17
|
|
|
$
|
27.17
|
|
|
|
||||
June 1
|
$
|
28.93
|
|
|
|
|
|
||||
Third Quarter
|
|
|
|
|
$
|
0.2675
|
|
||||
July 11
|
|
|
$
|
27.16
|
|
|
|
||||
September 11
|
$
|
30.45
|
|
|
|
|
|
||||
Fourth Quarter
(1)
|
|
|
|
|
$
|
0.5450
|
|
||||
November 30
|
$
|
30.01
|
|
|
|
|
|
||||
December 21
|
|
|
$
|
27.77
|
|
|
|
||||
|
|
|
|
|
|
||||||
2016
|
|
|
|
|
|
||||||
First Quarter
|
|
|
|
|
$
|
0.2575
|
|
||||
January 20
|
|
|
$
|
16.90
|
|
|
|
||||
March 29
|
$
|
21.25
|
|
|
|
|
|
||||
Second Quarter
|
|
|
|
|
$
|
0.2575
|
|
||||
April 5
|
|
|
$
|
20.51
|
|
|
|
||||
June 29
|
$
|
24.00
|
|
|
|
|
|
||||
Third Quarter
|
|
|
|
|
$
|
0.2575
|
|
||||
July 22
|
$
|
24.69
|
|
|
|
|
|
||||
August 16
|
|
|
$
|
22.13
|
|
|
|
||||
Fourth Quarter
|
|
|
|
|
$
|
0.2575
|
|
||||
October 11
|
|
|
$
|
21.84
|
|
|
|
||||
December 22
|
$
|
24.84
|
|
|
|
|
|
(1)
|
On
October 25, 2017
, our Board of Directors declared a regular quarterly cash dividend of
$0.2675
per share of common stock payable on
December 8, 2017
, to shareholders of record as of the close of business on
November 16, 2017
. On
December 13, 2017
, our Board of Directors declared a regular quarterly cash dividend of
$0.2775
per share, payable on
March 8, 2018
to shareholders of record at the close of business on
February 15, 2018
.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(in millions, except per share amounts)
|
||||||||||||||||||
Revenues
|
$
|
9,614
|
|
|
$
|
7,528
|
|
|
$
|
7,386
|
|
|
$
|
9,226
|
|
|
$
|
8,106
|
|
Equity in earnings (losses) of unconsolidated affiliates
|
265
|
|
|
208
|
|
|
(1,663
|
)
|
(2)
|
308
|
|
|
188
|
|
|||||
Net income (loss)
|
1,792
|
|
(1)
|
432
|
|
|
(692
|
)
|
|
611
|
|
|
311
|
|
|||||
Basic earnings (loss) per common share
|
4.16
|
|
|
1.00
|
|
|
(1.61
|
)
|
|
1.42
|
|
|
0.73
|
|
|||||
Diluted earnings (loss) per common share
|
4.13
|
|
|
1.00
|
|
|
(1.61
|
)
|
|
1.42
|
|
|
$
|
0.72
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends paid per common share
|
$
|
1.07
|
|
|
$
|
1.03
|
|
|
$
|
0.99
|
|
|
$
|
0.95
|
|
|
$
|
0.83
|
|
Dividend payout ratio
|
26
|
%
|
|
103
|
%
|
|
n/a
|
|
|
67
|
%
|
|
114
|
%
|
|||||
Return on average common equity
|
44
|
%
|
|
12
|
%
|
|
(17
|
)%
|
|
14
|
%
|
|
7
|
%
|
|||||
Ratio of earnings to fixed charges
|
3.70
|
|
|
2.74
|
|
|
2.67
|
|
|
2.79
|
|
|
2.42
|
|
|||||
At year-end:
|
|
|
|
|
|
|
|
|
|
||||||||||
Book value per common share
|
$
|
10.88
|
|
|
$
|
8.04
|
|
|
$
|
8.05
|
|
|
$
|
10.58
|
|
|
$
|
10.09
|
|
Market price per common share
|
28.36
|
|
|
24.64
|
|
|
18.36
|
|
|
23.43
|
|
|
23.18
|
|
|||||
Market price as a percent of book value
|
261
|
%
|
|
306
|
%
|
|
228
|
%
|
|
221
|
%
|
|
230
|
%
|
|||||
Percentage of common units owned representing limited partner interests in Enable
|
54.1
|
%
|
|
54.1
|
%
|
|
55.4
|
%
|
|
55.4
|
%
|
|
58.3
|
%
|
|||||
Total assets
(4)
|
$
|
22,736
|
|
|
$
|
21,829
|
|
|
$
|
21,290
|
|
|
$
|
23,150
|
|
|
$
|
21,816
|
|
Short-term borrowings
|
39
|
|
|
35
|
|
|
40
|
|
|
53
|
|
|
43
|
|
|||||
Securitization Bonds, including current maturities
(3)
|
1,868
|
|
|
2,278
|
|
|
2,667
|
|
|
3,037
|
|
|
3,388
|
|
|||||
Other long-term debt, including current maturities
(3)
|
6,933
|
|
|
6,279
|
|
|
6,063
|
|
|
5,717
|
|
|
4,873
|
|
|||||
Capitalization:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock equity
|
35
|
%
|
|
29
|
%
|
|
28
|
%
|
|
34
|
%
|
|
34
|
%
|
|||||
Long-term debt, including current maturities
|
65
|
%
|
|
71
|
%
|
|
72
|
%
|
|
66
|
%
|
|
66
|
%
|
|||||
Capitalization, excluding Securitization Bonds:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock equity
|
40
|
%
|
|
36
|
%
|
|
36
|
%
|
|
44
|
%
|
|
47
|
%
|
|||||
Long-term debt, excluding Securitization Bonds, and including current maturities
|
60
|
%
|
|
64
|
%
|
|
64
|
%
|
|
56
|
%
|
|
53
|
%
|
|||||
Capital expenditures
|
$
|
1,494
|
|
|
$
|
1,406
|
|
|
$
|
1,575
|
|
|
$
|
1,402
|
|
|
$
|
1,272
|
|
(1)
|
Net income for the year ended December 31, 2017 includes a reduction in income taxes of
$1,113 million
due to tax reform. See Note 14 to our consolidated financial statements for further discussion of the impacts of tax reform implementation.
|
(2)
|
This amount includes $1,846 million of non-cash impairment charges related to Enable.
|
(3)
|
Amounts for 2013 to 2015 have been restated to reflect adoption of ASU 2015-03.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Houston Electric, which engages in the electric transmission and distribution business in the Texas Gulf Coast area that includes the city of Houston;
|
•
|
CERC Corp., which owns and operates natural gas distribution systems in
six
states; and
|
•
|
CES, which obtains and offers competitive variable and fixed-price physical natural gas supplies and services primarily to commercial and industrial customers and electric and natural gas utilities in
33
states.
|
•
|
the performance of Enable, the amount of cash distributions we receive from Enable, Enable’s ability to redeem the Series A Preferred Units in certain circumstances and the value of our interest in Enable, and factors that may have a material impact on such performance, cash distributions and value, including factors such as:
|
◦
|
competitive conditions in the midstream industry, and actions taken by Enable’s customers and competitors, including the extent and timing of the entry of additional competition in the markets served by Enable;
|
◦
|
the timing and extent of changes in the supply of natural gas and associated commodity prices, particularly prices of natural gas and NGLs, the competitive effects of the available pipeline capacity in the regions served by Enable, and the effects of geographic and seasonal commodity price differentials, including the effects of these circumstances on re-contracting available capacity on Enable’s interstate pipelines;
|
◦
|
the demand for crude oil, natural gas, NGLs and transportation and storage services;
|
◦
|
environmental and other governmental regulations, including the availability of drilling permits and the regulation of hydraulic fracturing;
|
◦
|
recording of non-cash goodwill, long-lived asset or other than temporary impairment charges by or related to Enable;
|
◦
|
changes in tax status;
|
◦
|
access to debt and equity capital; and
|
◦
|
the availability and prices of raw materials and services for current and future construction projects;
|
•
|
industrial, commercial and residential growth in our service territories and changes in market demand, including the effects of energy efficiency measures and demographic patterns;
|
•
|
timely and appropriate rate actions that allow recovery of costs and a reasonable return on investment;
|
•
|
future economic conditions in regional and national markets and their effect on sales, prices and costs;
|
•
|
weather variations and other natural phenomena, including the impact of severe weather events on operations and capital;
|
•
|
state and federal legislative and regulatory actions or developments affecting various aspects of our businesses (including the businesses of Enable), including, among others, energy deregulation or re-regulation, pipeline integrity and safety and changes in regulation and legislation pertaining to trade, health care, finance and actions regarding the rates charged by our regulated businesses;
|
•
|
tax reform and legislation, including the effects of the TCJA and uncertainties involving state commissions’ and local municipalities’ regulatory requirements and determinations regarding the treatment of EDIT and our rates;
|
•
|
our ability to mitigate weather impacts through normalization or rate mechanisms, and the effectiveness of such mechanisms;
|
•
|
the timing and extent of changes in commodity prices, particularly natural gas, and the effects of geographic and seasonal commodity price differentials
;
|
•
|
problems with regulatory approval, 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;
|
•
|
local, state and federal legislative and regulatory actions or developments relating to the environment, including those related to global climate change;
|
•
|
the impact of unplanned facility outages;
|
•
|
any direct or indirect effects on our or Enable’s facilities, operations and financial condition resulting from terrorism, cyber-attacks, data security breaches or other attempts to disrupt our businesses or the businesses of third parties, or other
|
•
|
our ability to invest planned capital and the timely recovery of our investment in capital;
|
•
|
our ability to control operation and maintenance costs;
|
•
|
actions by credit rating agencies;
|
•
|
the sufficiency of our insurance coverage, including availability, cost, coverage and terms;
|
•
|
the investment performance of our pension and postretirement benefit plans;
|
•
|
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;
|
•
|
changes in interest rates and their impact on our costs of borrowing and the valuation of our pension benefit obligation;
|
•
|
changes in rates of inflation;
|
•
|
inability of various counterparties to meet their obligations to us;
|
•
|
non-payment for our services due to financial distress of our customers;
|
•
|
the extent and effectiveness of our risk management and hedging activities, including, but not limited to our financial and weather hedges;
|
•
|
timely and appropriate regulatory actions allowing securitization for any future hurricanes or natural disasters or other recovery of costs, including costs associated with Hurricane Harvey;
|
•
|
our or Enable’s potential business strategies and strategic initiatives, including restructurings, joint ventures and acquisitions or dispositions of assets or businesses (including a reduction of our interests in Enable, if any; whether through our decision to sell all or a portion of the Enable common units we own in the public equity markets or otherwise, subject to certain limitations), which we cannot assure you will be completed or will have the anticipated benefits to us or Enable;
|
•
|
acquisition and merger activities involving us or our competitors;
|
•
|
our or Enable’s ability to recruit, effectively transition and retain management and key employees and maintain good labor relations;
|
•
|
the ability of GenOn (formerly known as RRI Energy, Inc., Reliant Energy and RRI), a wholly-owned subsidiary of NRG, and its subsidiaries, currently the subject of bankruptcy proceedings, to satisfy their obligations to us, including indemnity obligations;
|
•
|
the outcome of litigation;
|
•
|
the ability of REPs, including REP affiliates of NRG and Vistra Energy Corp., formerly known as TCEH Corp., to satisfy their obligations to us and our subsidiaries;
|
•
|
changes in technology, particularly with respect to efficient battery storage or the emergence or growth of new, developing or alternative sources of generation;
|
•
|
the timing and outcome of any audits, disputes and other proceedings related to taxes;
|
•
|
the effective tax rates;
|
•
|
the effect of changes in and application of accounting standards and pronouncements; and
|
•
|
other factors we discuss under “Risk Factors” in Item 1A of this report and in other reports we file from time to time with the SEC.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions, except per share amounts)
|
||||||||||
Revenues
|
$
|
9,614
|
|
|
$
|
7,528
|
|
|
$
|
7,386
|
|
Expenses
|
8,542
|
|
|
6,569
|
|
|
6,453
|
|
|||
Operating Income
|
1,072
|
|
|
959
|
|
|
933
|
|
|||
Gain (Loss) on Marketable Securities
|
7
|
|
|
326
|
|
|
(93
|
)
|
|||
Gain (Loss) on Indexed Debt Securities
|
49
|
|
|
(413
|
)
|
|
74
|
|
|||
Interest and Other Finance Charges
|
(313
|
)
|
|
(338
|
)
|
|
(352
|
)
|
|||
Interest on Securitization Bonds
|
(77
|
)
|
|
(91
|
)
|
|
(105
|
)
|
|||
Equity in Earnings (Losses) of Unconsolidated Affiliates
|
265
|
|
|
208
|
|
|
(1,633
|
)
|
|||
Other Income, net
|
60
|
|
|
35
|
|
|
46
|
|
|||
Income (Loss) Before Income Taxes
|
1,063
|
|
|
686
|
|
|
(1,130
|
)
|
|||
Income Tax Expense (Benefit)
|
(729
|
)
|
|
254
|
|
|
(438
|
)
|
|||
Net Income (Loss)
|
$
|
1,792
|
|
|
$
|
432
|
|
|
$
|
(692
|
)
|
|
|
|
|
|
|
||||||
Basic Earnings (Loss) Per Share
|
$
|
4.16
|
|
|
$
|
1.00
|
|
|
$
|
(1.61
|
)
|
|
|
|
|
|
|
||||||
Diluted Earnings (Loss) Per Share
|
$
|
4.13
|
|
|
$
|
1.00
|
|
|
$
|
(1.61
|
)
|
•
|
a $983 million decrease in income tax expense, resulting from a reduction in income tax expense of $1,113 million due to tax reform, discussed further in Note 14 to our consolidated financial statements, offset by a $130 million increase in income tax expense primarily due to higher net income year over year;
|
•
|
a $462 million increase in gains on indexed debt securities related to the ZENS, resulting from increased gains of $345 million in the underlying value of the indexed debt securities and a loss of $117 million from the Charter merger in 2016;
|
•
|
a $113 million increase in operating income discussed below by segment;
|
•
|
a $57 million increase in equity earnings from our investment in Enable, discussed further in Note 10 to our consolidated financial statements;
|
•
|
a $25 million decrease in interest expense due to lower weighted average interest rates on outstanding debt;
|
•
|
a $17 million decrease in losses on early debt redemption;
|
•
|
a $14 million increase in cash distributions on Series A Preferred Units included in Other Income, net shown above; and
|
•
|
a $14 million decrease in interest expense related to lower outstanding balances of our Securitization Bonds.
|
•
|
a $1,841 million increase in equity earnings from our investment in Enable, as 2015 results included impairment charges of $1,846 million, discussed further in Note 10 to our consolidated financial statements;
|
•
|
a $419 million increase in the gain on our marketable securities;
|
•
|
a $26 million increase in operating income discussed below by segment;
|
•
|
a $22 million increase in cash distributions on Series A Preferred Units included in Other Income, net shown above;
|
•
|
a $14 million decrease in interest expense due to lower weighted average interest rates on outstanding debt; and
|
•
|
a $14 million decrease in interest expense related to lower outstanding balances of our Securitization Bonds.
|
•
|
a $692 million increase in income tax expense due to higher income before tax;
|
•
|
a $487 million increase in the loss on indexed debt securities related to the ZENS resulting from a loss of $117 million from the Charter merger in 2016 compared to a loss of $7 million from Verizon’s acquisition of AOL in 2015 and increased losses of $377 million in the underlying value of the indexed debt securities;
|
•
|
a $22 million loss on early redemption of our $300 million 6.5% senior notes otherwise due 2018 included in Other Income, net shown above;
|
•
|
a $6 million decrease in interest income due primarily to Enable’s repayment of $363 million note payable to us included in Other Income, net shown above; and
|
•
|
a $5 million decrease in miscellaneous other non-operating income include in Other Income, net shown above.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Electric Transmission & Distribution
|
$
|
610
|
|
|
$
|
628
|
|
|
$
|
607
|
|
Natural Gas Distribution
|
328
|
|
|
303
|
|
|
273
|
|
|||
Energy Services
|
125
|
|
|
20
|
|
|
42
|
|
|||
Other Operations
|
9
|
|
|
8
|
|
|
11
|
|
|||
Total Consolidated Operating Income
|
$
|
1,072
|
|
|
$
|
959
|
|
|
$
|
933
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
|
(in millions, except throughput and customer data)
|
||||||||||
TDU
|
$
|
2,588
|
|
|
$
|
2,507
|
|
|
$
|
2,364
|
|
Bond Companies
|
409
|
|
|
553
|
|
|
481
|
|
|||
Total revenues
|
2,997
|
|
|
3,060
|
|
|
2,845
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
|
|||
Operation and maintenance, excluding Bond Companies
|
1,423
|
|
|
1,355
|
|
|
1,300
|
|
|||
Depreciation and amortization, excluding Bond Companies
|
395
|
|
|
384
|
|
|
340
|
|
|||
Taxes other than income taxes
|
235
|
|
|
231
|
|
|
222
|
|
|||
Bond Companies
|
334
|
|
|
462
|
|
|
376
|
|
|||
Total expenses
|
2,387
|
|
|
2,432
|
|
|
2,238
|
|
|||
Operating Income
|
$
|
610
|
|
|
$
|
628
|
|
|
$
|
607
|
|
Operating Income:
|
|
|
|
|
|
|
|||||
TDU
|
$
|
535
|
|
|
$
|
537
|
|
|
$
|
502
|
|
Bond Companies
(1)
|
75
|
|
|
91
|
|
|
105
|
|
|||
Total segment operating income
|
$
|
610
|
|
|
$
|
628
|
|
|
$
|
607
|
|
Throughput (in GWh):
|
|
|
|
|
|
|
|
|
|||
Residential
|
29,703
|
|
|
29,586
|
|
|
28,995
|
|
|||
Total
|
88,636
|
|
|
86,829
|
|
|
84,191
|
|
|||
Number of metered customers at end of period:
|
|
|
|
|
|
|
|
|
|||
Residential
|
2,164,073
|
|
|
2,129,773
|
|
|
2,079,899
|
|
|||
Total
|
2,444,299
|
|
|
2,403,340
|
|
|
2,348,517
|
|
(1)
|
Represents the amount necessary to pay interest on the Securitization Bonds.
|
•
|
lower equity return of $22 million, primarily related to the annual true-up of transition charges correcting for over-collections that occurred during the preceding 12 months;
|
•
|
higher depreciation, primarily because of ongoing additions to plant in service, and other taxes of $20 million;
|
•
|
higher operation and maintenance expenses of $19 million, primarily due to higher labor and benefits costs of $10 million and corporate support services expenses of $8 million;
|
•
|
lower usage of $15 million; and
|
•
|
rate increases of $47 million related to distribution capital investments;
|
•
|
higher transmission-related revenues of $61 million, partially offset by transmission costs billed by transmission providers of $56 million.
|
•
|
higher transmission-related revenues of $82 million, partially offset by transmission costs billed by transmission providers of $55 million;
|
•
|
higher equity return of $17 million, primarily due to the annual true-up of transition charges correcting for under-collections that occurred during the preceding 12 months; and
|
•
|
higher depreciation, primarily because of ongoing additions to plant in service, and other taxes of $45 million;
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions, except throughput and customer data)
|
||||||||||
Revenues
|
$
|
2,639
|
|
|
$
|
2,409
|
|
|
$
|
2,632
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|||
Natural gas
|
1,164
|
|
|
1,008
|
|
|
1,297
|
|
|||
Operation and maintenance
|
742
|
|
|
714
|
|
|
697
|
|
|||
Depreciation and amortization
|
260
|
|
|
242
|
|
|
222
|
|
|||
Taxes other than income taxes
|
145
|
|
|
142
|
|
|
143
|
|
|||
Total expenses
|
2,311
|
|
|
2,106
|
|
|
2,359
|
|
|||
Operating Income
|
$
|
328
|
|
|
$
|
303
|
|
|
$
|
273
|
|
Throughput (in Bcf):
|
|
|
|
|
|
|
|||||
Residential
|
151
|
|
|
152
|
|
|
171
|
|
|||
Commercial and industrial
|
261
|
|
|
259
|
|
|
262
|
|
|||
Total Throughput
|
412
|
|
|
411
|
|
|
433
|
|
|||
Number of customers at end of period:
|
|
|
|
|
|
|
|
||||
Residential
|
3,213,140
|
|
|
3,183,538
|
|
|
3,149,845
|
|
|||
Commercial and industrial
|
256,651
|
|
|
255,806
|
|
|
253,921
|
|
|||
Total
|
3,469,791
|
|
|
3,439,344
|
|
|
3,403,766
|
|
•
|
rate increases of $38 million, primarily from Texas rate filings of $14 million, Arkansas rate case and formula rate plan filings of $9 million, Minnesota interim rates of $7 million and Mississippi RRA of $4 million;
|
•
|
higher other revenues of $8 million, primarily driven by transportation revenues;
|
•
|
customer growth of $7 million from the addition of over 30,000 new customers;
|
•
|
labor and benefits were favorable by $5 million, resulting primarily from the recording of a regulatory asset (and a corresponding reduction in expense) to recover $16 million of prior postretirement expenses in future rates established in the Texas Gulf rate order; and
|
•
|
an increase of $7 million from weather normalization adjustments, partially offset by $4 million of milder weather effects.
|
•
|
higher operation and maintenance expenses of $20 million, primarily due to increased bad debt expenses of $7 million, increased contract services of $7 million, increased insurance costs of $3 million and increased corporate support services expenses of $2 million; and
|
•
|
increased depreciation and amortization expense, primarily due to ongoing additions to plant-in-service, and other taxes of $16 million.
|
•
|
rate increases of $55 million, primarily from the 2015 Minnesota rate case, including the decoupling rider, and the Texas GRIP filing;
|
•
|
lower bad debt expense of $12 million resulting from lower customer bills due to warmer
than normal weather as well as credit and collections process improvements that have reduced write-offs;
|
•
|
an increase of $26 million from weather normalization adjustments, including weather-related decoupling and hedging activities, partially offset by $19 million of milder weather effects; and
|
•
|
customer growth of $5 million from the addition of over 35,000 new customers.
|
•
|
increased depreciation and amortization of $20 million, primarily due to ongoing additions to plant in service;
|
•
|
higher labor and benefits expenses of $11 million, primarily driven by increased pension costs;
|
•
|
higher contract services expenses of $10 million, primarily for increased pipeline integrity, leak surveying and repair activities; and
|
•
|
increased operation and maintenance expenses of $8 million related to higher support services costs and other miscellaneous expenses.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions, except throughput and customer data)
|
||||||||||
Revenues
|
$
|
4,049
|
|
|
$
|
2,099
|
|
|
$
|
1,957
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|||
Natural gas
|
3,816
|
|
|
2,011
|
|
|
1,867
|
|
|||
Operation and maintenance
|
87
|
|
|
59
|
|
|
42
|
|
|||
Depreciation and amortization
|
19
|
|
|
7
|
|
|
5
|
|
|||
Taxes other than income taxes
|
2
|
|
|
2
|
|
|
1
|
|
|||
Total expenses
|
3,924
|
|
|
2,079
|
|
|
1,915
|
|
|||
Operating Income
|
$
|
125
|
|
|
$
|
20
|
|
|
$
|
42
|
|
|
|
|
|
|
|
||||||
Timing impacts related to mark-to-market gain (loss)
(1)
|
$
|
79
|
|
|
$
|
(21
|
)
|
|
$
|
4
|
|
|
|
|
|
|
|
||||||
Throughput (in Bcf)
|
1,200
|
|
|
777
|
|
|
618
|
|
|||
|
|
|
|
|
|
||||||
Number of customers at end of period
(2)
|
31,000
|
|
|
30,000
|
|
|
18,000
|
|
(1)
|
Includes the change in unrealized mark-to-market value and the impact from derivative assets and liabilities acquired through the purchase of Continuum and AEM.
|
(2)
|
These numbers do not include approximately 72,000 and 60,100 natural gas customers as of December 31, 2017 and 2016, respectively, that are under residential and small customer choice programs invoiced by their host utility.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
(1)
|
||||||
|
(in millions)
|
||||||||||
Enable
|
$
|
265
|
|
|
$
|
208
|
|
|
$
|
(1,633
|
)
|
(1)
|
These amounts include impairment charges totaling
$1,846 million
composed of the impairment of our investment in Enable of
$1,225 million
and our share,
$621 million
, of impairment charges Enable recorded for goodwill and long-lived assets for the year ended December 31, 2015. This impairment is offset by
$213 million
of earnings for the year ended December 31, 2015.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Revenues
|
$
|
14
|
|
|
$
|
15
|
|
|
$
|
14
|
|
Expenses
|
5
|
|
|
7
|
|
|
3
|
|
|||
Operating Income
|
$
|
9
|
|
|
$
|
8
|
|
|
$
|
11
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
1,421
|
|
|
$
|
1,931
|
|
|
$
|
1,870
|
|
Investing activities
|
(1,257
|
)
|
|
(1,046
|
)
|
|
(1,387
|
)
|
|||
Financing activities
|
(245
|
)
|
|
(808
|
)
|
|
(517
|
)
|
•
|
capital expenditures of approximately $1.7 billion;
|
•
|
scheduled principal payments on Securitization Bonds of $434 million;
|
•
|
contributions of a minimum of $60 million to our qualified pension plan;
|
•
|
maturing collateralized pollution control bonds of $50 million; and
|
•
|
dividend payments on our common stock and interest payments on debt.
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Electric Transmission & Distribution
|
$
|
924
|
|
|
$
|
949
|
|
|
$
|
958
|
|
|
$
|
1,004
|
|
|
$
|
959
|
|
|
$
|
900
|
|
Natural Gas Distribution
|
523
|
|
|
635
|
|
|
612
|
|
|
637
|
|
|
664
|
|
|
687
|
|
||||||
Energy Services
|
11
|
|
|
20
|
|
|
15
|
|
|
15
|
|
|
15
|
|
|
15
|
|
||||||
Other Operations
|
36
|
|
|
60
|
|
|
38
|
|
|
33
|
|
|
32
|
|
|
32
|
|
||||||
Total
|
$
|
1,494
|
|
|
$
|
1,664
|
|
|
$
|
1,623
|
|
|
$
|
1,689
|
|
|
$
|
1,670
|
|
|
$
|
1,634
|
|
Contractual Obligations
|
|
Total
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
2023 and thereafter
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
Securitization Bonds
|
|
$
|
1,868
|
|
|
$
|
434
|
|
|
$
|
689
|
|
|
$
|
430
|
|
|
$
|
315
|
|
Other long-term debt
(1)
|
|
7,316
|
|
|
50
|
|
|
—
|
|
|
3,549
|
|
|
3,717
|
|
|||||
Interest payments — Securitization Bonds
(2)
|
|
191
|
|
|
65
|
|
|
76
|
|
|
38
|
|
|
12
|
|
|||||
Interest payments — other long-term debt
(2)
|
|
3,756
|
|
|
277
|
|
|
548
|
|
|
459
|
|
|
2,472
|
|
|||||
Short-term borrowings
|
|
39
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases
(3)
|
|
26
|
|
|
5
|
|
|
9
|
|
|
7
|
|
|
5
|
|
|||||
Benefit obligations
(4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Non-trading derivative liabilities
|
|
24
|
|
|
20
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|||||
Commodity and other commitments
(5)
|
|
1,286
|
|
|
500
|
|
|
550
|
|
|
128
|
|
|
108
|
|
|||||
Total contractual cash obligations
(6)
|
|
$
|
14,506
|
|
|
$
|
1,390
|
|
|
$
|
1,876
|
|
|
$
|
4,611
|
|
|
$
|
6,629
|
|
(1)
|
ZENS obligations are included in the
2023 and thereafter
column at their contingent principal amount as of
December 31, 2017
of
$505 million
. These obligations are exchangeable for cash at any time at the option of the holders for 95% of the current value of the reference shares attributable to each ZENS (
$960 million
as of
December 31, 2017
), as discussed in
Note 11
to our consolidated financial statements.
|
(2)
|
We calculated estimated interest payments for long-term debt as follows: for fixed-rate debt and term debt, we calculated interest based on the applicable rates and payment dates; for variable-rate debt and/or non-term debt, we used interest rates in place as of
December 31, 2017
. We typically expect to settle such interest payments with cash flows from operations and short-term borrowings.
|
(3)
|
For a discussion of operating leases, please read
Note 15
(c) to our consolidated financial statements.
|
(4)
|
In
2018
, we expect to contribute a minimum of approximately
$60 million
to our qualified pension plan. We expect to contribute approximately
$7 million
and
$16 million
, respectively, to our non-qualified pension and postretirement benefits plans in
2018
.
|
(5)
|
For a discussion of commodity and other commitments, please read
Note 15
(a) to our consolidated financial statements.
|
(6)
|
This table does not include estimated future payments for expected future AROs. These payments are primarily estimated to be incurred after 2022. We record a separate liability for the fair value of AROs, which totaled
$281 million
as of
December 31, 2017
. See
Note 3
(c) to our consolidated financial statements.
|
Mechanism
|
|
Annual Increase
(1)
(in millions)
|
|
Filing
Date
|
|
Effective Date
|
|
Approval Date
|
|
Additional Information
|
Houston Electric (PUCT)
|
||||||||||
AMS
|
|
N/A
|
|
June
2017
|
|
September 2017
|
|
December 2017
|
|
Final reconciliation of AMS surcharge for a $29.2 million refund of AMS revenue in excess of expenses, for which a reserve has been recorded. Refunds began in September 2017 and will continue through August 2018.
|
EECRF (2)
|
|
$11.0
|
|
June
2017
|
|
March 2018
|
|
November 2017
|
|
Annual reconciliation filing for program year 2016 and includes performance bonus of $11 million.
|
DCRF
|
|
41.8
|
|
April
2017
|
|
September
2017
|
|
July
2017
|
|
Based on an increase in eligible distribution-invested capital for 2016 of $479 million. Unanimous Stipulation and Settlement Agreement was filed in June 2017 for $86.8 million (a $41.8 million annual increase). The settlement agreement also included the AMS refund referenced above.
|
TCOS
|
|
7.8
|
|
December 2016
|
|
February
2017
|
|
February
2017 |
|
Based on an incremental increase in total rate base of $109.6 million.
|
TCOS
|
|
39.3
|
|
September 2017
|
|
November 2017
|
|
November 2017
|
|
Based on an incremental increase in total rate base of $263.4 million.
|
TCOS
|
|
N/A
|
|
February
2018
|
|
TBD
|
|
TBD
|
|
Revise TCOS application approved in November 2017 by a reduction of $41.6 million to recognize change in tax rates, amortize certain EDIT balances and adjust rate base by EDIT attributable to new plant since the last rate case, all of which are related to the TCJA.
|
South Texas and Beaumont/East Texas (Railroad Commission)
|
||||||||||
GRIP
|
|
7.6
|
|
March
2017
|
|
July
2017
|
|
June
2017
|
|
Based on net change in invested capital of $46.5 million.
|
Rate Case
(South Texas only)
|
|
0.5
|
|
November 2017
|
|
TBD
|
|
TBD
|
|
Reflects a proposed 10.3% ROE on a 55% equity ratio for South Texas jurisdiction.
|
Houston and Texas Coast (Railroad Commission)
|
||||||||||
Rate Case
|
|
16.5
|
|
November 2016
|
|
May
2017
|
|
May
2017
|
|
The Railroad Commission approved a unanimous settlement agreement establishing parameters for future GRIP filings, including a 9.6% ROE on a 55.15% equity ratio.
|
Texarkana, Texas Service Area (Multiple City Jurisdictions)
|
||||||||||
Rate Case
|
|
1.1
|
|
July
2017
|
|
September
2017
|
|
August 2017
|
|
Approved rates are consistent with Arkansas rates approved in 2016.
|
Arkansas (APSC)
|
||||||||||
EECR (2)
|
|
0.5
|
|
May
2017
|
|
January 2018
|
|
September 2017
|
|
Recovers $11.0 million, including an incentive of $0.5 million based on 2016 program performance.
|
FRP
|
|
7.6
|
|
April
2017 |
|
October
2017 |
|
September 2017
|
|
Based on ROE of 9.5% as approved in the last rate case. Unanimous Settlement Agreement was filed in July 2017 for $7.6 million and was subsequently approved.
|
BDA
|
|
3.9
|
|
March
2017
|
|
June
2017
|
|
June
2017
|
|
For the evaluation period between January 2016 and August 2016. Amounts are recorded during the evaluation period.
|
BDA
|
|
16.5
|
|
December 2017
|
|
February
2018
|
|
January
2018
|
|
For the evaluation period between October 2016 and September 2017. Amounts are recorded during the evaluation period.
|
Minnesota (MPUC)
|
||||||||||
Rate Case
|
|
56.5
|
|
August 2017
|
|
TBD
|
|
TBD
|
|
Reflects a proposed 10.0% ROE on a 52.18% equity ratio. Includes a proposal to extend decoupling beyond current expiration date of June 2018. Interim rates reflecting an annual increase of $47.8 million were effective October 1, 2017.
|
CIP (2)
|
|
13.8
|
|
May
2017
|
|
August 2017
|
|
August 2017
|
|
Annual reconciliation filing for program year 2016 and includes performance bonus of $13.8 million.
|
Decoupling
|
|
20.4
|
|
September 2017
|
|
September
2017
|
|
February 2018
|
|
Reflects revenue under recovery for the period July 1, 2016 through June 30, 2017 and $3.0 million related to the under recovery of prior period adjustment factor. $9.2 million and $11.2 million was recognized in 2016 and 2017, respectively.
|
Mississippi (MPSC)
|
||||||||||
RRA
|
|
2.3
|
|
May
2017
|
|
July
2017
|
|
July
2017
|
|
Authorized ROE of 9.59% and a capital structure of 50% debt and 50% equity.
|
Louisiana (LPSC)
|
||||||||||
RSP
|
|
1.0
|
|
September 2016
|
|
December 2016
|
|
April
2017
|
|
Authorized ROE of 9.95% and a capital structure of 48% debt and 52% equity.
|
RSP
|
|
3.0
|
|
September 2017
|
|
December 2017
|
|
January 2018
|
|
Authorized ROE of 9.95% and a capital structure of 48% debt and 52% equity.
|
Oklahoma (OCC)
|
||||||||||
EECR (2)
|
|
0.4
|
|
March
2017
|
|
November 2017
|
|
October 2017
|
|
Recovers $2.6 million, including an incentive of $0.4 million based on 2016 program performance.
|
PBRC
|
|
2.2
|
|
March
2017
|
|
November 2017
|
|
October 2017
|
|
Based on ROE of 10%.
|
(1)
|
Represents proposed increases when effective date and/or approval date is not yet determined. Approved rates could differ materially from proposed rates.
|
(2)
|
Amounts are recorded when approved.
|
Company
|
|
Size of
Facility
|
|
Amount
Utilized as of
February 9, 2018 (1)
|
|
Termination Date
|
||||
(in millions)
|
||||||||||
CenterPoint Energy
|
|
$
|
1,700
|
|
|
$
|
877
|
|
(2)
|
March 3, 2022
|
Houston Electric
|
|
300
|
|
|
4
|
|
(3)
|
March 3, 2022
|
||
CERC Corp.
|
|
900
|
|
|
899
|
|
(4)
|
March 3, 2022
|
(1)
|
Based on the consolidated debt to capitalization covenant in our revolving credit facility and the revolving credit facility of each of Houston Electric and CERC Corp., we would have been permitted to utilize the full capacity of such revolving credit facilities, which aggregated $2.9 billion as of
December 31, 2017
.
|
(2)
|
Represents outstanding commercial paper of $871 million and outstanding letters of credit of $6 million.
|
(3)
|
Represents outstanding letters of credit.
|
(4)
|
Represents outstanding commercial paper of $898 million and outstanding letters of credit of $1 million.
|
|
|
Moody’s
|
|
S&P
|
|
Fitch
|
||||||
Company/Instrument
|
|
Rating
|
|
Outlook (1)
|
|
Rating
|
|
Outlook (2)
|
|
Rating
|
|
Outlook (3)
|
CenterPoint Energy Senior Unsecured Debt
|
|
Baa1
|
|
Stable
|
|
BBB+
|
|
Stable
|
|
BBB
|
|
Positive
|
Houston Electric Senior Secured Debt
|
|
A1
|
|
Stable
|
|
A
|
|
Stable
|
|
A+
|
|
Stable
|
CERC Corp. Senior Unsecured Debt
|
|
Baa2
|
|
Stable
|
|
A-
|
|
Stable
|
|
BBB
|
|
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 indicates the direction a rating is likely to move over a one- to two-year period.
|
•
|
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 Energy 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, currently the subject of bankruptcy proceedings, to satisfy their obligations in respect of GenOn’s indemnity obligations to us and our subsidiaries;
|
•
|
the ability of REPs, including REP affiliates of NRG and Vistra Energy Corp., formerly known as TCEH Corp., 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 or 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 this report.
|
•
|
Interest rate risk primarily results from exposures to changes in the level of borrowings and changes in interest rates.
|
•
|
Equity price risk results from exposures to changes in prices of individual equity securities.
|
•
|
Commodity price risk results from exposures to changes in spot prices, forward prices and price volatilities of commodities, such as natural gas, NGLs and other energy commodities.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions, except per share amounts)
|
||||||||||
Revenues:
|
|
|
|
|
|
||||||
Utility revenues
|
$
|
5,603
|
|
|
$
|
5,440
|
|
|
$
|
5,448
|
|
Non-utility revenues
|
4,011
|
|
|
2,088
|
|
|
1,938
|
|
|||
Total
|
9,614
|
|
|
7,528
|
|
|
7,386
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
||||
Utility natural gas
|
1,109
|
|
|
983
|
|
|
1,264
|
|
|||
Non-utility natural gas
|
3,785
|
|
|
1,983
|
|
|
1,838
|
|
|||
Operation and maintenance
|
2,221
|
|
|
2,093
|
|
|
2,007
|
|
|||
Depreciation and amortization
|
1,036
|
|
|
1,126
|
|
|
970
|
|
|||
Taxes other than income taxes
|
391
|
|
|
384
|
|
|
374
|
|
|||
Total
|
8,542
|
|
|
6,569
|
|
|
6,453
|
|
|||
Operating Income
|
1,072
|
|
|
959
|
|
|
933
|
|
|||
Other Income (Expense):
|
|
|
|
|
|
|
|||||
Gain (loss) on marketable securities
|
7
|
|
|
326
|
|
|
(93
|
)
|
|||
Gain (loss) on indexed debt securities
|
49
|
|
|
(413
|
)
|
|
74
|
|
|||
Interest and other finance charges
|
(313
|
)
|
|
(338
|
)
|
|
(352
|
)
|
|||
Interest on Securitization Bonds
|
(77
|
)
|
|
(91
|
)
|
|
(105
|
)
|
|||
Equity in earnings (losses) of unconsolidated affiliates
|
265
|
|
|
208
|
|
|
(1,633
|
)
|
|||
Other, net
|
60
|
|
|
35
|
|
|
46
|
|
|||
Total
|
(9
|
)
|
|
(273
|
)
|
|
(2,063
|
)
|
|||
Income (Loss) Before Income Taxes
|
1,063
|
|
|
686
|
|
|
(1,130
|
)
|
|||
Income tax expense (benefit)
|
(729
|
)
|
|
254
|
|
|
(438
|
)
|
|||
Net Income (Loss)
|
$
|
1,792
|
|
|
$
|
432
|
|
|
$
|
(692
|
)
|
|
|
|
|
|
|
||||||
Basic Earnings (Loss) Per Share
|
$
|
4.16
|
|
|
$
|
1.00
|
|
|
$
|
(1.61
|
)
|
|
|
|
|
|
|
||||||
Diluted Earnings (Loss) Per Share
|
$
|
4.13
|
|
|
$
|
1.00
|
|
|
$
|
(1.61
|
)
|
|
|
|
|
|
|
||||||
Weighted Average Shares Outstanding, Basic
|
431
|
|
|
431
|
|
|
430
|
|
|||
|
|
|
|
|
|
||||||
Weighted Average Shares Outstanding, Diluted
|
434
|
|
|
434
|
|
|
430
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Net income (loss)
|
$
|
1,792
|
|
|
$
|
432
|
|
|
$
|
(692
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|||||
Adjustment to pension and other postretirement plans (net of tax of $6, $4 and $12, respectively)
|
6
|
|
|
(7
|
)
|
|
20
|
|
|||
Net deferred gain (loss) from cash flow hedges (net of tax of $2, $-0-, and $-0-, respectively)
|
(3
|
)
|
|
1
|
|
|
—
|
|
|||
Reclassification of deferred loss from cash flow hedges realized in net income (net of tax of $-0-, $1, and $-0-, respectively)
|
—
|
|
|
1
|
|
|
—
|
|
|||
Other comprehensive income (loss)
|
3
|
|
|
(5
|
)
|
|
20
|
|
|||
Comprehensive income (loss)
|
$
|
1,795
|
|
|
$
|
427
|
|
|
$
|
(672
|
)
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
|
(in millions)
|
||||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents ($230 and $340 related to VIEs, respectively)
|
$
|
260
|
|
|
$
|
341
|
|
Investment in marketable securities
|
960
|
|
|
953
|
|
||
Accounts receivable ($73 and $52 related to VIEs, respectively), less bad debt reserve of $19 and $15, respectively
|
1,000
|
|
|
740
|
|
||
Accrued unbilled revenues
|
427
|
|
|
335
|
|
||
Natural gas inventory
|
222
|
|
|
131
|
|
||
Materials and supplies
|
175
|
|
|
181
|
|
||
Non-trading derivative assets
|
110
|
|
|
51
|
|
||
Taxes receivable
|
—
|
|
|
30
|
|
||
Prepaid expense and other current assets ($35 and $40 related to VIEs, respectively)
|
241
|
|
|
161
|
|
||
Total current assets
|
3,395
|
|
|
2,923
|
|
||
Property, Plant and Equipment, net
|
13,057
|
|
|
12,307
|
|
||
Other Assets:
|
|
|
|
|
|
||
Goodwill
|
867
|
|
|
862
|
|
||
Regulatory assets ($1,590 and $1,919 related to VIEs, respectively)
|
2,347
|
|
|
2,677
|
|
||
Non-trading derivative assets
|
44
|
|
|
19
|
|
||
Investment in unconsolidated affiliates
|
2,472
|
|
|
2,505
|
|
||
Preferred units - unconsolidated affiliate
|
363
|
|
|
363
|
|
||
Other
|
191
|
|
|
173
|
|
||
Total other assets
|
6,284
|
|
|
6,599
|
|
||
Total Assets
|
$
|
22,736
|
|
|
$
|
21,829
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
|
(in millions, except par value
and shares) |
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current Liabilities:
|
|
|
|
|
|
||
Short-term borrowings
|
$
|
39
|
|
|
$
|
35
|
|
Current portion of VIE Securitization Bonds long-term debt
|
434
|
|
|
411
|
|
||
Indexed debt
|
122
|
|
|
114
|
|
||
Current portion of other long-term debt
|
50
|
|
|
500
|
|
||
Indexed debt securities derivative
|
668
|
|
|
717
|
|
||
Accounts payable
|
963
|
|
|
657
|
|
||
Taxes accrued
|
181
|
|
|
172
|
|
||
Interest accrued
|
104
|
|
|
108
|
|
||
Dividends accrued
|
120
|
|
|
—
|
|
||
Non-trading derivative liabilities
|
20
|
|
|
41
|
|
||
Other
|
368
|
|
|
325
|
|
||
Total current liabilities
|
3,069
|
|
|
3,080
|
|
||
Other Liabilities:
|
|
|
|
|
|
||
Deferred income taxes, net
|
3,174
|
|
|
5,263
|
|
||
Non-trading derivative liabilities
|
4
|
|
|
5
|
|
||
Benefit obligations
|
785
|
|
|
913
|
|
||
Regulatory liabilities
|
2,464
|
|
|
1,298
|
|
||
Other
|
357
|
|
|
278
|
|
||
Total other liabilities
|
6,784
|
|
|
7,757
|
|
||
Long-term Debt:
|
|
|
|
|
|
||
VIE Securitization Bonds, net
|
1,434
|
|
|
1,867
|
|
||
Other long-term debt, net
|
6,761
|
|
|
5,665
|
|
||
Total long-term debt, net
|
8,195
|
|
|
7,532
|
|
||
Commitments and Contingencies (Note 15)
|
|
|
|
|
|
||
Shareholders’ Equity:
|
|
|
|
||||
Cumulative preferred stock, $0.01 par value, 20,000,000 shares authorized, none issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 431,044,845 shares and 430,682,504 shares outstanding, respectively
|
4
|
|
|
4
|
|
||
Additional paid-in capital
|
4,209
|
|
|
4,195
|
|
||
Retained earnings (accumulated deficit)
|
543
|
|
|
(668
|
)
|
||
Accumulated other comprehensive loss
|
(68
|
)
|
|
(71
|
)
|
||
Total shareholders’ equity
|
4,688
|
|
|
3,460
|
|
||
Total Liabilities and Shareholders’ Equity
|
$
|
22,736
|
|
|
$
|
21,829
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
1,792
|
|
|
$
|
432
|
|
|
$
|
(692
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|||||
Depreciation and amortization
|
1,036
|
|
|
1,126
|
|
|
970
|
|
|||
Amortization of deferred financing costs
|
24
|
|
|
26
|
|
|
27
|
|
|||
Deferred income taxes
|
(770
|
)
|
|
213
|
|
|
(413
|
)
|
|||
Unrealized loss (gain) on marketable securities
|
(7
|
)
|
|
(326
|
)
|
|
93
|
|
|||
Loss (gain) on indexed debt securities
|
(49
|
)
|
|
413
|
|
|
(74
|
)
|
|||
Write-down of natural gas inventory
|
—
|
|
|
1
|
|
|
4
|
|
|||
Equity in (earnings) losses of unconsolidated affiliates, net of distributions
|
(265
|
)
|
|
(208
|
)
|
|
1,779
|
|
|||
Pension contributions
|
(48
|
)
|
|
(9
|
)
|
|
(66
|
)
|
|||
Changes in other assets and liabilities, excluding acquisitions:
|
|
|
|
|
|
|
|
|
|||
Accounts receivable and unbilled revenues, net
|
(216
|
)
|
|
(117
|
)
|
|
345
|
|
|||
Inventory
|
(7
|
)
|
|
34
|
|
|
28
|
|
|||
Taxes receivable
|
30
|
|
|
142
|
|
|
18
|
|
|||
Accounts payable
|
136
|
|
|
133
|
|
|
(224
|
)
|
|||
Fuel cost recovery
|
(85
|
)
|
|
(72
|
)
|
|
43
|
|
|||
Non-trading derivatives, net
|
(84
|
)
|
|
30
|
|
|
(7
|
)
|
|||
Margin deposits, net
|
(55
|
)
|
|
101
|
|
|
(4
|
)
|
|||
Interest and taxes accrued
|
5
|
|
|
5
|
|
|
(10
|
)
|
|||
Net regulatory assets and liabilities
|
(107
|
)
|
|
(60
|
)
|
|
63
|
|
|||
Other current assets
|
1
|
|
|
(17
|
)
|
|
10
|
|
|||
Other current liabilities
|
34
|
|
|
22
|
|
|
(50
|
)
|
|||
Other assets
|
(4
|
)
|
|
(16
|
)
|
|
(5
|
)
|
|||
Other liabilities
|
36
|
|
|
30
|
|
|
8
|
|
|||
Other, net
|
24
|
|
|
48
|
|
|
27
|
|
|||
Net cash provided by operating activities
|
1,421
|
|
|
1,931
|
|
|
1,870
|
|
|||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|||
Capital expenditures
|
(1,426
|
)
|
|
(1,414
|
)
|
|
(1,584
|
)
|
|||
Acquisitions, net of cash acquired
|
(132
|
)
|
|
(102
|
)
|
|
—
|
|
|||
Decrease in notes receivable - unconsolidated affiliate
|
—
|
|
|
363
|
|
|
—
|
|
|||
Investment in preferred units - unconsolidated affiliate
|
—
|
|
|
(363
|
)
|
|
—
|
|
|||
Distributions from unconsolidated affiliates in excess of cumulative earnings
|
297
|
|
|
297
|
|
|
148
|
|
|||
Decrease (increase) in restricted cash of Bond companies
|
5
|
|
|
(5
|
)
|
|
12
|
|
|||
Proceeds from sale of marketable securities
|
—
|
|
|
178
|
|
|
32
|
|
|||
Other, net
|
(1
|
)
|
|
—
|
|
|
5
|
|
|||
Net cash used in investing activities
|
(1,257
|
)
|
|
(1,046
|
)
|
|
(1,387
|
)
|
|||
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|||
Increase (decrease) in short-term borrowings, net
|
4
|
|
|
(5
|
)
|
|
(13
|
)
|
|||
Proceeds from commercial paper, net
|
349
|
|
|
469
|
|
|
403
|
|
|||
Proceeds from long-term debt, net
|
1,096
|
|
|
600
|
|
|
200
|
|
|||
Payments of long-term debt
|
(1,211
|
)
|
|
(1,218
|
)
|
|
(644
|
)
|
|||
Loss on reacquired debt
|
(5
|
)
|
|
(22
|
)
|
|
—
|
|
|||
Debt issuance costs
|
(13
|
)
|
|
(9
|
)
|
|
—
|
|
|||
Payment of dividends on common stock
|
(461
|
)
|
|
(443
|
)
|
|
(426
|
)
|
|||
Distribution to ZENS holders
|
—
|
|
|
(178
|
)
|
|
(32
|
)
|
|||
Other, net
|
(4
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|||
Net cash used in financing activities
|
(245
|
)
|
|
(808
|
)
|
|
(517
|
)
|
|||
Net Increase (Decrease) in Cash and Cash Equivalents
|
(81
|
)
|
|
77
|
|
|
(34
|
)
|
|||
Cash and Cash Equivalents at Beginning of Year
|
341
|
|
|
264
|
|
|
298
|
|
|||
Cash and Cash Equivalents at End of Year
|
$
|
260
|
|
|
$
|
341
|
|
|
$
|
264
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|||
Cash Payments:
|
|
|
|
|
|
|
|
|
|||
Interest, net of capitalized interest
|
$
|
378
|
|
|
$
|
406
|
|
|
$
|
426
|
|
Income taxes (refunds), net
|
15
|
|
|
(104
|
)
|
|
(45
|
)
|
|||
Non-cash transactions:
|
|
|
|
|
|
|
|
||||
Accounts payable related to capital expenditures
|
144
|
|
|
87
|
|
|
95
|
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|||||||||
|
(in millions of dollars and shares, except per share amounts)
|
|||||||||||||||||||
Preference Stock, none outstanding
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Cumulative Preferred Stock, $0.01 par value; authorized 20,000,000 shares, none outstanding
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common Stock, $0.01 par value; authorized 1,000,000,000 shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Balance, beginning of year
|
431
|
|
|
4
|
|
|
430
|
|
|
4
|
|
|
430
|
|
|
4
|
|
|||
Issuances related to benefit and investment plans
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance, end of year
|
431
|
|
|
4
|
|
|
431
|
|
|
4
|
|
|
430
|
|
|
4
|
|
|||
Additional Paid-in-Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance, beginning of year
|
|
|
4,195
|
|
|
|
|
|
4,180
|
|
|
|
|
4,169
|
|
|||||
Issuances related to benefit and investment plans
|
|
|
14
|
|
|
|
|
|
15
|
|
|
|
|
11
|
|
|||||
Balance, end of year
|
|
|
4,209
|
|
|
|
|
|
4,195
|
|
|
|
|
4,180
|
|
|||||
Retained Earnings (Accumulated Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance, beginning of year
|
|
|
(668
|
)
|
|
|
|
|
(657
|
)
|
|
|
|
461
|
|
|||||
Net income (loss)
|
|
|
1,792
|
|
|
|
|
|
432
|
|
|
|
|
(692
|
)
|
|||||
Common stock dividends declared ($1.3475, $1.03 and $0.99 per share, respectively)
|
|
|
(581
|
)
|
|
|
|
|
(443
|
)
|
|
|
|
(426
|
)
|
|||||
Balance, end of year
|
|
|
543
|
|
|
|
|
|
(668
|
)
|
|
|
|
(657
|
)
|
|||||
Accumulated Other Comprehensive Loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance, end of year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjustment to pension and postretirement plans
|
|
|
(66
|
)
|
|
|
|
|
(72
|
)
|
|
|
|
(65
|
)
|
|||||
Net deferred gain (loss) from cash flow hedges
|
|
|
(2
|
)
|
|
|
|
|
1
|
|
|
|
|
(1
|
)
|
|||||
Total accumulated other comprehensive loss, end of year
|
|
|
(68
|
)
|
|
|
|
|
(71
|
)
|
|
|
|
(66
|
)
|
|||||
Total Shareholders’ Equity
|
|
|
$
|
4,688
|
|
|
|
|
|
$
|
3,460
|
|
|
|
|
$
|
3,461
|
|
•
|
Houston Electric, which engages in the electric transmission and distribution business in the Texas Gulf Coast area that includes the city of Houston;
|
•
|
CERC Corp., which owns and operates natural gas distribution systems in
six
states; and
|
•
|
CES, which obtains and offers competitive variable and fixed-price physical natural gas supplies and services primarily to commercial and industrial customers and electric and natural gas utilities in
33
states.
|
(a)
|
Use of Estimates
|
(b)
|
Principles of Consolidation
|
(c)
|
Equity and Cost Method Investments
|
(d)
|
Revenues
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(in millions)
|
||||||||||
Capitalized interest and AFUDC included in Interest and other finance charges
|
|
$
|
9
|
|
|
$
|
8
|
|
|
$
|
10
|
|
AFUDC equity included in Other Income
|
|
11
|
|
|
7
|
|
|
12
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in millions)
|
||||||
Restricted cash included in Prepaid expenses and other current assets
|
|
$
|
35
|
|
|
$
|
40
|
|
Restricted cash included in Other assets
|
|
1
|
|
|
—
|
|
||
Total restricted cash
|
|
$
|
36
|
|
|
$
|
40
|
|
|
Weighted Average
Useful Lives
|
|
December 31,
|
||||||
|
(in years)
|
|
2017
|
|
2016
|
||||
|
|
|
(in millions)
|
||||||
Electric Transmission & Distribution
|
32
|
|
$
|
11,496
|
|
|
$
|
10,840
|
|
Natural Gas Distribution
|
28
|
|
6,735
|
|
|
6,219
|
|
||
Energy Services
|
27
|
|
102
|
|
|
83
|
|
||
Other property
|
26
|
|
698
|
|
|
689
|
|
||
Total
|
|
|
19,031
|
|
|
17,831
|
|
||
Accumulated depreciation and amortization:
|
|
|
|
|
|
|
|||
Electric Transmission & Distribution
|
|
|
3,633
|
|
|
3,443
|
|
||
Natural Gas Distribution
|
|
|
1,968
|
|
|
1,722
|
|
||
Energy Services
|
|
|
35
|
|
|
29
|
|
||
Other property
|
|
|
338
|
|
|
330
|
|
||
Total accumulated depreciation and amortization
|
|
|
5,974
|
|
|
5,524
|
|
||
Property, plant and equipment, net
|
|
|
$
|
13,057
|
|
|
$
|
12,307
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Depreciation expense
|
$
|
619
|
|
|
$
|
607
|
|
|
$
|
557
|
|
Amortization expense
|
417
|
|
|
519
|
|
|
413
|
|
|||
Total depreciation and amortization expense
|
$
|
1,036
|
|
|
$
|
1,126
|
|
|
$
|
970
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Beginning balance
|
$
|
205
|
|
|
$
|
195
|
|
Accretion expense
|
8
|
|
|
10
|
|
||
Revisions in estimates of cash flows
|
68
|
|
|
—
|
|
||
Ending balance
|
$
|
281
|
|
|
$
|
205
|
|
|
|
(in millions)
|
||
Total purchase price consideration
|
|
$
|
147
|
|
Cash
|
|
$
|
15
|
|
Receivables
|
|
140
|
|
|
Natural gas inventory
|
|
78
|
|
|
Derivative assets
|
|
35
|
|
|
Prepaid expenses and other current assets
|
|
5
|
|
|
Property and equipment
|
|
8
|
|
|
Identifiable intangibles
|
|
25
|
|
|
Total assets acquired
|
|
306
|
|
|
Accounts payable
|
|
113
|
|
|
Derivative liabilities
|
|
43
|
|
|
Other current liabilities
|
|
7
|
|
|
Other liabilities
|
|
1
|
|
|
Total liabilities assumed
|
|
164
|
|
|
Identifiable net assets acquired
|
|
142
|
|
|
Goodwill
|
|
5
|
|
|
Net assets acquired
|
|
$
|
147
|
|
|
|
Estimate Fair Value
|
|
Estimate Useful Life
|
||
|
|
(in millions)
|
|
(in years)
|
||
Customer relationships
|
|
$
|
25
|
|
|
15
|
|
|
Year Ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in millions)
|
||||||
Operating Revenue
|
|
$
|
9,614
|
|
|
$
|
8,541
|
|
Net Income
(1)
|
|
1,792
|
|
|
442
|
|
(1)
|
Net income for the year ended December 31, 2017 includes a reduction in income taxes of
$1,113 million
due to tax reform. See Note 14 for further discussion of the impacts of tax reform implementation.
|
|
December 31, 2016
|
|
AEM Acquisition (1)
|
|
December 31,
2017 |
|
||||||
|
(in millions)
|
|
||||||||||
Natural Gas Distribution
|
$
|
746
|
|
|
$
|
—
|
|
|
$
|
746
|
|
|
Energy Services
|
105
|
|
(2)
|
5
|
|
|
110
|
|
(2)
|
|||
Other Operations
|
11
|
|
|
—
|
|
|
11
|
|
|
|||
Total
|
$
|
862
|
|
|
$
|
5
|
|
|
$
|
867
|
|
|
|
December 31, 2017
|
||||||||||||
|
Useful Lives
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Balance
|
||||||
|
(in years)
|
|
(in millions)
|
||||||||||
Customer relationships
|
15
|
|
$
|
86
|
|
|
$
|
(21
|
)
|
|
$
|
65
|
|
Covenants not to compete
|
4
|
|
4
|
|
|
(2
|
)
|
|
2
|
|
|||
Other
|
Various
|
|
15
|
|
|
(8
|
)
|
|
7
|
|
|||
Total
|
|
|
$
|
105
|
|
|
$
|
(31
|
)
|
|
$
|
74
|
|
|
December 31, 2016
|
||||||||||||
|
Useful Lives
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Balance
|
||||||
|
(in years)
|
|
(in millions)
|
||||||||||
Customer relationships
|
15
|
|
$
|
61
|
|
|
$
|
(16
|
)
|
|
$
|
45
|
|
Covenants not to compete
|
4
|
|
4
|
|
|
(1
|
)
|
|
3
|
|
|||
Other
|
Various
|
|
2
|
|
|
(1
|
)
|
|
1
|
|
|||
Total
|
|
|
$
|
67
|
|
|
$
|
(18
|
)
|
|
$
|
49
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Current regulatory assets
(1)
|
$
|
130
|
|
|
$
|
70
|
|
Non-current regulatory assets:
|
|
|
|
||||
Securitized regulatory assets
|
1,590
|
|
|
1,919
|
|
||
Unrecognized equity return
(2)
|
(287
|
)
|
|
(329
|
)
|
||
Unamortized loss on reacquired debt
|
75
|
|
|
84
|
|
||
Pension and postretirement-related regulatory asset
(3)
|
646
|
|
|
809
|
|
||
Hurricane Harvey restoration costs
(4)
|
64
|
|
|
—
|
|
||
Excess deferred income taxes
(5)
|
48
|
|
|
—
|
|
||
Other long-term regulatory assets
(6)
|
211
|
|
|
194
|
|
||
Total non-current regulatory assets
|
2,347
|
|
|
2,677
|
|
||
Total regulatory assets
|
2,477
|
|
|
2,747
|
|
||
|
|
|
|
||||
Current regulatory liabilities
(7)
|
24
|
|
|
18
|
|
||
Non-current regulatory liabilities:
|
|
|
|
||||
Excess deferred income taxes
(5)
|
1,354
|
|
|
—
|
|
||
Estimated removal costs
|
878
|
|
|
1,010
|
|
||
Other long-term regulatory liabilities
|
232
|
|
|
288
|
|
||
Total non-current regulatory liabilities
|
2,464
|
|
|
1,298
|
|
||
Total regulatory liabilities
|
2,488
|
|
|
1,316
|
|
||
|
|
|
|
||||
Total regulatory assets and liabilities, net
|
$
|
(11
|
)
|
|
$
|
1,431
|
|
(1)
|
Current regulatory assets are included in Prepaid expenses and other current assets in CenterPoint Energy’s Consolidated Balance Sheets.
|
(2)
|
The unrecognized allowed equity return will be recognized as it is recovered in rates through 2024. During the years ended
December 31, 2017
,
2016
and
2015
, Houston Electric recognized approximately
$42 million
,
$64 million
and
$49 million
, respectively, of the allowed equity return. The timing of CenterPoint Energy’s recognition of the allowed equity return will vary each period based on amounts actually collected during the period. The actual amounts recognized are adjusted at least annually to correct any over-collections or under-collections during the preceding 12 months.
|
(3)
|
NGD’s actuarially determined pension and other postemployment expense in excess of the amount being recovered through rates is being deferred for rate making purposes. Deferred pension and other postemployment expenses of
$7 million
and
$6 million
as of
December 31, 2017
and
2016
, respectively, were not earning a return.
|
(4)
|
CenterPoint Energy is not earning a return on its Hurricane Harvey restoration costs.
|
(5)
|
The EDIT will be recovered or refunded to customers as required by tax and regulatory authorities. See Note 14 for additional information.
|
(6)
|
Other long-term regulatory assets that are not earning a return were not material as of
December 31, 2017
and
2016
.
|
(7)
|
Current regulatory liabilities are included in Other current liabilities in CenterPoint Energy’s Consolidated Balance Sheets.
|
|
|
Houston Electric
|
|
NGD
|
||||
|
|
(in millions)
|
||||||
Property, plant and equipment
|
|
$
|
42
|
|
|
$
|
5
|
|
Insurance proceeds received
|
|
(11
|
)
|
|
—
|
|
||
Insurance receivable
|
|
—
|
|
|
(5
|
)
|
||
Net property, plant and equipment
|
|
$
|
31
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Operation and maintenance expense
|
|
$
|
75
|
|
|
$
|
10
|
|
Insurance proceeds received
|
|
(3
|
)
|
|
—
|
|
||
Insurance receivable
|
|
(14
|
)
|
|
(4
|
)
|
||
Net regulatory asset
|
|
$
|
58
|
|
|
$
|
6
|
|
|
Outstanding and Non-Vested Shares
|
|||||||||||
|
Year Ended December 31, 2017
|
|||||||||||
|
Shares
(Thousands)
|
|
Weighted-Average
Grant Date
Fair Value
|
|
Remaining Average
Contractual
Life (Years)
|
|
Aggregate
Intrinsic
Value (Millions)
|
|||||
Outstanding as of December 31, 2016
|
3,423
|
|
|
$
|
20.90
|
|
|
|
|
|
||
Granted
|
1,263
|
|
|
26.64
|
|
|
|
|
|
|||
Forfeited or canceled
|
(846
|
)
|
|
23.38
|
|
|
|
|
|
|||
Vested and released to participants
|
(213
|
)
|
|
23.68
|
|
|
|
|
|
|||
Outstanding as of December 31, 2017
|
3,627
|
|
|
22.15
|
|
|
1
|
|
$
|
51
|
|
|
Outstanding and Non-Vested Shares
|
|||||||||||
|
Year Ended December 31, 2017
|
|||||||||||
|
Shares
(Thousands)
|
|
Weighted-Average
Grant Date
Fair Value
|
|
Remaining Average
Contractual
Life (Years)
|
|
Aggregate
Intrinsic
Value (Millions)
|
|||||
Outstanding as of December 31, 2016
|
920
|
|
|
$
|
20.74
|
|
|
|
|
|
||
Granted
|
414
|
|
|
26.77
|
|
|
|
|
|
|||
Forfeited or canceled
|
(47
|
)
|
|
22.25
|
|
|
|
|
|
|||
Vested and released to participants
|
(307
|
)
|
|
22.46
|
|
|
|
|
|
|||
Outstanding as of December 31, 2017
|
980
|
|
|
22.68
|
|
|
1.2
|
|
$
|
28
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Performance awards
|
$
|
26.64
|
|
|
$
|
18.98
|
|
|
$
|
21.28
|
|
Stock awards
|
26.77
|
|
|
19.24
|
|
|
21.39
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Performance awards
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
9
|
|
Stock awards
|
9
|
|
|
6
|
|
|
7
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
|
Pension
Benefits |
|
Post-retirement
Benefits |
|
Pension
Benefits
|
|
Post-retirement
Benefits
|
|
Pension
Benefits
|
|
Post-retirement
Benefits
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Service cost
|
$
|
36
|
|
|
$
|
2
|
|
|
$
|
38
|
|
|
$
|
2
|
|
|
$
|
41
|
|
|
$
|
2
|
|
Interest cost
|
89
|
|
|
16
|
|
|
93
|
|
|
16
|
|
|
93
|
|
|
20
|
|
||||||
Expected return on plan assets
|
(97
|
)
|
|
(5
|
)
|
|
(101
|
)
|
|
(6
|
)
|
|
(120
|
)
|
|
(7
|
)
|
||||||
Amortization of prior service cost (credit)
|
9
|
|
|
(5
|
)
|
|
9
|
|
|
(3
|
)
|
|
9
|
|
|
(1
|
)
|
||||||
Amortization of net loss
|
58
|
|
|
—
|
|
|
63
|
|
|
1
|
|
|
57
|
|
|
5
|
|
||||||
Curtailment
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
||||||
Settlement
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
||||||
Net periodic cost
|
$
|
95
|
|
|
$
|
8
|
|
|
$
|
102
|
|
|
$
|
5
|
|
|
$
|
90
|
|
|
$
|
19
|
|
(1)
|
A curtailment gain or loss is required when the expected future services of a significant number of current employees are reduced or eliminated for the accrual of benefits. During 2016, postretirement healthcare benefits were amended resulting in a net curtailment gain of
$5 million
. In May 2016, Houston Electric entered into a renegotiated collective bargaining agreement with the IBEW Local Union 66 that provides that for Houston Electric union employees covered under the agreement who retire on or after January 1, 2017, retiree medical and prescription drug coverage will be provided exclusively through the NECA/IBEW Family Medical Care Plan in exchange for the payment of monthly premiums as determined under the agreement. As a result, the accrued postretirement benefits related to such future Houston Electric union retirees were eliminated. Houston Electric recognized a curtailment gain of
$3 million
as an accelerated recognition of the prior service credit that would otherwise be recognized in future periods for the postretirement plan. CenterPoint Energy also recognized an additional curtailment gain of
$2 million
in October 2016 related to other amendments in the postretirement plan. As a result of these amendments, the 2016 postretirement expense was significantly lower than expenses reported for previous years.
|
(2)
|
A one-time, non-cash settlement charge is required when lump sum distributions or other settlements of plan benefit obligations during a plan year exceed the service cost and interest cost components of net periodic cost for that year. Due to the amount of lump sum payment distributions from the non-qualified pension plan during the year ended December 31, 2015, CenterPoint Energy recognized a non-cash settlement charge of
$10 million
. This charge is an acceleration of costs that would otherwise be recognized in future periods.
|
|
Year Ended December 31,
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||||||||
|
Pension
Benefits |
|
Post-retirement
Benefits |
|
Pension
Benefits
|
|
Post-retirement
Benefits
|
|
Pension
Benefits |
|
Post-retirement
Benefits |
||||||
Discount rate
|
4.15
|
%
|
|
4.15
|
%
|
|
4.40
|
%
|
|
4.35
|
%
|
|
4.05
|
%
|
|
3.90
|
%
|
Expected return on plan assets
|
6.00
|
|
|
4.50
|
|
|
6.25
|
|
|
4.80
|
|
|
6.50
|
|
|
5.20
|
|
Rate of increase in compensation levels
|
4.50
|
|
|
—
|
|
|
4.15
|
|
|
—
|
|
|
4.00
|
|
|
—
|
|
|
December 31,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
|
Pension
Benefits |
|
Post-retirement
Benefits |
|
Pension
Benefits
|
|
Post-retirement
Benefits
|
||||||||
|
(in millions, except for actuarial assumptions)
|
||||||||||||||
Change in Benefit Obligation
|
|
|
|
|
|
|
|
||||||||
Benefit obligation, beginning of year
|
$
|
2,197
|
|
|
$
|
383
|
|
|
$
|
2,193
|
|
|
$
|
432
|
|
Service cost
|
36
|
|
|
2
|
|
|
38
|
|
|
2
|
|
||||
Interest cost
|
89
|
|
|
16
|
|
|
93
|
|
|
16
|
|
||||
Participant contributions
|
—
|
|
|
7
|
|
|
—
|
|
|
10
|
|
||||
Benefits paid
|
(168
|
)
|
|
(26
|
)
|
|
(181
|
)
|
|
(37
|
)
|
||||
Actuarial loss
|
71
|
|
|
4
|
|
|
54
|
|
|
13
|
|
||||
Medicare reimbursement
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Plan amendment
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
(56
|
)
|
||||
Benefit obligation, end of year
|
2,225
|
|
|
386
|
|
|
2,197
|
|
|
383
|
|
||||
Change in Plan Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fair value of plan assets, beginning of year
|
1,656
|
|
|
113
|
|
|
1,679
|
|
|
136
|
|
||||
Employer contributions
|
48
|
|
|
16
|
|
|
9
|
|
|
18
|
|
||||
Participant contributions
|
—
|
|
|
7
|
|
|
—
|
|
|
10
|
|
||||
Benefits paid
|
(168
|
)
|
|
(26
|
)
|
|
(181
|
)
|
|
(37
|
)
|
||||
Plan amendment
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
||||
Actual investment return
|
265
|
|
|
10
|
|
|
149
|
|
|
6
|
|
||||
Fair value of plan assets, end of year
|
1,801
|
|
|
120
|
|
|
1,656
|
|
|
113
|
|
||||
Funded status, end of year
|
$
|
(424
|
)
|
|
$
|
(266
|
)
|
|
$
|
(541
|
)
|
|
$
|
(270
|
)
|
Amounts Recognized in Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Current liabilities-other
|
$
|
(7
|
)
|
|
$
|
(6
|
)
|
|
$
|
(7
|
)
|
|
$
|
(6
|
)
|
Other liabilities-benefit obligations
|
(417
|
)
|
|
(260
|
)
|
|
(534
|
)
|
|
(264
|
)
|
||||
Net liability, end of year
|
$
|
(424
|
)
|
|
$
|
(266
|
)
|
|
$
|
(541
|
)
|
|
$
|
(270
|
)
|
|
December 31,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
|
Pension Benefits
|
|
Post-retirement
Benefits |
|
Pension Benefits
|
|
Post-retirement
Benefits |
||||||||
Actuarial Assumptions
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
3.65
|
%
|
|
3.60
|
%
|
|
4.15
|
%
|
|
4.15
|
%
|
||||
Expected return on plan assets
|
6.00
|
|
|
4.55
|
|
|
6.00
|
|
|
4.50
|
|
||||
Rate of increase in compensation levels
|
4.45
|
|
|
—
|
|
|
4.50
|
|
|
—
|
|
||||
Medical cost trend rate assumed for the next year - Pre-65
|
—
|
|
|
6.15
|
|
|
—
|
|
|
5.75
|
|
||||
Medical/prescription drug cost trend rate assumed for the next year - Post-65
|
—
|
|
|
23.85
|
|
|
—
|
|
|
10.65
|
|
||||
Prescription drug cost trend rate assumed for the next year - Pre-65
|
—
|
|
|
9.85
|
|
|
—
|
|
|
10.75
|
|
||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
|
—
|
|
|
4.50
|
|
|
—
|
|
|
4.50
|
|
||||
Year that the cost trend rates reach the ultimate trend rate - Pre-65
|
—
|
|
|
2026
|
|
|
—
|
|
|
2024
|
|
||||
Year that the cost trend rates reach the ultimate trend rate - Post-65
|
—
|
|
|
2024
|
|
|
—
|
|
|
2024
|
|
(1)
|
The postretirement benefits were amended during 2016 to change retiree medical coverage, effective January 1, 2017, as follows: (i) members of the IBEW Local Union 66 who retire on or after January 1, 2017, and their dependents, will receive any retiree medical and prescription drug coverage exclusively through the NECA/IBEW Family Medical Care Plan pursuant to the terms of the renegotiated collective bargaining agreement entered into in May 2016; and (ii) Medicare eligible post-65 retirees will receive coverage through a Medicare Advantage Program, an insured benefit, in lieu of the previous self-insured benefit. These changes resulted in a reduction in our postretirement plan liability of
$56 million
as of December 31, 2016.
|
(2)
|
In May 2016, Houston Electric entered into a renegotiated collective bargaining agreement with the IBEW Local Union 66. The Houston Lighting & Power Company Union Retirees’ Medical and Dental Benefits Trust was amended to reflect the renegotiated collective bargaining agreement by establishing a segregated and restricted account under the trust for the retiree medical benefits of post-2016 union retirees who are now covered exclusively by the NECA/IBEW Family Medical Care Plan.
$20 million
was transferred to the account for post-2016 union retirees.
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Beginning Balance
|
$
|
(72
|
)
|
|
$
|
(65
|
)
|
Other comprehensive income (loss) before reclassifications
(1)
|
4
|
|
|
(19
|
)
|
||
Amounts reclassified from accumulated other comprehensive income:
|
|
|
|
||||
Prior service cost
(2)
|
1
|
|
|
—
|
|
||
Actuarial losses
(2)
|
7
|
|
|
8
|
|
||
Total reclassifications from accumulated other comprehensive income
|
8
|
|
|
8
|
|
||
Tax benefit (expense)
|
(6
|
)
|
|
4
|
|
||
Net current period other comprehensive income (loss)
|
6
|
|
|
(7
|
)
|
||
Ending Balance
|
$
|
(66
|
)
|
|
$
|
(72
|
)
|
(1)
|
Total other comprehensive income (loss) related to the remeasurement of pension, postretirement and other postemployment plans.
|
(2)
|
These accumulated other comprehensive components are included in the computation of net periodic cost.
|
|
December 31,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
|
Pension
Benefits
|
|
Postretirement
Benefits
|
|
Pension
Benefits
|
|
Postretirement
Benefits
|
||||||||
|
(in millions)
|
||||||||||||||
Unrecognized actuarial loss (gain)
|
$
|
94
|
|
|
$
|
(8
|
)
|
|
$
|
100
|
|
|
$
|
3
|
|
Unrecognized prior service cost
|
1
|
|
|
6
|
|
|
2
|
|
|
6
|
|
||||
Net amount recognized in accumulated other comprehensive loss (gain)
|
$
|
95
|
|
|
$
|
(2
|
)
|
|
$
|
102
|
|
|
$
|
9
|
|
|
Pension
Benefits
|
|
Postretirement
Benefits
|
||||
|
(in millions)
|
||||||
Net loss (gain)
|
$
|
1
|
|
|
$
|
(10
|
)
|
Amortization of net loss
|
(7
|
)
|
|
—
|
|
||
Amortization of prior service cost
|
(1
|
)
|
|
(1
|
)
|
||
Total recognized in comprehensive income
|
$
|
(7
|
)
|
|
$
|
(11
|
)
|
|
Pension
Benefits
|
|
Postretirement
Benefits
|
||||
|
(in millions)
|
||||||
Unrecognized actuarial loss
|
$
|
6
|
|
|
$
|
—
|
|
Unrecognized prior service cost
|
1
|
|
|
1
|
|
||
Amounts in accumulated comprehensive loss to be recognized in net periodic cost in 2018
(1)
|
$
|
7
|
|
|
$
|
1
|
|
(1)
|
Upon adoption of ASU 2017-07 on January 1, 2018, these amounts will be recognized as Other Income (Expense) in CenterPoint Energy’s Statements of Consolidated Income.
|
|
December 31,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
|
Pension
Qualified
|
|
Pension
Non-qualified
|
|
Pension
Qualified
|
|
Pension
Non-qualified
|
||||||||
|
(in millions)
|
||||||||||||||
Accumulated benefit obligation
|
$
|
2,090
|
|
|
$
|
74
|
|
|
$
|
2,097
|
|
|
$
|
71
|
|
Projected benefit obligation
|
2,151
|
|
|
74
|
|
|
2,126
|
|
|
71
|
|
||||
Fair value of plan assets
|
1,801
|
|
|
—
|
|
|
1,656
|
|
|
—
|
|
|
1%
Increase
|
|
1%
Decrease
|
||||
|
(in millions)
|
||||||
Effect on postretirement benefit obligation
|
$
|
12
|
|
|
$
|
11
|
|
Effect on total of service and interest cost
|
—
|
|
|
—
|
|
|
Pension
Benefits
|
|
Postretirement
Benefits
|
U.S. equity
|
12 – 28%
|
|
13 – 23%
|
International developed market equity
|
7 – 17%
|
|
3 – 13%
|
Emerging market equity
|
3 – 13%
|
|
—
|
Fixed income
|
54 – 66%
|
|
69 – 79%
|
Cash
|
0 – 2%
|
|
0 – 2%
|
|
Fair Value Measurements as of December 31, 2017
|
||||||||||||||
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
(3)
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Cash
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18
|
|
Corporate bonds:
|
|
|
|
|
|
|
|
|
|
|
|||||
Investment grade or above
|
—
|
|
|
432
|
|
|
—
|
|
|
432
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. companies
|
76
|
|
|
—
|
|
|
—
|
|
|
76
|
|
||||
Cash received as collateral from securities lending
|
76
|
|
|
—
|
|
|
—
|
|
|
76
|
|
||||
U.S. treasuries
|
67
|
|
|
—
|
|
|
—
|
|
|
67
|
|
||||
Mortgage backed securities
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||
Asset backed securities
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Municipal bonds
|
—
|
|
|
47
|
|
|
—
|
|
|
47
|
|
||||
Mutual funds
(1)
|
211
|
|
|
—
|
|
|
—
|
|
|
211
|
|
||||
International government bonds
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||
Obligation to return cash received as collateral from securities lending
|
(76
|
)
|
|
—
|
|
|
—
|
|
|
(76
|
)
|
||||
Total investments at fair value
|
$
|
372
|
|
|
$
|
505
|
|
|
$
|
—
|
|
|
$
|
877
|
|
Investments measured by net asset value per share or its equivalent
(2)
|
|
|
|
|
|
|
924
|
|
|||||||
Total Investments
|
|
|
|
|
|
|
$
|
1,801
|
|
(1)
|
57%
of the amount invested in mutual funds was in international equities,
30%
was in emerging market equities and
13%
was in U.S. equities.
|
(2)
|
This represents the common collective trust funds with
55%
of the amount invested in fixed income securities,
6%
in U.S. equities,
34%
in international equities and
5%
in emerging market equities.
|
(3)
|
The changes in the fair value of the pension plan’s Level 3 investments for the year ended December 31, 2017 were not material.
|
|
Fair Value Measurements as of December 31, 2016
|
||||||||||||||
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
(3)
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Cash
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14
|
|
Corporate bonds:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment grade or above
|
—
|
|
|
401
|
|
|
—
|
|
|
401
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. companies
|
73
|
|
|
—
|
|
|
—
|
|
|
73
|
|
||||
Cash received as collateral from securities lending
|
69
|
|
|
—
|
|
|
—
|
|
|
69
|
|
||||
U.S. treasuries
|
49
|
|
|
—
|
|
|
—
|
|
|
49
|
|
||||
Mortgage backed securities
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Asset backed securities
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Municipal bonds
|
—
|
|
|
52
|
|
|
—
|
|
|
52
|
|
||||
Mutual funds
(1)
|
171
|
|
|
—
|
|
|
—
|
|
|
171
|
|
||||
International government bonds
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
||||
Obligation to return cash received as collateral from securities lending
|
(69
|
)
|
|
—
|
|
|
—
|
|
|
(69
|
)
|
||||
Total investments at fair value
|
$
|
307
|
|
|
$
|
474
|
|
|
$
|
—
|
|
|
$
|
781
|
|
Investments measured by net asset value per share or its equivalent
(2)
|
|
|
|
|
|
|
875
|
|
|||||||
Total Investments
|
|
|
|
|
|
|
$
|
1,656
|
|
(1)
|
57%
of the amount invested in mutual funds was in international equities,
28%
was in emerging market equities and
15%
was in U.S. equities.
|
(2)
|
This represents the common collective trust funds with
53%
of the amount invested in fixed income securities,
12%
in U.S. equities,
30%
in international equities and
5%
in emerging market equities.
|
(3)
|
The changes in the fair value of the pension plan’s Level 3 investments for the year ended December 31, 2016 were not material.
|
|
Fair Value Measurements as of December 31, 2017
|
||||||||||||||
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Mutual funds
(1)
|
$
|
120
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
120
|
|
Total
|
$
|
120
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
120
|
|
(1)
|
74%
of the amount invested in mutual funds was in fixed income securities,
18%
was in U.S. equities and
8%
was in international equities.
|
|
Fair Value Measurements as of December 31, 2016
|
||||||||||||||
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Mutual funds
(1)
|
$
|
113
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
113
|
|
Total
|
$
|
113
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
113
|
|
(1)
|
74%
of the amount invested in mutual funds was in fixed income securities,
18%
was in U.S. equities and
8%
was in international equities.
|
|
Pension
Benefits
|
|
Postretirement Benefit
Payments
|
||||
|
(in millions)
|
||||||
2018
|
$
|
144
|
|
|
$
|
19
|
|
2019
|
147
|
|
|
21
|
|
||
2020
|
153
|
|
|
24
|
|
||
2021
|
156
|
|
|
27
|
|
||
2022
|
158
|
|
|
29
|
|
||
2023-2027
|
774
|
|
|
145
|
|
Fair Value of Derivative Instruments
|
||||||||||
|
|
December 31, 2017
|
||||||||
Derivatives designated
as fair value hedges:
|
|
Balance Sheet
Location
|
|
Derivative
Assets
Fair Value
|
|
Derivative
Liabilities
Fair Value
|
||||
|
|
|
|
(in millions)
|
||||||
Natural gas derivatives
(1) (2) (3)
|
|
Current Liabilities: Non-trading derivative liabilities
|
|
$
|
13
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
||||
Natural gas derivatives
(1) (2) (3)
|
|
Current Assets: Non-trading derivative assets
|
|
114
|
|
|
4
|
|
||
Natural gas derivatives
(1) (2) (3)
|
|
Other Assets: Non-trading derivative assets
|
|
44
|
|
|
—
|
|
||
Natural gas derivatives
(1) (2) (3)
|
|
Current Liabilities: Non-trading derivative liabilities
|
|
38
|
|
|
78
|
|
||
Natural gas derivatives
(1) (2) (3)
|
|
Other Liabilities: Non-trading derivative liabilities
|
|
9
|
|
|
24
|
|
||
Indexed debt securities derivative
|
|
Current Liabilities
|
|
—
|
|
|
668
|
|
||
Total
|
|
$
|
218
|
|
|
$
|
775
|
|
(1)
|
The fair value shown for natural gas contracts is comprised of derivative gross volumes totaling
1,795
Bcf or a net
224
Bcf long position. Certain natural gas contracts hedge basis risk only and lack a fixed price exposure.
|
(2)
|
Natural gas contracts are presented on a net basis in the Consolidated Balance Sheets as they are subject to master netting arrangements. This netting applies to all undisputed amounts due or past due and causes derivative assets (liabilities) to be ultimately presented net in a liability (asset) account within the Consolidated Balance Sheets. The net of total non-trading natural gas derivative assets and liabilities was a
$130 million
asset as shown on CenterPoint Energy’s Consolidated Balance Sheets (and as detailed in the table below), and was comprised of the natural gas contracts derivative assets and liabilities separately shown above, impacted by collateral netting of
$19 million
.
|
(3)
|
Derivative Assets and Derivative Liabilities include no material amounts related to physical forward transactions with Enable.
|
Offsetting of Natural Gas Derivative Assets and Liabilities
|
||||||||||||
|
|
December 31, 2017
|
||||||||||
|
|
Gross Amounts
Recognized (1)
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Net Amount Presented in the Consolidated Balance Sheets (2)
|
||||||
|
|
(in millions)
|
||||||||||
Current Assets: Non-trading derivative assets
|
|
$
|
165
|
|
|
$
|
(55
|
)
|
|
$
|
110
|
|
Other Assets: Non-trading derivative assets
|
|
53
|
|
|
(9
|
)
|
|
44
|
|
|||
Current Liabilities: Non-trading derivative liabilities
|
|
(83
|
)
|
|
63
|
|
|
(20
|
)
|
|||
Other Liabilities: Non-trading derivative liabilities
|
|
(24
|
)
|
|
20
|
|
|
(4
|
)
|
|||
Total
|
|
$
|
111
|
|
|
$
|
19
|
|
|
$
|
130
|
|
(1)
|
Gross amounts recognized include some derivative assets and liabilities that are not subject to master netting arrangements.
|
(2)
|
The derivative assets and liabilities on the Consolidated Balance Sheets exclude accounts receivable or accounts payable that, should they exist, could be used as offsets to these balances in the event of a default.
|
Fair Value of Derivative Instruments
|
||||||||||
|
|
December 31, 2016
|
||||||||
Total derivatives not designated
as hedging instruments
|
|
Balance Sheet
Location
|
|
Derivative
Assets
Fair Value
|
|
Derivative
Liabilities
Fair Value
|
||||
|
|
|
|
(in millions)
|
||||||
Natural gas derivatives
(1) (2) (3)
|
|
Current Assets: Non-trading derivative assets
|
|
$
|
79
|
|
|
$
|
14
|
|
Natural gas derivatives
(1) (2) (3)
|
|
Other Assets: Non-trading derivative assets
|
|
24
|
|
|
5
|
|
||
Natural gas derivatives
(1) (2) (3)
|
|
Current Liabilities: Non-trading derivative liabilities
|
|
2
|
|
|
43
|
|
||
Natural gas derivatives
(1) (2) (3)
|
|
Other Liabilities: Non-trading derivative liabilities
|
|
—
|
|
|
5
|
|
||
Indexed debt securities derivative
|
|
Current Liabilities
|
|
—
|
|
|
717
|
|
||
Total
|
|
$
|
105
|
|
|
$
|
784
|
|
(1)
|
The fair value shown for natural gas contracts is comprised of derivative gross volumes totaling
1,035
Bcf or a net
59
Bcf long position. Certain natural gas contracts hedge basis risk only and lack a fixed price exposure.
|
(2)
|
Natural gas contracts are presented on a net basis in the Consolidated Balance Sheets. Natural gas contracts are subject to master netting arrangements. This netting applies to all undisputed amounts due or past due and causes derivative assets (liabilities) to be ultimately presented net in a liability (asset) account within the Consolidated Balance Sheets. The net of total non-trading derivative assets and liabilities was a
$24 million
asset as shown on CenterPoint Energy’s Consolidated Balance Sheets (and as detailed in the table below), and was comprised of the natural gas contracts derivative assets and liabilities separately shown above, impacted by collateral netting of
$14 million
.
|
(3)
|
Derivative Assets and Derivative Liabilities include no material amounts related to physical forward transactions with Enable.
|
Offsetting of Natural Gas Derivative Assets and Liabilities
|
||||||||||||
|
|
December 31, 2016
|
||||||||||
|
|
Gross Amounts
Recognized (1)
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Net Amount Presented in the Consolidated Balance Sheets (2)
|
||||||
|
|
(in millions)
|
||||||||||
Current Assets: Non-trading derivative assets
|
|
$
|
81
|
|
|
$
|
(30
|
)
|
|
$
|
51
|
|
Other Assets: Non-trading derivative assets
|
|
24
|
|
|
(5
|
)
|
|
19
|
|
|||
Current Liabilities: Non-trading derivative liabilities
|
|
(57
|
)
|
|
16
|
|
|
(41
|
)
|
|||
Other Liabilities: Non-trading derivative liabilities
|
|
(10
|
)
|
|
5
|
|
|
(5
|
)
|
|||
Total
|
|
$
|
38
|
|
|
$
|
(14
|
)
|
|
$
|
24
|
|
(1)
|
Gross amounts recognized include some derivative assets and liabilities that are not subject to master netting arrangements.
|
(2)
|
The derivative assets and liabilities on the Consolidated Balance Sheets exclude accounts receivable or accounts payable that, should they exist, could be used as offsets to these balances in the event of a default.
|
(1)
|
Hedge ineffectiveness results from the basis ineffectiveness discussed above, and excludes the impact to natural gas expense from timing ineffectiveness. Timing ineffectiveness arises due to changes in the difference between the spot price and the futures price, as well as the difference between the timing of the settlement of the futures and the valuation of the underlying physical commodity. As the commodity contract nears the settlement date, spot-to-forward price differences should converge, which should reduce or eliminate the impact of this ineffectiveness on natural gas expense.
|
|
December 31, 2017
|
|
December 31, 2016
|
|
||||||||||||
|
Investment
Grade (1)
|
|
Total
|
|
Investment
Grade (1)
|
|
Total
|
|
||||||||
|
(in millions)
|
|
||||||||||||||
Energy marketers
|
$
|
6
|
|
|
$
|
45
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
Financial institutions
|
—
|
|
|
—
|
|
|
33
|
|
|
33
|
|
|
||||
End users
(2)
|
17
|
|
|
109
|
|
|
2
|
|
|
47
|
|
|
||||
Total
|
$
|
23
|
|
|
$
|
154
|
|
(3)
|
$
|
36
|
|
|
$
|
84
|
|
(3)
|
(1)
|
“Investment grade” is primarily determined using publicly available credit ratings and considers credit support (including parent company guarantees) and collateral (including cash and standby letters of credit). For unrated counterparties, CenterPoint Energy determines a synthetic credit rating by performing financial statement analysis and considers contractual rights and restrictions and collateral.
|
(2)
|
End users are comprised primarily of customers who have contracted to fix the price of a portion of their physical gas requirements for future periods.
|
(3)
|
The net of total non-trading natural gas derivative assets was
$154 million
and
$70 million
as of December 31, 2017 and 2016, respectively, as shown on CenterPoint Energy’s Consolidated Balance Sheets, and was comprised of the natural gas contracts derivatives assets separately shown above, impacted by collateral netting of
$-0-
and
$14 million
as of December 31, 2017 and 2016, respectively.
|
|
December 31, 2017
|
||||||||||||||||||
|
Quoted Prices in
Active Markets
for Identical Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Netting
Adjustments (1)
|
|
Balance
|
||||||||||
|
|
|
|
|
|||||||||||||||
|
(in millions)
|
||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate equities
|
$
|
963
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
963
|
|
Investments, including money
market funds
(2)
|
68
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68
|
|
|||||
Natural gas derivatives
(3)
|
—
|
|
|
161
|
|
|
57
|
|
|
(64
|
)
|
|
154
|
|
|||||
Hedged portion of natural gas inventory
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|||||
Total assets
|
$
|
1,045
|
|
|
$
|
161
|
|
|
$
|
57
|
|
|
$
|
(64
|
)
|
|
$
|
1,199
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Indexed debt securities derivative
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
668
|
|
|
$
|
—
|
|
|
$
|
668
|
|
Natural gas derivatives
(3)
|
—
|
|
|
96
|
|
|
11
|
|
|
(83
|
)
|
|
24
|
|
|||||
Total liabilities
|
$
|
—
|
|
|
$
|
96
|
|
|
$
|
679
|
|
|
$
|
(83
|
)
|
|
$
|
692
|
|
(1)
|
Amounts represent the impact of legally enforceable master netting arrangements that allow CenterPoint Energy to settle positive and negative positions and also include cash collateral of
$19 million
posted with the same counterparties.
|
(2)
|
Amounts are included in Prepaid and Other Current Assets and Other Assets in the Consolidated Balance Sheets.
|
(3)
|
Natural gas derivatives include no material amounts related to physical forward transactions with Enable.
|
|
December 31, 2016
|
||||||||||||||||||
|
Quoted Prices in
Active Markets
for Identical Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Netting
Adjustments
(1)
|
|
Balance
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate equities
|
$
|
956
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
956
|
|
Investments, including money
market funds
(2)
|
77
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
77
|
|
|||||
Natural gas derivatives
(3)
|
11
|
|
|
74
|
|
|
20
|
|
|
(35
|
)
|
|
70
|
|
|||||
Total assets
|
$
|
1,044
|
|
|
$
|
74
|
|
|
$
|
20
|
|
|
$
|
(35
|
)
|
|
$
|
1,103
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Indexed debt securities derivative
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
717
|
|
|
$
|
—
|
|
|
$
|
717
|
|
Natural gas derivatives
(3)
|
4
|
|
|
56
|
|
|
7
|
|
|
(21
|
)
|
|
46
|
|
|||||
Total liabilities
|
$
|
4
|
|
|
$
|
56
|
|
|
$
|
724
|
|
|
$
|
(21
|
)
|
|
$
|
763
|
|
(1)
|
Amounts represent the impact of legally enforceable master netting arrangements that allow CenterPoint Energy to settle positive and negative positions and also include cash collateral of
$14 million
held by CES from the same counterparties.
|
(2)
|
Amounts are included in Prepaid and Other Current Assets and Other Assets in the Consolidated Balance Sheets.
|
(3)
|
Natural gas derivatives include no material amounts related to physical forward transactions with Enable.
|
|
Fair Value Measurements Using Significant
Unobservable Inputs (Level 3)
|
||||||||||
|
Derivative assets and liabilities, net
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Beginning balance
|
$
|
(704
|
)
|
|
$
|
12
|
|
|
$
|
17
|
|
Purchases
(1)
|
—
|
|
|
12
|
|
|
—
|
|
|||
Total gains
|
96
|
|
|
12
|
|
|
7
|
|
|||
Total settlements
|
(11
|
)
|
|
(27
|
)
|
|
(12
|
)
|
|||
Transfers out of Level 3
|
(17
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|||
Transfers into Level 3
|
14
|
|
|
(712
|
)
|
|
1
|
|
|||
Ending balance
(2)
|
$
|
(622
|
)
|
|
$
|
(704
|
)
|
|
$
|
12
|
|
The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at the reporting date
(3)
|
$
|
87
|
|
|
$
|
(402
|
)
|
|
$
|
6
|
|
(1)
|
Mark-to-market value of Level 3 derivative assets acquired through the purchase of AEM was
less than $1 million
at the acquisition date.
|
(2)
|
CenterPoint Energy did not have significant Level 3 sales during any of the years ended
December 31, 2017
,
2016
or 2015.
|
(3)
|
During 2016, CenterPoint Energy transferred its indexed debt securities from Level 2 to Level 3 to reflect changes in the significance of the unobservable inputs used in the valuation. As of
December 31, 2017
, the indexed debt securities liability was
$668 million
. During the year ended
December 31, 2017
, there was a gain of
$49 million
on the indexed debt securities.
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
|
(in millions)
|
||||||||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Long-term debt
|
$
|
8,679
|
|
|
$
|
9,220
|
|
|
$
|
8,443
|
|
|
$
|
8,846
|
|
|
|
As of December 31,
|
|||||||
|
|
2017
|
|
2016 (2)
|
|
2015
|
|||
CenterPoint Energy
|
|
54.1
|
%
|
|
54.1
|
%
|
|
55.4
|
%
|
OGE
|
|
25.7
|
%
|
|
25.7
|
%
|
|
26.3
|
%
|
(1)
|
Excluding the Series A Preferred Units owned by CenterPoint Energy.
|
(2)
|
In November 2016, Enable completed a public offering of
11,500,000
common units of which
1,424,281
were sold by ArcLight Capital Partners, LLC. The common units issued and sold by Enable resulted in dilution of both CenterPoint Energy’s and OGE’s limited partner interest in Enable.
|
|
December 31, 2017
|
|||||
|
Common
|
|
Series A Preferred
|
|
||
CenterPoint Energy
|
233,856,623
|
|
(1)
|
14,520,000
|
|
(2)
|
OGE
|
110,982,805
|
|
|
—
|
|
|
(1)
|
The
139,704,916
subordinated units previously owned by CERC Corp. converted into common units of Enable on a one-for-one basis, on August 30, 2017, at the end of the subordination period, as set forth in Enable’s Fourth Amended and Restated Agreement of Limited Partnership. Upon conversion, holders of common units resulting from the conversion of subordinated units have all the rights and obligations of unitholders holding all other common units, including the right to receive distributions pro rata made with respect to common units.
|
(2)
|
On February 18, 2016, CenterPoint Energy purchased an aggregate of
14,520,000
Series A Preferred Units from Enable for a total purchase price of
$363 million
, which is accounted for as a cost method investment.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(in millions)
|
||||||||||
Investment in Enable’s common units
|
|
$
|
297
|
|
|
$
|
297
|
|
|
$
|
294
|
|
Investment in Enable’s Series A Preferred Units
|
|
36
|
|
|
22
|
|
(1)
|
—
|
|
|||
Total
|
|
$
|
333
|
|
|
$
|
319
|
|
|
$
|
294
|
|
(1)
|
Represents the period from February 18, 2016 to December 31, 2016.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(in millions)
|
||||||||||
Reimbursement of transition services
(1)
|
|
$
|
4
|
|
|
$
|
7
|
|
|
$
|
16
|
|
Natural gas expenses, including transportation and storage costs
|
|
115
|
|
|
110
|
|
|
117
|
|
|||
Interest income related to notes receivable from Enable
(2)
|
|
—
|
|
|
1
|
|
|
8
|
|
(1)
|
Represents amounts billed under the Transition Agreements, including the costs of seconded employees. Substantially all of the seconded employees became employees of Enable effective January 1, 2015. Actual transition services costs are recorded net of reimbursement.
|
(2)
|
In connection with CenterPoint Energy’s purchase of Series A Preferred Units, Enable redeemed
$363 million
of notes owed to a wholly-owned subsidiary of CERC Corp., which bore interest at an annual rate of
2.10%
to
2.45%
.
|
|
|
Year Ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in millions)
|
||||||
Accounts receivable for amounts billed for transition services
|
|
$
|
1
|
|
|
$
|
1
|
|
Accounts payable for natural gas purchases from Enable
|
|
13
|
|
|
10
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(in millions)
|
||||||||||
Operating revenues
|
|
$
|
2,803
|
|
|
$
|
2,272
|
|
|
$
|
2,418
|
|
Cost of sales, excluding depreciation and amortization
|
|
1,381
|
|
|
1,017
|
|
|
1,097
|
|
|||
Impairment of goodwill and other long-lived assets
|
|
—
|
|
|
9
|
|
|
1,134
|
|
|||
Operating income (loss)
|
|
528
|
|
|
385
|
|
|
(712
|
)
|
|||
Net income (loss) attributable to Enable
|
|
400
|
|
|
290
|
|
|
(752
|
)
|
|||
|
|
|
|
|
|
|
||||||
Reconciliation of Equity in Earnings (Losses), net:
|
|
|
|
|
|
|
||||||
CenterPoint Energy’s interest
|
|
$
|
216
|
|
|
$
|
160
|
|
|
$
|
(416
|
)
|
Basis difference amortization
(1)
|
|
49
|
|
|
48
|
|
|
8
|
|
|||
Impairment of CenterPoint Energy’s equity method investment in Enable
|
|
—
|
|
|
—
|
|
|
(1,225
|
)
|
|||
CenterPoint Energy’s equity in earnings (losses), net
(2)
|
|
$
|
265
|
|
|
$
|
208
|
|
|
$
|
(1,633
|
)
|
(1)
|
Equity in earnings of unconsolidated affiliates includes CenterPoint Energy’s share of Enable earnings adjusted for the amortization of the basis difference of CenterPoint Energy’s original investment in Enable and its underlying equity in net assets of Enable. The basis difference is being amortized over approximately
31
years, the average life of the assets to which the basis difference is attributed.
|
(2)
|
These amounts include impairment charges totaling
$1,846 million
composed of CenterPoint Energy’s impairment of its equity method investment in Enable of
$1,225 million
and CenterPoint Energy’s share,
$621 million
, of impairment charges Enable recorded for goodwill and long-lived assets for the year ended December 31, 2015. This impairment is offset by
$213 million
of earnings for the year ended December 31, 2015.
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in millions)
|
||||||
Current assets
|
|
$
|
416
|
|
|
$
|
396
|
|
Non-current assets
|
|
11,177
|
|
|
10,816
|
|
||
Current liabilities
|
|
1,279
|
|
|
362
|
|
||
Non-current liabilities
|
|
2,660
|
|
|
3,056
|
|
||
Non-controlling interest
|
|
12
|
|
|
12
|
|
||
Preferred equity
|
|
362
|
|
|
362
|
|
||
Enable partners’ capital
|
|
7,280
|
|
|
7,420
|
|
||
|
|
|
|
|
||||
Reconciliation of Investment in Enable:
|
|
|
|
|
||||
CenterPoint Energy’s ownership interest in Enable partners’ capital
|
|
$
|
3,935
|
|
|
$
|
4,067
|
|
CenterPoint Energy’s basis difference
|
|
(1,463
|
)
|
|
(1,562
|
)
|
||
CenterPoint Energy’s investment in Enable
|
|
$
|
2,472
|
|
|
$
|
2,505
|
|
|
TW
Securities
|
|
Debt
Component
of ZENS (1)
|
|
Derivative
Component
of ZENS
|
||||||
|
(in millions)
|
||||||||||
Balance as of December 31, 2014
|
$
|
930
|
|
|
$
|
142
|
|
|
$
|
541
|
|
Accretion of debt component of ZENS
|
—
|
|
|
27
|
|
|
—
|
|
|||
2% interest paid
|
—
|
|
|
(17
|
)
|
|
—
|
|
|||
Sale of TW Securities
|
(32
|
)
|
|
—
|
|
|
—
|
|
|||
Distribution to ZENS holders
|
—
|
|
|
(7
|
)
|
|
(18
|
)
|
|||
Gain on indexed debt securities
|
—
|
|
|
—
|
|
|
(81
|
)
|
|||
Loss on TW Securities
|
(93
|
)
|
|
—
|
|
|
—
|
|
|||
Balance as of December 31, 2015
|
805
|
|
|
145
|
|
|
442
|
|
|||
Accretion of debt component of ZENS
|
—
|
|
|
26
|
|
|
—
|
|
|||
2% interest paid
|
—
|
|
|
(17
|
)
|
|
—
|
|
|||
Sale of TW Securities
|
(178
|
)
|
|
—
|
|
|
—
|
|
|||
Distribution to ZENS holders
|
—
|
|
|
(40
|
)
|
|
(21
|
)
|
|||
Loss on indexed debt securities
|
—
|
|
|
—
|
|
|
296
|
|
|||
Gain on TW Securities
|
326
|
|
|
—
|
|
|
—
|
|
|||
Balance as of December 31, 2016
|
953
|
|
|
114
|
|
|
717
|
|
|||
Accretion of debt component of ZENS
|
—
|
|
|
27
|
|
|
—
|
|
|||
2% interest paid
|
—
|
|
|
(17
|
)
|
|
—
|
|
|||
Distribution to ZENS holders
|
—
|
|
|
(2
|
)
|
|
—
|
|
|||
Gain on indexed debt securities
|
—
|
|
|
—
|
|
|
(49
|
)
|
|||
Gain on TW Securities
|
7
|
|
|
—
|
|
|
—
|
|
|||
Balance as of December 31, 2017
|
$
|
960
|
|
|
$
|
122
|
|
|
$
|
668
|
|
(1)
|
To reflect adoption of ASU 2015-03, balances have been restated to include unamortized debt issuance costs of
$9 million
and
$10 million
as of December 31, 2015 and 2014, respectively.
|
|
December 31,
2017 |
|
December 31,
2016 |
||||||||||||
|
Long-Term
|
|
Current
(1)
|
|
Long-Term
|
|
Current
(1)
|
||||||||
|
(in millions)
|
||||||||||||||
Short-term borrowings:
|
|
|
|
|
|
|
|
||||||||
Inventory financing
(2)
|
$
|
—
|
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
35
|
|
Total short-term borrowings
|
—
|
|
|
39
|
|
|
—
|
|
|
35
|
|
||||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
||||
CenterPoint Energy:
|
|
|
|
|
|
|
|
|
|
|
|
||||
ZENS due 2029
(3)
|
—
|
|
|
122
|
|
|
—
|
|
|
114
|
|
||||
Senior notes 2.50% due 2022
|
500
|
|
|
—
|
|
|
—
|
|
|
250
|
|
||||
Pollution control bonds 5.05% to 5.125% due 2018 to 2028
(4)
|
68
|
|
|
50
|
|
|
118
|
|
|
—
|
|
||||
Commercial paper
(5)
|
855
|
|
|
—
|
|
|
835
|
|
|
—
|
|
||||
Houston Electric:
|
|
|
|
|
|
|
|
|
|
|
|
||||
First mortgage bonds 9.15% due 2021
|
102
|
|
|
—
|
|
|
102
|
|
|
—
|
|
||||
General mortgage bonds 1.85% to 6.95% due 2021 to 2044
|
2,812
|
|
|
—
|
|
|
2,512
|
|
|
—
|
|
||||
System restoration bonds 3.46% to 4.243% due 2018 to 2022
|
256
|
|
|
56
|
|
|
312
|
|
|
53
|
|
||||
Transition bonds 2.161% to 5.302% due 2019 to 2024
|
1,181
|
|
|
378
|
|
|
1,560
|
|
|
358
|
|
||||
CERC Corp.:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Senior notes 4.10% to 6.625% due 2021 to 2047
|
1,593
|
|
|
—
|
|
|
1,593
|
|
|
250
|
|
||||
Commercial paper
(5)
|
898
|
|
|
—
|
|
|
569
|
|
|
—
|
|
||||
Unamortized debt issuance costs
|
(38
|
)
|
|
—
|
|
|
(33
|
)
|
|
—
|
|
||||
Unamortized discount and premium, net
|
(32
|
)
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
||||
Total long-term debt
|
8,195
|
|
|
606
|
|
|
7,532
|
|
|
1,025
|
|
||||
Total debt
|
$
|
8,195
|
|
|
$
|
645
|
|
|
$
|
7,532
|
|
|
$
|
1,060
|
|
(1)
|
Includes amounts due or exchangeable within one year of the date noted.
|
(2)
|
NGD has AMAs associated with its utility distribution service in Arkansas, Louisiana, Mississippi, Oklahoma and Texas. The AMAs have varying terms, the longest of which expires in 2020. Pursuant to the provisions of the agreements, NGD sells natural gas and agrees to repurchase an equivalent amount of natural gas during the winter heating seasons at the same cost, plus a financing charge. These transactions are accounted for as an inventory financing.
|
(3)
|
CenterPoint Energy’s ZENS obligation is bifurcated into a debt component and an embedded derivative component. For additional information regarding ZENS, see Note 11(b). As ZENS are exchangeable for cash at any time at the option of the holders, these notes are classified as a current portion of long-term debt.
|
(4)
|
$118 million
of these series of debt were secured by general mortgage bonds of Houston Electric as of both
December 31, 2017
and
2016
.
|
(5)
|
Classified as long-term debt because the termination date of the facility that backstops the commercial paper is more than one year from the date noted.
|
|
|
Issuance Date
|
|
Debt Instrument
|
|
Aggregate Principal Amount
|
|
Interest Rate
|
|
Maturity Date
|
||
|
|
|
|
|
|
(in millions)
|
|
|
|
|
||
Houston Electric
|
|
January 2017
|
|
General mortgage bonds
|
|
$
|
300
|
|
|
3.00%
|
|
2027
|
CenterPoint Energy
|
|
August 2017
|
|
Unsecured senior notes
|
|
500
|
|
|
2.50%
|
|
2022
|
|
CERC Corp.
|
|
August 2017
|
|
Unsecured senior notes
|
|
300
|
|
|
4.10%
|
|
2047
|
|
December 31, 2017
|
|
December 31, 2016
|
|
||||||||||||||||||||||||||||
|
Size of
Facility |
|
Loans
|
|
Letters
of Credit |
|
Commercial
Paper |
|
Size of
Facility |
|
Loans
|
|
Letters
of Credit |
|
Commercial
Paper |
|
||||||||||||||||
|
(in millions)
|
|
||||||||||||||||||||||||||||||
CenterPoint Energy
|
$
|
1,700
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
855
|
|
(1)
|
$
|
1,600
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
835
|
|
(1)
|
Houston Electric
|
300
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
300
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
||||||||
CERC Corp.
|
900
|
|
|
—
|
|
|
1
|
|
|
898
|
|
(2)
|
600
|
|
|
—
|
|
|
4
|
|
|
569
|
|
(2)
|
||||||||
Total
|
$
|
2,900
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
1,753
|
|
|
$
|
2,500
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
1,404
|
|
|
(1)
|
Weighted average interest rate was
1.88%
and
1.04%
as of
December 31, 2017
and
December 31, 2016
, respectively.
|
(2)
|
Weighted average interest rate was
1.72%
and
1.03%
as of
December 31, 2017
and
December 31, 2016
, respectively.
|
Execution
Date
|
|
Company
|
|
Size of
Facility
|
|
Draw Rate of LIBOR plus
(2)
|
|
Financial Covenant Limit on Debt for Borrowed Money to Capital Ratio
|
|
Debt for Borrowed Money to Capital
Ratio as of
December 31, 2017
(3)
|
|
Termination Date
(5)
|
||
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
||
March 3, 2016
|
|
CenterPoint Energy
|
|
$
|
1,700
|
|
(1)
|
1.250%
|
|
65%
|
(4)
|
52.9%
|
|
March 3, 2022
|
March 3, 2016
|
|
Houston Electric
|
|
300
|
|
|
1.125%
|
|
65%
|
(4)
|
48.6%
|
|
March 3, 2022
|
|
March 3, 2016
|
|
CERC Corp.
|
|
900
|
|
(1)
|
1.250%
|
|
65%
|
|
40.4%
|
|
March 3, 2022
|
(1)
|
Amended on June 16, 2017 to increase the aggregate commitment size as noted above.
|
(2)
|
Based on current credit ratings.
|
(3)
|
As defined in the revolving credit facility agreement, excluding Securitization Bonds.
|
(4)
|
The financial covenant limit will temporarily increase from
65%
to
70%
if Houston Electric experiences damage from a natural disaster in its service territory and CenterPoint Energy certifies to the administrative agent that Houston Electric has incurred system restoration costs reasonably likely to exceed
$100 million
in a consecutive
12
-month period, all or part of which Houston Electric intends to seek to recover through securitization financing. Such temporary increase in the financial covenant would be in effect from the date CenterPoint Energy delivers its certification until the earliest to occur of (i) the completion of the securitization financing, (ii) the first anniversary of CenterPoint Energy’s certification or (iii) the revocation of such certification.
|
(5)
|
Amended on June 16, 2017 to extend the termination date as noted above.
|
|
CenterPoint
Energy (1)
|
|
Securitization Bonds
|
||||
|
(in millions)
|
||||||
2018
|
$
|
484
|
|
|
$
|
434
|
|
2019
|
458
|
|
|
458
|
|
||
2020
|
231
|
|
|
231
|
|
||
2021
|
1,206
|
|
|
211
|
|
||
2022
|
2,773
|
|
|
219
|
|
(1)
|
These maturities include Securitization Bonds principal repayments on scheduled payment dates.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Current income tax expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
$
|
32
|
|
|
$
|
23
|
|
|
$
|
(37
|
)
|
State
|
9
|
|
|
18
|
|
|
12
|
|
|||
Total current expense (benefit)
|
41
|
|
|
41
|
|
|
(25
|
)
|
|||
Deferred income tax expense (benefit):
|
|
|
|
|
|
|
|
|
|||
Federal
|
(806
|
)
|
|
185
|
|
|
(359
|
)
|
|||
State
|
36
|
|
|
28
|
|
|
(54
|
)
|
|||
Total deferred expense (benefit)
|
(770
|
)
|
|
213
|
|
|
(413
|
)
|
|||
Total income tax expense (benefit)
|
$
|
(729
|
)
|
|
$
|
254
|
|
|
$
|
(438
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Income (loss) before income taxes
|
$
|
1,063
|
|
|
$
|
686
|
|
|
$
|
(1,130
|
)
|
Federal statutory income tax rate
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
|||
Expected federal income tax expense (benefit)
|
372
|
|
|
240
|
|
|
(396
|
)
|
|||
Increase (decrease) in tax expense resulting from:
|
|
|
|
|
|
|
|
|
|||
State income tax expense, net of federal income tax
|
26
|
|
|
27
|
|
|
(27
|
)
|
|||
State valuation allowance, net of federal income tax
|
3
|
|
|
3
|
|
|
—
|
|
|||
Federal income tax rate reduction
|
(1,113
|
)
|
|
—
|
|
|
—
|
|
|||
Other, net
|
(17
|
)
|
|
(16
|
)
|
|
(15
|
)
|
|||
Total
|
(1,101
|
)
|
|
14
|
|
|
(42
|
)
|
|||
Total income tax expense (benefit)
|
$
|
(729
|
)
|
|
$
|
254
|
|
|
$
|
(438
|
)
|
Effective tax rate
|
(69
|
)%
|
|
37
|
%
|
|
39
|
%
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Benefits and compensation
|
$
|
162
|
|
|
$
|
316
|
|
Regulatory liabilities
|
347
|
|
|
57
|
|
||
Loss and credit carryforwards
|
90
|
|
|
79
|
|
||
Asset retirement obligations
|
68
|
|
|
77
|
|
||
Other
|
16
|
|
|
21
|
|
||
Valuation allowance
|
(7
|
)
|
|
(5
|
)
|
||
Total deferred tax assets
|
676
|
|
|
545
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
||
Property, plant, and equipment
|
1,808
|
|
|
2,603
|
|
||
Investment in unconsolidated affiliates
|
927
|
|
|
1,383
|
|
||
Regulatory assets
|
473
|
|
|
940
|
|
||
Investment in marketable securities and indexed debt
|
502
|
|
|
772
|
|
||
Indexed debt securities derivative
|
13
|
|
|
4
|
|
||
Other
|
127
|
|
|
106
|
|
||
Total deferred tax liabilities
|
3,850
|
|
|
5,808
|
|
||
Net deferred tax liabilities
|
$
|
3,174
|
|
|
$
|
5,263
|
|
|
Natural Gas Supply
|
|
Other
(1)
|
||||
|
(in millions)
|
||||||
2018
|
$
|
463
|
|
|
$
|
37
|
|
2019
|
353
|
|
|
17
|
|
||
2020
|
169
|
|
|
11
|
|
||
2021
|
79
|
|
|
—
|
|
||
2022
|
49
|
|
|
—
|
|
||
2023 and beyond
|
108
|
|
|
—
|
|
|
(in millions)
|
||
2018
|
$
|
5
|
|
2019
|
5
|
|
|
2020
|
4
|
|
|
2021
|
4
|
|
|
2022
|
3
|
|
|
2023 and beyond
|
5
|
|
|
Total
|
$
|
26
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions, except per share and share amounts)
|
||||||||||
Net income (loss)
(1)
|
$
|
1,792
|
|
|
$
|
432
|
|
|
$
|
(692
|
)
|
|
|
|
|
|
|
||||||
Basic weighted average shares outstanding
|
430,964,000
|
|
|
430,606,000
|
|
|
430,180,000
|
|
|||
Plus: Incremental shares from assumed conversions:
|
|
|
|
|
|
|
|
|
|||
Restricted stock
(2)
|
3,344,000
|
|
|
2,997,000
|
|
|
—
|
|
|||
Diluted weighted average shares
|
434,308,000
|
|
|
433,603,000
|
|
|
430,180,000
|
|
|||
|
|
|
|
|
|
||||||
Basic earnings (loss) per share
|
$
|
4.16
|
|
|
$
|
1.00
|
|
|
$
|
(1.61
|
)
|
|
|
|
|
|
|
||||||
Diluted earnings (loss) per share
|
$
|
4.13
|
|
|
$
|
1.00
|
|
|
$
|
(1.61
|
)
|
(1)
|
Net income for the year ended December 31, 2017 includes a reduction in income taxes of
$1,113 million
due to tax reform. See Note 14 for further discussion of the impacts of tax reform implementation.
|
(2)
|
2,349,000
incremental shares from assumed conversions of restricted stock have not been included in the computation of diluted earnings (loss) per share for the year ended December 31, 2015, as their inclusion would be anti-dilutive.
|
|
Year Ended December 31, 2017
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
(in millions, except per share amounts)
|
||||||||||||||
Revenues
|
$
|
2,735
|
|
|
$
|
2,143
|
|
|
$
|
2,098
|
|
|
$
|
2,638
|
|
Operating income
|
274
|
|
|
223
|
|
|
279
|
|
|
296
|
|
||||
Net income
(1)
|
192
|
|
|
135
|
|
|
169
|
|
|
1,296
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
(2)
|
$
|
0.45
|
|
|
$
|
0.31
|
|
|
$
|
0.39
|
|
|
$
|
3.01
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share
(2)
|
$
|
0.44
|
|
|
$
|
0.31
|
|
|
$
|
0.39
|
|
|
$
|
2.99
|
|
|
Year Ended December 31, 2016
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter |
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
(in millions, except per share amounts)
|
||||||||||||||
Revenues
|
$
|
1,984
|
|
|
$
|
1,574
|
|
|
$
|
1,889
|
|
|
$
|
2,081
|
|
Operating income
|
250
|
|
|
182
|
|
|
284
|
|
|
243
|
|
||||
Net income (loss)
|
154
|
|
|
(2
|
)
|
|
179
|
|
|
101
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share
(2)
|
$
|
0.36
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.42
|
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per share
(2)
|
$
|
0.36
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.41
|
|
|
$
|
0.23
|
|
(1)
|
Net income for the fourth quarter 2017 includes a reduction in income taxes of
$1,113 million
due to tax reform. See Note 14 for further discussion of the impacts of tax reform implementation.
|
(2)
|
Quarterly earnings (loss) per common share are based on the weighted average number of shares outstanding during the quarter, and the sum of the quarters may not equal annual earnings (loss) per common share.
|
|
Revenues
from
External
Customers
|
|
Intersegment
Revenues
|
|
Depreciation
and
Amortization
|
|
Operating
Income
|
|
Total
Assets (1)
|
|
Expenditures
for Long-Lived
Assets
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
As of and for the year ended December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Electric Transmission & Distribution
|
$
|
2,997
|
|
(2)
|
$
|
—
|
|
|
$
|
724
|
|
|
$
|
610
|
|
|
$
|
10,292
|
|
|
$
|
924
|
|
Natural Gas Distribution
|
2,606
|
|
|
33
|
|
|
260
|
|
|
328
|
|
|
6,608
|
|
|
523
|
|
||||||
Energy Services
|
3,997
|
|
|
52
|
|
|
19
|
|
|
125
|
|
|
1,521
|
|
|
11
|
|
||||||
Midstream Investments (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,472
|
|
|
—
|
|
||||||
Other
|
14
|
|
|
—
|
|
|
33
|
|
|
9
|
|
|
2,497
|
|
(4)
|
36
|
|
||||||
Eliminations
|
—
|
|
|
(85
|
)
|
|
—
|
|
|
—
|
|
|
(654
|
)
|
|
—
|
|
||||||
Consolidated
|
$
|
9,614
|
|
|
$
|
—
|
|
|
$
|
1,036
|
|
|
$
|
1,072
|
|
|
$
|
22,736
|
|
|
1,494
|
|
|
Reconciling items
|
|
|
|
|
|
|
|
|
|
|
(68
|
)
|
|||||||||||
Capital expenditures per Statements of Consolidated Cash Flows
|
|
|
|
|
|
|
|
|
|
|
$
|
1,426
|
|
||||||||||
As of and for the year ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Electric Transmission & Distribution
|
$
|
3,060
|
|
(2)
|
$
|
—
|
|
|
$
|
838
|
|
|
$
|
628
|
|
|
$
|
10,211
|
|
|
$
|
858
|
|
Natural Gas Distribution
|
2,380
|
|
|
29
|
|
|
242
|
|
|
303
|
|
|
6,099
|
|
|
510
|
|
||||||
Energy Services
|
2,073
|
|
|
26
|
|
|
7
|
|
|
20
|
|
|
1,102
|
|
|
5
|
|
||||||
Midstream Investments (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,505
|
|
|
—
|
|
||||||
Other
|
15
|
|
|
—
|
|
|
39
|
|
|
8
|
|
|
2,681
|
|
(4)
|
33
|
|
||||||
Eliminations
|
—
|
|
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
(769
|
)
|
|
—
|
|
||||||
Consolidated
|
$
|
7,528
|
|
|
$
|
—
|
|
|
$
|
1,126
|
|
|
$
|
959
|
|
|
$
|
21,829
|
|
|
1,406
|
|
|
Reconciling items
|
|
|
|
|
|
|
|
|
|
|
8
|
|
|||||||||||
Capital expenditures per Statements of Consolidated Cash Flows
|
|
|
|
|
|
|
|
|
|
|
$
|
1,414
|
|
||||||||||
As of and for the year ended December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Electric Transmission & Distribution
|
$
|
2,845
|
|
(2)
|
$
|
—
|
|
|
$
|
705
|
|
|
$
|
607
|
|
|
$
|
10,028
|
|
|
$
|
934
|
|
Natural Gas Distribution
|
2,603
|
|
|
29
|
|
|
222
|
|
|
273
|
|
|
5,657
|
|
|
601
|
|
||||||
Energy Services
|
1,924
|
|
|
33
|
|
|
5
|
|
|
42
|
|
|
857
|
|
|
5
|
|
||||||
Midstream Investments (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,594
|
|
|
—
|
|
||||||
Other
|
14
|
|
|
—
|
|
|
38
|
|
|
11
|
|
|
2,879
|
|
(4)
|
35
|
|
||||||
Eliminations
|
—
|
|
|
(62
|
)
|
|
—
|
|
|
—
|
|
|
(725
|
)
|
|
—
|
|
||||||
Consolidated
|
$
|
7,386
|
|
|
$
|
—
|
|
|
$
|
970
|
|
|
$
|
933
|
|
|
$
|
21,290
|
|
|
1,575
|
|
|
Reconciling items
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|||||||||||
Capital expenditures per Statements of Consolidated Cash Flows
|
|
|
|
|
|
|
|
|
|
|
$
|
1,584
|
|
(1)
|
Amounts for 2015 have been restated to reflect the adoption of ASU 2015-03.
|
(2)
|
Houston Electric’s transmission and distribution revenues from major customers are as follows:
|
|
|
Year Ended December 31, 2017
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(in millions)
|
||||||||||
Affiliates of NRG
|
|
$
|
713
|
|
|
$
|
698
|
|
|
$
|
741
|
|
Affiliates of Vistra Energy Corp.
|
|
229
|
|
|
220
|
|
|
220
|
|
(3)
|
Midstream Investments’ equity earnings (losses) are as follows:
|
|
|
Year Ended December 31, 2017
|
||||||||||
|
|
2017
|
|
2016
|
|
2015 (a)
|
||||||
|
|
(in millions)
|
||||||||||
Enable
|
|
$
|
265
|
|
|
$
|
208
|
|
|
$
|
(1,633
|
)
|
(a)
|
Includes impairment charges totaling
$1,846 million
composed of CenterPoint Energy’s impairment of its equity method investment in Enable of
$1,225 million
and CenterPoint Energy’s share,
$621 million
, of impairment charges Enable recorded for goodwill and long-lived assets for the year ended December 31, 2015. This impairment is offset by
$213 million
of earnings for the year ended December 31, 2015.
|
(4)
|
Included in total assets of Other Operations as of
December 31, 2017
,
2016
and
2015
, are pension and other postemployment related regulatory assets of
$600 million
,
$759 million
and
$814 million
, respectively.
|
|
|
Year Ended December 31,
|
||||||||||
Revenues by Products and Services:
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(in millions)
|
||||||||||
Electric delivery
|
|
$
|
2,997
|
|
|
$
|
3,060
|
|
|
$
|
2,845
|
|
Retail gas sales
|
|
3,634
|
|
|
3,329
|
|
|
3,725
|
|
|||
Wholesale gas sales
|
|
2,811
|
|
|
977
|
|
|
657
|
|
|||
Gas transportation and processing
|
|
29
|
|
|
23
|
|
|
26
|
|
|||
Energy products and services
|
|
143
|
|
|
139
|
|
|
133
|
|
|||
Total
|
|
$
|
9,614
|
|
|
$
|
7,528
|
|
|
$
|
7,386
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
•
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director
Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
Report of Independent Registered Public Accounting Firm
|
|
Statements of Consolidated Income for the Three Years Ended December 31, 2017
|
|
Statements of Consolidated Comprehensive Income for the Three Years Ended December 31, 2017
|
|
Consolidated Balance Sheets as of December 31, 2017 and 2016
|
|
Statements of Consolidated Cash Flows for the Three Years Ended December 31, 2017
|
|
Statements of Consolidated Shareholders’ Equity for the Three Years Ended December 31, 2017
|
|
Notes to Consolidated Financial Statements
|
Exhibit
Number
|
|
Description
|
|
Report or Registration Statement
|
|
SEC File or
Registration
Number
|
|
Exhibit
Reference
|
2
|
—
|
|
CenterPoint Energy’s Form 8-K dated July 21, 2004
|
|
1-31447
|
|
10.1
|
|
3(a)
|
—
|
|
CenterPoint Energy’s Form 8-K dated July 24, 2008
|
|
1-31447
|
|
3.2
|
|
3(b)
|
—
|
|
CenterPoint Energy’s Form 8-K dated February 21, 2017
|
|
1-31447
|
|
3.1
|
|
3(c)
|
—
|
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2011
|
|
1-31447
|
|
3(c)
|
4(a)
|
—
|
|
CenterPoint Energy’s Registration Statement on Form S-4
|
|
333-69502
|
|
4.1
|
|
4(b)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2001
|
|
1-31447
|
|
4.3
|
|
4(c)(1)
|
—
|
Mortgage and Deed of Trust, dated November 1, 1944 between Houston Lighting and Power Company (HL&P) and Chase Bank of Texas, National Association (formerly, South Texas Commercial National Bank of Houston), as Trustee, as amended and supplemented by 20 Supplemental Indentures thereto
|
|
HL&P’s Form S-7 filed on August 25, 1977
|
|
2-59748
|
|
2(b)
|
4(c)(2)
|
—
|
Twenty-First through Fiftieth Supplemental Indentures to Exhibit 4(c)(1)
|
|
HL&P’s Form 10-K for the year ended December 31, 1989
|
|
1-3187
|
|
4(a)(2)
|
4(c)(3)
|
—
|
Fifty-First Supplemental Indenture to Exhibit 4(c)(1) dated as of March 25, 1991
|
|
HL&P’s Form 10-Q for the quarter ended June 30, 1991
|
|
1-3187
|
|
4(a)
|
4(c)(4)
|
—
|
Fifty-Second through Fifty-Fifth Supplemental Indentures to Exhibit 4(c)(1) each dated as of March 1, 1992
|
|
HL&P’s Form 10-Q for the quarter ended March 31, 1992
|
|
1-3187
|
|
4
|
4(c)(5)
|
—
|
Fifty-Sixth and Fifty-Seventh Supplemental Indentures to Exhibit 4(c)(1) each dated as of October 1, 1992
|
|
HL&P’s Form 10-Q for the quarter ended September 30, 1992
|
|
1-3187
|
|
4
|
4(c)(6)
|
—
|
Fifty-Eighth and Fifty-Ninth Supplemental Indentures to Exhibit 4(c)(1) each dated as of March 1, 1993
|
|
HL&P’s Form 10-Q for the quarter ended March 31, 1993
|
|
1-3187
|
|
4
|
4(c)(7)
|
—
|
Sixtieth Supplemental Indenture to Exhibit 4(c)(1) dated as of July 1, 1993
|
|
HL&P’s Form 10-Q for the quarter ended June 30, 1993
|
|
1-3187
|
|
4
|
4(c)(8)
|
—
|
Sixty-First through Sixty-Third Supplemental Indentures to Exhibit 4(c)(1) each dated as of December 1, 1993
|
|
HL&P’s Form 10-K for the year ended December 31, 1993
|
|
1-3187
|
|
4(a)(8)
|
4(c)(9)
|
—
|
Sixty-Fourth and Sixty-Fifth Supplemental Indentures to Exhibit 4(c)(1) each dated as of July 1, 1995
|
|
HL&P’s Form 10-K for the year ended December 31, 1995
|
|
1-3187
|
|
4(a)(9)
|
4(d)(1)
|
—
|
|
Houston Electric’s Form 10-Q for the quarter ended September 30, 2002
|
|
1-3187
|
|
4(j)(1)
|
|
4(d)(2)
|
—
|
|
Houston Electric’s Form 10- Q for the quarter ended September 30, 2002
|
|
1-3187
|
|
4(j)(3)
|
|
4(d)(3)
|
—
|
|
Houston Electric’s Form 10-Q for the quarter ended September 30, 2002
|
|
1-3187
|
|
4(j)(4)
|
|
4(d)(4)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2003
|
|
1-31447
|
|
4(e)(10)
|
|
4(d)(5)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2002
|
|
1-31447
|
|
4(e)(10)
|
|
4(d)(6)
|
—
|
|
CenterPoint Energy’s Form 8-K dated March 13, 2003
|
|
1-31447
|
|
4.1
|
|
4(d)(7)
|
—
|
|
CenterPoint Energy’s Form 8-K dated March 13, 2003
|
|
1-31447
|
|
4.2
|
|
4(d)(8)
|
—
|
|
CenterPoint Energy’s Form 8-K dated May 16, 2003
|
|
1-31447
|
|
4.2
|
|
4(d)(9)
|
—
|
|
CenterPoint Energy’s Form 8-K dated May 16, 2003
|
|
1-31447
|
|
4.1
|
|
4(d)(10)
|
—
|
|
Houston Electric’s Form 8-K dated January 6, 2009
|
|
1-3187
|
|
4.2
|
|
4(d)(11)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2012
|
|
1-31447
|
|
4(e)(33)
|
|
4(d)(12)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2012
|
|
1-31447
|
|
4(e)(34)
|
|
4(d)(13)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended March 31, 2014
|
|
1-31447
|
|
4.10
|
|
4(d)(14)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended March 31, 2014
|
|
1-31447
|
|
4.11
|
|
4(d)(15)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended June 30, 2016
|
|
1-31447
|
|
4.5
|
4(d)(16)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended June 30, 2016
|
|
1-31447
|
|
4.6
|
|
4(d)(17)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2016
|
|
1-31447
|
|
4.5
|
|
4(d)(18)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2016
|
|
1-31447
|
|
4.6
|
|
4(d)(19)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2016
|
|
1-31447
|
|
4(e)(41)
|
|
4(d)(20)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2016
|
|
1-31447
|
|
4(e)(42)
|
|
4(e)(1)
|
—
|
Indenture, dated as of February 1, 1998, between Reliant Energy Resources Corp. (RERC Corp.) and Chase Bank of Texas, National Association, as Trustee
|
|
CERC Corp.’s Form 8-K dated February 5, 1998
|
|
1-13265
|
|
4.1
|
4(e)(2)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2006
|
|
1-31447
|
|
4(f)(11)
|
|
4(e)(3)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended June 30, 2008
|
|
1-31447
|
|
4.9
|
|
4(e)(4)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2010
|
|
1-31447
|
|
4(f)(15)
|
|
4(e)(5)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2010
|
|
1-31447
|
|
4(f)(16)
|
|
4(e)(6)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2017
|
|
1-31447
|
|
4.11
|
|
4(f)(1)
|
—
|
|
CenterPoint Energy’s Form 8-K dated May 19, 2003
|
|
1-31447
|
|
4.1
|
|
4(f)(2)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2017
|
|
1-31447
|
|
4.9
|
|
4(g)(1)
|
—
|
Subordinated Indenture dated as of September 1, 1999
|
|
Reliant Energy’s Form 8-K dated September 1, 1999
|
|
1-3187
|
|
4.1
|
4(g)(2)
|
—
|
Supplemental Indenture No. 1 dated as of September 1, 1999, between Reliant Energy and Chase Bank of Texas (supplementing Exhibit 4(g)(1) and providing for the issuance Reliant Energy’s 2% Zero-Premium Exchangeable Subordinated Notes Due 2029)
|
|
Reliant Energy’s Form 8-K dated September 15, 1999
|
|
1-3187
|
|
4.2
|
4(g)(3)
|
—
|
|
CenterPoint Energy’s Form 8-K12B dated August 31, 2002
|
|
1-31447
|
|
4(e)
|
|
4(g)(4)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2005
|
|
1-31447
|
|
4(h)(4)
|
|
4(h)(1)
|
—
|
|
CenterPoint Energy’s Form 8-K dated March 3, 2016
|
|
1-31447
|
|
4.1
|
|
4(h)(2)
|
—
|
|
|
CenterPoint Energy’s Form 8-K dated June 16, 2017
|
|
1-31447
|
|
4.1
|
4(i)(1)
|
—
|
|
CenterPoint Energy’s Form 8-K dated March 3, 2016
|
|
1-31447
|
|
4.2
|
|
4(i)(2)
|
—
|
|
CenterPoint Energy’s Form 8-K dated June 16, 2017
|
|
1-31447
|
|
4.2
|
|
4(j)(1)
|
—
|
|
CenterPoint Energy’s Form 8-K dated March 3, 2016
|
|
1-31447
|
|
4.3
|
|
4(j)(2)
|
—
|
|
CenterPoint Energy’s Form 8-K dated June 16, 2017
|
|
1-31447
|
|
4.3
|
Exhibit
Number
|
|
Description
|
|
Report or Registration Statement
|
|
SEC File or
Registration
Number
|
|
Exhibit
Reference
|
*10(a)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended March 31, 2011
|
|
1-31447
|
|
10.3
|
|
*10(b)(1)
|
—
|
|
CenterPoint Energy’s Form 8-K dated December 22, 2008
|
|
1-31447
|
|
10.1
|
|
*10(b)(2)
|
—
|
|
CenterPoint Energy’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011
|
|
1-31447
|
|
10.4
|
|
*10(c)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2003
|
|
1-31447
|
|
10.1
|
|
*10(d)(1)
|
—
|
|
CenterPoint Energy’s Form 8-K dated December 22, 2008
|
|
1-31447
|
|
10.4
|
|
*10(d)(2)
|
—
|
|
CenterPoint Energy’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011
|
|
1-31447
|
|
10.5
|
|
*10(e)(1)
|
—
|
|
CenterPoint Energy’s Form 8-K dated December 22, 2008
|
|
1-31447
|
|
10.3
|
*10(e)(2)
|
—
|
|
CenterPoint Energy’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011
|
|
1-31447
|
|
10.6
|
|
*10(f)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2003
|
|
1-31447
|
|
10.5
|
|
10(g)(1)
|
—
|
Stockholder’s Agreement dated as of July 6, 1995 between Houston Industries Incorporated and Time Warner Inc.
|
|
Schedule 13-D dated July 6, 1995
|
|
5-19351
|
|
2
|
10(g)(2)
|
—
|
Amendment to Exhibit 10(g)(1) dated November 18, 1996
|
|
HI’s Form 10-K for the year ended December 31, 1996
|
|
1-7629
|
|
10(x)(4)
|
†10(h)
|
—
|
|
|
|
|
|
|
|
10(i)(1)
|
—
|
|
Reliant Energy’s Form 10-Q for the quarter ended March 31, 2001
|
|
1-3187
|
|
10.1
|
|
10(i)(2)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2002
|
|
1-31447
|
|
10(bb)(5)
|
|
10(i)(3)
|
—
|
|
Reliant Energy’s Form 10-Q for the quarter ended March 31, 2001
|
|
1-3187
|
|
10.5
|
|
10(i)(4)
|
—
|
|
Reliant Energy’s Form 10-Q for the quarter ended March 31, 2001
|
|
1-3187
|
|
10.6
|
|
10(i)(5)
|
—
|
|
Reliant Energy’s Form 10-Q for the quarter ended March 31, 2001
|
|
1-3187
|
|
10.8
|
|
10(j)(1)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2002
|
|
1-31447
|
|
10(cc)(1)
|
|
10(j)(2)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2002
|
|
1-31447
|
|
10(cc)(2)
|
|
10(j)(3)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2002
|
|
1-31447
|
|
10(cc)(3)
|
|
*10(k)(1)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended June 30, 2003
|
|
1-31447
|
|
10.2
|
|
*10(k)(2)
|
—
|
|
CenterPoint Energy’s Form 8-K dated February 20, 2008
|
|
1-31447
|
|
10.4
|
|
*10(l)(1)
|
—
|
|
CenterPoint Energy’s Form 8-K dated February 20, 2008
|
|
1-31447
|
|
10.3
|
|
*10(l)(2)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2008
|
|
1-31447
|
|
10.1
|
|
*10(m)(1)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2003
|
|
1-31447
|
|
10.3
|
|
*10(m)(3)
|
—
|
|
CenterPoint Energy’s Form 8-K dated December 10, 2009
|
|
1-31447
|
|
10.1
|
|
*10(n)(1)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2003
|
|
1-31447
|
|
10(ll)
|
|
*10(n)(2)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended March 31, 2010
|
|
1-31447
|
|
10.2
|
|
*10(n)(3)
|
—
|
|
CenterPoint Energy’s Registration Statement on Form S-8
|
|
333-173660
|
|
4.6
|
*10(n)(4)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2014
|
|
1-31447
|
|
10(dd)(4)
|
|
10(o)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended June 30, 2005
|
|
1-31447
|
|
10.1
|
|
10(p)(1)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2008
|
|
1-31447
|
|
10.2
|
|
10(p)(2)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2008
|
|
1-31447
|
|
10.3
|
|
*10(q)(1)
|
—
|
|
CenterPoint Energy’s Schedule 14A dated March 13, 2009
|
|
1-31447
|
|
A
|
|
†*10(q)(2)
|
—
|
|
|
|
|
|
|
|
†*10(q)(3)
|
—
|
|
|
|
|
|
|
|
*10(q)(4)
|
—
|
|
CenterPoint Energy’s Form 8-K dated February 28, 2012
|
|
1-31447
|
|
10.2
|
|
†*10(q)(5)
|
—
|
|
|
|
|
|
|
|
†*10(q)(6)
|
—
|
|
|
|
|
|
|
|
†*10(q)(7)
|
—
|
|
|
|
|
|
|
|
†10(r)
|
—
|
|
|
|
|
|
|
|
†10(s)
|
—
|
|
|
|
|
|
|
|
10(t)
|
—
|
|
CenterPoint Energy’s Form 8-K dated April 27, 2017
|
|
1-31447
|
|
10.1
|
|
10(u)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2013
|
|
1-31447
|
|
10(zz)
|
|
10(v)
|
—
|
|
CenterPoint Energy’s Form 8-K dated March 14, 2013
|
|
1-31447
|
|
2.1
|
|
10(w)
|
—
|
|
CenterPoint Energy’s Form 8-K dated November 14, 2017
|
|
1-31447
|
|
10.1
|
|
10(x)
|
—
|
|
CenterPoint Energy’s Form 8-K dated June 22, 2016
|
|
1-31447
|
|
10.2
|
|
10(y)
|
—
|
|
CenterPoint Energy’s Form 8-K dated May 1, 2013
|
|
1-31447
|
|
10.3
|
|
10(z)
|
—
|
|
CenterPoint Energy’s Form 8-K dated May 1, 2013
|
|
1-31447
|
|
10.4
|
|
10(aa)
|
—
|
|
CenterPoint Energy’s Form 8-K dated January 28, 2016
|
|
1-31447
|
|
10.1
|
|
10(bb)
|
—
|
|
CenterPoint Energy’s Form 8-K dated February 18, 2016
|
|
1-31447
|
|
10.2
|
|
†12
|
—
|
|
|
|
|
|
|
|
†21
|
—
|
|
|
|
|
|
|
†23.1
|
—
|
|
|
|
|
|
|
|
†23.2
|
—
|
|
|
|
|
|
|
|
†31.1
|
—
|
|
|
|
|
|
|
|
†31.2
|
—
|
|
|
|
|
|
|
|
†32.1
|
—
|
|
|
|
|
|
|
|
†32.2
|
—
|
|
|
|
|
|
|
|
99.1
|
—
|
Financial Statements of Enable Midstream Partners, LP as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015
|
|
Part II, Item 8 of Enable Midstream Partners, LP’s Form 10-K for the year ended December 31, 2017
|
|
001-36413
|
|
Item 8
|
†101.INS
|
—
|
XBRL Instance Document
|
|
|
|
|
|
|
†101.SCH
|
—
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
†101.CAL
|
—
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
†101.DEF
|
—
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
†101.LAB
|
—
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
|
|
|
|
†101.PRE
|
—
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
CENTERPOINT ENERGY, INC.
|
|
(Registrant)
|
|
|
|
|
|
By:
/s/ Scott M. Prochazka
|
|
Scott M. Prochazka
|
|
President and Chief Executive Officer
|
Signature
|
|
Title
|
/s/ SCOTT M. PROCHAZKA
|
|
President, Chief Executive Officer and
|
Scott M. Prochazka
|
|
Director (Principal Executive Officer and Director)
|
|
|
|
/s/ WILLIAM D. ROGERS
|
|
Executive Vice President and Chief
|
William D. Rogers
|
|
Financial Officer (Principal Financial Officer)
|
|
|
|
/s/ KRISTIE L. COLVIN
|
|
Senior Vice President and Chief
|
Kristie L. Colvin
|
|
Accounting Officer (Principal Accounting Officer)
|
|
|
|
/s/ MILTON CARROLL
|
|
Executive Chairman of the Board of Directors
|
Milton Carroll
|
|
|
|
|
|
/s/ MICHAEL P. JOHNSON
|
|
Director
|
Michael P. Johnson
|
|
|
|
|
|
/s/ JANIECE M. LONGORIA
|
|
Director
|
Janiece M. Longoria
|
|
|
|
|
|
/s/ SCOTT J. MCLEAN
|
|
Director
|
Scott J. McLean
|
|
|
|
|
|
/s/ THEODORE F. POUND
|
|
Director
|
Theodore F. Pound
|
|
|
|
|
|
/s/ SUSAN O. RHENEY
|
|
Director
|
Susan O. Rheney
|
|
|
|
|
|
/s/ PHILLIP R. SMITH
|
|
Director
|
Phillip R. Smith
|
|
|
|
|
|
/s/ JOHN W. SOMERHALDER II
|
|
Director
|
John W. Somerhalder II
|
|
|
|
|
|
/s/ PETER S. WAREING
|
|
Director
|
Peter S. Wareing
|
|
|
|
|
|
•
|
Mr. Carroll’s annual base salary is increased from $675,000 to $710,000 effective as of April 1, 2018 and continuing thereafter until the termination of Mr. Carroll’s service as Executive Chairman of the Board or as otherwise modified by the Board; and
|
•
|
No changes were made to Mr. Carroll’s 300% long-term incentive compensation target.
|
9.
|
Participant Obligations.
|
(f)
|
Definitions
. For purposes of this Section 4:
|
7.
|
Participant Obligations.
|
8.
|
Participant Obligations.
|
•
|
Supplemental annual retainer of $20,000 for serving as a chairman of the Audit Committee or Compensation Committee; and
|
•
|
Supplemental annual retainer of $15,000 for serving as a chairman of the Finance Committee or Governance Committee.
|
Name and Position
|
|
Base Salary
|
||
Scott M. Prochazka
President and Chief Executive Officer
|
|
$
|
1,260,000
|
|
William D. Rogers
Executive Vice President and Chief Financial Officer
|
|
$
|
595,000
|
|
Tracy B. Bridge
Executive Vice President and President Electric Division |
|
$
|
540,000
|
|
Dana C. O’Brien
Senior Vice President and General Counsel |
|
$
|
515,000
|
|
•
|
No changes were made to Mr. Prochazka’s short-term incentive target of 115%;
|
•
|
No changes were made to Mr. Rogers’s short-term incentive target of 75%;
|
•
|
No changes were made to Mr. Bridge’s short-term incentive target of 75%; and
|
•
|
No changes were made to Ms. O’Brien’s short-term incentive target of 65%.
|
•
|
Mr. Prochazka’s long-term incentive target was increased from 400% to 435%;
|
•
|
Mr. Rogers’s long-term incentive target was increased from 195% to 200%;
|
•
|
Mr. Bridge’s long-term incentive target was increased from 160% to 170%; and
|
•
|
Ms. O’Brien’s long-term incentive target was increased from 155% to 160%.
|
|
2017 (1)
|
|
2016
|
|
2015 (2)
|
|
2014 (3)
|
|
2013 (3)
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Income (loss) before extraordinary item
(2) (3)
|
$
|
1,792
|
|
|
$
|
432
|
|
|
$
|
(692
|
)
|
|
$
|
611
|
|
|
$
|
311
|
|
Equity in (earnings) losses of unconsolidated affiliates, net of distributions
|
32
|
|
|
89
|
|
|
1,927
|
|
|
(2
|
)
|
|
(58
|
)
|
|||||
Income tax expense (benefit)
|
(729
|
)
|
|
254
|
|
|
(438
|
)
|
|
274
|
|
|
470
|
|
|||||
Capitalized interest
|
(9
|
)
|
|
(8
|
)
|
|
(10
|
)
|
|
(11
|
)
|
|
(11
|
)
|
|||||
|
1,086
|
|
|
767
|
|
|
787
|
|
|
872
|
|
|
712
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges, as defined:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest
|
390
|
|
|
429
|
|
|
457
|
|
|
471
|
|
|
484
|
|
|||||
Capitalized interest
|
9
|
|
|
8
|
|
|
10
|
|
|
11
|
|
|
11
|
|
|||||
Interest component of rentals charged to operating expense
|
3
|
|
|
3
|
|
|
3
|
|
|
4
|
|
|
7
|
|
|||||
Total fixed charges
|
402
|
|
|
440
|
|
|
470
|
|
|
486
|
|
|
502
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings, as defined
|
$
|
1,488
|
|
|
$
|
1,207
|
|
|
$
|
1,257
|
|
|
$
|
1,358
|
|
|
$
|
1,214
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
3.70
|
|
|
2.74
|
|
|
2.67
|
|
|
2.79
|
|
|
2.42
|
|
(1)
|
Net income for the year ended December 31, 2017 includes a reduction in income taxes of $1,113 million due to tax reform. See Note 14 for further discussion of the impacts of tax reform implementation.
|
(2)
|
Net income for the year ended December 31, 2015 includes a $1,633 million loss related to CenterPoint Energy's investment in Enable. See Note 10 for further discussion of CenterPoint Energy's investment in Enable.
|
(3)
|
Excluded from the computation of fixed charges for the years ended December 31, 2014, and 2013 is interest expense of $3 million and interest income of $6 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/ Scott M. Prochazka
|
|
Scott M. Prochazka
|
|
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/ William D. Rogers
|
|
William D. Rogers
|
|
Executive Vice President and Chief Financial Officer
|
/s/ Scott M. Prochazka
|
|
Scott M. Prochazka
|
|
President and Chief Executive Officer
|
|
February 22, 2018
|
|
/s/ William D. Rogers
|
|
William D. Rogers
|
|
Executive Vice President and Chief Financial Officer
|
|
February 22, 2018
|
|