|
|
Registrant, State or Other Jurisdiction
of Incorporation or Organization
|
|
Commission file number
|
Address of Principal Executive Offices, Zip Code
and Telephone Number
|
I.R.S. Employer Identification No.
|
|
|
|
1-31447
|
CenterPoint Energy, Inc.
|
74-0694415
|
|
(a Texas corporation)
|
|
|
1111 Louisiana
|
|
|
Houston, Texas 77002
|
|
|
(713-207-1111)
|
|
|
|
|
1-3187
|
CenterPoint Energy Houston Electric, LLC
|
22-3865106
|
|
(a Texas limited liability company)
|
|
|
1111 Louisiana
|
|
|
Houston, Texas 77002
|
|
|
(713-207-1111)
|
|
|
|
|
1-13265
|
CenterPoint Energy Resources Corp.
|
76-0511406
|
|
(a Delaware corporation)
|
|
|
1111 Louisiana
|
|
|
Houston, Texas 77002
|
|
|
(713-207-1111)
|
|
|
|
|
Securities registered pursuant to Section 12(b) of the Act:
|
||
Registrant
|
Title of each class
|
Name of each exchange on which registered
|
CenterPoint Energy, Inc.
|
Common Stock, $0.01 par value
|
New York Stock Exchange
Chicago Stock Exchange
|
CenterPoint Energy, Inc.
|
Depositary shares, each representing a 1/20th interest in a share of 7.00% Series B Mandatory Convertible Preferred Stock, $0.01 par value
|
New York Stock Exchange
|
CenterPoint Energy Houston Electric, LLC
|
9.15% First Mortgage Bonds due 2021
|
New York Stock Exchange
|
CenterPoint Energy Houston Electric, LLC
|
6.95% General Mortgage Bonds due 2033
|
New York Stock Exchange
|
CenterPoint Energy Resources Corp.
|
6.625% Senior Notes due 2037
|
New York Stock Exchange
|
|
|
|
Securities registered pursuant to Section 12(g) of the Act:
|
||
|
None
|
|
CenterPoint Energy, Inc.
|
Yes
þ
|
No
o
|
CenterPoint Energy Houston Electric, LLC
|
Yes
þ
|
No
o
|
CenterPoint Energy Resources Corp.
|
Yes
þ
|
No
o
|
CenterPoint Energy, Inc.
|
Yes
o
|
No
þ
|
|
CenterPoint Energy Houston Electric, LLC
|
Yes
o
|
No
þ
|
|
CenterPoint Energy Resources Corp.
|
Yes
o
|
No
þ
|
CenterPoint Energy, Inc.
|
Yes
þ
|
No
o
|
CenterPoint Energy Houston Electric, LLC
|
Yes
þ
|
No
o
|
CenterPoint Energy Resources Corp.
|
Yes
þ
|
No
o
|
CenterPoint Energy, Inc.
|
Yes
þ
|
No
o
|
CenterPoint Energy Houston Electric, LLC
|
Yes
þ
|
No
o
|
CenterPoint Energy Resources Corp.
|
Yes
þ
|
No
o
|
CenterPoint Energy, Inc.
|
þ
|
|
CenterPoint Energy Houston Electric, LLC
|
þ
|
|
CenterPoint Energy Resources Corp.
|
þ
|
|
|
Large accelerated filer
|
Accelerated filer
|
Non-accelerated filer
|
Smaller reporting company
|
Emerging growth company
|
CenterPoint Energy, Inc.
|
þ
|
o
|
o
|
o
|
o
|
CenterPoint Energy Houston Electric, LLC
|
o
|
o
|
þ
|
o
|
o
|
CenterPoint Energy Resources Corp.
|
o
|
o
|
þ
|
o
|
o
|
CenterPoint Energy, Inc.
|
Yes
o
|
No
þ
|
CenterPoint Energy Houston Electric, LLC
|
Yes
o
|
No
þ
|
CenterPoint Energy Resources Corp.
|
Yes
o
|
No
þ
|
CenterPoint Energy, Inc. (using the definition of beneficial ownership contained in Rule 13d-3 promulgated pursuant to Securities Exchange Act of 1934 and excluding shares held by directors and executive officers)
|
|
$11,873,304,802
|
CenterPoint Energy Houston Electric, LLC
|
|
None
|
CenterPoint Energy Resources Corp.
|
|
None
|
CenterPoint Energy, Inc.
|
501,206,304 shares of common stock outstanding, excluding 166 shares held as treasury stock
|
CenterPoint Energy Houston Electric, LLC
|
1,000 common shares outstanding, all held by Utility Holding, LLC, a wholly-owned subsidiary of CenterPoint Energy, Inc.
|
CenterPoint Energy Resources Corp.
|
1,000 shares of common stock outstanding, all held by Utility Holding, LLC, a wholly-owned subsidiary of CenterPoint Energy, Inc.
|
|
PART I
|
||||
|
|
Page
|
||
Item 1.
|
|
Business
|
|
|
Item 1A.
|
|
Risk Factors
|
|
|
Item 1B.
|
|
Unresolved Staff Comments
|
|
|
Item 2.
|
|
Properties
|
|
|
Item 3.
|
|
Legal Proceedings
|
|
|
Item 4.
|
|
Mine Safety Disclosures
|
|
|
PART II
|
||||
Item 5.
|
|
Market for Registrants’ Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
|
Item 6.
|
|
Selected Financial Data
|
|
|
Item 7.
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Item 7A.
|
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
|
Item 8.
|
|
Financial Statements and Supplementary Data
|
|
|
Item 9.
|
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
|
|
Item 9A.
|
|
Controls and Procedures
|
|
|
Item 9B.
|
|
Other Information
|
|
|
PART III
|
||||
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
|
|
|
PART IV
|
||||
Item 15.
|
|
Exhibits and Financial Statement Schedules
|
|
|
Item 16.
|
|
Form 10-K Summary
|
|
GLOSSARY
|
||
ADFIT
|
|
Accumulated deferred federal income taxes
|
ADMS
|
|
Advanced Distribution Management System
|
AEM
|
|
Atmos Energy Marketing, LLC, previously a wholly-owned subsidiary of Atmos Energy Holdings, Inc., a wholly-owned subsidiary of Atmos Energy Corporation
|
AFUDC
|
|
Allowance for funds used during construction
|
AMAs
|
|
Asset Management Agreements
|
AMS
|
|
Advanced Metering System
|
APSC
|
|
Arkansas Public Service Commission
|
ARAM
|
|
Average rate assumption method
|
ARO
|
|
Asset retirement obligation
|
ARP
|
|
Alternative revenue program
|
ASC
|
|
Accounting Standards Codification
|
ASU
|
|
Accounting Standards Update
|
AT&T
|
|
AT&T Inc.
|
AT&T Common
|
|
AT&T common stock
|
Bcf
|
|
Billion cubic feet
|
Bond Companies
|
|
Bankruptcy remote entities wholly-owned by Houston Electric and formed solely for the purpose of purchasing and owning transition or system restoration property through the issuance of Securitization Bonds, consisting of Bond Company II, Bond Company III, Bond Company IV and Restoration Bond Company
|
Bond Company II
|
|
CenterPoint Energy Transition Bond Company II, LLC, a wholly-owned subsidiary of Houston Electric
|
Bond Company III
|
|
CenterPoint Energy Transition Bond Company III, LLC, a wholly-owned subsidiary of Houston Electric
|
Bond Company IV
|
|
CenterPoint Energy Transition Bond Company IV, LLC, a wholly-owned subsidiary of Houston Electric
|
Brazos Valley Connection
|
|
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
|
Bridge Facility
|
|
A $5 billion 364-day senior unsecured bridge term loan facility
|
CCR
|
|
Coal Combustion Residuals
|
CEA
|
|
Commodities Exchange Act of 1936
|
CECL
|
|
Current expected credit losses
|
CEIP
|
|
CenterPoint Energy Intrastate Pipelines, LLC
|
CenterPoint Energy
|
|
CenterPoint Energy, Inc., and its subsidiaries
|
CERC Corp.
|
|
CenterPoint Energy Resources Corp.
|
CERC
|
|
CERC Corp., together with its subsidiaries
|
CERCLA
|
|
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended
|
CES
|
|
CenterPoint Energy Services, Inc., a wholly-owned subsidiary of CERC Corp.
|
CFTC
|
|
Commodity Futures Trading Commission
|
Charter Common
|
|
Charter Communications, Inc. common stock
|
Charter merger
|
|
Merger of Charter Communications, Inc. and Time Warner Cable Inc.
|
CIP
|
|
Conservation Improvement Program
|
CME
|
|
Chicago Mercantile Exchange
|
CNG
|
|
Compressed natural gas
|
CNP Midstream
|
|
CenterPoint Energy Midstream, Inc., a wholly-owned subsidiary of CenterPoint Energy
|
COLI
|
|
Corporate-owned life insurance
|
GLOSSARY
|
||
Common Stock
|
|
CenterPoint Energy, Inc. common stock, par value $0.01 per share
|
Continuum
|
|
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
|
CPP
|
|
Clean Power Plan
|
CSIA
|
|
Compliance and System Improvement Adjustment
|
DCA
|
|
Distribution Contractors Association
|
DCRF
|
|
Distribution Cost Recovery Factor
|
Dodd-Frank Act
|
|
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
|
DOT
|
|
U.S. Department of Transportation
|
DRR
|
|
Distribution Replacement Rider
|
DSMA
|
|
Demand Side Management Adjustment
|
Dth
|
|
Dekatherms
|
EDIT
|
|
Excess deferred income taxes
|
EECR
|
|
Energy Efficiency Cost Recovery
|
EECRF
|
|
Energy Efficiency Cost Recovery Factor
|
EGT
|
|
Enable Gas Transmission, LLC
|
Enable
|
|
Enable Midstream Partners, LP
|
Enable GP
|
|
Enable GP, LLC, Enable’s general partner
|
Enable Series A Preferred Units
|
|
Enable’s 10% Series A Fixed-to-Floating Non-Cumulative Redeemable Perpetual Preferred Units, representing limited partner interests in Enable
|
EPA
|
|
Environmental Protection Agency
|
EPAct of 2005
|
|
Energy Policy Act of 2005
|
ERCOT
|
|
Electric Reliability Council of Texas
|
ERCOT ISO
|
|
ERCOT Independent System Operator
|
ERISA
|
|
Employee Retirement Income Security Act of 1974
|
ERO
|
|
Electric Reliability Organization
|
ESG
|
|
Energy Systems Group, LLC, a wholly-owned subsidiary of Vectren
|
ESPC
|
|
Energy Savings Performance Contracting
|
FERC
|
|
Federal Energy Regulatory Commission
|
Fitch
|
|
Fitch Ratings, Inc.
|
FRP
|
|
Formula Rate Plan
|
Gas Daily
|
|
Platts gas daily indices
|
GenOn
|
|
GenOn Energy, Inc.
|
GHG
|
|
Greenhouse gases
|
GMES
|
|
Government Mandated Expenditure Surcharge
|
GRIP
|
|
Gas Reliability Infrastructure Program
|
GWh
|
|
Gigawatt-hours
|
Houston Electric
|
|
CenterPoint Energy Houston Electric, LLC and its subsidiaries
|
HVAC
|
|
Heating, ventilation and air conditioning
|
IBEW
|
|
International Brotherhood of Electrical Workers
|
ICA
|
|
Interstate Commerce Act of 1887
|
IG
|
|
Intelligent Grid
|
Indiana Electric
|
|
Operations of SIGECO’s electric transmission and distribution services, and includes its power generating and wholesale power operations
|
Indiana Gas
|
|
Indiana Gas Company, Inc., a wholly-owned subsidiary of Vectren
|
Infrastructure Services
|
|
Provides underground pipeline construction and repair services through Vectren’s wholly-owned subsidiaries Miller Pipeline, LLC and Minnesota Limited, LLC
|
GLOSSARY
|
||
Internal Spin
|
|
CERC’s contribution of its equity investment in Enable to CNP Midstream (detailed in Note 11 to the consolidated financial statements)
|
IRP
|
|
Integrated Resource Plan
|
IRS
|
|
Internal Revenue Service
|
IURC
|
|
Indiana Utility Regulatory Commission
|
kV
|
|
Kilovolt
|
LIBOR
|
|
London Interbank Offered Rate
|
LNG
|
|
Liquefied natural gas
|
LPSC
|
|
Louisiana Public Service Commission
|
LTIPs
|
|
Long-term incentive plans
|
Meredith
|
|
Meredith Corporation
|
Merger
|
|
The merger of Merger Sub with and into Vectren on the terms and subject to the conditions set forth in the Merger Agreement, with Vectren continuing as the surviving corporation and as a wholly-owned subsidiary of CenterPoint Energy, Inc., which closed on February 1, 2019
|
Merger Agreement
|
|
Agreement and Plan of Merger, dated as of April 21, 2018, among CenterPoint Energy, Vectren and Merger Sub
|
Merger Sub
|
|
Pacer Merger Sub, Inc., an Indiana corporation and wholly-owned subsidiary of CenterPoint Energy
|
MES
|
|
Mobile Energy Solutions
|
MGP
|
|
Manufactured gas plant
|
MISO
|
|
Midcontinent Independent System Operator
|
MLP
|
|
Master Limited Partnership
|
MMBtu
|
|
One million British thermal units
|
MMcf
|
|
Million cubic feet
|
Moody’s
|
|
Moody’s Investors Service, Inc.
|
MP2017
|
|
2017 pension mortality improvement scale developed annually by the Society of Actuaries
|
MP2018
|
|
2018 pension mortality improvement scale developed annually by the Society of Actuaries
|
MPSC
|
|
Mississippi Public Service Commission
|
MPUC
|
|
Minnesota Public Utilities Commission
|
MRT
|
|
Enable-Mississippi River Transmission, LLC
|
MW
|
|
Megawatt
|
NECA
|
|
National Electrical Contractors Association
|
NERC
|
|
North American Electric Reliability Corporation
|
NESHAPS
|
|
National Emission Standards for Hazardous Air Pollutants
|
NGA
|
|
Natural Gas Act of 1938
|
NGD
|
|
Natural gas distribution business
|
NGLs
|
|
Natural gas liquids
|
NGPA
|
|
Natural Gas Policy Act of 1978
|
NGPSA
|
|
Natural Gas Pipeline Safety Act of 1968
|
NOPR
|
|
Notice of Proposed Rulemaking
|
NRG
|
|
NRG Energy, Inc.
|
NYMEX
|
|
New York Mercantile Exchange
|
NYSE
|
|
New York Stock Exchange
|
OCC
|
|
Oklahoma Corporation Commission
|
OGE
|
|
OGE Energy Corp.
|
OPEIU
|
|
Office & Professional Employees International Union
|
GLOSSARY
|
||
PBRC
|
|
Performance Based Rate Change
|
PHMSA
|
|
Pipeline and Hazardous Materials Safety Administration
|
PLCA
|
|
Pipeline Contractors Association
|
PRPs
|
|
Potentially responsible parties
|
PUCT
|
|
Public Utility Commission of Texas
|
Railroad Commission
|
|
Railroad Commission of Texas
|
RCRA
|
|
Resource Conservation and Recovery Act of 1976
|
Registrants
|
|
CenterPoint Energy, Houston Electric and CERC, collectively
|
Reliant Energy
|
|
Reliant Energy, Incorporated
|
REP
|
|
Retail electric provider
|
Restoration Bond Company
|
|
CenterPoint Energy Restoration Bond Company, LLC, a wholly-owned subsidiary of Houston Electric
|
Revised Policy Statement
|
|
Revised Policy Statement on Treatment of Income Taxes
|
RICE MACT
|
|
Reciprocating Internal Combustion Engines Maximum Achievable Control Technology
|
ROE
|
|
Return on equity
|
RRA
|
|
Rate Regulation Adjustment
|
RRI
|
|
Reliant Resources, Inc.
|
RSP
|
|
Rate Stabilization Plan
|
SEC
|
|
Securities and Exchange Commission
|
SESH
|
|
Southeast Supply Header, LLC
|
Securitization Bonds
|
|
Transition and system restoration bonds
|
Series A Preferred Stock
|
|
CenterPoint Energy’s Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share, with a liquidation preference of $1,000 per share
|
Series B Preferred Stock
|
|
CenterPoint Energy’s 7.00% Series B Mandatory Convertible Preferred Stock, par value $0.01 per share, with a liquidation preference of $1,000 per share
|
SIGECO
|
|
Southern Indiana Gas and Electric Company, a wholly-owned subsidiary of Vectren
|
S&P
|
|
S&P Global Ratings
|
TCEH Corp.
|
|
Formerly Texas Competitive Electric Holdings Company LLC, predecessor to Vistra Energy Corp. whose major subsidiaries include Luminant and TXU Energy
|
TCJA
|
|
Tax reform legislation informally called the Tax Cuts and Jobs Act of 2017
|
TCOS
|
|
Transmission Cost of Service
|
TDSIC
|
|
Transmission, Distribution and Storage System Improvement Charge
|
TDU
|
|
Transmission and distribution utility
|
Time
|
|
Time Inc.
|
Time Common
|
|
Time common stock
|
Transition Agreements
|
|
Services Agreement, Employee Transition Agreement, Transitional Seconding Agreement and other agreements entered into in connection with the formation of Enable
|
Texas RE
|
|
Texas Reliability Entity
|
TW
|
|
Time Warner Inc.
|
TW Common
|
|
TW common stock
|
UESC
|
|
Utility Energy Services Contract
|
USW
|
|
United Steelworkers Union
|
GLOSSARY
|
||
Utility Holding
|
|
Utility Holding, LLC, a wholly-owned subsidiary of CenterPoint Energy
|
VaR
|
|
Value at Risk
|
Vectren
|
|
Vectren Corporation
|
VEDO
|
|
Vectren Energy Delivery of Ohio, Inc., a wholly-owned subsidiary of Vectren
|
VIE
|
|
Variable interest entity
|
Vistra Energy Corp.
|
|
Texas-based energy company focused on the competitive energy and power generation markets
|
VUHI
|
|
Vectren Utility Holdings, Inc., a wholly-owned subsidiary of Vectren
|
WACC
|
|
Weighted average cost of capital
|
ZENS
|
|
2.0% Zero-Premium Exchangeable Subordinated Notes due 2029
|
ZENS-Related Securities
|
|
As of December 31, 2018, consisted of AT&T Common and Charter Common and as of December 31, 2017, consisted of Charter Common, Time Common and TW Common
|
2002 Act
|
|
Pipeline Safety Improvement Act of 2002
|
2006 Act
|
|
Pipeline Inspection, Protection, Enforcement and Safety Act of 2006
|
2011 Act
|
|
Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011
|
2016 Act
|
|
Protecting our Infrastructure of Pipelines and Enhancing Safety Act
of 2016
|
Item 1.
|
Business
|
(1)
|
Houston Electric engages in the electric transmission and distribution business in the Texas Gulf Coast area that includes the city of Houston.
|
(2)
|
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.
|
(3)
|
NGD operates natural gas distribution systems in
six
states.
|
(4)
|
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 over
30
states.
|
(5)
|
As of December 31, 2018, CNP Midstream owned approximately
54.0%
of the common units representing limited partner interests in Enable, which owns, operates and develops natural gas and crude oil infrastructure assets; CNP Midstream also owned
50%
of the management rights and
40%
of the incentive distribution rights in Enable GP. For additional information regarding CenterPoint Energy’s interest in Enable, including the 14,520,000 Enable Series A Preferred Units directly owned by CenterPoint Energy, see
Note 11
to the consolidated financial statements.
|
|
|
Electric Transmission & Distribution
|
|
Natural Gas Distribution
|
|
Energy
Services
|
|
Midstream Investments
|
|
Other Operations
|
CenterPoint Energy
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
Houston Electric
|
|
X
|
|
|
|
|
|
|
|
|
CERC
|
|
|
|
X
|
|
X
|
|
|
|
X
|
•
|
our Code of Ethics for our Chief Executive Officer and Senior Financial Officers;
|
•
|
our Ethics and Compliance Code;
|
•
|
our Corporate Governance Guidelines; and
|
•
|
the charters of the audit, compensation, finance and governance committees of our Board of Directors.
|
|
Residential
|
|
Commercial/
Industrial
|
|
Total Customers
|
|||
Texas Gulf Coast
|
2,198,225
|
|
|
287,145
|
|
|
2,485,370
|
|
•
|
the lien of a Mortgage and Deed of Trust (the Mortgage) dated November 1, 1944, as supplemented; and
|
•
|
the lien of a General Mortgage (the General Mortgage) dated October 10, 2002, as supplemented, which is junior to the lien of the Mortgage.
|
|
|
Circuit Miles
|
||||
Description
|
|
Overhead Lines
|
|
Underground Lines
|
||
Transmission lines - 69 kV
|
|
266
|
|
|
2
|
|
Transmission lines - 138 kV
|
|
2,207
|
|
|
24
|
|
Transmission lines - 345 kV
|
|
1,336
|
|
|
—
|
|
Total transmission lines
|
|
3,809
|
|
|
26
|
|
Distribution lines
|
|
29,094
|
|
|
25,255
|
|
|
Residential
|
|
Commercial/
Industrial
|
|
Total Customers
|
|||
Arkansas
|
377,290
|
|
|
47,963
|
|
|
425,253
|
|
Louisiana
|
230,234
|
|
|
16,648
|
|
|
246,882
|
|
Minnesota
|
797,907
|
|
|
70,604
|
|
|
868,511
|
|
Mississippi
|
114,694
|
|
|
12,628
|
|
|
127,322
|
|
Oklahoma
|
88,685
|
|
|
10,783
|
|
|
99,468
|
|
Texas
|
1,637,467
|
|
|
101,407
|
|
|
1,738,874
|
|
Total NGD
|
3,246,277
|
|
|
260,033
|
|
|
3,506,310
|
|
Supplier
|
|
Percent of Supply Volumes
|
Tenaska Marketing Ventures
|
|
18.5%
|
Macquarie Energy, LLC
|
|
13.1%
|
BP Energy Company/BP Canada Energy Marketing
|
|
10.3%
|
Sequent Energy Management, LP
|
|
7.6%
|
Kinder Morgan Tejas Pipeline/Kinder Morgan Texas Pipeline
|
|
5.6%
|
Mieco, Inc.
|
|
5.4%
|
Spire Marketing, Inc.
|
|
3.4%
|
United Energy Trading, LLC
|
|
3.1%
|
CIMA Energy, LTD
|
|
3.0%
|
Koch Energy Services, LLC
|
|
2.6%
|
•
|
restricting the way the Registrants 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 and monitoring to mitigate environmental conditions caused by the Registrants’ 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 the Registrants’ 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, upgrade or replace existing and proposed equipment; and
|
•
|
decommission or remediate waste management areas, fuel storage facilities and other locations.
|
|
|
Number of Employees
|
|
Number of Employees Represented by Collective Bargaining Groups
|
||||||||||||||
Reportable Segment
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||
Electric Transmission & Distribution
|
|
2,800
|
|
|
2,800
|
|
|
—
|
|
|
1,431
|
|
|
1,431
|
|
|
—
|
|
Natural Gas Distribution
|
|
3,298
|
|
|
—
|
|
|
3,298
|
|
|
1,200
|
|
|
—
|
|
|
1,200
|
|
Energy Services
|
|
302
|
|
|
—
|
|
|
302
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other Operations
|
|
1,577
|
|
|
—
|
|
|
—
|
|
|
127
|
|
|
—
|
|
|
—
|
|
Total
|
|
7,977
|
|
|
2,800
|
|
|
3,600
|
|
|
2,758
|
|
|
1,431
|
|
|
1,200
|
|
Name
|
|
Age
|
|
Title
|
Milton Carroll
|
|
68
|
|
Executive Chairman
|
Scott M. Prochazka
|
|
52
|
|
President and Chief Executive Officer and Director
|
William D. Rogers
|
|
58
|
|
Executive Vice President and Chief Financial Officer
|
Tracy B. Bridge
|
|
60
|
|
Executive Vice President and President, Electric Division
|
Scott E. Doyle
|
|
47
|
|
Senior Vice President, Natural Gas Distribution
|
Joseph J. Vortherms
|
|
58
|
|
Senior Vice President, Energy Services
|
Dana C. O’Brien
|
|
51
|
|
Senior Vice President and General Counsel
|
Sue B. Ortenstone
|
|
62
|
|
Senior Vice President and Chief Human Resources Officer
|
Item 1A.
|
Risk Factors
|
•
|
general economic and capital market conditions;
|
•
|
credit availability from financial institutions and other lenders;
|
•
|
volatility or fluctuations in distributions from Enable’s units or volatility in Enable’s unit price;
|
•
|
investor confidence in us and the markets in which we operate;
|
•
|
the future performance of our and Enable’s businesses;
|
•
|
integration of Vectren’s businesses into CenterPoint Energy;
|
•
|
maintenance of acceptable credit ratings;
|
•
|
market expectations regarding our future earnings and cash flows;
|
•
|
our ability to access capital markets on reasonable terms;
|
•
|
incremental collateral that may be required due to regulation of derivatives; and
|
•
|
provisions of relevant tax and securities laws.
|
•
|
the fees and gross margins it realizes with respect to the volume of natural gas, NGLs and crude oil that it handles;
|
•
|
the prices of, levels of production of, and demand for natural gas, NGLs and crude oil;
|
•
|
the volume of natural gas, NGLs and crude oil it gathers, compresses, treats, dehydrates, processes, fractionates, transports and stores;
|
•
|
the relationship among prices for natural gas, NGLs and crude oil;
|
•
|
cash calls and settlements of hedging positions;
|
•
|
margin requirements on open price risk management assets and liabilities;
|
•
|
the level of competition from other companies offering midstream services;
|
•
|
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 Enable GP;
|
•
|
distributions paid on the Enable Series A Preferred Units;
|
•
|
any impact on cash levels should any sale of CenterPoint Energy’s investment in Enable occur, as discussed further below; and
|
•
|
other business risks affecting its cash levels.
|
•
|
Contract Renewal
: Enable’s contracts are subject to renewal risks. To the extent Enable is unable to renew or replace its expiring contracts on terms that are favorable, if at all, or successfully manage its overall contract mix over time, its financial position, results of operations and ability to make cash distributions could be adversely affected;
|
•
|
Customers
: Enable depends on a small number of customers for a significant portion of its gathering and processing revenues and its transportation and storage revenues. The loss of, or reduction in volumes from, these customers or the failure to extend or replace these contracts or the extension or replacement of these contracts on less favorable terms, as a result of competition or otherwise, could result in a decline in sales of its gathering and processing or transportation and storage services and adversely affect Enable’s financial position, results of operations and ability to make cash distributions;
|
•
|
Third-Party Drilling and Production Decisions
: Enable’s businesses are dependent, in part, on the natural gas and crude oil drilling and production market conditions and decisions of others, over which Enable has no control. Further, sustained reductions in exploration or production activity in Enable’s areas of operation and fluctuations in energy prices could lead to further reductions in the utilization of Enable’s systems, which could adversely affect its financial position, results of operations and ability to make cash distributions. It may also become more difficult to maintain or increase the current volumes on Enable’s gathering systems and in its processing plants, as several of the formations in the unconventional resource plays in which it operates generally have higher initial production rates and steeper production decline curves than wells in more conventional basins. Should Enable determine that the economics of its gathering assets do not justify the capital expenditures needed to grow or maintain volumes associated therewith, Enable may reduce such capital expenditures, which could cause revenues associated with these assets to decline over time;
|
•
|
Competition
: Enable competes with similar enterprises, some of which include large energy companies with greater financial resources and access to natural gas, NGL and crude oil supplies, in its respective areas of operation, primarily through rates, terms of service and flexibility and reliability of service. Increased competitive pressure in Enable’s industry, which is already highly competitive, could adversely affect Enable’s financial position, results of operations and ability to make cash distributions;
|
•
|
Cost Recovery of Capital Improvements
: Enable may not be able to recover the costs of its substantial planned investment in capital improvements and additions, and the actual cost of such improvements and additions may be significantly higher than it anticipates. In Enable’s Form 10-K for the fiscal year ended December 31, 2018, Enable stated that it expects that its expansion capital could range from approximately $325 million to $425 million and its maintenance capital could range from approximately $105 million to $125 million for the year ending December 31, 2019;
|
•
|
Commodity Prices
: Natural gas, NGL and crude oil prices are volatile, and changes in these prices could adversely affect Enable’s financial position, results of operations and ability to make cash distributions. Factors affecting prices are beyond Enable’s control and include the following: (i) demand for these commodities, which fluctuates with changes in market and economic conditions and other factors, including the impact of seasonality and weather, general economic conditions, the level of domestic and offshore natural gas production and consumption, (ii) the availability of imported natural gas, LNG, NGLs and crude oil, (iii) actions taken by foreign natural gas and oil producing nations, (iv) the availability of local, intrastate and interstate transportation systems, (v) the availability and marketing of competitive fuels, (vi) the impact of energy conservation efforts, technological advances affecting energy consumption and (vii) the extent of governmental regulation and taxation. Further, Enable’s natural gas processing arrangements expose it to commodity price fluctuations. In 2018, 6%, 27% and 67% of Enable’s processing plant inlet volumes consisted of keep-whole arrangements, percent-of-proceeds or percent-of-liquids and fee-based, respectively. If the price at which Enable sells natural gas or NGLs is less than the cost at which Enable purchases natural gas or NGLs under these arrangements, then Enable’s financial position, results of operations and ability to make cash distributions could be adversely affected;
|
•
|
Credit Risk of Customers:
Enable is exposed to credit risks of its customers, and any material nonpayment or nonperformance by its customers, whether through severe financial problems or otherwise, could adversely affect its financial position, results of operations and ability to make cash distributions;
|
•
|
“Negotiated Rate” Contracts
: Enable provides certain transportation and storage services under fixed-price “negotiated rate” contracts, which are authorized by the FERC, that are not subject to adjustment, even if its cost to perform these services exceeds the revenues received from these contracts. As of December 31, 2018, approximately 44% of Enable’s aggregate contracted firm transportation capacity on EGT and MRT and 45% of its aggregate contracted firm storage capacity on EGT and MRT, was subscribed under such “negotiated rate” contracts. As a result, Enable’s costs could exceed its revenues received under these contracts, and if Enable’s costs increase and it is not able to recover any shortfall of revenue associated with its negotiated rate contracts, the cash flow realized by its systems could decrease and, therefore, the cash Enable has available for distribution could also decrease;
|
•
|
Unavailability of Interconnected Facilities
: If third-party pipelines and other facilities interconnected to Enable’s gathering, processing or transportation facilities (including those providing transportation of natural gas and crude oil, transportation and fractionation of NGLs and electricity for compression, among others) become partially or fully unavailable for any reason, Enable’s financial position, results of operations and ability to make cash distributions could be adversely affected; and
|
•
|
Land Ownership
: Enable does not own all of the land on which its pipelines and facilities are located, and it is therefore subject to the possibility of more onerous terms and/or increased costs to retain necessary land use if it does not have valid rights-of-way or if such rights-of-way lapse or terminate, which could disrupt its operations or result in increased costs related to the construction and continuing operations elsewhere and adversely affect its financial position, results of operations and ability to make cash distributions.
|
•
|
Enable shares certain approval rights over major decisions and may not be able to control decisions, including control of cash distributions to Enable from the joint venture;
|
•
|
Enable may incur liabilities as a result of an action taken by its joint venture partners, including leaving Enable liable for the other joint venture partners’ shares of joint venture liabilities if those partners do not pay their share of the joint venture’s obligations;
|
•
|
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 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.
|
•
|
Rate Regulation
: The rates charged by several of Enable’s pipeline systems, including for interstate gas transportation service provided by its intrastate pipelines, are regulated by the FERC. Enable’s pipeline operations that are not regulated by the FERC may be subject to state and local regulation applicable to intrastate natural gas transportation services and crude oil gathering services. The FERC and state regulatory agencies also regulate other terms and conditions of the services Enable may offer. If one of these regulatory agencies, on its own initiative or due to challenges by third parties, were to lower its tariff rates or deny any rate increase or other material changes to the types, or terms and conditions, of service Enable might propose or offer, the profitability of Enable’s pipeline businesses could suffer.
|
•
|
FERC Revised Policy Statement and NOPR
: In a series of related issuances on March 15, 2018, the FERC issued a Revised Policy Statement stating that it will no longer permit pipelines organized as MLPs to recover an income tax allowance in their cost-of-service rates. On July 18, 2018, FERC issued a Final Rule adopting procedures that are generally the same as proposed in a March 15, 2018 NOPR implementing the Revised Policy Statement and the corporate income tax rate reduction with certain clarifications and modifications. For more information, please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Regulatory Matters” in Item 7 of Part II of this report, which discussion is incorporated herein by reference. If FERC requires Enable to establish new tariff rates for either its natural gas or crude oil pipelines that reflect a lower federal corporate income tax rate, it is possible the rates would be reduced, which could adversely affect Enable’s financial position, results of operations and ability to make cash distributions to its unitholders. With regard to FERC-jurisdictional rates on Enable’s crude oil pipelines, the FERC plans to address the Revised Policy Statement and corporate tax rate reduction in its next five-year review of the oil pipeline rate index, which will occur in 2020 and become effective July 1, 2021. The potential rate impacts from the revision are currently uncertain.
|
•
|
Permits, Licenses and Approvals
: Enable may be unable to obtain or renew federal or state permits, licenses or approvals necessary for its operations, which could inhibit its ability to do business. All of these permits, licenses, approval limits and standards require a significant amount of monitoring, record keeping and reporting to demonstrate compliance with the underlying permit, license, approval limit or standard. Noncompliance or incomplete documentation of Enable’s compliance status may result in the imposition of fines, penalties and injunctive relief. Further, to obtain new permits or renew permits and other approvals in the future, Enable may be required to prepare and present data to governmental authorities pertaining to potential adverse impact of a proposed project. Compliance with these regulatory requirements may be expensive and may significantly lengthen the time required to prepare applications and to receive authorizations and consequently could disrupt Enable’s project construction schedules;
|
•
|
Hydraulic Fracturing Regulation
: Increased regulation of hydraulic fracturing and waste water injection wells could result in reductions or delays in natural gas or crude oil production by Enable’s customers, which could adversely affect its financial position, results of operations and ability to make cash distributions; and
|
•
|
Jurisdictional Characterization of Assets
: Enable’s natural gas gathering and intrastate transportation systems are generally exempt from the jurisdiction of the FERC under the NGA, and its crude oil gathering system in the Anadarko Basin is generally exempt from the jurisdiction of the FERC under ICA. FERC regulation may indirectly impact these businesses and the markets for products derived from these businesses. Natural gas gathering and intrastate crude oil gathering may receive greater regulatory scrutiny at the state level; therefore, Enable’s operations could be adversely affected should they become subject to the application of state regulation of rates and services. A change in the jurisdictional characterization of some of Enable’s assets by federal, state or local regulatory agencies or a change in policy by those agencies may result in increased regulation of its assets, which may cause its revenues to decline and operating expenses to increase.
|
•
|
unanticipated delays, disruptions, issues or costs in integrating operations, financial and accounting, information technology, communications and other systems;
|
•
|
potential inconsistencies in procedures, practices, policies, controls, and standards;
|
•
|
possible differences in compensation arrangements, management perspectives and corporate culture; and
|
•
|
loss of or difficulties retaining talented employees or valuable third-party relationships.
|
•
|
restricting the way we manage hazardous and non-hazardous wastes;
|
•
|
limiting or prohibiting construction activities in sensitive areas such as wetlands, coastal regions, or areas inhabited by endangered species;
|
•
|
requiring remedial action and monitoring to mitigate environmental conditions caused by our operations, or attributable to former operations;
|
•
|
limiting airborne emissions from electric generating facilities, including particulate matter, sulfur dioxide (SO
2
), nitrogen oxides (NOx) and mercury, and the disposal non-hazardous substances such as coal combustion residuals, among others;
|
•
|
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
|
•
|
decommission or remediate 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 and 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.
|
•
|
The collective bargaining agreement with IBEW Local 66 related to employees of Houston Electric is scheduled to expire in May 2020;
|
•
|
The collective bargaining agreements with USW Locals 13-227 and 13-1 related to NGD’s employees in Texas are scheduled to expire in June 2022 and July 2022, respectively;
|
•
|
The collective bargaining agreements with Gas Workers Union Local 340, IBEW Local 949 and OPEIU Local 12 and Mankato related to NGD employees in Minnesota are scheduled to expire in April 2020, December 2020, May 2021 and March 2021, respectively;
|
•
|
The collective bargaining agreements with IBEW Local 1393, USW Locals 12213 and 7441 related to employees of NGD in Indiana are scheduled to expire in December 2020;
|
•
|
The collective bargaining agreements with the Teamsters, Chauffeurs, Warehousemen and Helpers Union Local 135 and Utility Workers Union Local 175 related to employees of Indiana Electric were recently renegotiated and are scheduled to expire in September 2021 and October 2021, respectively; and
|
•
|
The collective bargaining agreement with IBEW Local 702 related to employees of Indiana Electric was scheduled to expire in June 2019 but was renegotiated in January 2019 with the ratification of a new three-year labor agreement.
|
•
|
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 our or Enable’s 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
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(in millions, except per share amounts)
|
||||||||||||||||||
Revenues
|
$
|
10,589
|
|
|
$
|
9,614
|
|
|
$
|
7,528
|
|
|
$
|
7,386
|
|
|
$
|
9,226
|
|
Equity in earnings (losses) of unconsolidated affiliates, net
|
307
|
|
|
265
|
|
|
208
|
|
|
(1,663
|
)
|
(2)
|
308
|
|
|||||
Income (loss) available to common shareholders
|
333
|
|
|
1,792
|
|
(1)
|
432
|
|
|
(692
|
)
|
|
611
|
|
|||||
Basic earnings (loss) per common share
|
0.74
|
|
|
4.16
|
|
|
1.00
|
|
|
(1.61
|
)
|
|
1.42
|
|
|||||
Diluted earnings (loss) per common share
|
0.74
|
|
|
4.13
|
|
|
1.00
|
|
|
(1.61
|
)
|
|
1.42
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends paid per common share
|
$
|
1.11
|
|
|
$
|
1.07
|
|
|
$
|
1.03
|
|
|
$
|
0.99
|
|
|
$
|
0.95
|
|
Dividend payout ratio
|
150
|
%
|
|
26
|
%
|
|
103
|
%
|
|
n/a
|
|
|
67
|
%
|
|||||
Return on average common equity
|
5
|
%
|
|
44
|
%
|
|
12
|
%
|
|
(17
|
)%
|
|
14
|
%
|
|||||
At year-end:
|
|
|
|
|
|
|
|
|
|
||||||||||
Book value per common share
|
$
|
16.08
|
|
|
$
|
10.88
|
|
|
$
|
8.04
|
|
|
$
|
8.05
|
|
|
$
|
10.58
|
|
Market price per common share
|
28.23
|
|
|
28.36
|
|
|
24.64
|
|
|
18.36
|
|
|
23.43
|
|
|||||
Market price as a percent of book value
|
176
|
%
|
|
261
|
%
|
|
306
|
%
|
|
228
|
%
|
|
221
|
%
|
|||||
Percentage of common units owned representing limited partner interests in Enable
|
54.0
|
%
|
|
54.1
|
%
|
|
54.1
|
%
|
|
55.4
|
%
|
|
55.4
|
%
|
|||||
Total assets
(3) (4)
|
$
|
27,009
|
|
|
$
|
22,736
|
|
|
$
|
21,829
|
|
|
$
|
21,290
|
|
|
$
|
23,150
|
|
Short-term borrowings
|
—
|
|
|
39
|
|
|
35
|
|
|
40
|
|
|
53
|
|
|||||
Securitization Bonds, including current maturities
(3)
|
1,435
|
|
|
1,868
|
|
|
2,278
|
|
|
2,667
|
|
|
3,037
|
|
|||||
Other long-term debt, including current maturities
(3)
|
7,729
|
|
|
6,933
|
|
|
6,279
|
|
|
6,063
|
|
|
5,717
|
|
|||||
Capitalization:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock equity
|
47
|
%
|
|
35
|
%
|
|
29
|
%
|
|
28
|
%
|
|
34
|
%
|
|||||
Long-term debt, including current maturities
|
53
|
%
|
|
65
|
%
|
|
71
|
%
|
|
72
|
%
|
|
66
|
%
|
|||||
Capitalization, excluding Securitization Bonds:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock equity
|
51
|
%
|
|
40
|
%
|
|
36
|
%
|
|
36
|
%
|
|
44
|
%
|
|||||
Long-term debt, excluding Securitization Bonds, and including current maturities
|
49
|
%
|
|
60
|
%
|
|
64
|
%
|
|
64
|
%
|
|
56
|
%
|
|||||
Capital expenditures
|
$
|
1,720
|
|
|
$
|
1,494
|
|
|
$
|
1,406
|
|
|
$
|
1,575
|
|
|
$
|
1,402
|
|
(1)
|
Net income for the year ended December 31, 2017 includes a reduction in income tax expense of
$1,113 million
due to tax reform. See
Note 15
to the consolidated financial statements for further discussion of the impacts of the TCJA implementation.
|
(2)
|
This amount includes $1,846 million of non-cash impairment charges related to Enable.
|
(3)
|
Amounts for 2014 and 2015 have been recast to reflect adoption of ASU 2015-03.
|
(4)
|
Total assets as of December 31, 2018 include cash and cash equivalents of $4.2 billion.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Houston Electric engages in the electric transmission and distribution business in the Texas Gulf Coast area that includes the city of Houston; and
|
•
|
CERC Corp. (i) owns and operates natural gas distribution systems in
six
states and (ii) 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 over
30
states through its wholly-owned subsidiary, CES.
|
•
|
Electric transmission and distribution services are subject to rate regulation and are reported in the Electric Transmission & Distribution reportable segment, as are impacts of generation-related stranded costs and other true-up balances recoverable by the regulated electric utility. For further information about the Electric Transmission & Distribution reportable segment, see “Business — Our Business — Electric Transmission & Distribution” in Item 1 of Part I of this report.
|
•
|
Natural gas distribution services are also subject to rate regulation and are reported in the Natural Gas Distribution reportable segment. For further information about the Natural Gas Distribution reportable segment, see “Business — Our Business — Natural Gas Distribution” in Item 1 of Part I of this report.
|
•
|
The Energy Services reportable segment includes non-rate regulated natural gas sales to, and transportation and storage services, for commercial and industrial customers. For further information about the Energy Services reportable segment, see “Business — Our Business — Energy Services” in Item 1 of Part I of this report.
|
•
|
The results of the Midstream Investments reportable segment are dependent upon the results of Enable, which are driven primarily by the volume of natural gas, NGLs and crude oil that Enable gathers, processes and transports across its systems and other factors as discussed below under “— Factors Influencing Midstream Investments.”
|
•
|
CenterPoint Energy’s Other Operations reportable segment includes office buildings and other real estate used for business operations, home repair protection plans through a third party and other corporate support operations that support
|
•
|
the performance of Enable, the amount of cash distributions CenterPoint Energy receives from Enable, Enable’s ability to redeem the Enable Series A Preferred Units in certain circumstances and the value of CenterPoint Energy’s 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 goodwill, long-lived asset or other than temporary impairment charges by or related to Enable;
|
◦
|
changes in tax status; and
|
◦
|
access to debt and equity capital;
|
•
|
CenterPoint Energy’s expected benefits of the Merger and integration, including the outcome of shareholder litigation filed against Vectren that could reduce anticipated benefits of the Merger, as well as the ability to successfully integrate the Vectren businesses and realize anticipated benefits and the risk that the credit ratings of the combined company or its subsidiaries may be different from what CenterPoint Energy expects;
|
•
|
industrial, commercial and residential growth in our service territories and changes in market demand, including the demand for our non-utility products and services and effects of energy efficiency measures and demographic patterns;
|
•
|
timely and appropriate rate actions that allow recovery of costs and a reasonable return on investment, including Houston Electric’s anticipated rate case in 2019, the outcome of which may not result in expected rates or recovery of costs;
|
•
|
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 legislation, including the effects of the TCJA (which includes any potential changes to interest deductibility) and uncertainties involving state commissions’ and local municipalities’ regulatory requirements and determinations regarding the treatment of EDIT and our rates;
|
•
|
CenterPoint Energy’s and CERC’s 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 on CERC and Enable
;
|
•
|
actions by credit rating agencies, including any potential downgrades to credit ratings;
|
•
|
changes in interest rates and their impact on costs of borrowing and the valuation of CenterPoint Energy’s pension benefit obligation;
|
•
|
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;
|
•
|
the availability and prices of raw materials and services and changes in labor for current and future construction projects;
|
•
|
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 catastrophic events such as fires, earthquakes, explosions, leaks, floods, droughts, hurricanes, pandemic health events or other occurrences;
|
•
|
our ability to invest planned capital and the timely recovery of our investments;
|
•
|
our ability to control operation and maintenance costs;
|
•
|
the sufficiency of our insurance coverage, including availability, cost, coverage and terms and ability to recover claims;
|
•
|
the investment performance of CenterPoint Energy’s 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 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 and Enable’s risk management and hedging activities, including, but not limited to financial and weather hedges and commodity risk management activities;
|
•
|
timely and appropriate regulatory actions, which include actions allowing securitization, for any future hurricanes or natural disasters or other recovery of costs, including costs associated with Hurricane Harvey;
|
•
|
CenterPoint Energy’s 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 CenterPoint Energy’s interest in Enable, if any, whether through its decision to sell a portion of the Enable common units it owns in the public equity markets or otherwise, subject to certain limitations), which CenterPoint Energy and Enable cannot assure will be completed or will have the anticipated benefits to CenterPoint Energy or Enable;
|
•
|
acquisition and merger activities involving us or our competitors, including the ability to successfully complete merger, acquisition and divestiture plans;
|
•
|
our or Enable’s ability to recruit, effectively transition and retain management and key employees and maintain good labor relations;
|
•
|
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 CenterPoint Energy and Houston Electric;
|
•
|
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 discussed in “Risk Factors” in Item 1A of this report and in other reports that the Registrants file from time to time with the SEC.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions, except per share amounts)
|
||||||||||
Revenues
|
$
|
10,589
|
|
|
$
|
9,614
|
|
|
$
|
7,528
|
|
Expenses
|
9,758
|
|
|
8,478
|
|
|
6,505
|
|
|||
Operating Income
|
831
|
|
|
1,136
|
|
|
1,023
|
|
|||
Gain (Loss) on Marketable Securities
|
(22
|
)
|
|
7
|
|
|
326
|
|
|||
Gain (Loss) on Indexed Debt Securities
|
(232
|
)
|
|
49
|
|
|
(413
|
)
|
|||
Interest and Other Finance Charges
|
(361
|
)
|
|
(313
|
)
|
|
(338
|
)
|
|||
Interest on Securitization Bonds
|
(59
|
)
|
|
(77
|
)
|
|
(91
|
)
|
|||
Equity in Earnings of Unconsolidated Affiliates
|
307
|
|
|
265
|
|
|
208
|
|
|||
Other Income (Expense), net
|
50
|
|
|
(4
|
)
|
|
(29
|
)
|
|||
Income Before Income Taxes
|
514
|
|
|
1,063
|
|
|
686
|
|
|||
Income Tax Expense (Benefit)
|
146
|
|
|
(729
|
)
|
|
254
|
|
|||
Net Income
|
368
|
|
|
1,792
|
|
|
432
|
|
|||
Preferred Stock dividend requirement
|
35
|
|
|
—
|
|
|
—
|
|
|||
Income Available to Common Shareholders
|
$
|
333
|
|
|
$
|
1,792
|
|
|
$
|
432
|
|
|
|
|
|
|
|
||||||
Basic Earnings Per Common Share
|
$
|
0.74
|
|
|
$
|
4.16
|
|
|
$
|
1.00
|
|
|
|
|
|
|
|
||||||
Diluted Earnings Per Common Share
|
$
|
0.74
|
|
|
$
|
4.13
|
|
|
$
|
1.00
|
|
•
|
an $875 million increase in income tax expense, resulting from a reduction in income tax expense of $1,113 million due to tax reform in 2017, discussed further in
Note 15
to the consolidated financial statements, offset by a $238 million decrease in income tax expense primarily due to a reduction in the corporate income tax rate resulting from the TCJA in 2018 and lower income before income taxes year over year;
|
•
|
a $305 million decrease in operating income, discussed below by reportable segment in Results of Operations by Reportable Segment;
|
•
|
a $281 million increase in losses on indexed debt securities related to the ZENS, resulting from a loss of $11 million from Meredith’s acquisition of Time in March 2018, a loss of $242 million from AT&T’s acquisition of TW in June 2018 and reduced gains of $28 million in the underlying value of the indexed debt securities;
|
•
|
a $48 million increase in interest expense primarily due to higher outstanding other long-term debt and the amortization of Bridge Facility fees of $24 million;
|
•
|
a $35 million increase in preferred stock dividend requirements; and
|
•
|
a $29 million increase in losses on marketable securities.
|
•
|
an $17 million decrease in the non-service cost components of net periodic pension and post-retirement costs included in Other Income (Expense), net shown above;
|
•
|
a $4 million increase in dividend income on CenterPoint Energy’s ZENS-Related Securities included in Other Income (Expense), net shown above; and
|
•
|
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 15
to the 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 reportable segment in Results of Operations by Reportable Segment;
|
•
|
a $57 million increase in equity earnings from the investment in Enable, discussed further in
Note 11
to the 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 the Enable Series A Preferred Units included in Other Income (Expense), net shown above; and
|
•
|
a $14 million decrease in interest expense related to lower outstanding balances of the Securitization Bonds.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Revenues
|
$
|
3,234
|
|
|
$
|
2,998
|
|
|
$
|
3,059
|
|
Expenses
|
2,609
|
|
|
2,361
|
|
|
2,407
|
|
|||
Operating Income
|
625
|
|
|
637
|
|
|
652
|
|
|||
Interest and other finance charges
|
(138
|
)
|
|
(128
|
)
|
|
(126
|
)
|
|||
Interest on Securitization Bonds
|
(59
|
)
|
|
(77
|
)
|
|
(91
|
)
|
|||
Other expense, net
|
(3
|
)
|
|
(8
|
)
|
|
(10
|
)
|
|||
Income before income taxes
|
425
|
|
|
424
|
|
|
425
|
|
|||
Income tax expense (benefit)
|
89
|
|
|
(9
|
)
|
|
149
|
|
|||
Net income
|
$
|
336
|
|
|
$
|
433
|
|
|
$
|
276
|
|
•
|
a $98 million increase in income tax expense, resulting from a reduction in income tax expense of $158 million due to tax reform in 2017, discussed further in
Note 15
to the consolidated financial statements, offset by a $60 million decrease in income tax expense primarily due to a reduction in the corporate income tax rate resulting from the TCJA in 2018; and
|
•
|
an $10 million increase in interest expense due to higher outstanding other long-term debt.
|
•
|
a $5 million decrease in non-service cost components of net periodic pension and post-retirement costs included in Other expense, net shown above; and
|
•
|
an $8 million increase in TDU operating income resulting from a $7 million increase discussed below in Results of Operations by Reportable Segment and increased usage of $1 million, primarily due to a return to more normal weather, which was not offset by the weather hedge loss recorded on CenterPoint Energy.
|
•
|
a $158 million decrease in income tax expense due to a reduction in the corporate income tax rate resulting from the TCJA; and
|
•
|
a $1 million increase in TDU operating income resulting from a $1 million decrease discussed below in Results of Operations by Reportable Segment, which was more than offset by increased usage of $2 million, primarily due to a return to more normal weather, which was not offset by the weather hedge loss recorded on CenterPoint Energy.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Revenues
|
$
|
7,343
|
|
|
$
|
6,603
|
|
|
$
|
4,454
|
|
Expenses
|
7,121
|
|
|
6,136
|
|
|
4,113
|
|
|||
Operating Income
|
222
|
|
|
467
|
|
|
341
|
|
|||
Interest and other finance charges
|
(122
|
)
|
|
(123
|
)
|
|
(122
|
)
|
|||
Other expense, net
|
(8
|
)
|
|
(25
|
)
|
|
(20
|
)
|
|||
Income from continuing operations before income taxes
|
92
|
|
|
319
|
|
|
199
|
|
|||
Income tax expense (benefit)
|
22
|
|
|
(265
|
)
|
|
81
|
|
|||
Income from continuing operations
|
70
|
|
|
584
|
|
|
118
|
|
|||
Income from discontinued operations, net of tax
|
138
|
|
|
161
|
|
|
127
|
|
|||
Net Income
|
$
|
208
|
|
|
$
|
745
|
|
|
$
|
245
|
|
•
|
a $287 million increase in income tax expense, resulting from a reduction in income tax expense of $396 million due to tax reform in 2017, discussed further in
Note 15
to the consolidated financial statements, offset by a $109 million decrease in income tax expense primarily due to lower income from continuing operations and a reduction in the corporate income tax rate resulting from the TCJA in 2018;
|
•
|
a $245 million decrease in operating income, discussed below by reportable segment in Results of Operations by Reportable Segment; and
|
•
|
a $23 million decrease in income from discontinued operations, net of tax, due to the Internal Spin discussed further in Note
11
to the consolidated financial statements.
|
•
|
a $12 million decrease in the non-service cost components of net periodic pension and post-retirement costs included in Other expense, net shown above;
|
•
|
a $5 million increase in miscellaneous other non-operating income included in Other expense, net shown above; and
|
•
|
a $1 million decrease in interest expense due to lower outstanding long-term debt.
|
•
|
a $346 million decrease in income tax expense, resulting from a reduction in income tax expense of $396 million due to tax reform, discussed further in
Note 15
to the consolidated financial statements, offset by a $50 million increase in income tax expense primarily due to higher income from continuing operations year-over-year;
|
•
|
a $126 million increase in operating income discussed below in Results of Operations by Reportable Segment; and
|
•
|
a $34 million increase in income from discontinued operations, net of tax, discussed further in Notes
11
and
15
to the consolidated financial statements.
|
•
|
a $5 million decrease in miscellaneous other non-operating income included in Other Income, net shown above; and
|
•
|
a $1 million increase in interest expense due to the issuance of $300 million of unsecured senior notes and higher weighted average commercial paper interest rates discussed further in
Note 14
to the consolidated financial statements.
|
Registrant
|
|
Electric Transmission & Distribution
|
|
Natural Gas Distribution
|
|
Energy
Services
|
|
Midstream Investments
|
|
Other Operations
|
CenterPoint Energy
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
Houston Electric
|
|
X
|
|
|
|
|
|
|
|
|
CERC
|
|
|
|
X
|
|
X
|
|
|
|
X
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
CenterPoint Energy
|
|
|
|
|
|
||||||
Electric Transmission & Distribution
|
$
|
623
|
|
|
$
|
636
|
|
|
$
|
653
|
|
Natural Gas Distribution
|
266
|
|
|
348
|
|
|
321
|
|
|||
Energy Services
|
(47
|
)
|
|
126
|
|
|
21
|
|
|||
Other Operations
|
(11
|
)
|
|
26
|
|
|
28
|
|
|||
Total CenterPoint Energy Consolidated Operating Income
|
$
|
831
|
|
|
$
|
1,136
|
|
|
$
|
1,023
|
|
Houston Electric
|
|
|
|
|
|
||||||
Electric Transmission & Distribution
(1)
|
$
|
625
|
|
|
$
|
637
|
|
|
$
|
652
|
|
CERC
|
|
|
|
|
|
||||||
Natural Gas Distribution
|
$
|
266
|
|
|
$
|
348
|
|
|
$
|
321
|
|
Energy Services
|
(47
|
)
|
|
126
|
|
|
21
|
|
|||
Other Operations
|
3
|
|
|
(7
|
)
|
|
(1
|
)
|
|||
Total CERC Consolidated Operating Income
|
$
|
222
|
|
|
$
|
467
|
|
|
$
|
341
|
|
(1)
|
Excludes weather hedge gain (loss) of $(2) million, $(1) million and $1 million recorded on CenterPoint Energy. See Note 9(a) to the consolidated financial statements for more information on the weather hedge.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues:
|
(in millions, except throughput and customer data)
|
||||||||||
TDU
|
$
|
2,638
|
|
|
$
|
2,588
|
|
|
$
|
2,507
|
|
Bond Companies
|
594
|
|
|
409
|
|
|
553
|
|
|||
Total revenues
|
3,232
|
|
|
2,997
|
|
|
3,060
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
|
|||
Operation and maintenance, excluding Bond Companies
|
1,444
|
|
|
1,397
|
|
|
1,330
|
|
|||
Depreciation and amortization, excluding Bond Companies
|
386
|
|
|
395
|
|
|
384
|
|
|||
Taxes other than income taxes
|
240
|
|
|
235
|
|
|
231
|
|
|||
Bond Companies
|
539
|
|
|
334
|
|
|
462
|
|
|||
Total expenses
|
2,609
|
|
|
2,361
|
|
|
2,407
|
|
|||
Operating Income
|
$
|
623
|
|
|
$
|
636
|
|
|
$
|
653
|
|
Operating Income:
|
|
|
|
|
|
|
|||||
TDU
|
$
|
568
|
|
|
$
|
561
|
|
|
$
|
562
|
|
Bond Companies
(1)
|
55
|
|
|
75
|
|
|
91
|
|
|||
Total segment operating income
|
$
|
623
|
|
|
$
|
636
|
|
|
$
|
653
|
|
Throughput (in GWh):
|
|
|
|
|
|
|
|
|
|||
Residential
|
30,405
|
|
|
29,703
|
|
|
29,586
|
|
|||
Total
|
90,409
|
|
|
88,636
|
|
|
86,829
|
|
|||
Number of metered customers at end of period:
|
|
|
|
|
|
|
|
|
|||
Residential
|
2,198,225
|
|
|
2,164,073
|
|
|
2,129,773
|
|
|||
Total
|
2,485,370
|
|
|
2,444,299
|
|
|
2,403,340
|
|
(1)
|
Represents the amount necessary to pay interest on the Securitization Bonds.
|
•
|
higher transmission-related revenues of $37 million, exclusive of the TCJA, and lower transmission costs billed by transmission providers of $32 million;
|
•
|
customer growth of $31 million from the addition of over 41,000 customers;
|
•
|
rate increases of $36 million related to distribution capital investments, exclusive of the TCJA;
|
•
|
higher equity return of $32 million, primarily related to the annual true-up of transition charges correcting for under-collections that occurred during the preceding 12 months;
|
•
|
higher miscellaneous revenues of $9 million largely due to right-of-way and fiber and wireless revenues; and
|
•
|
higher usage of $8 million, primarily due to a return to more normal weather.
|
•
|
increased operation and maintenance expenses of $79 million, excluding transmission costs billed by transmission providers, primarily due to the following:
|
◦
|
contract services of $24 million, largely due to increased resiliency spend and services related to fiber and wireless;
|
◦
|
support services of $23 million, primarily related to technology projects;
|
◦
|
labor and benefits costs of $14 million;
|
◦
|
other miscellaneous operation and maintenance expenses of $12 million; and
|
◦
|
damage claims from third parties of $6 million;
|
•
|
lower revenues of $79 million due to the recording of a regulatory liability and a corresponding decrease to revenue of $31 million reflecting the difference in revenues collected under customer rates at the pre-TCJA tax rate and the revenues that would have been collected had rates been adjusted to the lower corporate tax rate upon TCJA enactment and lower revenues of $48 million due to lower transmission and distribution rate filings as a result of the TCJA; and
|
•
|
higher depreciation and amortization expense, primarily because of ongoing additions to plant in service, and other taxes of $17 million.
|
•
|
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 $18 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.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions, except throughput and customer data)
|
||||||||||
Revenues
|
$
|
2,967
|
|
|
$
|
2,639
|
|
|
$
|
2,409
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|||
Natural gas
|
1,467
|
|
|
1,164
|
|
|
1,008
|
|
|||
Operation and maintenance
|
803
|
|
|
722
|
|
|
696
|
|
|||
Depreciation and amortization
|
277
|
|
|
260
|
|
|
242
|
|
|||
Taxes other than income taxes
|
154
|
|
|
145
|
|
|
142
|
|
|||
Total expenses
|
2,701
|
|
|
2,291
|
|
|
2,088
|
|
|||
Operating Income
|
$
|
266
|
|
|
$
|
348
|
|
|
$
|
321
|
|
Throughput (in Bcf):
|
|
|
|
|
|
|
|||||
Residential
|
186
|
|
|
151
|
|
|
152
|
|
|||
Commercial and industrial
|
285
|
|
|
261
|
|
|
259
|
|
|||
Total Throughput
|
471
|
|
|
412
|
|
|
411
|
|
|||
Number of customers at end of period:
|
|
|
|
|
|
|
|
||||
Residential
|
3,246,277
|
|
|
3,213,140
|
|
|
3,183,538
|
|
|||
Commercial and industrial
|
260,033
|
|
|
256,651
|
|
|
255,806
|
|
|||
Total
|
3,506,310
|
|
|
3,469,791
|
|
|
3,439,344
|
|
•
|
lower revenue of $47 million, associated with the recording of a regulatory liability and a corresponding decrease to revenue in certain jurisdictions of $14 million reflecting the difference in revenues collected under customer rates at the pre-TCJA tax rates and the revenues that would have been collected had rates been adjusted to the lower corporate tax rate upon TCJA enactment and lower filing amounts of $33 million associated with the lower corporate tax rate as a result of the TCJA;
|
•
|
higher operation and maintenance expenses of $41 million, primarily consisting of:
|
◦
|
materials and supplies, contracts and services and bad debt expenses of $15 million;
|
◦
|
support services expenses of $16 million, primarily related to technology projects; and
|
◦
|
other miscellaneous operation and maintenance expenses of $10 million;
|
•
|
higher labor and benefits costs of $30 million, resulting from the recording in 2017 of regulatory assets (and a corresponding reduction in expense) to recover $16 million of prior post-retirement expenses in future rates established in the Texas Gulf rate order and additional maintenance activities;
|
•
|
increased depreciation and amortization expense of $17 million, primarily due to ongoing additions to plant-in-service;
|
•
|
decreased revenue of $10 million, primarily driven by timing of weather normalization adjustments; and
|
•
|
higher other taxes of $2 million, primarily due to higher property taxes.
|
•
|
rate increases of $46 million, primarily in the Texas, Minnesota and Arkansas jurisdictions, exclusive of the TCJA impact discussed above;
|
•
|
an increase in non-volumetric revenues of $10 million; and
|
•
|
a $10 million increase associated with customer growth from the addition of over 36,000 customers.
|
•
|
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 $18 million, primarily due to increased bad debt expenses of $7 million, increased contract services of $7 million and increased insurance costs of $3 million; and
|
•
|
increased depreciation and amortization expense, primarily due to ongoing additions to plant-in-service, and other taxes of $16 million.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions, except throughput and customer data)
|
||||||||||
Revenues
|
$
|
4,521
|
|
|
$
|
4,049
|
|
|
$
|
2,099
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|||
Natural gas
|
4,453
|
|
|
3,816
|
|
|
2,011
|
|
|||
Operation and maintenance
|
96
|
|
|
86
|
|
|
58
|
|
|||
Depreciation and amortization
|
16
|
|
|
19
|
|
|
7
|
|
|||
Taxes other than income taxes
|
3
|
|
|
2
|
|
|
2
|
|
|||
Total expenses
|
4,568
|
|
|
3,923
|
|
|
2,078
|
|
|||
Operating Income (Loss)
|
$
|
(47
|
)
|
|
$
|
126
|
|
|
$
|
21
|
|
|
|
|
|
|
|
||||||
Timing impacts related to mark-to-market gain (loss)
(1)
|
$
|
(110
|
)
|
|
$
|
79
|
|
|
$
|
(21
|
)
|
|
|
|
|
|
|
||||||
Throughput (in Bcf)
|
1,355
|
|
|
1,200
|
|
|
777
|
|
|||
|
|
|
|
|
|
||||||
Number of customers at end of period
(2)
|
30,000
|
|
|
31,000
|
|
|
30,000
|
|
(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 65,000, 72,000 and 60,100 natural gas customers as of
December 31, 2018
,
2017
and
2016
, respectively, that are under residential and small commercial choice programs invoiced by their host utility.
|
•
|
a $189 million decrease from mark-to-market accounting for derivatives associated with certain natural gas purchases and sales used to lock in economic margins; and
|
•
|
an $10 million increase in operation and maintenance expenses, attributable to increased technology expenses, higher contract and services expense related to pipeline integrity testing, higher support services and legal expenses.
|
•
|
a $22 million increase in margin due to increased opportunities to optimize natural gas supply costs through storage and transportation capacity, primarily in the first quarter of 2018, and incremental volumes from customers. Realized commercial opportunities attributable to the Continuum and AEM acquisitions and colder than normal weather in several regions of the United States, primarily in the first quarter of 2018, drove incremental sales volumes; and
|
•
|
a $5 million increase in margin due to increased revenues from energy delivery to customers through CEIP interconnect projects and MES’ portable natural gas supply services.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Equity earnings from Enable, net
|
$
|
307
|
|
|
$
|
265
|
|
|
$
|
208
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Revenues
|
$
|
15
|
|
|
$
|
14
|
|
|
$
|
15
|
|
Expenses
|
26
|
|
|
(12
|
)
|
|
(13
|
)
|
|||
Operating Income (Loss)
|
$
|
(11
|
)
|
|
$
|
26
|
|
|
$
|
28
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Revenues
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Expenses
|
(2
|
)
|
|
7
|
|
|
2
|
|
|||
Operating Income (Loss)
|
$
|
3
|
|
|
$
|
(7
|
)
|
|
$
|
(1
|
)
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||||||
Cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
$
|
2,136
|
|
|
$
|
1,115
|
|
|
$
|
814
|
|
|
$
|
1,417
|
|
|
$
|
905
|
|
|
$
|
278
|
|
|
$
|
1,923
|
|
|
$
|
1,102
|
|
|
$
|
512
|
|
Investing activities
|
(1,207
|
)
|
|
(911
|
)
|
|
(697
|
)
|
|
(1,257
|
)
|
|
(776
|
)
|
|
(346
|
)
|
|
(1,034
|
)
|
|
(951
|
)
|
|
42
|
|
|||||||||
Financing activities
|
3,053
|
|
|
(108
|
)
|
|
(104
|
)
|
|
(245
|
)
|
|
(236
|
)
|
|
79
|
|
|
(808
|
)
|
|
(69
|
)
|
|
(553
|
)
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2018 compared to 2017
|
|
2017 compared to 2016
|
||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston
Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston
Electric |
|
CERC
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Changes in net income after adjusting for non-cash items
|
$
|
(63
|
)
|
|
$
|
154
|
|
|
$
|
(243
|
)
|
|
$
|
141
|
|
|
$
|
(22
|
)
|
|
$
|
215
|
|
Changes in working capital
|
604
|
|
|
57
|
|
|
595
|
|
|
(545
|
)
|
|
(189
|
)
|
|
(474
|
)
|
||||||
Change in equity in earnings from Enable, net of distributions
(1)
|
225
|
|
|
—
|
|
|
—
|
|
|
(57
|
)
|
|
—
|
|
|
—
|
|
||||||
Changes related to discontinued operations
(2)
|
—
|
|
|
—
|
|
|
176
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Higher pension contribution
|
(21
|
)
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
||||||
Other
|
(26
|
)
|
|
(1
|
)
|
|
8
|
|
|
(6
|
)
|
|
14
|
|
|
25
|
|
||||||
|
$
|
719
|
|
|
$
|
210
|
|
|
$
|
536
|
|
|
$
|
(506
|
)
|
|
$
|
(197
|
)
|
|
$
|
(234
|
)
|
(1)
|
This change is partially offset by the change in distributions from Enable in excess of cumulative earnings in investing activities noted in the table below.
|
(2)
|
See Notes 2(c) and 11 to the consolidated financial statements for a discussion of CERC’s discontinued operations.
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2018 compared to 2017
|
|
2017 compared to 2016
|
||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston
Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston
Electric |
|
CERC
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Proceeds from the sale of marketable securities
|
$
|
398
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(178
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Acquisitions, net of cash acquired
|
132
|
|
|
—
|
|
|
132
|
|
|
(30
|
)
|
|
—
|
|
|
(30
|
)
|
||||||
Net change in capital expenditures
|
(225
|
)
|
|
(47
|
)
|
|
(120
|
)
|
|
(12
|
)
|
|
(13
|
)
|
|
4
|
|
||||||
Investment in Enable Series A Preferred Units
|
—
|
|
|
—
|
|
|
—
|
|
|
363
|
|
|
—
|
|
|
—
|
|
||||||
Net change in notes receivable from unconsolidated affiliates
|
—
|
|
|
(96
|
)
|
|
(114
|
)
|
|
(363
|
)
|
|
192
|
|
|
—
|
|
||||||
Change in distributions from Enable in excess of cumulative earnings
|
(267
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Changes related to discontinued operations
(1)
|
—
|
|
|
—
|
|
|
(250
|
)
|
|
—
|
|
|
—
|
|
|
(363
|
)
|
||||||
Other
|
12
|
|
|
8
|
|
|
1
|
|
|
(3
|
)
|
|
(4
|
)
|
|
1
|
|
||||||
|
$
|
50
|
|
|
$
|
(135
|
)
|
|
$
|
(351
|
)
|
|
$
|
(223
|
)
|
|
$
|
175
|
|
|
$
|
(388
|
)
|
(1)
|
See Notes 2(c) and 11 to the consolidated financial statements for a discussion of CERC’s discontinued operations.
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2018 compared to 2017
|
|
2017 compared to 2016
|
||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston
Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston
Electric |
|
CERC
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Net changes in commercial paper outstanding
|
$
|
(1,892
|
)
|
|
$
|
—
|
|
|
$
|
(1,017
|
)
|
|
$
|
(120
|
)
|
|
$
|
—
|
|
|
$
|
(21
|
)
|
Increased proceeds from issuances of preferred stock
|
1,740
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Increased proceeds from issuance of Common Stock
|
1,844
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net changes in long-term debt outstanding, excluding commercial paper
|
2,126
|
|
|
77
|
|
|
851
|
|
|
503
|
|
|
(123
|
)
|
|
73
|
|
||||||
Net changes in reacquired debt
|
5
|
|
|
—
|
|
|
5
|
|
|
17
|
|
|
—
|
|
|
(5
|
)
|
||||||
Net changes in debt issuance costs
|
(34
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
3
|
|
|
(4
|
)
|
||||||
Net changes in short-term borrowings
|
(43
|
)
|
|
—
|
|
|
(43
|
)
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||
Distributions to ZENS note holders
|
(398
|
)
|
|
—
|
|
|
—
|
|
|
178
|
|
|
—
|
|
|
—
|
|
||||||
Increased payment of Common Stock dividends
|
(38
|
)
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
||||||
Increased payment of preferred stock dividends
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net change in notes payable from affiliated companies
|
—
|
|
|
(119
|
)
|
|
(1,140
|
)
|
|
—
|
|
|
372
|
|
|
570
|
|
||||||
Contribution from parent
|
—
|
|
|
200
|
|
|
922
|
|
|
—
|
|
|
(374
|
)
|
|
(34
|
)
|
||||||
Dividend to parent
|
—
|
|
|
(29
|
)
|
|
241
|
|
|
—
|
|
|
(45
|
)
|
|
42
|
|
||||||
Other
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
2
|
|
||||||
|
$
|
3,298
|
|
|
$
|
128
|
|
|
$
|
(183
|
)
|
|
$
|
563
|
|
|
$
|
(167
|
)
|
|
$
|
632
|
|
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||
|
|
(in millions)
|
||||||||||
Merger consideration for Vectren acquisition
(1)
|
|
$
|
5,982
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Estimated capital expenditures
(2)
|
|
2,432
|
|
|
979
|
|
|
714
|
|
|||
Change in control debt redemption
(1)
|
|
759
|
|
|
—
|
|
|
—
|
|
|||
Scheduled principal payments on Securitization Bonds
|
|
458
|
|
|
458
|
|
|
—
|
|
|||
Minimum contributions to pension plans and other post-retirement plans
|
|
110
|
|
|
10
|
|
|
4
|
|
|||
Maturing Vectren senior notes
|
|
60
|
|
|
—
|
|
|
—
|
|
(1)
|
On February 1, 2019, pursuant to the Merger Agreement, CenterPoint Energy consummated the previously announced Merger and acquired Vectren for approximately $6 billion in cash. In conjunction with the consummation of the Merger, $759 million of debt at Vectren was redeemed due to the change in control. For further discussion of the Merger, see Note 4 to the consolidated financial statements.
|
(2)
|
CenterPoint Energy’s estimated capital expenditures include estimated capital expenditures for Vectren and its subsidiaries as of the closing of the Merger.
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
||||||||||||
CenterPoint Energy
|
(in millions)
|
||||||||||||||||||||||
Electric Transmission & Distribution
|
$
|
952
|
|
|
$
|
979
|
|
|
$
|
1,028
|
|
|
$
|
1,178
|
|
|
$
|
979
|
|
|
$
|
980
|
|
Natural Gas Distribution
|
638
|
|
|
673
|
|
|
678
|
|
|
691
|
|
|
694
|
|
|
711
|
|
||||||
Energy Services
|
20
|
|
|
40
|
|
|
16
|
|
|
15
|
|
|
39
|
|
|
13
|
|
||||||
Other Operations
|
110
|
|
|
71
|
|
|
39
|
|
|
33
|
|
|
34
|
|
|
35
|
|
||||||
Vectren and its subsidiaries
(1)
|
—
|
|
|
669
|
|
|
740
|
|
|
867
|
|
|
1,056
|
|
|
896
|
|
||||||
Total
|
$
|
1,720
|
|
|
$
|
2,432
|
|
|
$
|
2,501
|
|
|
$
|
2,784
|
|
|
$
|
2,802
|
|
|
$
|
2,635
|
|
Houston Electric
(2)
|
$
|
952
|
|
|
$
|
979
|
|
|
$
|
1,028
|
|
|
$
|
1,178
|
|
|
$
|
979
|
|
|
$
|
980
|
|
CERC
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Natural Gas Distribution
|
$
|
638
|
|
|
$
|
673
|
|
|
$
|
678
|
|
|
$
|
691
|
|
|
$
|
694
|
|
|
$
|
711
|
|
Energy Services
|
20
|
|
|
40
|
|
|
16
|
|
|
15
|
|
|
39
|
|
|
13
|
|
||||||
Other Operations
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
658
|
|
|
$
|
714
|
|
|
$
|
694
|
|
|
$
|
706
|
|
|
$
|
733
|
|
|
$
|
724
|
|
(1)
|
Vectren 2019 capital expenditures reflect capital expenditure estimates for the period February through December 2019 only.
|
(2)
|
Houston Electric consists of a single reportable segment, Electric Transmission & Distribution.
|
Contractual Obligations
|
|
Total
|
|
2019
|
|
2020-2021
|
|
2022-2023
|
|
2024 and thereafter
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
CenterPoint Energy
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Securitization Bonds
|
|
$
|
1,435
|
|
|
$
|
458
|
|
|
$
|
442
|
|
|
$
|
375
|
|
|
$
|
160
|
|
Other long-term debt
(1)
|
|
7,798
|
|
|
—
|
|
|
1,495
|
|
|
1,510
|
|
|
4,793
|
|
|||||
Interest payments — Securitization Bonds
(2)
|
|
125
|
|
|
46
|
|
|
51
|
|
|
24
|
|
|
4
|
|
|||||
Interest payments — other long-term debt
(2)
|
|
4,482
|
|
|
350
|
|
|
679
|
|
|
541
|
|
|
2,912
|
|
|||||
Operating leases
(3)
|
|
36
|
|
|
6
|
|
|
11
|
|
|
7
|
|
|
12
|
|
|||||
Benefit obligations
(4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Non-trading derivative liabilities
|
|
131
|
|
|
126
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|||||
Commodity and other commitments
(5)
|
|
3,058
|
|
|
454
|
|
|
773
|
|
|
385
|
|
|
1,446
|
|
|||||
Total contractual cash obligations
(6)
|
|
$
|
17,065
|
|
|
$
|
1,440
|
|
|
$
|
3,456
|
|
|
$
|
2,842
|
|
|
$
|
9,327
|
|
Contractual Obligations
|
|
Total
|
|
2019
|
|
2020-2021
|
|
2022-2023
|
|
2024 and thereafter
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
Houston Electric
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Securitization Bonds
|
|
$
|
1,435
|
|
|
$
|
458
|
|
|
$
|
442
|
|
|
$
|
375
|
|
|
$
|
160
|
|
Other long-term debt
(1)
|
|
3,281
|
|
|
—
|
|
|
402
|
|
|
500
|
|
|
2,379
|
|
|||||
Interest payments — Securitization Bonds
(2)
|
|
125
|
|
|
46
|
|
|
51
|
|
|
24
|
|
|
4
|
|
|||||
Interest payments — other long-term debt
(2)
|
|
2,150
|
|
|
132
|
|
|
255
|
|
|
226
|
|
|
1,537
|
|
|||||
Non-trading derivative liabilities
|
|
24
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases
(3)
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Benefit obligations
(4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual cash obligations
(6)
|
|
$
|
7,016
|
|
|
$
|
661
|
|
|
$
|
1,150
|
|
|
$
|
1,125
|
|
|
$
|
4,080
|
|
CERC
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
|
$
|
2,371
|
|
|
$
|
—
|
|
|
$
|
593
|
|
|
$
|
510
|
|
|
$
|
1,268
|
|
Interest payments — long-term debt
(1)
|
|
1,488
|
|
|
111
|
|
|
209
|
|
|
153
|
|
|
1,015
|
|
|||||
Operating leases
(3)
|
|
32
|
|
|
5
|
|
|
9
|
|
|
7
|
|
|
11
|
|
|||||
Benefit obligations
(4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Non-trading derivative liabilities
|
|
107
|
|
|
102
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|||||
Commodity and other commitments
(5)
|
|
3,058
|
|
|
454
|
|
|
773
|
|
|
385
|
|
|
1,446
|
|
|||||
Total contractual cash obligations
(6)
|
|
$
|
7,056
|
|
|
$
|
672
|
|
|
$
|
1,589
|
|
|
$
|
1,055
|
|
|
$
|
3,740
|
|
(1)
|
ZENS obligations are included in the
2024 and thereafter
column at their contingent principal amount as of
December 31, 2018
of
$93 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 (
$540 million
as of
December 31, 2018
), as discussed in
Note 12
to the consolidated financial statements.
|
(2)
|
The Registrants calculated estimated interest payments for long-term debt as follows: for fixed-rate debt and term debt, the Registrants calculated interest based on the applicable rates and payment dates; for variable-rate debt and/or non-term debt, the Registrants used interest rates in place as of
December 31, 2018
. The Registrants 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 16
(c) to the consolidated financial statements.
|
(4)
|
See
Note 8
(g) to the consolidated financial statements for information on the Registrants’ expected contributions to pension plans and other postretirement plans in
2019
.
|
(5)
|
For a discussion of commodity and other commitments, please read
Note 16
(a) to the 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 2024. See
Note 3
(c) to the consolidated financial statements for further information.
|
Mechanism
|
|
Annual Increase (Decrease)
(1)
(in millions)
|
|
Filing
Date
|
|
Effective Date
|
|
Approval Date
|
|
Additional Information
|
CenterPoint Energy and Houston Electric (PUCT)
|
||||||||||
TCOS
|
|
N/A
|
|
February
2018
|
|
April
2018
|
|
April
2018
|
|
Revised TCOS annual revenue application approved in November 2017 by a reduction of $41.6 million to recognize a decrease in the federal income tax rate, 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.
|
TCOS
|
|
$40.8
|
|
May
2018
|
|
July
2018
|
|
July
2018
|
|
Requested an increase of $285 million to rate base and reflects a $40.8 million annual increase in current revenues. Also reflects a one-time refund of $6.6 million in excess federal income tax collected from January to April 2018.
|
TCOS
|
|
2.4
|
|
September 2018
|
|
November 2018
|
|
November 2018
|
|
Requested an increase of $15.4 million to rate base and reflects a $2.4 million annual increase in current revenues.
|
EECRF
|
|
8.4
|
|
June
2018
|
|
March 2019
|
|
December 2018
|
|
The PUCT issued a final order in December 2018 approving recovery of 2019 EECRF of $39.5 million, including an $8.4 million performance bonus.
|
DCRF
|
|
30.9
|
|
April
2018
|
|
September
2018
|
|
August 2018
|
|
Unanimous settlement agreement approved by the PUCT in August 2018 results in incremental annual revenue of $30.9 million. It results in a $120.6 million annual revenue requirement effective September 1, 2018. The settlement agreement also reflects an approximately $39 million decrease resulting from the 21% federal income tax rate, a $20 million decrease to return to customers the reserve recorded recognizing this decrease in the federal income tax rate from January 25, 2018 through August 31, 2018 and a $19.2 million decrease related to the unprotected EDIT. Effective September 1, 2019, the reserve amount returned to customers ends. In December 2018, Houston Electric filed an updated DCRF tariff to adjust the interim DCRF rates to reflect the difference between the $20 million estimated tax-expense regulatory liability and the $23.4 million actual tax-expense regulatory liability recorded by Houston Electric.
|
Mechanism
|
|
Annual Increase (Decrease)
(1)
(in millions)
|
|
Filing
Date
|
|
Effective Date
|
|
Approval Date
|
|
Additional Information
|
CenterPoint Energy and CERC - South Texas (Railroad Commission)
|
||||||||||
Rate Case
|
|
(1.0)
|
|
November 2017
|
|
May
2018
|
|
May
2018 |
|
Unanimous settlement agreement approved by the Railroad Commission in May 2018 that provides for a $1 million annual decrease in current revenues. The settlement agreement also reflects an approximately $2 million decrease in the federal income tax rate and amortization of certain EDIT balances and establishes a 9.8% ROE for future GRIP filings for the South Texas jurisdiction.
|
CenterPoint Energy and CERC - Beaumont/East Texas, Houston and Texas Coast (Railroad Commission)
|
||||||||||
GRIP
|
|
14.7
|
|
March
2018
|
|
July
2018
|
|
June
2018
|
|
Based on net change in invested capital of $70.0 million and reflects a $14.7 million annual increase in current revenues, net of an approximate $1.0 million decrease from the federal income tax rate reduction as a result of the TCJA.
|
Administrative 104.111
|
|
N/A
|
|
July
2018
|
|
September 2018
|
|
August 2018
|
|
Beaumont/East Texas, Houston and Texas Coast proposed to decrease base rates by $12.9 million to reflect the change in the federal income tax rate. In addition, Beaumont/East Texas proposed to decrease the GRIP charge to reflect the change in the federal income tax rate. The impact of deferred taxes is expected to be reflected in the next rate case.
|
CenterPoint Energy and CERC - Arkansas (APSC)
|
||||||||||
FRP
|
|
13.2
|
|
August
2018
|
|
October 2018
|
|
September 2018
|
|
Based on ROE of 9.5% as approved in the last rate case and reflects a $13.2 million annual increase in current revenues, excluding the effects of the TCJA. The annual increase is reduced from TCJA impacts by approximately $8.1 million, which include the effects of a lower federal income tax rate and amortization of EDIT balances.
|
CenterPoint Energy and CERC - Louisiana (LPSC)
|
||||||||||
RSP
|
|
6.1
|
|
December 2018
|
|
December 2018
|
|
February 2019
|
|
Based on ROE of 9.95% and the 21% federal income tax rate and reflects a $6.1 million annual increase in current revenues. Other impacts of the TCJA, which were calculated outside the band, reduced the annual increase by approximately $4 million. Interim rates were implemented in December 2018. Final rates were implemented February 2019 upon receipt of the LPSC’s final order. The LPSC also approved the refund of $5.6 million of other TCJA impacts over a three month period, beginning January 31, 2019.
|
CenterPoint Energy and CERC - Minnesota (MPUC)
|
||||||||||
Rate Case
|
|
3.9
|
|
August 2017
|
|
November 2018
|
|
July
2018
|
|
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. A unanimous settlement agreement was filed in March 2018, subject to MPUC approval. The settlement agreement increases base rates by $3.9 million, makes decoupling a permanent part of the tariff, incorporates the impact of the decrease in the federal income tax rate and amortization of EDIT balances (approximately $20 million) and establishes or continues tracker recovery mechanisms that account for approximately $13.3 million in the initial filing. The MPUC voted to approve the settlement and a formal order was issued on July 20, 2018. Final rates (and the refund of interim rates that exceed final rates) were implemented beginning November 1, 2018.
|
Decoupling
|
|
(13.8)
|
|
September 2018
|
|
September 2018
|
|
January 2019
|
|
Represents revenue over-recovery of $21.9 million recorded for and during the period July 1, 2017 through June 30, 2018 offset by the rate and prior period adjustments totaling $8.1 million recorded in 2018.
|
CIP
|
|
12.5
|
|
May
2018
|
|
September 2018
|
|
September 2018
|
|
Annual reconciliation filing for program year 2017 and includes performance bonus of $12.5 million which was recorded in September 2018.
|
CenterPoint Energy and CERC - Mississippi (MPSC)
|
||||||||||
RRA
|
|
3.2
|
|
May
2018
|
|
November 2018
|
|
November 2018
|
|
Based on authorized ROE of 9.144% and a capital structure of 50% debt and 50% equity and reflects a $3.2 million annual increase in revenues.
|
CenterPoint Energy and CERC - Oklahoma (OCC)
|
||||||||||
PBRC
|
|
5.4
|
|
March
2018
|
|
October 2018
|
|
October 2018
|
|
Based on ROE of 10% and reflects a $5.4 million annual increase in revenues. As a result of the final order, all EDIT was removed from the PBRC calculation. Protected EDIT amortization will begin to be refunded in April 2019 via one-time annual bill credits. Unprotected EDIT will be refunded over a five-year period via annual bill credits which began in October 2018.
|
(1)
|
Represents proposed increases (decreases) when effective date and/or approval date is not yet determined. Approved rates could differ materially from proposed rates.
|
|
|
|
|
Amount Utilized as of February 12, 2019
|
|
|
|
|
||||||||||||
Registrant/Subsidiary
|
|
Size of
Facility |
|
Loans
|
|
Letters
of Credit |
|
Commercial
Paper |
|
Weighted Average Interest Rate
|
|
Termination Date
|
||||||||
|
|
(in millions, except weighted average interest rate)
|
|
|
||||||||||||||||
CenterPoint Energy
(1)
|
|
$
|
3,300
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
2,592
|
|
|
2.88%
|
|
March 2022
|
VUHI
(2)
|
|
400
|
|
|
—
|
|
|
—
|
|
|
190
|
|
|
2.73%
|
|
July 2022
|
||||
Vectren Capital Corp.
(2)
|
|
200
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
3.63%
|
|
July 2022
|
||||
Total CenterPoint Energy
|
|
3,900
|
|
|
37
|
|
|
6
|
|
|
2,782
|
|
|
|
|
|
||||
Houston Electric
|
|
300
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
March 2022
|
||||
CERC
(3)
|
|
900
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
March 2022
|
||||
Total
|
|
$
|
5,100
|
|
|
$
|
37
|
|
|
$
|
11
|
|
|
$
|
2,782
|
|
|
|
|
|
(1)
|
Pursuant to the amendment entered into in May 2018, the aggregate commitments under the CenterPoint Energy revolving credit facility increased to $3.3 billion on October 5, 2018 due to the satisfaction of certain conditions, including the termination of the Bridge Facility. For further information, see Note 4 to the consolidated financial statements.
|
(2)
|
Vectren’s outstanding short-term and long-term debt on the closing date of the Merger became debt of CenterPoint Energy.
|
(3)
|
Issued by CERC Corp.
|
|
Weighted Average Interest Rate
|
|
Houston Electric
|
|
CERC
|
|
CNP Midstream
|
||||||
|
|
|
(in millions)
|
||||||||||
Money pool investments
|
2.92%
|
|
$
|
485
|
|
|
$
|
27
|
|
|
$
|
293
|
|
|
|
Moody’s
|
|
S&P
|
|
Fitch
|
||||||
Registrant/Instrument
|
|
Rating
|
|
Outlook (1)
|
|
Rating
|
|
Outlook (2)
|
|
Rating
|
|
Outlook (3)
|
CenterPoint Energy Senior Unsecured Debt
|
|
Baa2
|
|
Stable
|
|
BBB
|
|
Stable
|
|
BBB
|
|
Stable
|
Houston Electric Senior Secured Debt
|
|
A1
|
|
Stable
|
|
A
|
|
Stable
|
|
A+
|
|
Stable
|
CERC Senior Unsecured Debt
(4)
|
|
Baa1
|
|
Positive
|
|
BBB+
|
|
Stable
|
|
BBB+
|
|
Stable
|
(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 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.
|
(4)
|
Issued by CERC Corp.
|
|
|
Moody’s
|
|
S&P
|
||||
Company/Instrument
|
|
Rating
|
|
Outlook (1)
|
|
Rating
|
|
Outlook (2)
|
Vectren Corp. Issuer Rating
|
|
n/a
|
|
n/a
|
|
BBB+
|
|
Stable
|
VUHI Senior Unsecured Debt
|
|
A2
|
|
Negative
|
|
BBB+
|
|
Stable
|
Indiana Gas Senior Unsecured Debt
|
|
A2
|
|
Negative
|
|
BBB+
|
|
Stable
|
SIGECO Senior Secured Debt
|
|
Aa3
|
|
Negative
|
|
A
|
|
Stable
|
(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 outlook assesses the potential direction of a long-term credit rating over the intermediate to longer term.
|
•
|
cash collateral requirements that could exist in connection with certain contracts, including weather hedging arrangements, and natural gas purchases, natural gas price and natural gas storage activities of CenterPoint Energy’s and CERC’s Natural Gas Distribution and Energy Services reportable segments;
|
•
|
acceleration of payment dates on certain gas supply contracts, under certain circumstances, as a result of increased natural gas prices and concentration of natural gas suppliers (CenterPoint Energy and CERC);
|
•
|
increased costs related to the acquisition of natural gas (CenterPoint Energy and CERC);
|
•
|
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 (CenterPoint Energy and CERC);
|
•
|
the ability of REPs, including REP affiliates of NRG and Vistra Energy Corp., formerly known as TCEH Corp., to satisfy their obligations to CenterPoint Energy and Houston Electric;
|
•
|
slower customer payments and increased write-offs of receivables due to higher natural gas prices or changing economic conditions (CenterPoint Energy and CERC);
|
•
|
the outcome of litigation;
|
•
|
contributions to pension and postretirement benefit plans (CenterPoint Energy);
|
•
|
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.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
CenterPoint Energy
|
(in millions)
|
||||||||||
Minimum funding requirements for qualified pension plan
|
$
|
60
|
|
|
$
|
39
|
|
|
$
|
—
|
|
Employer contributions to the qualified pension plan
|
60
|
|
|
39
|
|
|
—
|
|
|||
Employer contributions to the non-qualified benefit restoration plan
|
9
|
|
|
9
|
|
|
9
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||||||
Pension cost
|
$
|
61
|
|
|
$
|
25
|
|
|
$
|
22
|
|
|
$
|
95
|
|
|
$
|
42
|
|
|
$
|
35
|
|
|
$
|
102
|
|
|
$
|
45
|
|
|
$
|
37
|
|
Impact to pre-tax earnings
|
64
|
|
|
27
|
|
|
23
|
|
|
71
|
|
|
23
|
|
|
29
|
|
|
67
|
|
|
20
|
|
|
28
|
|
•
|
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 (CenterPoint Energy).
|
•
|
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 (CenterPoint Energy and CERC).
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions, except per share amounts)
|
||||||||||
Revenues:
|
|
|
|
|
|
||||||
Utility revenues
|
$
|
6,163
|
|
|
$
|
5,603
|
|
|
$
|
5,440
|
|
Non-utility revenues
|
4,426
|
|
|
4,011
|
|
|
2,088
|
|
|||
Total
|
10,589
|
|
|
9,614
|
|
|
7,528
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
||||
Utility natural gas
|
1,410
|
|
|
1,109
|
|
|
983
|
|
|||
Non-utility natural gas
|
4,364
|
|
|
3,785
|
|
|
1,983
|
|
|||
Operation and maintenance
|
2,335
|
|
|
2,157
|
|
|
2,029
|
|
|||
Depreciation and amortization
|
1,243
|
|
|
1,036
|
|
|
1,126
|
|
|||
Taxes other than income taxes
|
406
|
|
|
391
|
|
|
384
|
|
|||
Total
|
9,758
|
|
|
8,478
|
|
|
6,505
|
|
|||
Operating Income
|
831
|
|
|
1,136
|
|
|
1,023
|
|
|||
Other Income (Expense):
|
|
|
|
|
|
|
|||||
Gain (loss) on marketable securities
|
(22
|
)
|
|
7
|
|
|
326
|
|
|||
Gain (loss) on indexed debt securities
|
(232
|
)
|
|
49
|
|
|
(413
|
)
|
|||
Interest and other finance charges
|
(361
|
)
|
|
(313
|
)
|
|
(338
|
)
|
|||
Interest on Securitization Bonds
|
(59
|
)
|
|
(77
|
)
|
|
(91
|
)
|
|||
Equity in earnings of unconsolidated affiliates, net
|
307
|
|
|
265
|
|
|
208
|
|
|||
Other, net
|
50
|
|
|
(4
|
)
|
|
(29
|
)
|
|||
Total
|
(317
|
)
|
|
(73
|
)
|
|
(337
|
)
|
|||
Income Before Income Taxes
|
514
|
|
|
1,063
|
|
|
686
|
|
|||
Income tax expense (benefit)
|
146
|
|
|
(729
|
)
|
|
254
|
|
|||
Net Income
|
368
|
|
|
1,792
|
|
|
432
|
|
|||
Preferred stock dividend requirement
|
35
|
|
|
—
|
|
|
—
|
|
|||
Income Available to Common Shareholders
|
$
|
333
|
|
|
$
|
1,792
|
|
|
$
|
432
|
|
|
|
|
|
|
|
||||||
Basic Earnings Per Common Share
|
$
|
0.74
|
|
|
$
|
4.16
|
|
|
$
|
1.00
|
|
|
|
|
|
|
|
||||||
Diluted Earnings Per Common Share
|
$
|
0.74
|
|
|
$
|
4.13
|
|
|
$
|
1.00
|
|
|
|
|
|
|
|
||||||
Weighted Average Common Shares Outstanding, Basic
|
449
|
|
|
431
|
|
|
431
|
|
|||
|
|
|
|
|
|
||||||
Weighted Average Common Shares Outstanding, Diluted
|
452
|
|
|
434
|
|
|
434
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Net income
|
$
|
368
|
|
|
$
|
1,792
|
|
|
$
|
432
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|||||
Adjustment to pension and other postretirement plans (net of tax expense (benefit) of ($2), $6 and ($4), respectively)
|
(10
|
)
|
|
6
|
|
|
(7
|
)
|
|||
Net deferred gain (loss) from cash flow hedges (net of tax expense (benefit) of ($4), ($2), and $-0-, respectively)
|
(15
|
)
|
|
(3
|
)
|
|
1
|
|
|||
Reclassification of deferred loss from cash flow hedges realized in net income (net of tax expense of $-0-, $-0-, and $1, respectively)
|
—
|
|
|
—
|
|
|
1
|
|
|||
Other comprehensive income (loss)
|
(25
|
)
|
|
3
|
|
|
(5
|
)
|
|||
Comprehensive income
|
343
|
|
|
1,795
|
|
|
427
|
|
|||
Preferred stock dividend requirement
|
35
|
|
|
—
|
|
|
—
|
|
|||
Comprehensive income available to common shareholders
|
$
|
308
|
|
|
$
|
1,795
|
|
|
$
|
427
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(in millions)
|
||||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents ($335 and $230 related to VIEs, respectively)
|
$
|
4,231
|
|
|
$
|
260
|
|
Investment in marketable securities
|
540
|
|
|
960
|
|
||
Accounts receivable ($56 and $73 related to VIEs, respectively), less bad debt reserve of $18 and $19, respectively
|
1,190
|
|
|
1,000
|
|
||
Accrued unbilled revenues
|
378
|
|
|
427
|
|
||
Natural gas inventory
|
194
|
|
|
222
|
|
||
Materials and supplies
|
200
|
|
|
175
|
|
||
Non-trading derivative assets
|
100
|
|
|
110
|
|
||
Prepaid expense and other current assets ($34 and $35 related to VIEs, respectively)
|
192
|
|
|
241
|
|
||
Total current assets
|
7,025
|
|
|
3,395
|
|
||
Property, Plant and Equipment, net
|
14,044
|
|
|
13,057
|
|
||
Other Assets:
|
|
|
|
|
|
||
Goodwill
|
867
|
|
|
867
|
|
||
Regulatory assets ($1,059 and $1,590 related to VIEs, respectively)
|
1,967
|
|
|
2,347
|
|
||
Non-trading derivative assets
|
38
|
|
|
44
|
|
||
Investment in unconsolidated affiliates
|
2,482
|
|
|
2,472
|
|
||
Preferred units - unconsolidated affiliate
|
363
|
|
|
363
|
|
||
Other
|
223
|
|
|
191
|
|
||
Total other assets
|
5,940
|
|
|
6,284
|
|
||
Total Assets
|
$
|
27,009
|
|
|
$
|
22,736
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(in millions, except par value
and shares) |
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current Liabilities:
|
|
|
|
|
|
||
Short-term borrowings
|
$
|
—
|
|
|
$
|
39
|
|
Current portion of VIE Securitization Bonds long-term debt
|
458
|
|
|
434
|
|
||
Indexed debt, net
|
24
|
|
|
122
|
|
||
Current portion of other long-term debt
|
—
|
|
|
50
|
|
||
Indexed debt securities derivative
|
601
|
|
|
668
|
|
||
Accounts payable
|
1,240
|
|
|
963
|
|
||
Taxes accrued
|
204
|
|
|
181
|
|
||
Interest accrued
|
121
|
|
|
104
|
|
||
Dividends accrued
|
187
|
|
|
120
|
|
||
Non-trading derivative liabilities
|
126
|
|
|
20
|
|
||
Other
|
341
|
|
|
368
|
|
||
Total current liabilities
|
3,302
|
|
|
3,069
|
|
||
Other Liabilities:
|
|
|
|
|
|
||
Deferred income taxes, net
|
3,239
|
|
|
3,174
|
|
||
Non-trading derivative liabilities
|
5
|
|
|
4
|
|
||
Benefit obligations
|
796
|
|
|
785
|
|
||
Regulatory liabilities
|
2,525
|
|
|
2,464
|
|
||
Other
|
402
|
|
|
357
|
|
||
Total other liabilities
|
6,967
|
|
|
6,784
|
|
||
Long-term Debt:
|
|
|
|
|
|
||
VIE Securitization Bonds, net
|
977
|
|
|
1,434
|
|
||
Other long-term debt, net
|
7,705
|
|
|
6,761
|
|
||
Total long-term debt, net
|
8,682
|
|
|
8,195
|
|
||
Commitments and Contingencies (Note 16)
|
|
|
|
|
|
||
Shareholders’ Equity:
|
|
|
|
||||
Cumulative preferred stock, $0.01 par value, 20,000,000 shares authorized
|
—
|
|
|
—
|
|
||
Series A Preferred Stock, $0.01 par value, $800 aggregate liquidation preference, 800,000 shares outstanding
|
790
|
|
|
—
|
|
||
Series B Preferred Stock, $0.01 par value, $978 aggregate liquidation preference, 977,500 shares outstanding
|
950
|
|
|
—
|
|
||
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 501,197,784 shares and 431,044,845 shares outstanding, respectively
|
5
|
|
|
4
|
|
||
Additional paid-in capital
|
6,072
|
|
|
4,209
|
|
||
Retained earnings
|
349
|
|
|
543
|
|
||
Accumulated other comprehensive loss
|
(108
|
)
|
|
(68
|
)
|
||
Total shareholders’ equity
|
8,058
|
|
|
4,688
|
|
||
Total Liabilities and Shareholders’ Equity
|
$
|
27,009
|
|
|
$
|
22,736
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
368
|
|
|
$
|
1,792
|
|
|
$
|
432
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|||||
Depreciation and amortization
|
1,243
|
|
|
1,036
|
|
|
1,126
|
|
|||
Amortization of deferred financing costs
|
48
|
|
|
24
|
|
|
26
|
|
|||
Deferred income taxes
|
48
|
|
|
(770
|
)
|
|
213
|
|
|||
Unrealized loss (gain) on marketable securities
|
22
|
|
|
(7
|
)
|
|
(326
|
)
|
|||
Loss (gain) on indexed debt securities
|
232
|
|
|
(49
|
)
|
|
413
|
|
|||
Write-down of natural gas inventory
|
2
|
|
|
—
|
|
|
1
|
|
|||
Equity in earnings of unconsolidated affiliates, net of distributions
|
(40
|
)
|
|
(265
|
)
|
|
(208
|
)
|
|||
Pension contributions
|
(69
|
)
|
|
(48
|
)
|
|
(9
|
)
|
|||
Changes in other assets and liabilities, excluding acquisitions:
|
|
|
|
|
|
|
|
|
|||
Accounts receivable and unbilled revenues, net
|
(154
|
)
|
|
(216
|
)
|
|
(117
|
)
|
|||
Inventory
|
1
|
|
|
(7
|
)
|
|
34
|
|
|||
Taxes receivable
|
—
|
|
|
30
|
|
|
142
|
|
|||
Accounts payable
|
220
|
|
|
136
|
|
|
133
|
|
|||
Fuel cost recovery
|
33
|
|
|
(85
|
)
|
|
(72
|
)
|
|||
Non-trading derivatives, net
|
103
|
|
|
(84
|
)
|
|
30
|
|
|||
Margin deposits, net
|
5
|
|
|
(55
|
)
|
|
101
|
|
|||
Interest and taxes accrued
|
40
|
|
|
5
|
|
|
5
|
|
|||
Net regulatory assets and liabilities
|
28
|
|
|
(107
|
)
|
|
(60
|
)
|
|||
Other current assets
|
—
|
|
|
(3
|
)
|
|
(25
|
)
|
|||
Other current liabilities
|
(24
|
)
|
|
34
|
|
|
22
|
|
|||
Other assets
|
6
|
|
|
(4
|
)
|
|
(16
|
)
|
|||
Other liabilities
|
12
|
|
|
36
|
|
|
30
|
|
|||
Other, net
|
12
|
|
|
24
|
|
|
48
|
|
|||
Net cash provided by operating activities
|
2,136
|
|
|
1,417
|
|
|
1,923
|
|
|||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|||
Capital expenditures
|
(1,651
|
)
|
|
(1,426
|
)
|
|
(1,414
|
)
|
|||
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
|
30
|
|
|
297
|
|
|
297
|
|
|||
Proceeds from sale of marketable securities
|
398
|
|
|
—
|
|
|
178
|
|
|||
Other, net
|
16
|
|
|
4
|
|
|
7
|
|
|||
Net cash used in investing activities
|
(1,207
|
)
|
|
(1,257
|
)
|
|
(1,034
|
)
|
|||
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|||
Increase (decrease) in short-term borrowings, net
|
(39
|
)
|
|
4
|
|
|
(5
|
)
|
|||
Proceeds from (payments of) commercial paper, net
|
(1,543
|
)
|
|
349
|
|
|
469
|
|
|||
Proceeds from long-term debt, net
|
2,495
|
|
|
1,096
|
|
|
600
|
|
|||
Payments of long-term debt
|
(484
|
)
|
|
(1,211
|
)
|
|
(1,218
|
)
|
|||
Loss on reacquired debt
|
—
|
|
|
(5
|
)
|
|
(22
|
)
|
|||
Debt and equity issuance costs
|
(47
|
)
|
|
(13
|
)
|
|
(9
|
)
|
|||
Payment of dividends on Common Stock
|
(499
|
)
|
|
(461
|
)
|
|
(443
|
)
|
|||
Payment of dividends on preferred stock
|
(11
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of Common Stock, net
|
1,844
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of preferred stock, net
|
1,740
|
|
|
—
|
|
|
—
|
|
|||
Distribution to ZENS holders
|
(398
|
)
|
|
—
|
|
|
(178
|
)
|
|||
Other, net
|
(5
|
)
|
|
(4
|
)
|
|
(2
|
)
|
|||
Net cash provided by (used in) financing activities
|
3,053
|
|
|
(245
|
)
|
|
(808
|
)
|
|||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash
|
3,982
|
|
|
(85
|
)
|
|
81
|
|
|||
Cash, Cash Equivalents and Restricted Cash at Beginning of Year
|
296
|
|
|
381
|
|
|
300
|
|
|||
Cash, Cash Equivalents and Restricted Cash at End of Year
|
$
|
4,278
|
|
|
$
|
296
|
|
|
$
|
381
|
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
||||||||||
|
(in millions of dollars and shares, except per share amounts)
|
||||||||||||||||||||
Cumulative Preferred Stock, $0.01 par value; authorized 20,000,000 shares
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance, beginning of year
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
Issuances of Series A Preferred Stock
|
1
|
|
|
790
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Issuances of Series B Preferred Stock
|
1
|
|
|
950
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance, end of year
|
2
|
|
|
1,740
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Common Stock, $0.01 par value; authorized 1,000,000,000 shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance, beginning of year
|
431
|
|
|
4
|
|
|
431
|
|
|
4
|
|
|
430
|
|
|
4
|
|
||||
Issuances related to benefit and investment plans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Issuances of Common Stock
|
70
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance, end of year
|
501
|
|
|
5
|
|
|
431
|
|
|
4
|
|
|
431
|
|
|
4
|
|
||||
Additional Paid-in-Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of year
|
|
|
4,209
|
|
|
|
|
|
4,195
|
|
|
|
|
4,180
|
|
||||||
Issuances related to benefit and investment plans
|
|
|
19
|
|
|
|
|
|
14
|
|
|
|
|
15
|
|
||||||
Issuances of Common Stock, net of issuance costs
|
|
|
1,844
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||
Balance, end of year
|
|
|
6,072
|
|
|
|
|
|
4,209
|
|
|
|
|
4,195
|
|
||||||
Retained Earnings (Accumulated Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance, beginning of year
|
|
|
543
|
|
|
|
|
|
(668
|
)
|
|
|
|
(657
|
)
|
||||||
Net income
|
|
|
368
|
|
0.000372
|
|
|
|
|
1,792
|
|
|
|
|
432
|
|
|||||
Common Stock dividends declared ($1.12, $1.3475 and $1.03 per share, respectively)
|
|
|
(523
|
)
|
|
|
|
|
(581
|
)
|
|
|
|
(443
|
)
|
||||||
Series A Preferred Stock dividends declared ($32.1563, $-0- and $-0- per share, respectively)
|
|
|
(26
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|||||||
Series B Preferred Stock dividends declared ($29.1667, $-0- and $-0- per share, respectively)
|
|
|
(28
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|||||||
Adoption of ASU 2018-02
|
|
|
15
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|||||||
Balance, end of year
|
|
|
349
|
|
|
|
|
|
543
|
|
|
|
|
(668
|
)
|
||||||
Accumulated Other Comprehensive Loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance, beginning of year
|
|
|
(68
|
)
|
|
|
|
|
(71
|
)
|
|
|
|
(66
|
)
|
||||||
Other comprehensive income (loss)
|
|
|
(25
|
)
|
|
|
|
|
3
|
|
|
|
|
(5
|
)
|
||||||
Adoption of ASU 2018-02
|
|
|
(15
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|||||||
Balance, end of year
|
|
|
(108
|
)
|
|
|
|
|
(68
|
)
|
|
|
|
(71
|
)
|
||||||
Total Shareholders’ Equity
|
|
|
$
|
8,058
|
|
|
|
|
|
$
|
4,688
|
|
|
|
|
$
|
3,460
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Revenues
|
$
|
3,234
|
|
|
$
|
2,998
|
|
|
$
|
3,059
|
|
|
|
|
|
|
|
||||||
Expenses:
|
|
|
|
|
|
|
|
|
|||
Operation and maintenance
|
1,452
|
|
|
1,402
|
|
|
1,338
|
|
|||
Depreciation and amortization
|
917
|
|
|
724
|
|
|
838
|
|
|||
Taxes other than income taxes
|
240
|
|
|
235
|
|
|
231
|
|
|||
Total
|
2,609
|
|
|
2,361
|
|
|
2,407
|
|
|||
Operating Income
|
625
|
|
|
637
|
|
|
652
|
|
|||
|
|
|
|
|
|
||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|||
Interest and other finance charges
|
(138
|
)
|
|
(128
|
)
|
|
(126
|
)
|
|||
Interest on Securitization Bonds
|
(59
|
)
|
|
(77
|
)
|
|
(91
|
)
|
|||
Other, net
|
(3
|
)
|
|
(8
|
)
|
|
(10
|
)
|
|||
Total
|
(200
|
)
|
|
(213
|
)
|
|
(227
|
)
|
|||
Income Before Income Taxes
|
425
|
|
|
424
|
|
|
425
|
|
|||
Income tax expense (benefit)
|
89
|
|
|
(9
|
)
|
|
149
|
|
|||
Net Income
|
$
|
336
|
|
|
$
|
433
|
|
|
$
|
276
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Net income
|
$
|
336
|
|
|
$
|
433
|
|
|
$
|
276
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Net deferred gain (loss) from cash flow hedges (net of tax expense (benefit) of ($4), $-0-, and $-0-)
|
(14
|
)
|
|
(1
|
)
|
|
1
|
|
|||
Other comprehensive income (loss):
|
(14
|
)
|
|
(1
|
)
|
|
1
|
|
|||
Comprehensive income
|
$
|
322
|
|
|
$
|
432
|
|
|
$
|
277
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
|
(in millions)
|
||||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents ($335 and $230 related to VIEs, respectively)
|
$
|
335
|
|
|
$
|
238
|
|
Accounts and notes receivable, net ($56 and $73 related to VIEs, respectively), less bad debt reserve of $1 and $1, respectively
|
283
|
|
|
284
|
|
||
Accounts and notes receivable—affiliated companies
|
20
|
|
|
7
|
|
||
Accrued unbilled revenues
|
110
|
|
|
120
|
|
||
Materials and supplies
|
135
|
|
|
119
|
|
||
Taxes receivable
|
5
|
|
|
—
|
|
||
Other ($34 and $35 related to VIEs, respectively)
|
61
|
|
|
62
|
|
||
Total current assets
|
949
|
|
|
830
|
|
||
Property, Plant and Equipment, net
|
8,402
|
|
|
7,863
|
|
||
Other Assets:
|
|
|
|
|
|
||
Regulatory assets ($1,059 and $1,590 related to VIEs, respectively)
|
1,124
|
|
|
1,570
|
|
||
Other
|
32
|
|
|
29
|
|
||
Total other assets
|
1,156
|
|
|
1,599
|
|
||
Total Assets
|
$
|
10,507
|
|
|
$
|
10,292
|
|
|
|
|
|
||||
LIABILITIES AND MEMBER’S EQUITY
|
|
|
|
|
|
||
Current Liabilities:
|
|
|
|
|
|
||
Current portion of VIE Securitization Bonds long-term debt
|
$
|
458
|
|
|
$
|
434
|
|
Accounts payable
|
262
|
|
|
243
|
|
||
Accounts and notes payable—affiliated companies
|
78
|
|
|
104
|
|
||
Taxes accrued
|
115
|
|
|
116
|
|
||
Interest accrued
|
64
|
|
|
65
|
|
||
Non-trading derivative liabilities
|
24
|
|
|
—
|
|
||
Other
|
89
|
|
|
120
|
|
||
Total current liabilities
|
1,090
|
|
|
1,082
|
|
||
Other Liabilities:
|
|
|
|
|
|
||
Deferred income taxes, net
|
1,023
|
|
|
1,059
|
|
||
Benefit obligations
|
91
|
|
|
146
|
|
||
Regulatory liabilities
|
1,298
|
|
|
1,263
|
|
||
Other
|
65
|
|
|
54
|
|
||
Total other liabilities
|
2,477
|
|
|
2,522
|
|
||
Long-Term Debt, net:
|
|
|
|
|
|
||
VIE Securitization Bonds, net
|
977
|
|
|
1,434
|
|
||
Other long-term debt, net
|
3,281
|
|
|
2,885
|
|
||
Total long-term debt, net
|
4,258
|
|
|
4,319
|
|
||
Commitments and Contingencies (Note 16)
|
|
|
|
|
|
||
Member’s Equity:
|
|
|
|
||||
Common stock
|
—
|
|
|
—
|
|
||
Paid-in capital
|
1,896
|
|
|
1,696
|
|
||
Retained earnings
|
800
|
|
|
673
|
|
||
Accumulated other comprehensive loss
|
(14
|
)
|
|
—
|
|
||
Total member’s equity
|
2,682
|
|
|
2,369
|
|
||
Total Liabilities and Member’s Equity
|
$
|
10,507
|
|
|
$
|
10,292
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
336
|
|
|
$
|
433
|
|
|
$
|
276
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
917
|
|
|
724
|
|
|
838
|
|
|||
Amortization of deferred financing costs
|
11
|
|
|
13
|
|
|
14
|
|
|||
Deferred income taxes
|
(38
|
)
|
|
(98
|
)
|
|
(34
|
)
|
|||
Changes in other assets and liabilities:
|
|
|
|
|
|
|
|
||||
Accounts and notes receivable, net
|
11
|
|
|
(73
|
)
|
|
(1
|
)
|
|||
Accounts receivable/payable–affiliated companies
|
20
|
|
|
(46
|
)
|
|
63
|
|
|||
Inventory
|
(16
|
)
|
|
15
|
|
|
(1
|
)
|
|||
Accounts payable
|
(1
|
)
|
|
59
|
|
|
(4
|
)
|
|||
Taxes receivable
|
(5
|
)
|
|
6
|
|
|
53
|
|
|||
Interest and taxes accrued
|
(2
|
)
|
|
7
|
|
|
4
|
|
|||
Non-trading derivatives, net
|
5
|
|
|
—
|
|
|
—
|
|
|||
Net regulatory assets and liabilities
|
(97
|
)
|
|
(148
|
)
|
|
(110
|
)
|
|||
Other current assets
|
(2
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|||
Other current liabilities
|
(26
|
)
|
|
16
|
|
|
21
|
|
|||
Other assets
|
(3
|
)
|
|
13
|
|
|
(8
|
)
|
|||
Other liabilities
|
17
|
|
|
(4
|
)
|
|
(4
|
)
|
|||
Other, net
|
(12
|
)
|
|
(6
|
)
|
|
1
|
|
|||
Net cash provided by operating activities
|
1,115
|
|
|
905
|
|
|
1,102
|
|
|||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|||
Capital expenditures
|
(922
|
)
|
|
(875
|
)
|
|
(862
|
)
|
|||
Decrease (increase) in notes receivable–affiliated companies
|
—
|
|
|
96
|
|
|
(96
|
)
|
|||
Other, net
|
11
|
|
|
3
|
|
|
7
|
|
|||
Net cash used in investing activities
|
(911
|
)
|
|
(776
|
)
|
|
(951
|
)
|
|||
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from long-term debt, net
|
398
|
|
|
298
|
|
|
600
|
|
|||
Payments of long-term debt
|
(434
|
)
|
|
(411
|
)
|
|
(590
|
)
|
|||
Dividend to parent
|
(209
|
)
|
|
(180
|
)
|
|
(135
|
)
|
|||
Increase (decrease) in notes payable
–
affiliated companies
|
(59
|
)
|
|
60
|
|
|
(312
|
)
|
|||
Debt issuance costs
|
(4
|
)
|
|
(3
|
)
|
|
(6
|
)
|
|||
Contribution from parent
|
200
|
|
|
—
|
|
|
374
|
|
|||
Net cash used in financing activities
|
(108
|
)
|
|
(236
|
)
|
|
(69
|
)
|
|||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash
|
96
|
|
|
(107
|
)
|
|
82
|
|
|||
Cash, Cash Equivalents and Restricted Cash at Beginning of the Year
|
274
|
|
|
381
|
|
|
299
|
|
|||
Cash, Cash Equivalents and Restricted Cash at End of the Year
|
$
|
370
|
|
|
$
|
274
|
|
|
$
|
381
|
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|||||||||
|
(in millions, except share amounts)
|
|||||||||||||||||||
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Balance, beginning of year
|
1,000
|
|
|
$
|
—
|
|
|
1,000
|
|
|
$
|
—
|
|
|
1,000
|
|
|
$
|
—
|
|
Balance, end of year
|
1,000
|
|
|
—
|
|
|
1,000
|
|
|
—
|
|
|
1,000
|
|
|
—
|
|
|||
Additional Paid-in-Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance, beginning of year
|
|
|
1,696
|
|
|
|
|
|
1,696
|
|
|
|
|
1,322
|
|
|||||
Contribution from parent
|
|
|
200
|
|
|
|
|
—
|
|
|
|
|
374
|
|
||||||
Balance, end of year
|
|
|
1,896
|
|
|
|
|
|
1,696
|
|
|
|
|
1,696
|
|
|||||
Retained Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance, beginning of year
|
|
|
673
|
|
|
|
|
|
420
|
|
|
|
|
279
|
|
|||||
Net income
|
|
|
336
|
|
|
|
|
|
433
|
|
|
|
|
276
|
|
|||||
Dividend to parent
|
|
|
(209
|
)
|
|
|
|
(180
|
)
|
|
|
|
(135
|
)
|
||||||
Balance, end of year
|
|
|
800
|
|
|
|
|
|
673
|
|
|
|
|
420
|
|
|||||
Accumulated Other Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, beginning of year
|
|
|
—
|
|
|
|
|
1
|
|
|
|
|
—
|
|
||||||
Other comprehensive income (loss)
|
|
|
(14
|
)
|
|
|
|
(1
|
)
|
|
|
|
1
|
|
||||||
Balance, end of year
|
|
|
(14
|
)
|
|
|
|
—
|
|
|
|
|
1
|
|
||||||
Total Member’s Equity
|
|
|
$
|
2,682
|
|
|
|
|
|
$
|
2,369
|
|
|
|
|
$
|
2,117
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Revenues:
|
|
|
|
|
|
||||||
Utility revenues
|
$
|
2,931
|
|
|
$
|
2,606
|
|
|
$
|
2,380
|
|
Non-utility revenues
|
4,412
|
|
|
3,997
|
|
|
2,074
|
|
|||
Total
|
7,343
|
|
|
6,603
|
|
|
4,454
|
|
|||
|
|
|
|
|
|
||||||
Expenses:
|
|
|
|
|
|
|
|
|
|||
Utility natural gas
|
1,410
|
|
|
1,109
|
|
|
983
|
|
|||
Non-utility natural gas
|
4,364
|
|
|
3,785
|
|
|
1,983
|
|
|||
Operation and maintenance
|
898
|
|
|
816
|
|
|
754
|
|
|||
Depreciation and amortization
|
293
|
|
|
279
|
|
|
249
|
|
|||
Taxes other than income taxes
|
156
|
|
|
147
|
|
|
144
|
|
|||
Total
|
7,121
|
|
|
6,136
|
|
|
4,113
|
|
|||
Operating Income
|
222
|
|
|
467
|
|
|
341
|
|
|||
|
|
|
|
|
|
||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|||
Interest and other finance charges
|
(122
|
)
|
|
(123
|
)
|
|
(122
|
)
|
|||
Other, net
|
(8
|
)
|
|
(25
|
)
|
|
(20
|
)
|
|||
Total
|
(130
|
)
|
|
(148
|
)
|
|
(142
|
)
|
|||
Income From Continuing Operations Before Income Taxes
|
92
|
|
|
319
|
|
|
199
|
|
|||
Income tax expense (benefit)
|
22
|
|
|
(265
|
)
|
|
81
|
|
|||
Income From Continuing Operations
|
70
|
|
|
584
|
|
|
118
|
|
|||
Income from discontinued operations (net of tax expense of $46, $104, and $81, respectively)
|
138
|
|
|
161
|
|
|
127
|
|
|||
Net Income
|
$
|
208
|
|
|
$
|
745
|
|
|
$
|
245
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Net income
|
$
|
208
|
|
|
$
|
745
|
|
|
$
|
245
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|||
Adjustment to postretirement and other postemployment plans (net of tax expense (benefit) of $1, $4 and ($4))
|
1
|
|
|
4
|
|
|
(6
|
)
|
|||
Net deferred loss from cash flow hedges (net of tax expense (benefit) of $-0-, ($1), and $-0-, respectively)
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Other comprehensive income (loss)
|
—
|
|
|
3
|
|
|
(6
|
)
|
|||
Comprehensive income
|
$
|
208
|
|
|
$
|
748
|
|
|
$
|
239
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
ASSETS
|
|
|
|
||||
Current Assets
:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
14
|
|
|
$
|
12
|
|
Accounts receivable, less bad debt reserve of $17 million and $18 million, respectively
|
894
|
|
|
713
|
|
||
Accrued unbilled revenue
|
268
|
|
|
307
|
|
||
Accounts and notes receivable — affiliated companies
|
120
|
|
|
6
|
|
||
Material and supplies
|
65
|
|
|
56
|
|
||
Natural gas inventory
|
194
|
|
|
222
|
|
||
Non-trading derivative assets
|
100
|
|
|
110
|
|
||
Prepaid expenses and other current assets
|
115
|
|
|
166
|
|
||
Total current assets
|
1,770
|
|
|
1,592
|
|
||
Property, Plant and Equipment, Net
|
5,226
|
|
|
4,852
|
|
||
Other Assets:
|
|
|
|
|
|
||
Goodwill
|
867
|
|
|
867
|
|
||
Regulatory Assets
|
181
|
|
|
181
|
|
||
Non-trading derivative assets
|
38
|
|
|
44
|
|
||
Investment in unconsolidated affiliates - discontinued operations
|
—
|
|
|
2,472
|
|
||
Other
|
132
|
|
|
104
|
|
||
Total other assets
|
1,218
|
|
|
3,668
|
|
||
Total Assets
|
$
|
8,214
|
|
|
$
|
10,112
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
208
|
|
|
$
|
745
|
|
|
$
|
245
|
|
Less: Income from discontinued operations, net of tax
|
138
|
|
|
161
|
|
|
127
|
|
|||
Income from continuing operations
|
70
|
|
|
584
|
|
|
118
|
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
293
|
|
|
279
|
|
|
249
|
|
|||
Amortization of deferred financing costs
|
9
|
|
|
9
|
|
|
9
|
|
|||
Deferred income taxes
|
31
|
|
|
(224
|
)
|
|
56
|
|
|||
Write-down of natural gas inventory
|
2
|
|
|
—
|
|
|
1
|
|
|||
Changes in other assets and liabilities:
|
|
|
|
|
|
|
|
|
|||
Accounts receivable and unbilled revenues, net
|
(155
|
)
|
|
(143
|
)
|
|
(122
|
)
|
|||
Accounts receivable/payable–affiliated companies
|
9
|
|
|
—
|
|
|
4
|
|
|||
Inventory
|
17
|
|
|
(22
|
)
|
|
34
|
|
|||
Accounts payable
|
163
|
|
|
64
|
|
|
117
|
|
|||
Fuel cost recovery
|
33
|
|
|
(85
|
)
|
|
(72
|
)
|
|||
Interest and taxes accrued
|
—
|
|
|
(41
|
)
|
|
26
|
|
|||
Non-trading derivatives, net
|
98
|
|
|
(82
|
)
|
|
29
|
|
|||
Margin deposits, net
|
5
|
|
|
(55
|
)
|
|
101
|
|
|||
Net regulatory assets and liabilities
|
50
|
|
|
(27
|
)
|
|
—
|
|
|||
Other current assets
|
4
|
|
|
2
|
|
|
(19
|
)
|
|||
Other current liabilities
|
(3
|
)
|
|
15
|
|
|
2
|
|
|||
Other assets
|
5
|
|
|
(8
|
)
|
|
(21
|
)
|
|||
Other liabilities
|
6
|
|
|
6
|
|
|
(2
|
)
|
|||
Other, net
|
1
|
|
|
6
|
|
|
2
|
|
|||
Net cash provided by operating activities from continuing operations
|
638
|
|
|
278
|
|
|
512
|
|
|||
Net cash provided by operating activities from discontinued operations
|
176
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by operating activities
|
814
|
|
|
278
|
|
|
512
|
|
|||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|||
Capital expenditures
|
(633
|
)
|
|
(513
|
)
|
|
(517
|
)
|
|||
Acquisitions, net of cash acquired
|
—
|
|
|
(132
|
)
|
|
(102
|
)
|
|||
Increase in notes receivable–affiliated companies
|
(114
|
)
|
|
—
|
|
|
—
|
|
|||
Other, net
|
3
|
|
|
2
|
|
|
1
|
|
|||
Net cash used in investing activities from continuing operations
|
(744
|
)
|
|
(643
|
)
|
|
(618
|
)
|
|||
Net cash provided by investing activities from discontinued operations
|
47
|
|
|
297
|
|
|
660
|
|
|||
Net cash provided by (used in) investing activities
|
(697
|
)
|
|
(346
|
)
|
|
42
|
|
|||
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|||
Increase (decrease) in short-term borrowings, net
|
(39
|
)
|
|
4
|
|
|
(5
|
)
|
|||
Proceeds from (payments of) commercial paper, net
|
(688
|
)
|
|
329
|
|
|
350
|
|
|||
Proceeds from long-term debt
|
599
|
|
|
298
|
|
|
—
|
|
|||
Payments of long-term debt
|
—
|
|
|
(550
|
)
|
|
(325
|
)
|
|||
Dividends to parent
|
(360
|
)
|
|
(601
|
)
|
|
(643
|
)
|
|||
Debt issuance costs
|
(5
|
)
|
|
(4
|
)
|
|
—
|
|
|||
Loss on reacquired debt
|
—
|
|
|
(5
|
)
|
|
—
|
|
|||
Contribution from parent
|
960
|
|
|
38
|
|
|
72
|
|
|||
Increase (decrease) in notes payable–affiliated companies
|
(570
|
)
|
|
570
|
|
|
—
|
|
|||
Other, net
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Net cash provided by (used in) financing activities from continuing operations
|
(104
|
)
|
|
79
|
|
|
(553
|
)
|
|||
Net cash provided by financing activities from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
(104
|
)
|
|
79
|
|
|
(553
|
)
|
|||
Net Increase in Cash, Cash Equivalents and Restricted Cash
|
13
|
|
|
11
|
|
|
1
|
|
|||
Cash, Cash Equivalents and Restricted Cash at Beginning of Year
|
12
|
|
|
1
|
|
|
—
|
|
|||
Cash, Cash Equivalents and Restricted Cash at End of Year
|
$
|
25
|
|
|
$
|
12
|
|
|
$
|
1
|
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|||||||||
|
(in millions, except share amounts)
|
|||||||||||||||||||
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, beginning of year
|
1,000
|
|
|
$
|
—
|
|
|
1,000
|
|
|
$
|
—
|
|
|
1,000
|
|
|
$
|
—
|
|
Balance, end of year
|
1,000
|
|
|
—
|
|
|
1,000
|
|
|
—
|
|
|
1,000
|
|
|
—
|
|
|||
Additional Paid-in-Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance, beginning of year
|
|
|
2,528
|
|
|
|
|
|
2,489
|
|
|
|
|
2,417
|
|
|||||
Contribution from parent
|
|
|
960
|
|
|
|
|
38
|
|
|
|
|
72
|
|
||||||
Capital distribution to parent associated with Internal Spin
|
|
|
(1,473
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||
Other
|
|
|
—
|
|
|
|
|
1
|
|
|
|
|
—
|
|
||||||
Balance, end of year
|
|
|
2,015
|
|
|
|
|
|
2,528
|
|
|
|
|
2,489
|
|
|||||
Retained Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance, beginning of year
|
|
|
574
|
|
|
|
|
|
430
|
|
|
|
|
828
|
|
|||||
Net income
|
|
|
208
|
|
|
|
|
|
745
|
|
|
|
|
245
|
|
|||||
Dividend to parent
|
|
|
(360
|
)
|
|
|
|
|
(601
|
)
|
|
|
|
(643
|
)
|
|||||
Adoption of ASU 2018-02
|
|
|
1
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||
Balance, end of year
|
|
|
423
|
|
|
|
|
|
574
|
|
|
|
|
430
|
|
|||||
Accumulated Other Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance, beginning of year
|
|
|
6
|
|
|
|
|
|
3
|
|
|
|
|
9
|
|
|||||
Other comprehensive income (loss)
|
|
|
—
|
|
|
|
|
3
|
|
|
|
|
(6
|
)
|
||||||
Adoption of ASU 2018-02
|
|
|
(1
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||
Balance, end of year
|
|
|
5
|
|
|
|
|
|
6
|
|
|
|
|
3
|
|
|||||
Total Stockholder’s Equity
|
|
|
$
|
2,443
|
|
|
|
|
|
$
|
3,108
|
|
|
|
|
$
|
2,922
|
|
•
|
Houston Electric engages in the electric transmission and distribution business in the Texas Gulf Coast area that includes the city of Houston; and
|
•
|
CERC Corp. (i) owns and operates natural gas distribution systems in
six
states and (ii) 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 over
30
states through its wholly-owned subsidiary, CES.
|
(a)
|
Use of Estimates
|
(b)
|
Principles of Consolidation
|
(c)
|
Equity and Investments without a Readily Determinable Fair Value (CenterPoint Energy and CERC)
|
(d)
|
Revenues
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||||||
Interest and AFUDC debt
(1)
|
$
|
8
|
|
|
$
|
6
|
|
|
$
|
2
|
|
|
$
|
9
|
|
|
$
|
6
|
|
|
$
|
2
|
|
|
$
|
8
|
|
|
$
|
6
|
|
|
$
|
2
|
|
AFUDC equity
(2)
|
12
|
|
|
10
|
|
|
2
|
|
|
11
|
|
|
10
|
|
|
1
|
|
|
7
|
|
|
6
|
|
|
1
|
|
(1)
|
Included in Interest and other finance charges on the Registrants’ respective Statements of Consolidated Income.
|
(2)
|
Included in Other Income (Expense) on the Registrants’ respective Statements of Consolidated Income.
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||||||
Provision for doubtful accounts
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
14
|
|
|
$
|
1
|
|
|
$
|
13
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
Recently Adopted Accounting Standards
|
||||||
ASU Number and Name
|
|
Description
|
|
Date of Adoption
|
|
Financial Statement Impact
upon Adoption
|
ASU 2016-15- Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments
|
|
This standard provides clarifying guidance on the classification of certain cash receipts and payments in the statement of cash flows and eliminates the variation in practice related to such classifications.
Transition method:
retrospective
|
|
January 1, 2018
|
|
The adoption did not have a material impact on the Registrants’ financial position, results of operations or disclosures. However, CenterPoint Energy’s and Houston Electric’s Statements of Consolidated Cash Flows reflect an increase in investing activities and a corresponding decrease in operating activities of $2 million, $4 million and $8 million for the years ended December 31, 2018, 2017 and 2016, respectively, due to the requirement that cash proceeds from COLI policies be classified as cash inflows from investing activity.
|
ASU 2016-18- Statement of Cash Flows (Topic 230): Restricted Cash
|
|
This standard requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. As a result, the statement of cash flows will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet.
Transition method:
retrospective
|
|
January 1, 2018
|
|
The adoption of this standard did not have a material impact on the Registrants’ financial position, results of operations or disclosures. However, the Registrants’ respective Statements of Consolidated Cash Flows are reconciled to cash, cash equivalents and restricted cash, resulting in a decrease in investing activities of $11 million for each of CenterPoint Energy’s and CERC’s respective Statements of Consolidated Cash Flows for the year ended December 31, 2018. In addition, each of CenterPoint Energy and Houston Electric showed a decrease of $4 million and an increase of $5 million in investing activities for the years ended December 31, 2017 and 2016, respectively, in their respective Statements of Consolidated Cash Flows. See Note 20 for further discussion.
|
ASU 2017-07- Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
|
|
This standard requires an employer to report the service cost component of the net periodic pension cost and postretirement benefit cost in the same line item(s) as other employee compensation costs arising from services rendered during the period; all other components will be presented separately from the line item(s) that includes the service cost and outside of any subtotal of operating income. In addition, only the service cost component will be eligible for capitalization in assets.
Transition method:
retrospective for the presentation of the service cost component and other components; prospective for the capitalization of the service cost component
|
|
January 1, 2018
|
|
The adoption of this standard did not have a material impact on the Registrants’ financial position, results of operations, cash flows or disclosures; however, it resulted in the increases to operating income and corresponding decreases to other income reported in the table below. Other components of net periodic costs previously capitalized in assets are recorded as regulatory assets by the Registrants’ rate-regulated businesses prospectively from date of adoption.
|
ASU 2017-12- Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities
|
|
This standard, including standards amending this standard, expands an entity’s ability to hedge and account for risk components, reduces the complexity of applying certain aspects of hedge accounting and updates the presentation and disclosure requirements. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness.
Transition method
: cumulative-effect adjustment for elimination of the separate measurement of ineffectiveness; prospective for presentation and disclosure
|
|
July 1, 2018
Applicable January 1, 2018
|
|
The adoption of this standard did not have a material impact on the Registrants’ financial position, results of operations or cash flows. As a result of the adoption, the Registrants will no longer recognize ineffectiveness for derivatives designated as cash flow hedges; all changes in fair value will flow through other comprehensive income. As the Registrants did not have existing cash flow hedges as of the initial application date and the adoption date, no cumulative effective adjustment was recorded. Note 9 reflects disclosures modified upon adoption.
|
ASU 2018-02-Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
|
|
This standard allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA and requires entities to provide certain disclosures regarding stranded tax effects.
Transition method
: in the period of adoption
|
|
October 1, 2018
|
|
The adoption of this standard did not impact the Registrants’ results of operations or cash flows. As a result of the adoption, CenterPoint Energy and CERC elected to reclassify a stranded tax benefit of $15 million and $1 million, respectively, primarily related to benefit plans, from accumulated other comprehensive loss and income to Retained earnings on their respective Consolidated Balance Sheets. The reclassification only encompasses the change in the federal corporate income tax rate due to the TCJA.
|
ASU 2018-13- Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement
|
|
This standard eliminates, modifies and adds certain disclosure requirements for fair value measurements.
Transition method : prospective for additions and one modification and retrospective for all other amendments |
|
Adoption of eliminations and modifications as of September 30, 2018; Additions will be adopted January 1, 2020
|
|
The adoption of this standard did not impact the Registrants’ financial position, results of operations or cash flows. Note 10 reflects the disclosures modified upon adoption.
|
Recently Adopted Accounting Standards
|
||||||
ASU Number and Name
|
|
Description
|
|
Date of Adoption
|
|
Financial Statement Impact
upon Adoption
|
ASU 2018-14-Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans
|
|
This standard eliminates, modifies and adds certain disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.
Transition method
: retrospective
|
|
October 1, 2018
|
|
The adoption of this standard did not impact the Registrants’ financial position, results of operations, and cash flows. Note 8 reflects the disclosures modified upon adoption.
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||||||
Increase to operating income
|
$
|
47
|
|
|
$
|
21
|
|
|
$
|
11
|
|
|
$
|
64
|
|
|
$
|
26
|
|
|
$
|
23
|
|
|
$
|
64
|
|
|
$
|
25
|
|
|
$
|
23
|
|
Decrease to other income
|
47
|
|
|
21
|
|
|
11
|
|
|
64
|
|
|
26
|
|
|
23
|
|
|
64
|
|
|
25
|
|
|
23
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
|||||||||||||||||||||
|
Weighted Average Useful Lives
|
Property, Plant and Equipment, Gross
|
|
Accumulated Depreciation & Amortization
|
|
Property, Plant and Equipment, Net
|
|
Property, Plant and Equipment, Gross
|
|
Accumulated Depreciation & Amortization
|
|
Property, Plant and Equipment, Net
|
|||||||||||||
CenterPoint Energy
|
(in years)
|
(in millions)
|
|||||||||||||||||||||||
Electric Transmission & Distribution
|
35
|
|
$
|
12,148
|
|
|
$
|
3,746
|
|
|
$
|
8,402
|
|
|
$
|
11,496
|
|
|
$
|
3,633
|
|
|
$
|
7,863
|
|
Natural Gas Distribution
|
28
|
|
7,257
|
|
|
2,128
|
|
|
5,129
|
|
|
6,735
|
|
|
1,968
|
|
|
4,767
|
|
||||||
Energy Services
|
27
|
|
121
|
|
|
43
|
|
|
78
|
|
|
102
|
|
|
35
|
|
|
67
|
|
||||||
Other property
|
26
|
|
741
|
|
|
306
|
|
|
435
|
|
|
698
|
|
|
338
|
|
|
360
|
|
||||||
Total
|
|
|
$
|
20,267
|
|
|
$
|
6,223
|
|
|
$
|
14,044
|
|
|
$
|
19,031
|
|
|
$
|
5,974
|
|
|
$
|
13,057
|
|
Houston Electric
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Electric Transmission
|
45
|
|
$
|
3,077
|
|
|
$
|
650
|
|
|
$
|
2,427
|
|
|
$
|
2,767
|
|
|
$
|
620
|
|
|
$
|
2,147
|
|
Electric Distribution
|
33
|
|
7,524
|
|
|
2,553
|
|
|
4,971
|
|
|
7,178
|
|
|
2,522
|
|
|
4,656
|
|
||||||
Other transmission & distribution property
|
18
|
|
1,547
|
|
|
543
|
|
|
1,004
|
|
|
1,551
|
|
|
491
|
|
|
1,060
|
|
||||||
Total
|
|
|
$
|
12,148
|
|
|
$
|
3,746
|
|
|
$
|
8,402
|
|
|
$
|
11,496
|
|
|
$
|
3,633
|
|
|
$
|
7,863
|
|
CERC
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Natural Gas Distribution
|
28
|
|
$
|
7,257
|
|
|
$
|
2,128
|
|
|
$
|
5,129
|
|
|
$
|
6,735
|
|
|
$
|
1,968
|
|
|
$
|
4,767
|
|
Energy Services
|
27
|
|
121
|
|
|
43
|
|
|
78
|
|
|
102
|
|
|
35
|
|
|
67
|
|
||||||
Other property
|
23
|
|
53
|
|
|
34
|
|
|
19
|
|
|
51
|
|
|
33
|
|
|
18
|
|
||||||
Total
|
|
|
$
|
7,431
|
|
|
$
|
2,205
|
|
|
$
|
5,226
|
|
|
$
|
6,888
|
|
|
$
|
2,036
|
|
|
$
|
4,852
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||||||
Depreciation
|
$
|
626
|
|
|
$
|
342
|
|
|
$
|
264
|
|
|
$
|
619
|
|
|
$
|
354
|
|
|
$
|
243
|
|
|
$
|
607
|
|
|
$
|
349
|
|
|
$
|
230
|
|
Amortization of securitized regulatory assets
|
531
|
|
|
531
|
|
|
—
|
|
|
329
|
|
|
329
|
|
|
—
|
|
|
455
|
|
|
455
|
|
|
—
|
|
|||||||||
Other amortization
|
86
|
|
|
44
|
|
|
29
|
|
|
88
|
|
|
41
|
|
|
36
|
|
|
64
|
|
|
34
|
|
|
19
|
|
|||||||||
Total
|
$
|
1,243
|
|
|
$
|
917
|
|
|
$
|
293
|
|
|
$
|
1,036
|
|
|
$
|
724
|
|
|
$
|
279
|
|
|
$
|
1,126
|
|
|
$
|
838
|
|
|
$
|
249
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Beginning balance
|
$
|
281
|
|
|
$
|
35
|
|
|
$
|
243
|
|
|
$
|
205
|
|
|
$
|
33
|
|
|
$
|
169
|
|
Accretion expense
(1)
|
10
|
|
|
1
|
|
|
9
|
|
|
8
|
|
|
1
|
|
|
7
|
|
||||||
Revisions in estimates
(2)
|
(33
|
)
|
|
(2
|
)
|
|
(31
|
)
|
|
68
|
|
|
1
|
|
|
67
|
|
||||||
Ending balance
|
$
|
258
|
|
|
$
|
34
|
|
|
$
|
221
|
|
|
$
|
281
|
|
|
$
|
35
|
|
|
$
|
243
|
|
(1)
|
Reflected in Regulatory assets on each of the Registrants’ respective Consolidated Balance Sheets.
|
(2)
|
In 2018, CenterPoint Energy and CERC reflected a decrease in their respective ARO liability which is primarily attributable to increases in the long-term interest rates used for discounting in the ARO calculation. In 2017, CenterPoint Energy and CERC reflected an increase in their respective ARO liability which is primarily attributable to decreases in the long-term interest rates used for discounting in the ARO calculation.
|
•
|
Indiana Gas provides energy delivery services to natural gas customers located in central and southern Indiana;
|
•
|
SIGECO provides energy delivery services to electric and natural gas customers located near Evansville in southwestern Indiana and owns and operates electric generation assets to serve its electric customers and optimizes those assets in the wholesale power market; and
|
•
|
VEDO provides energy delivery services to natural gas customers located near Dayton in west-central Ohio.
|
•
|
Infrastructure Services provides underground pipeline construction and repair services; and
|
•
|
ESG provides energy performance contracting and sustainable infrastructure, such as renewables, distributed generation and combined heat and power projects.
|
|
|
Fair Value
|
|
Useful Life
|
||
|
|
(in millions)
|
|
(in years)
|
||
Customer relationships
|
|
$
|
25
|
|
|
15
|
|
|
Year Ended December 31,
|
||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||
|
|
CenterPoint Energy
|
|
CERC
|
|
CenterPoint Energy
|
|
CERC
|
||||||||
|
|
(in millions)
|
||||||||||||||
Revenues
|
|
$
|
9,614
|
|
|
$
|
6,603
|
|
|
$
|
8,541
|
|
|
$
|
5,467
|
|
Net Income
(1)
|
|
1,792
|
|
|
745
|
|
|
442
|
|
|
255
|
|
(1)
|
Net income for the year ended December 31, 2017 includes a reduction in income tax expense of
$1,113 million
and
$396 million
due to the TCJA for CenterPoint Energy and CERC, respectively. See
Note 15
for further discussion of the impacts of tax reform implementation.
|
|
|
Year Ended December 31, 2018
|
||||||||||||||||||||||||||||||||||||||
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||||||||||||||||||||||||
|
|
Electric Transmission & Distribution (1)
|
|
Natural Gas Distribution (1)
|
|
Energy
Services
(2)
|
|
Other Operations (2)
|
|
Total
|
|
Total
|
|
Natural Gas Distribution (1)
|
|
Energy
Services
(2)
|
|
Other Operations (2)
|
|
Total
|
||||||||||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||||||||||||||||||
Revenue from contracts
|
|
$
|
3,235
|
|
|
$
|
3,011
|
|
|
$
|
493
|
|
|
$
|
6
|
|
|
$
|
6,745
|
|
|
$
|
3,235
|
|
|
$
|
3,011
|
|
|
$
|
493
|
|
|
$
|
1
|
|
|
$
|
3,505
|
|
Derivatives income
|
|
(2
|
)
|
|
(2
|
)
|
|
4,028
|
|
|
—
|
|
|
4,024
|
|
|
—
|
|
|
(2
|
)
|
|
4,028
|
|
|
—
|
|
|
4,026
|
|
||||||||||
Other (3)
|
|
(1
|
)
|
|
(42
|
)
|
|
—
|
|
|
9
|
|
|
(34
|
)
|
|
(1
|
)
|
|
(42
|
)
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
||||||||||
Eliminations
|
|
—
|
|
|
(36
|
)
|
|
(110
|
)
|
|
—
|
|
|
(146
|
)
|
|
—
|
|
|
(36
|
)
|
|
(110
|
)
|
|
—
|
|
|
(146
|
)
|
||||||||||
Total revenues
|
|
$
|
3,232
|
|
|
$
|
2,931
|
|
|
$
|
4,411
|
|
|
$
|
15
|
|
|
$
|
10,589
|
|
|
$
|
3,234
|
|
|
$
|
2,931
|
|
|
$
|
4,411
|
|
|
$
|
1
|
|
|
$
|
7,343
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
Year Ended December 31, 2017
|
||||||||||||||||||||||||||||||||||||||
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||||||||||||||||||||||||
|
|
Electric Transmission & Distribution (1)
|
|
Natural Gas Distribution (1)
|
|
Energy
Services
(2)
|
|
Other Operations (2)
|
|
Total
|
|
Total
|
|
Natural Gas Distribution (1)
|
|
Energy
Services
(2)
|
|
Other Operations (2)
|
|
Total
|
||||||||||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||||||||||||||||||
Revenue from contracts
|
|
$
|
3,001
|
|
|
$
|
2,638
|
|
|
$
|
480
|
|
|
$
|
5
|
|
|
$
|
6,124
|
|
|
$
|
3,001
|
|
|
$
|
2,638
|
|
|
$
|
480
|
|
|
$
|
—
|
|
|
$
|
3,118
|
|
Derivatives income
|
|
(1
|
)
|
|
—
|
|
|
3,569
|
|
|
—
|
|
|
3,568
|
|
|
—
|
|
|
—
|
|
|
3,569
|
|
|
—
|
|
|
3,569
|
|
||||||||||
Other (3)
|
|
(3
|
)
|
|
1
|
|
|
—
|
|
|
9
|
|
|
7
|
|
|
(3
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||||||
Eliminations
|
|
—
|
|
|
(33
|
)
|
|
(52
|
)
|
|
—
|
|
|
(85
|
)
|
|
—
|
|
|
(33
|
)
|
|
(52
|
)
|
|
—
|
|
|
(85
|
)
|
||||||||||
Total revenues
|
|
$
|
2,997
|
|
|
$
|
2,606
|
|
|
$
|
3,997
|
|
|
$
|
14
|
|
|
$
|
9,614
|
|
|
$
|
2,998
|
|
|
$
|
2,606
|
|
|
$
|
3,997
|
|
|
$
|
—
|
|
|
$
|
6,603
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
Year Ended December 31, 2016
|
||||||||||||||||||||||||||||||||||||||
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||||||||||||||||||||||||
|
|
Electric Transmission & Distribution (1)
|
|
Natural Gas Distribution (1)
|
|
Energy
Services
(2)
|
|
Other Operations (2)
|
|
Total
|
|
Total
|
|
Natural Gas Distribution (1)
|
|
Energy
Services
(2)
|
|
Other Operations (2)
|
|
Total
|
||||||||||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||||||||||||||||||
Revenue from contracts
|
|
$
|
3,050
|
|
|
$
|
2,368
|
|
|
$
|
288
|
|
|
$
|
5
|
|
|
$
|
5,711
|
|
|
$
|
3,050
|
|
|
$
|
2,368
|
|
|
$
|
288
|
|
|
$
|
—
|
|
|
$
|
2,656
|
|
Derivatives income
|
|
1
|
|
|
—
|
|
|
1,811
|
|
|
—
|
|
|
1,812
|
|
|
—
|
|
|
—
|
|
|
1,811
|
|
|
—
|
|
|
1,811
|
|
||||||||||
Other (3)
|
|
9
|
|
|
41
|
|
|
—
|
|
|
10
|
|
|
60
|
|
|
9
|
|
|
41
|
|
|
—
|
|
|
1
|
|
|
42
|
|
||||||||||
Eliminations
|
|
—
|
|
|
(29
|
)
|
|
(26
|
)
|
|
—
|
|
|
(55
|
)
|
|
—
|
|
|
(29
|
)
|
|
(26
|
)
|
|
—
|
|
|
(55
|
)
|
||||||||||
Total revenues
|
|
$
|
3,060
|
|
|
$
|
2,380
|
|
|
$
|
2,073
|
|
|
$
|
15
|
|
|
$
|
7,528
|
|
|
$
|
3,059
|
|
|
$
|
2,380
|
|
|
$
|
2,073
|
|
|
$
|
1
|
|
|
$
|
4,454
|
|
(1)
|
Reflected in Utility revenues in the Statements of Consolidated Income.
|
(2)
|
Reflected in Non-utility revenues in the Statements of Consolidated Income.
|
(3)
|
Primarily consists of income from ARPs and leases. ARPs are contracts between the utility and its regulators, not between the utility and a customer. The Registrants recognize ARP revenue as other revenues when the regulator-specified conditions for recognition have been met. Upon recovery of ARP revenue through incorporation in rates charged for utility service to customers, ARP revenue is reversed and recorded as revenue from contracts with customers. The recognition of ARP revenues and the reversal of ARP revenues upon recovery through rates charged for utility service may not occur in the same period.
|
(1)
|
Amount presented is net of the accumulated goodwill impairment charge of
$252 million
recorded in 2012.
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Balance
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Balance
|
||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||
Customer relationships
|
|
$
|
86
|
|
|
$
|
(27
|
)
|
|
$
|
59
|
|
|
$
|
86
|
|
|
$
|
(21
|
)
|
|
$
|
65
|
|
Covenants not to compete
|
|
4
|
|
|
(3
|
)
|
|
1
|
|
|
4
|
|
|
(2
|
)
|
|
2
|
|
||||||
Other
|
|
16
|
|
|
(11
|
)
|
|
5
|
|
|
15
|
|
|
(8
|
)
|
|
7
|
|
||||||
Total
|
|
$
|
106
|
|
|
$
|
(41
|
)
|
|
$
|
65
|
|
|
$
|
105
|
|
|
$
|
(31
|
)
|
|
$
|
74
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
(in millions)
|
||||||||||
Amortization expense of intangible assets
(1)
|
|
$
|
10
|
|
|
$
|
13
|
|
|
$
|
4
|
|
(1)
|
Recorded in Depreciation and amortization expenses on CenterPoint Energy’s and CERC’s respective Statements of Consolidated Income.
|
|
Amortization Expense
|
||
|
(in millions)
|
||
2019
|
$
|
11
|
|
2020
|
6
|
|
|
2021
|
6
|
|
|
2022
|
6
|
|
|
2023
|
5
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Regulatory Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current regulatory assets (1)
|
$
|
77
|
|
|
$
|
—
|
|
|
$
|
77
|
|
|
$
|
130
|
|
|
$
|
—
|
|
|
$
|
130
|
|
Non-current regulatory assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Securitized regulatory assets
|
1,059
|
|
|
1,059
|
|
|
—
|
|
|
1,590
|
|
|
1,590
|
|
|
—
|
|
||||||
Unrecognized equity return (2)
|
(213
|
)
|
|
(213
|
)
|
|
—
|
|
|
(287
|
)
|
|
(287
|
)
|
|
—
|
|
||||||
Unamortized loss on reacquired debt
|
68
|
|
|
68
|
|
|
—
|
|
|
75
|
|
|
75
|
|
|
—
|
|
||||||
Pension and postretirement-related regulatory
asset (3)
|
725
|
|
|
33
|
|
|
30
|
|
|
646
|
|
|
31
|
|
|
20
|
|
||||||
Hurricane Harvey restoration costs (4)
|
68
|
|
|
64
|
|
|
4
|
|
|
64
|
|
|
58
|
|
|
6
|
|
||||||
Regulatory assets related to TCJA (5)
|
33
|
|
|
23
|
|
|
10
|
|
|
48
|
|
|
33
|
|
|
15
|
|
||||||
Other long-term regulatory assets (6)
|
227
|
|
|
90
|
|
|
137
|
|
|
211
|
|
|
70
|
|
|
140
|
|
||||||
Total non-current regulatory assets
|
1,967
|
|
|
1,124
|
|
|
181
|
|
|
2,347
|
|
|
1,570
|
|
|
181
|
|
||||||
Total regulatory assets
|
2,044
|
|
|
1,124
|
|
|
258
|
|
|
2,477
|
|
|
1,570
|
|
|
311
|
|
||||||
Regulatory Liabilities:
|
|
||||||||||||||||||||||
Current regulatory liabilities (7)
|
38
|
|
|
17
|
|
|
21
|
|
|
24
|
|
|
22
|
|
|
2
|
|
||||||
Non-current regulatory liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Regulatory liabilities related to TCJA (5)
|
1,323
|
|
|
847
|
|
|
476
|
|
|
1,354
|
|
|
862
|
|
|
492
|
|
||||||
Estimated removal costs
|
886
|
|
|
269
|
|
|
617
|
|
|
878
|
|
|
285
|
|
|
593
|
|
||||||
Other long-term regulatory liabilities
|
316
|
|
|
182
|
|
|
134
|
|
|
232
|
|
|
116
|
|
|
116
|
|
||||||
Total non-current regulatory liabilities
|
2,525
|
|
|
1,298
|
|
|
1,227
|
|
|
2,464
|
|
|
1,263
|
|
|
1,201
|
|
||||||
Total regulatory liabilities
|
2,563
|
|
|
1,315
|
|
|
1,248
|
|
|
2,488
|
|
|
1,285
|
|
|
1,203
|
|
||||||
Total regulatory assets and liabilities, net
|
$
|
(519
|
)
|
|
$
|
(191
|
)
|
|
$
|
(990
|
)
|
|
$
|
(11
|
)
|
|
$
|
285
|
|
|
$
|
(892
|
)
|
(1)
|
Current regulatory assets are included in Prepaid expenses and other current assets in the Registrants’ respective Consolidated Balance Sheets.
|
(2)
|
The unrecognized equity return will be recognized as it is recovered in rates through 2024. During the years ended
December 31, 2018
,
2017
and
2016
, Houston Electric recognized approximately
$74 million
,
$42 million
and
$64 million
, respectively, of the allowed equity return. The timing of Houston Electric’s recognition of the 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)
|
Includes a portion of Houston Electric’s and CERC’s NGD’s actuarially determined pension and other postemployment expense in excess of the amount being recovered through rates that is being deferred for rate making purposes, of which
$33 million
and
$4 million
as of
December 31, 2018
, respectively, and
$31 million
and
$7 million
as of
December 31, 2017
, respectively, were not earning a return.
|
(4)
|
The Registrants suffered damage as a result of Hurricane Harvey, a major storm classified as a Category 4 hurricane on the Saffir-Simpson Hurricane Wind Scale, that first struck the Texas coast on Friday, August 25, 2017 and remained over the Houston area for the next several days. The unprecedented flooding from torrential amounts of rainfall accompanying the storm caused significant damage to or destruction of residences and businesses served by the Registrants. The Registrants deferred the uninsured storm restoration costs as management believed it was probable that such costs will be recovered through traditional rate adjustment mechanisms for capital costs and through the next base rate proceeding for operation and maintenance expenses. As a result, storm restoration costs did not materially affect the Registrants’ reported net income for 2017. The Registrants are not earning a return on Hurricane Harvey restoration costs.
|
(5)
|
The EDIT and deferred revenues will be recovered or refunded to customers as required by tax and regulatory authorities. See
Note 15
for additional information.
|
(6)
|
Other long-term regulatory assets that are not earning a return were not material as of
December 31, 2018
and
2017
.
|
(7)
|
Current regulatory liabilities are included in Other current liabilities in each of the Registrants’ respective Consolidated Balance Sheets.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
LTIP Compensation expense
(1)
|
$
|
26
|
|
|
$
|
21
|
|
|
$
|
19
|
|
Income tax benefit recognized
|
6
|
|
|
8
|
|
|
7
|
|
|||
Actual tax benefit realized for tax deductions
|
5
|
|
|
6
|
|
|
5
|
|
(1)
|
Included in Operation and maintenance expense in CenterPoint Energy’s Statements of Consolidated Income and not capitalized as a part of Inventory or Property, Plant and Equipment.
|
|
Year Ended December 31, 2018
|
|||||||||||
|
Shares
(Thousands)
|
|
Weighted-Average
Grant Date
Fair Value
|
|
Remaining Average
Contractual
Life (Years)
|
|
Aggregate
Intrinsic
Value
(2)
(Millions)
|
|||||
Performance Awards
(1)
|
|
|
|
|
|
|
|
|||||
Outstanding and non-vested as of December 31, 2017
|
3,627
|
|
|
$
|
22.15
|
|
|
|
|
|
||
Granted
|
1,321
|
|
|
26.74
|
|
|
|
|
|
|||
Forfeited or canceled
|
(721
|
)
|
|
21.72
|
|
|
|
|
|
|||
Vested and released to participants
|
(409
|
)
|
|
21.31
|
|
|
|
|
|
|||
Outstanding and non-vested as of December 31, 2018
|
3,818
|
|
|
$
|
23.91
|
|
|
1
|
|
$
|
57
|
|
|
|
|
|
|
|
|
|
|||||
Stock Awards
|
|
|
|
|
|
|
|
|||||
Outstanding and non-vested as of December 31, 2017
|
980
|
|
|
$
|
22.68
|
|
|
|
|
|
||
Granted
|
409
|
|
|
26.62
|
|
|
|
|
|
|||
Forfeited or canceled
|
(29
|
)
|
|
25.31
|
|
|
|
|
|
|||
Vested and released to participants
|
(300
|
)
|
|
22.84
|
|
|
|
|
|
|||
Outstanding and non-vested as of December 31, 2018
|
1,060
|
|
|
$
|
24.08
|
|
|
1.1
|
|
$
|
30
|
|
(1)
|
Reflects maximum performance achievement.
|
(2)
|
Reflects the impact of current expectations of achievement and stock price.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In millions, except for per unit amounts)
|
||||||||||
Performance Awards
|
|
||||||||||
Weighted-average grant date fair value per unit of awards granted
|
$
|
26.74
|
|
|
$
|
26.64
|
|
|
$
|
18.98
|
|
Total intrinsic value of awards received by participants
|
12
|
|
|
7
|
|
|
7
|
|
|||
Vested grant date fair value
|
9
|
|
|
5
|
|
|
7
|
|
|||
|
|
|
|
|
|
||||||
Stock Awards
|
|
|
|
|
|
||||||
Weighted-average grant date fair value per unit of awards granted
|
$
|
26.62
|
|
|
$
|
26.77
|
|
|
$
|
19.24
|
|
Total intrinsic value of awards received by participants
|
9
|
|
|
9
|
|
|
6
|
|
|||
Vested grant date fair value
|
7
|
|
|
7
|
|
|
6
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Service cost
(1)
|
$
|
37
|
|
|
$
|
36
|
|
|
$
|
38
|
|
Interest cost
(2)
|
79
|
|
|
89
|
|
|
93
|
|
|||
Expected return on plan assets
(2)
|
(107
|
)
|
|
(97
|
)
|
|
(101
|
)
|
|||
Amortization of prior service cost
(2)
|
9
|
|
|
9
|
|
|
9
|
|
|||
Amortization of net loss
(2)
|
43
|
|
|
58
|
|
|
63
|
|
|||
Net periodic cost
|
$
|
61
|
|
|
$
|
95
|
|
|
$
|
102
|
|
(1)
|
Amounts presented in the table above are included in Operation and maintenance expense in CenterPoint Energy’s Statements of Consolidated Income, net of regulatory deferrals and amounts capitalized. See Note 2(r).
|
(2)
|
Amounts presented in the table above are included in Other, net in CenterPoint Energy’s Statements of Consolidated Income, net of regulatory deferrals. See Note 2(r).
|
|
Year Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Discount rate
|
3.65
|
%
|
|
4.15
|
%
|
|
4.40
|
%
|
Expected return on plan assets
|
6.00
|
|
|
6.00
|
|
|
6.25
|
|
Rate of increase in compensation levels
|
4.45
|
|
|
4.50
|
|
|
4.15
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions, except for actuarial assumptions)
|
||||||
Change in Benefit Obligation
|
|
|
|
||||
Benefit obligation, beginning of year
|
$
|
2,225
|
|
|
$
|
2,197
|
|
Service cost
|
37
|
|
|
36
|
|
||
Interest cost
|
79
|
|
|
89
|
|
||
Benefits paid
|
(201
|
)
|
|
(168
|
)
|
||
Actuarial (gain) loss
(1)
|
(127
|
)
|
|
71
|
|
||
Benefit obligation, end of year
|
2,013
|
|
|
2,225
|
|
||
Change in Plan Assets
|
|
|
|
|
|
||
Fair value of plan assets, beginning of year
|
1,801
|
|
|
1,656
|
|
||
Employer contributions
|
69
|
|
|
48
|
|
||
Benefits paid
|
(201
|
)
|
|
(168
|
)
|
||
Actual investment return
|
(153
|
)
|
|
265
|
|
||
Fair value of plan assets, end of year
|
1,516
|
|
|
1,801
|
|
||
Funded status, end of year
|
$
|
(497
|
)
|
|
$
|
(424
|
)
|
|
|
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions, except for actuarial assumptions)
|
||||||
Amounts Recognized in Balance Sheets
|
|
|
|
|
|
||
Current liabilities-other
|
$
|
(7
|
)
|
|
$
|
(7
|
)
|
Other liabilities-benefit obligations
|
(490
|
)
|
|
(417
|
)
|
||
Net liability, end of year
|
$
|
(497
|
)
|
|
$
|
(424
|
)
|
Actuarial Assumptions
|
|
|
|
||||
Discount rate
(2)
|
4.35
|
%
|
|
3.65
|
%
|
||
Expected return on plan assets
(3)
|
6.00
|
|
|
6.00
|
|
||
Rate of increase in compensation levels
|
4.60
|
|
|
4.45
|
|
||
Interest crediting rate
|
3.75
|
|
|
3.75
|
|
(1)
|
Significant sources of gain for 2018 include the increase in discount rate from
3.65%
to
4.35%
and the mortality projection scale change from MP2017 to MP2018. For 2017, the significant source of loss was the decrease in the discount rate from
4.15%
to
3.65%
.
|
(2)
|
The discount rate assumption was determined by matching the projected cash flows of CenterPoint Energy’s plans against a hypothetical yield curve of high-quality corporate bonds represented by a series of annualized individual discount rates from one-half to 99 years.
|
(3)
|
The expected rate of return assumption was developed using the targeted asset allocation of CenterPoint Energy’s plans and the expected return for each asset class.
|
|
December 31,
|
||||||||||||||
|
2018
|
|
2017
|
||||||||||||
|
Pension
(Qualified)
|
|
Pension
(Non-qualified)
|
|
Pension
(Qualified) |
|
Pension
(Non-qualified) |
||||||||
|
(in millions)
|
||||||||||||||
Accumulated benefit obligation
|
$
|
1,930
|
|
|
$
|
61
|
|
|
$
|
2,090
|
|
|
$
|
74
|
|
Projected benefit obligation
|
1,952
|
|
|
61
|
|
|
2,151
|
|
|
74
|
|
||||
Fair value of plan assets
|
1,516
|
|
|
—
|
|
|
1,801
|
|
|
—
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||||||
Service cost
(1)
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
(2)
|
13
|
|
|
8
|
|
|
4
|
|
|
16
|
|
|
9
|
|
|
5
|
|
|
16
|
|
|
10
|
|
|
4
|
|
|||||||||
Expected return on plan assets
(2)
|
(5
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|
(6
|
)
|
|
(5
|
)
|
|
(1
|
)
|
|||||||||
Amortization of prior service cost (credit)
(2)
|
(5
|
)
|
|
(5
|
)
|
|
1
|
|
|
(5
|
)
|
|
(6
|
)
|
|
1
|
|
|
(3
|
)
|
|
(4
|
)
|
|
—
|
|
|||||||||
Amortization of net loss
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|||||||||
Curtailment
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|||||||||
Net postretirement benefit cost (credit)
|
$
|
5
|
|
|
$
|
(1
|
)
|
|
$
|
5
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
(1
|
)
|
|
$
|
4
|
|
(1)
|
Amounts presented in the table above are included in Operation and maintenance expense in CenterPoint Energy’s Statements of Consolidated Income, net of regulatory deferrals and amounts capitalized. See Note 2(r).
|
(2)
|
Amounts presented in the table above are included in Other, net in each of the Registrants’ respective Statements of Consolidated Income, net of regulatory deferrals. See Note 2(r).
|
(3)
|
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 bargaining unit 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 CenterPoint Energy and 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.
|
|
Year Ended December 31,
|
|||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|||||||||
Discount rate
|
3.60
|
%
|
|
3.60
|
%
|
|
3.60
|
%
|
|
4.15
|
%
|
|
4.15
|
%
|
|
4.15
|
%
|
|
4.35
|
%
|
|
4.35
|
%
|
|
4.35
|
%
|
Expected return on plan assets
|
4.55
|
|
|
4.75
|
|
|
3.85
|
|
|
4.50
|
|
|
4.75
|
|
|
3.60
|
|
|
4.80
|
|
|
5.00
|
|
|
3.95
|
|
|
December 31,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Change in Benefit Obligation
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Benefit obligation, beginning of year
|
$
|
386
|
|
|
$
|
225
|
|
|
$
|
109
|
|
|
$
|
383
|
|
|
$
|
217
|
|
|
$
|
115
|
|
Service cost
|
2
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
1
|
|
|
1
|
|
||||||
Interest cost
|
13
|
|
|
8
|
|
|
4
|
|
|
16
|
|
|
9
|
|
|
5
|
|
||||||
Participant contributions
|
7
|
|
|
2
|
|
|
4
|
|
|
7
|
|
|
2
|
|
|
3
|
|
||||||
Benefits paid
|
(25
|
)
|
|
(13
|
)
|
|
(9
|
)
|
|
(26
|
)
|
|
(14
|
)
|
|
(9
|
)
|
||||||
Actuarial (gain) loss
(1)
|
(52
|
)
|
|
(56
|
)
|
|
1
|
|
|
4
|
|
|
10
|
|
|
(6
|
)
|
||||||
Benefit obligation, end of year
|
331
|
|
|
166
|
|
|
110
|
|
|
386
|
|
|
225
|
|
|
109
|
|
||||||
Change in Plan Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Fair value of plan assets, beginning of year
|
120
|
|
|
93
|
|
|
26
|
|
|
113
|
|
|
88
|
|
|
25
|
|
||||||
Employer contributions
|
14
|
|
|
9
|
|
|
4
|
|
|
16
|
|
|
10
|
|
|
5
|
|
||||||
Participant contributions
|
7
|
|
|
2
|
|
|
4
|
|
|
7
|
|
|
2
|
|
|
3
|
|
||||||
Benefits paid
|
(25
|
)
|
|
(13
|
)
|
|
(9
|
)
|
|
(26
|
)
|
|
(14
|
)
|
|
(9
|
)
|
||||||
Actual investment return
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|
10
|
|
|
7
|
|
|
2
|
|
||||||
Fair value of plan assets, end of year
|
114
|
|
|
89
|
|
|
25
|
|
|
120
|
|
|
93
|
|
|
26
|
|
||||||
Funded status, end of year
|
$
|
(217
|
)
|
|
$
|
(77
|
)
|
|
$
|
(85
|
)
|
|
$
|
(266
|
)
|
|
$
|
(132
|
)
|
|
$
|
(83
|
)
|
Amounts Recognized in Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Current liabilities-other
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
Other liabilities-benefit obligations
|
(211
|
)
|
|
(77
|
)
|
|
(82
|
)
|
|
(260
|
)
|
|
(132
|
)
|
|
(79
|
)
|
||||||
Net liability, end of year
|
$
|
(217
|
)
|
|
$
|
(77
|
)
|
|
$
|
(85
|
)
|
|
$
|
(266
|
)
|
|
$
|
(132
|
)
|
|
$
|
(83
|
)
|
Actuarial Assumptions
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount rate
(2)
|
4.35
|
%
|
|
4.35
|
%
|
|
4.35
|
%
|
|
3.60
|
%
|
|
3.60
|
%
|
|
3.60
|
%
|
||||||
Expected return on plan assets
(3)
|
4.60
|
|
|
4.70
|
|
|
4.15
|
|
|
4.55
|
|
|
4.75
|
|
|
3.85
|
|
||||||
Medical cost trend rate assumed for the next year - Pre-65
|
5.95
|
|
|
5.95
|
|
|
5.95
|
|
|
6.15
|
|
|
6.15
|
|
|
6.15
|
|
||||||
Medical/prescription drug cost trend rate assumed for the next year - Post-65
|
28.60
|
|
|
28.60
|
|
|
28.60
|
|
|
23.85
|
|
|
23.85
|
|
|
23.85
|
|
||||||
Prescription drug cost trend rate assumed for the next year - Pre-65
|
9.20
|
|
|
9.20
|
|
|
9.20
|
|
|
9.85
|
|
|
9.85
|
|
|
9.85
|
|
||||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
|
4.50
|
|
|
4.50
|
|
|
4.50
|
|
|
4.50
|
|
|
4.50
|
|
|
4.50
|
|
||||||
Year that the cost trend rates reach the ultimate trend rate - Pre-65
|
2026
|
|
|
2026
|
|
|
2026
|
|
|
2026
|
|
|
2026
|
|
|
2026
|
|
||||||
Year that the cost trend rates reach the ultimate trend rate - Post-65
|
2027
|
|
|
2027
|
|
|
2027
|
|
|
2024
|
|
|
2024
|
|
|
2024
|
|
(1)
|
Significant sources of gain for 2018 include the increase in the discount rate from
3.60%
to
4.35%
, favorable benefit claims experience and cost trend rates in addition to the change in mortality projection scale from MP2017 to MP2018.
|
(2)
|
The discount rate assumption was determined by matching the projected cash flows of the plans against a hypothetical yield curve of high-quality corporate bonds represented by a series of annualized individual discount rates from one-half to 99 years.
|
(3)
|
The expected rate of return assumption was developed using the targeted asset allocation of the plans and the expected return for each asset class.
|
|
December 31,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
|
Pension
Benefits
|
|
Postretirement
Benefits
|
|
Pension
Benefits
|
|
Postretirement
Benefits
|
||||||||||||||||
|
CenterPoint Energy
|
|
CenterPoint Energy
|
|
CERC
|
|
CenterPoint Energy
|
|
CenterPoint Energy
|
|
CERC
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Unrecognized actuarial loss (gain)
|
$
|
109
|
|
|
$
|
(7
|
)
|
|
$
|
(3
|
)
|
|
$
|
94
|
|
|
$
|
(8
|
)
|
|
$
|
(2
|
)
|
Unrecognized prior service cost
|
1
|
|
|
5
|
|
|
5
|
|
|
1
|
|
|
6
|
|
|
6
|
|
||||||
Deferred tax benefit
(1)
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
||||||
Net amount recognized in accumulated other comprehensive loss (gain)
|
$
|
110
|
|
|
$
|
(2
|
)
|
|
$
|
(7
|
)
|
|
$
|
95
|
|
|
$
|
(2
|
)
|
|
$
|
(7
|
)
|
(1)
|
CenterPoint Energy’s and CERC’s postretirement benefit obligation is reduced by the impact of previously non-taxable government subsidies under the Medicare Prescription Drug Act. Because the subsidies were non-taxable, the temporary difference used in measuring the deferred tax impact was determined on the unrecognized losses excluding such subsidies.
|
|
Pension
Benefits
|
|
Postretirement
Benefits
|
||||||||
|
CenterPoint Energy
|
|
CenterPoint Energy
|
|
CERC
|
||||||
|
(in millions)
|
||||||||||
Net loss (gain)
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Amortization of net loss
|
(6
|
)
|
|
—
|
|
|
—
|
|
|||
Amortization of prior service cost
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Total recognized in comprehensive income
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
Total expense recognized in net periodic costs and Other comprehensive income
|
$
|
76
|
|
|
$
|
5
|
|
|
$
|
3
|
|
U.S. equity
|
12 - 28%
|
International developed market equity
|
7 - 17%
|
Emerging market equity
|
5 - 11%
|
Fixed income
|
55 - 65%
|
Cash
|
0 - 2%
|
|
Fair Value Measurements as of December 31,
|
||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
|
||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||
Cash
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18
|
|
Corporate bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Investment grade or above
|
—
|
|
|
368
|
|
|
—
|
|
|
368
|
|
|
—
|
|
|
432
|
|
|
—
|
|
|
432
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
U.S. companies
|
60
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|
76
|
|
|
—
|
|
|
—
|
|
|
76
|
|
||||||||
Cash received as collateral from securities lending
|
77
|
|
|
—
|
|
|
—
|
|
|
77
|
|
|
76
|
|
|
—
|
|
|
—
|
|
|
76
|
|
||||||||
U.S. treasuries
|
196
|
|
|
—
|
|
|
—
|
|
|
196
|
|
|
67
|
|
|
—
|
|
|
—
|
|
|
67
|
|
||||||||
Mortgage backed securities
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||||||
Asset backed securities
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||||
Municipal bonds
|
—
|
|
|
27
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
47
|
|
|
—
|
|
|
47
|
|
||||||||
Mutual funds
(2)
|
167
|
|
|
—
|
|
|
—
|
|
|
167
|
|
|
211
|
|
|
—
|
|
|
—
|
|
|
211
|
|
||||||||
International government bonds
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||||||
Obligation to return cash received as collateral from securities lending
|
(77
|
)
|
|
—
|
|
|
—
|
|
|
(77
|
)
|
|
(76
|
)
|
|
—
|
|
|
—
|
|
|
(76
|
)
|
||||||||
Total investments at fair value
|
$
|
442
|
|
|
$
|
418
|
|
|
$
|
—
|
|
|
860
|
|
|
$
|
372
|
|
|
$
|
505
|
|
|
$
|
—
|
|
|
877
|
|
||
Investments measured by net asset value per share or its equivalent
(1) (2)
|
|
|
|
|
|
|
656
|
|
|
|
|
|
|
|
|
924
|
|
||||||||||||||
Total Investments
|
|
|
|
|
|
|
$
|
1,516
|
|
|
|
|
|
|
|
|
$
|
1,801
|
|
(1)
|
Represents investments in common collective trust funds.
|
(2)
|
The amounts invested in mutual funds and common collective trust funds were allocated as follows:
|
|
As of December 31,
|
||||||||||
|
2018
|
|
2017
|
||||||||
|
Mutual Funds
|
|
Common Collective Trust Funds
|
|
Mutual Funds
|
|
Common Collective Trust Funds
|
||||
International equities
|
51
|
%
|
|
37
|
%
|
|
57
|
%
|
|
34
|
%
|
Emerging market equities
|
34
|
%
|
|
4
|
%
|
|
30
|
%
|
|
5
|
%
|
U.S. equities
|
15
|
%
|
|
5
|
%
|
|
13
|
%
|
|
6
|
%
|
Fixed income
|
—
|
|
|
54
|
%
|
|
—
|
|
|
55
|
%
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
U.S. equity
|
13 - 23%
|
|
13 - 23%
|
|
15 - 25%
|
International developed market equity
|
3 - 13%
|
|
3 - 13%
|
|
2 - 12%
|
Fixed income
|
69 - 79%
|
|
69 - 79%
|
|
68 - 78%
|
Cash
|
0 - 2%
|
|
0 - 2%
|
|
0 - 2%
|
|
Fair Value Measurements as of December 31,
|
||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||||||||||
|
Mutual Funds
|
||||||||||||||||||||||||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
|
|
(Level 1) |
|
(Level 2) |
|
(Level 3) |
|
Total
|
||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||
CenterPoint Energy
|
$
|
114
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
114
|
|
|
$
|
120
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
120
|
|
Houston Electric
|
89
|
|
|
—
|
|
|
—
|
|
|
89
|
|
|
93
|
|
|
—
|
|
|
—
|
|
|
93
|
|
||||||||
CERC
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
As of December 31,
|
||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||
Fixed income
|
74
|
%
|
|
74
|
%
|
|
73
|
%
|
|
74
|
%
|
|
74
|
%
|
|
71
|
%
|
U.S. equities
|
19
|
%
|
|
19
|
%
|
|
21
|
%
|
|
18
|
%
|
|
18
|
%
|
|
21
|
%
|
International equities
|
7
|
%
|
|
7
|
%
|
|
6
|
%
|
|
8
|
%
|
|
8
|
%
|
|
8
|
%
|
|
Contributions in 2018
|
|
Expected Minimum Contributions in 2019
|
||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Qualified pension plan
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
86
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-qualified pension plan
|
9
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||||
Postretirement benefit plan
|
14
|
|
|
9
|
|
|
4
|
|
|
17
|
|
|
10
|
|
|
4
|
|
|
Pension
Benefits
|
|
Postretirement Benefits
|
||||||||||||
|
CenterPoint
Energy
|
|
CenterPoint
Energy
|
|
Houston Electric
|
|
CERC
|
||||||||
|
(in millions)
|
||||||||||||||
2019
|
$
|
141
|
|
|
$
|
16
|
|
|
$
|
9
|
|
|
$
|
5
|
|
2020
|
146
|
|
|
19
|
|
|
10
|
|
|
6
|
|
||||
2021
|
154
|
|
|
20
|
|
|
11
|
|
|
6
|
|
||||
2022
|
155
|
|
|
21
|
|
|
11
|
|
|
7
|
|
||||
2023
|
156
|
|
|
22
|
|
|
12
|
|
|
7
|
|
||||
2024-2028
|
759
|
|
|
116
|
|
|
61
|
|
|
37
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||||||||
|
(in millions)
|
|
|
||||||||||||||||||||||||||||||||
Savings plan benefit
expenses
|
$
|
43
|
|
|
$
|
17
|
|
|
$
|
18
|
|
|
$
|
41
|
|
|
$
|
17
|
|
|
$
|
17
|
|
|
$
|
38
|
|
|
$
|
15
|
|
|
$
|
16
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||||||||
|
(in millions)
|
|
|
||||||||||||||||||||||||||||||||
Postemployment benefits
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
6
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Deferred compensation plans
|
3
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Postemployment benefits
|
$
|
11
|
|
|
$
|
3
|
|
|
$
|
7
|
|
|
$
|
20
|
|
|
$
|
3
|
|
|
$
|
14
|
|
Deferred compensation plans
|
42
|
|
|
9
|
|
|
3
|
|
|
45
|
|
|
10
|
|
|
3
|
|
||||||
Split-dollar life insurance arrangements
|
36
|
|
|
1
|
|
|
—
|
|
|
39
|
|
|
1
|
|
|
—
|
|
|
|
|
Percentage of Employees Covered
|
|||||||
|
Agreement Expiration
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|||
IBEW Local 66
|
May 2020
|
|
18
|
%
|
|
51
|
%
|
|
—
|
|
OPEIU Local 12 and Mankato
|
March and May 2021
|
|
3
|
%
|
|
—
|
|
|
3
|
%
|
Gas Workers Union Local 340
|
April 2020
|
|
6
|
%
|
|
—
|
|
|
12
|
%
|
IBEW Local 949
|
December 2020
|
|
3
|
%
|
|
—
|
|
|
7
|
%
|
USW Locals 13-227 and 13-1
|
June and July 2022
|
|
5
|
%
|
|
—
|
|
|
11
|
%
|
Total
|
|
|
35
|
%
|
|
51
|
%
|
|
33
|
%
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||||
Jurisdiction
|
|
Winter Season
|
|
Bilateral Cap
|
|
2018
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
(in millions)
|
||||||||||||||
Certain NGD jurisdictions
|
|
2018 – 2019
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Certain NGD jurisdictions
|
|
2017 – 2018
|
|
8
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||
Total CERC
(1)
|
|
|
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||||
Electric operations’ Texas service territory
|
|
2018 – 2019
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Electric operations’ Texas service territory
|
|
2017 – 2018
|
|
9
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||
Electric operations’ Texas service territory
|
|
2016 – 2017
|
|
9
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
||||
Total CenterPoint Energy
(1)
|
|
|
|
|
|
$
|
(4
|
)
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
(1)
|
Weather hedge gains (losses) are recorded in Revenues in the Statements of Consolidated Income.
|
Fair Value of Derivative Instruments
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
|
Balance Sheet
Location
|
|
Derivative
Assets
Fair Value
|
|
Derivative
Liabilities
Fair Value
|
|
Derivative
Assets Fair Value |
|
Derivative
Liabilities Fair Value |
||||||||
|
|
|
|
(in millions)
|
||||||||||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate derivatives
|
|
Current Liabilities: Non-trading derivative liabilities
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Total Houston Electric
|
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
||||
Derivatives designated as fair value hedges:
|
|
|
|
|
|
|
|
|
||||||||||
Natural gas derivatives (1) (2) (3)
|
|
Current Liabilities: Non-trading derivative liabilities
|
|
1
|
|
|
7
|
|
|
13
|
|
|
1
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||||||
Natural gas derivatives (1) (2) (3)
|
|
Current Assets: Non-trading derivative assets
|
|
103
|
|
|
3
|
|
|
114
|
|
|
4
|
|
||||
Natural gas derivatives (1) (2) (3)
|
|
Other Assets: Non-trading derivative assets
|
|
38
|
|
|
—
|
|
|
44
|
|
|
—
|
|
||||
Natural gas derivatives (1) (2) (3)
|
|
Current Liabilities: Non-trading derivative liabilities
|
|
62
|
|
|
173
|
|
|
38
|
|
|
78
|
|
||||
Natural gas derivatives (1) (2) (3)
|
|
Other Liabilities: Non-trading derivative liabilities
|
|
16
|
|
|
25
|
|
|
9
|
|
|
24
|
|
||||
|
|
Total CERC
|
|
220
|
|
|
208
|
|
|
218
|
|
|
107
|
|
||||
Indexed debt securities derivative
|
|
Current Liabilities
|
|
—
|
|
|
601
|
|
|
—
|
|
|
668
|
|
||||
|
|
Total CenterPoint Energy
|
|
$
|
220
|
|
|
$
|
833
|
|
|
$
|
218
|
|
|
$
|
775
|
|
(1)
|
The fair value shown for natural gas contracts is comprised of derivative gross volumes totaling
1,674
Bcf or a net
140
Bcf long position and
1,795
Bcf or a net
224
Bcf long position as of
December 31, 2018
and
2017
, respectively. 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 is detailed in the Offsetting of Natural Gas Derivative Assets and Liabilities table below.
|
(3)
|
Derivative Assets and Derivative Liabilities include no material amounts related to physical forward transactions with Enable.
|
(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.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
Location and Amount of Gain (Loss) recognized in Income on Hedging Relationship (2)
|
||||||||||
|
Non-utility natural gas expense
|
||||||||||
|
(in millions)
|
||||||||||
Total amounts presented in the statements of income in which the effects of hedges are recorded
|
$
|
4,364
|
|
|
$
|
3,785
|
|
|
$
|
1,983
|
|
|
|
|
|
|
|
||||||
Gain (loss) on fair value hedging relationships:
|
|
|
|
|
|
||||||
Commodity contracts:
|
|
|
|
|
|
||||||
Hedged items - Natural gas inventory
|
(13
|
)
|
|
14
|
|
|
—
|
|
|||
Derivatives designated as hedging instruments
|
13
|
|
|
(14
|
)
|
|
—
|
|
|||
Amounts excluded from effectiveness testing recognized in earnings immediately (1)
|
(149
|
)
|
|
(67
|
)
|
|
70
|
|
(1)
|
Upon adoption of ASU 2017-12 effective January 1, 2018 (see Note 2 for additional information), CenterPoint Energy and CERC elected to exclude from their assessment of hedge effectiveness the natural gas market price difference between locations of the hedged inventory and the delivery location specified in the hedge instruments. Prior to the adoption of this accounting guidance, the timing 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, was excluded from the assessment of effectiveness for CenterPoint Energy’s and CERC’s existing fair value hedges and will continue to be excluded from the assessment of hedge effectiveness. CenterPoint Energy and CERC elected to continue to immediately recognize amounts excluded from hedge effectiveness in their respective Statements of Consolidated Income.
|
(2)
|
Income statement impact associated with cash flow hedge activity is related to gains and losses reclassified from Accumulated other comprehensive income into income. Amounts are immaterial for the Registrants for the years ended December 31, 2018, 2017 and 2016, respectively.
|
|
|
December 31,
2018 |
|
December 31, 2017
|
||||
|
|
(in millions)
|
||||||
Aggregate fair value of derivatives containing material adverse change provisions in a net liability position
|
|
$
|
1
|
|
|
$
|
2
|
|
Fair value of collateral already posted
|
|
—
|
|
|
—
|
|
||
Additional collateral required to be posted if credit risk contingent features triggered
|
|
—
|
|
|
2
|
|
(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 and CERC determine a synthetic credit rating by performing financial statement analysis and consider 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 amounts reflected in the table above were not impacted by collateral netting.
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||||||||||
|
Level 1 (4)
|
|
Level 2
|
|
Level 3
|
|
Netting
(1)
|
|
Total
|
|
Level 1 (4)
|
|
Level 2
|
|
Level 3
|
|
Netting
(1)
|
|
Total
|
||||||||||||||||||||
Assets
|
(in millions)
|
||||||||||||||||||||||||||||||||||||||
Corporate equities
|
$
|
542
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
542
|
|
|
$
|
963
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
963
|
|
Investments, including money market funds (2)
|
66
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66
|
|
|
68
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68
|
|
||||||||||
Natural gas derivatives (3)(4)
|
—
|
|
|
173
|
|
|
47
|
|
|
(82
|
)
|
|
138
|
|
|
—
|
|
|
161
|
|
|
57
|
|
|
(64
|
)
|
|
154
|
|
||||||||||
Hedged portion of natural gas inventory
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
||||||||||
Total assets
|
$
|
609
|
|
|
$
|
173
|
|
|
$
|
47
|
|
|
$
|
(82
|
)
|
|
$
|
747
|
|
|
$
|
1,045
|
|
|
$
|
161
|
|
|
$
|
57
|
|
|
$
|
(64
|
)
|
|
$
|
1,199
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Indexed debt securities derivative
|
$
|
—
|
|
|
$
|
601
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
601
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
668
|
|
|
$
|
—
|
|
|
$
|
668
|
|
Interest rate derivatives
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Natural gas derivatives (3)(4)
|
—
|
|
|
191
|
|
|
17
|
|
|
(101
|
)
|
|
107
|
|
|
—
|
|
|
96
|
|
|
11
|
|
|
(83
|
)
|
|
24
|
|
||||||||||
Total liabilities
|
$
|
24
|
|
|
$
|
792
|
|
|
$
|
17
|
|
|
$
|
(101
|
)
|
|
$
|
732
|
|
|
$
|
—
|
|
|
$
|
96
|
|
|
$
|
679
|
|
|
$
|
(83
|
)
|
|
$
|
692
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
|
|
Total
|
||||||||||||||||||||
Assets
|
(in millions)
|
||||||||||||||||||||||||||||||||||||||
Investments, including money market funds (2)
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48
|
|
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51
|
|
Total assets
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48
|
|
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Interest rate derivatives
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total liabilities
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||||||||||
|
Level 1 (4) |
|
Level 2
|
|
Level 3
|
|
Netting
(1)
|
|
Total
|
|
Level 1 (4) |
|
Level 2
|
|
Level 3
|
|
Netting
(1)
|
|
Total
|
||||||||||||||||||||
Assets
|
(in millions)
|
||||||||||||||||||||||||||||||||||||||
Corporate equities
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Investments, including money market funds (2)
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||||||||
Natural gas derivatives (3)(4)
|
—
|
|
|
173
|
|
|
47
|
|
|
(82
|
)
|
|
138
|
|
|
—
|
|
|
161
|
|
|
57
|
|
|
(64
|
)
|
|
154
|
|
||||||||||
Hedged portion of natural gas inventory
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
||||||||||
Total assets
|
$
|
14
|
|
|
$
|
173
|
|
|
$
|
47
|
|
|
$
|
(82
|
)
|
|
$
|
152
|
|
|
$
|
28
|
|
|
$
|
161
|
|
|
$
|
57
|
|
|
$
|
(64
|
)
|
|
$
|
182
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Natural gas derivatives (3)(4)
|
$
|
—
|
|
|
$
|
191
|
|
|
$
|
17
|
|
|
$
|
(101
|
)
|
|
$
|
107
|
|
|
$
|
—
|
|
|
$
|
96
|
|
|
$
|
11
|
|
|
$
|
(83
|
)
|
|
$
|
24
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
191
|
|
|
$
|
17
|
|
|
$
|
(101
|
)
|
|
$
|
107
|
|
|
$
|
—
|
|
|
$
|
96
|
|
|
$
|
11
|
|
|
$
|
(83
|
)
|
|
$
|
24
|
|
(1)
|
Amounts represent the impact of legally enforceable master netting arrangements that allow CenterPoint Energy and CERC to settle positive and negative positions and also include cash collateral of
$19 million
as of both
December 31, 2018
and
2017
, respectively, 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.
|
(4)
|
Level 1 natural gas derivatives include exchange-traded derivatives cleared by the CME, which deems that financial instruments cleared by the CME are settled daily in connection with posted cash payments. As a result of this exchange rule, CME-related derivatives are considered to have no fair value at the balance sheet date for financial reporting purposes, and are presented in Level 1 net of posted cash; however, the derivatives remain outstanding and subject to future commodity price fluctuations until they are settled in accordance with their contractual terms. Derivative transactions cleared on exchanges other than the CME (e.g., the Intercontinental Exchange or ICE) continue to be reported on a gross basis.
|
(1)
|
Mark-to-market value of Level 3 derivative assets acquired through the purchase of AEM were
less than $1 million
at the acquisition date.
|
(2)
|
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.
|
(3)
|
During 2018, CenterPoint Energy transferred its indexed debt securities derivative from Level 3 to Level 2 to reflect changes in the significance of the unobservable inputs used in the valuation.
|
(4)
|
CenterPoint Energy and CERC did not have significant Level 3 sales during any of the years ended
December 31, 2018
,
2017
or 2016.
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
CenterPoint Energy
(1)
|
|
Houston Electric
(1)
|
|
CERC
|
|
CenterPoint Energy
(1)
|
|
Houston Electric
(1)
|
|
CERC
|
||||||||||||
Long-term debt, including current maturities
|
(in millions)
|
||||||||||||||||||||||
Carrying amount
|
$
|
9,140
|
|
|
$
|
4,717
|
|
|
$
|
2,371
|
|
|
$
|
8,679
|
|
|
$
|
4,753
|
|
|
$
|
2,457
|
|
Fair value
|
9,308
|
|
|
4,770
|
|
|
2,488
|
|
|
9,220
|
|
|
5,034
|
|
|
2,708
|
|
(1)
|
Includes Securitization Bond debt.
|
|
As of December 31,
|
||||||||||||||||
|
2018
|
2017
|
|||||||||||||||
|
Limited Partner Interest
(1)
|
|
Common Units
|
|
Enable Series A Preferred Units
(2)
|
|
Limited Partner Interest
(1)
|
|
Common Units
|
|
Enable Series A Preferred Units
(2)
|
||||||
CenterPoint Energy
(3)
|
54.0
|
%
|
|
233,856,623
|
|
|
14,520,000
|
|
|
54.1
|
%
|
|
233,856,623
|
|
|
14,520,000
|
|
OGE
|
25.6
|
%
|
|
110,982,805
|
|
|
—
|
|
|
25.7
|
%
|
|
110,982,805
|
|
|
—
|
|
Public unitholders
|
20.4
|
%
|
|
88,392,983
|
|
|
—
|
|
|
20.2
|
%
|
|
87,744,652
|
|
|
—
|
|
(1)
|
Excludes the Enable Series A Preferred Units owned by CenterPoint Energy.
|
(2)
|
The carrying amount of the Enable Series A Preferred Units, reflected as Preferred units - unconsolidated affiliate on CenterPoint Energy’s Consolidated Balance Sheets, was
$363 million
as of both
December 31, 2018
and
2017
. No impairment charges or adjustment to carrying value were made as no observable price changes were identified in the current or prior reporting periods. See Note 2(r) for further discussion.
|
(3)
|
Prior to the Internal Spin on September 4, 2018 described above, CenterPoint Energy’s investment in Enable’s common units, excluding the Enable Series A Preferred Units held directly by CenterPoint Energy, was held indirectly through CERC.
|
|
Management
Rights
(1)
|
|
Incentive Distribution Rights
(2)
|
||
CenterPoint Energy
(3)
|
50
|
%
|
|
40
|
%
|
OGE
|
50
|
%
|
|
60
|
%
|
(1)
|
As of December 31, 2018, Enable is controlled jointly by CenterPoint Energy and OGE. Sale of CenterPoint Energy’s or OGE’s ownership interests in Enable GP to a third party is subject to mutual rights of first offer and first refusal, and CenterPoint Energy is not permitted to dispose of less than all of its interest in Enable GP.
|
(2)
|
Enable is expected to pay a minimum quarterly distribution of
$0.2875
per common unit on its outstanding common units to the extent it has sufficient cash from operations after establishment of cash reserves and payment of fees and expenses, including payments to Enable GP and its affiliates, within 60 days after the end of each quarter. If cash distributions to Enable’s unitholders exceed
$0.330625
per common unit in any quarter, Enable GP will receive increasing percentages or incentive distributions rights, up to
50%
, of the cash Enable distributes in excess of that amount. In certain circumstances Enable GP will have the right to reset the minimum quarterly distribution and the target distribution levels at which the incentive distributions receive increasing percentages to higher levels based on Enable’s cash distributions at the time of the exercise of this reset election. To date, no incentive distributions have been made.
|
(3)
|
CenterPoint Energy held the management rights and incentive distributions rights in Enable GP indirectly through CERC until the Internal Spin on September 4, 2018 described above.
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
|
|
Per Unit
|
|
Cash Distribution
|
|
Per Unit
|
|
Cash Distribution
|
|
Per Unit
|
|
Cash Distribution
|
||||||||||||
|
|
(in millions, except per unit amounts)
|
||||||||||||||||||||||
Enable common units
(1)
|
|
$
|
0.9540
|
|
|
$
|
223
|
|
|
$
|
1.2720
|
|
|
$
|
297
|
|
|
$
|
1.2720
|
|
|
$
|
297
|
|
Total CERC
|
|
|
|
223
|
|
|
|
|
297
|
|
|
|
|
297
|
|
|||||||||
Enable common units
(1)
|
|
0.3180
|
|
|
74
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Enable Series A Preferred Units
(2)
|
|
2.5000
|
|
|
36
|
|
|
2.5000
|
|
|
36
|
|
|
1.5417
|
|
|
22
|
|
||||||
Total CenterPoint Energy
|
|
|
|
$
|
333
|
|
|
|
|
$
|
333
|
|
|
|
|
$
|
319
|
|
(1)
|
Reflects CERC’s ownership of Enable common units up to September 4, 2018 when CERC completed the Internal Spin. After such date, distributions from Enable were received directly by CenterPoint Energy.
|
(2)
|
2016 amounts represent the period from February 18, 2016 to December 31, 2016.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
CenterPoint Energy and CERC
|
|
(in millions)
|
||||||||||
Natural gas expenses, including transportation and storage costs
|
|
$
|
122
|
|
|
$
|
115
|
|
|
$
|
110
|
|
CenterPoint Energy
|
|
|
|
|
|
|
||||||
Reimbursement of transition services
(1)
|
|
4
|
|
|
4
|
|
|
7
|
|
(1)
|
Represents amounts billed under the Transition Agreements for certain support services provided to Enable. Actual transition services costs are recorded net of reimbursement.
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
CenterPoint Energy and CERC
|
|
(in millions)
|
||||||
Accounts payable for natural gas purchases from Enable
|
|
$
|
11
|
|
|
$
|
13
|
|
CenterPoint Energy
|
|
|
|
|
||||
Accounts receivable for amounts billed for transition services
|
|
2
|
|
|
1
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
(in millions)
|
||||||||||
Operating revenues
|
|
$
|
3,431
|
|
|
$
|
2,803
|
|
|
$
|
2,272
|
|
Cost of sales, excluding depreciation and amortization
|
|
1,819
|
|
|
1,381
|
|
|
1,017
|
|
|||
Depreciation and amortization
|
|
398
|
|
|
366
|
|
|
338
|
|
|||
Operating income
|
|
648
|
|
|
528
|
|
|
385
|
|
|||
Net income attributable to Enable common units
|
|
485
|
|
|
400
|
|
|
290
|
|
|||
|
|
|
|
|
|
|
||||||
Reconciliation of Equity in Earnings (Losses), net:
|
|
|
|
|
|
|
||||||
CenterPoint Energy’s interest
|
|
$
|
262
|
|
|
$
|
216
|
|
|
$
|
160
|
|
Basis difference amortization
(1)
|
|
47
|
|
|
49
|
|
|
48
|
|
|||
Loss on dilution, net of proportional basis difference recognition
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||
CenterPoint Energy’s equity in earnings, net
|
|
$
|
307
|
|
|
$
|
265
|
|
|
$
|
208
|
|
(1)
|
Equity in earnings of unconsolidated affiliate 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
30
years, the remaining average life of the assets to which the basis difference is attributed.
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(in millions)
|
||||||
Current assets
|
|
$
|
449
|
|
|
$
|
416
|
|
Non-current assets
|
|
11,995
|
|
|
11,177
|
|
||
Current liabilities
|
|
1,615
|
|
|
1,279
|
|
||
Non-current liabilities
|
|
3,211
|
|
|
2,660
|
|
||
Non-controlling interest
|
|
38
|
|
|
12
|
|
||
Preferred equity
|
|
362
|
|
|
362
|
|
||
Enable partners’ equity
|
|
7,218
|
|
|
7,280
|
|
||
Reconciliation of Investment in Enable:
|
|
|
|
|
||||
CenterPoint Energy’s ownership interest in Enable partners’ equity
|
|
$
|
3,896
|
|
|
$
|
3,935
|
|
CenterPoint Energy’s basis difference
|
|
(1,414
|
)
|
|
(1,463
|
)
|
||
CenterPoint Energy’s equity method investment in Enable
|
|
$
|
2,482
|
|
|
$
|
2,472
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
(in millions)
|
||||||||||
Equity in earnings of unconsolidated affiliate, net
|
|
$
|
184
|
|
|
$
|
265
|
|
|
$
|
208
|
|
Income tax expense
|
|
46
|
|
|
104
|
|
|
81
|
|
|||
Income from discontinued operations, net of tax
|
|
$
|
138
|
|
|
$
|
161
|
|
|
$
|
127
|
|
|
Meredith/Time
|
|
AT&T/TW
|
||||
|
(in millions)
|
||||||
Cash payment to ZENS note holders
|
$
|
16
|
|
|
$
|
382
|
|
Indexed debt – reduction
|
(4
|
)
|
|
(95
|
)
|
||
Indexed debt securities derivative – reduction
|
(1
|
)
|
|
(45
|
)
|
||
Loss on indexed debt securities
|
$
|
11
|
|
|
$
|
242
|
|
|
ZENS-Related
Securities
|
|
Debt
Component
of ZENS
|
|
Derivative
Component
of ZENS
|
||||||
|
(in millions)
|
||||||||||
Balance as of December 31, 2015
|
$
|
805
|
|
|
$
|
145
|
|
|
$
|
442
|
|
Accretion of debt component of ZENS
|
—
|
|
|
26
|
|
|
—
|
|
|||
2% interest paid
|
—
|
|
|
(17
|
)
|
|
—
|
|
|||
Sale of ZENS-Related Securities
|
(178
|
)
|
|
—
|
|
|
—
|
|
|||
Distribution to ZENS holders
|
—
|
|
|
(40
|
)
|
|
(21
|
)
|
|||
Loss on indexed debt securities
|
—
|
|
|
—
|
|
|
296
|
|
|||
Gain on ZENS-Related 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 ZENS-Related Securities
|
7
|
|
|
—
|
|
|
—
|
|
|||
Balance as of December 31, 2017
|
960
|
|
|
122
|
|
|
668
|
|
|||
Accretion of debt component of ZENS
|
—
|
|
|
21
|
|
|
—
|
|
|||
2% interest paid
|
—
|
|
|
(17
|
)
|
|
—
|
|
|||
Sale of ZENS-Related Securities
|
(398
|
)
|
|
—
|
|
|
—
|
|
|||
Distribution to ZENS holders
|
—
|
|
|
(102
|
)
|
|
(46
|
)
|
|||
Gain on indexed debt securities
|
—
|
|
|
—
|
|
|
(21
|
)
|
|||
Loss on ZENS-Related Securities
|
(22
|
)
|
|
—
|
|
|
—
|
|
|||
Balance as of December 31, 2018
|
$
|
540
|
|
|
$
|
24
|
|
|
$
|
601
|
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Per Share
|
|
Total
(in millions)
|
||||
December 12, 2018
|
|
February 21, 2019
|
|
March 14, 2019
|
|
$
|
0.2875
|
|
|
$
|
144
|
|
October 23, 2018
|
|
November 15, 2018
|
|
December 13, 2018
|
|
0.2775
|
|
|
139
|
|
||
July 26, 2018
|
|
August 16, 2018
|
|
September 13, 2018
|
|
0.2775
|
|
|
120
|
|
||
April 26, 2018
|
|
May 17, 2018
|
|
June 14, 2018
|
|
0.2775
|
|
|
120
|
|
||
Total 2018
|
|
|
|
|
|
$
|
1.1200
|
|
|
$
|
523
|
|
|
|
|
|
|
|
|
|
|
||||
December 13, 2017
|
|
February 15, 2018
|
|
March 8, 2018
|
|
$
|
0.2775
|
|
|
$
|
120
|
|
October 25, 2017
|
|
November 16, 2017
|
|
December 8, 2017
|
|
0.2675
|
|
|
116
|
|
||
July 27, 2017
|
|
August 16, 2017
|
|
September 8, 2017
|
|
0.2675
|
|
|
115
|
|
||
April 27, 2017
|
|
May 16, 2017
|
|
June 9, 2017
|
|
0.2675
|
|
|
115
|
|
||
January 5, 2017
|
|
February 16, 2017
|
|
March 10, 2017
|
|
0.2675
|
|
|
115
|
|
||
Total 2017
|
|
|
|
|
|
$
|
1.3475
|
|
|
$
|
581
|
|
|
|
|
|
|
|
|
|
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Per Share
|
|
Total
(in millions)
|
||||
October 27, 2016
|
|
November 16, 2016
|
|
December 9, 2016
|
|
$
|
0.2575
|
|
|
$
|
111
|
|
July 28, 2016
|
|
August 16, 2016
|
|
September 9, 2016
|
|
0.2575
|
|
|
111
|
|
||
April 28, 2016
|
|
May 16, 2016
|
|
June 10, 2016
|
|
0.2575
|
|
|
111
|
|
||
January 20, 2016
|
|
February 16, 2016
|
|
March 10, 2016
|
|
0.2575
|
|
|
110
|
|
||
Total 2016
|
|
|
|
|
|
$
|
1.0300
|
|
|
$
|
443
|
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Per Share
|
|
Total
|
||||
|
|
|
|
|
|
|
|
(in millions)
|
||||
December 12, 2018
|
|
February 15, 2019
|
|
March 1, 2019
|
|
$
|
32.1563
|
|
|
$
|
26
|
|
Total 2018
|
|
|
|
|
|
$
|
32.1563
|
|
|
$
|
26
|
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Per Share
|
|
Total
|
||||
|
|
|
|
|
|
|
|
(in millions)
|
||||
December 12, 2018
|
|
February 15, 2019
|
|
March 1, 2019
|
|
$
|
17.5000
|
|
|
$
|
17
|
|
October 23, 2018
|
|
November 15, 2018
|
|
December 1, 2018
|
|
11.6667
|
|
|
11
|
|
||
Total 2018
|
|
|
|
|
|
$
|
29.1667
|
|
|
$
|
28
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Series A Preferred Stock
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Series B Preferred Stock
|
17
|
|
|
—
|
|
|
—
|
|
|||
Total preferred stock dividend requirement
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
senior to Common Stock and to each other class or series of capital stock established after the initial issue date of the Series A Preferred Stock that is expressly made subordinated to the Series A Preferred Stock;
|
•
|
on a parity with any class or series of capital stock established after the initial issue date of the Series A Preferred Stock that is not expressly made senior or subordinated to the Series A Preferred Stock, including the Series B Preferred Stock;
|
•
|
junior to any class or series of capital stock established after the initial issue date of the Series A Preferred Stock that is expressly made senior to the Series A Preferred Stock;
|
•
|
junior to all existing and future indebtedness (including indebtedness outstanding under CenterPoint Energy’s credit facilities, senior notes and commercial paper) and other liabilities with respect to assets available to satisfy claims against CenterPoint Energy; and
|
•
|
structurally subordinated to any existing and future indebtedness and other liabilities of CenterPoint Energy’s subsidiaries and capital stock of CenterPoint Energy’s subsidiaries held by third parties.
|
Applicable Market Value of the Common Stock
|
|
Conversion Rate per Share of Series B Preferred Stock
|
Greater than $32.6990 (threshold appreciation price)
|
|
30.5820 shares of Common Stock
|
Equal to or less than $32.6990 but greater than or equal to $27.2494
|
|
Between 30.5820 and 36.6980 shares of Common Stock, determined by dividing $1,000 by the applicable market value
|
Less than $27.2494 (initial price)
|
|
36.6980 shares of Common Stock
|
Applicable Market Value of the Common Stock
|
|
Conversion Rate per Depository Share
|
Greater than $32.6990 (threshold appreciation price)
|
|
1.5291 shares of Common Stock
|
Equal to or less than $32.6990 but greater than or equal to $27.2494
|
|
Between 1.5291 and 1.8349 shares of Common Stock, determined by dividing $50 by the applicable market value
|
Less than $27.2494 (initial price)
|
|
1.8349 shares of Common Stock
|
•
|
senior to Common Stock and to each other class or series of capital stock established after the initial issue date of the Series B Preferred Stock that is expressly made subordinated to the Series B Preferred Stock;
|
•
|
on a parity with the Series A Preferred Stock and any class or series of capital stock established after the initial issue date that is not expressly made senior or subordinated to the Series B Preferred Stock;
|
•
|
junior to any class or series of capital stock established after the initial issue date that is expressly made senior to the Series B Preferred Stock;
|
•
|
junior to all existing and future indebtedness (including indebtedness outstanding under CenterPoint Energy’s credit facilities, senior notes and commercial paper) and other liabilities with respect to assets available to satisfy claims against CenterPoint Energy; and
|
•
|
structurally subordinated to any existing and future indebtedness and other liabilities of CenterPoint Energy’s subsidiaries and capital stock of CenterPoint Energy’s subsidiaries held by third parties.
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Beginning Balance
|
$
|
(68
|
)
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
(71
|
)
|
|
$
|
1
|
|
|
$
|
3
|
|
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Remeasurement of pension and other postretirement plans
|
(19
|
)
|
|
—
|
|
|
1
|
|
|
4
|
|
|
—
|
|
|
7
|
|
||||||
Deferred loss from interest rate derivatives
(1)
|
(19
|
)
|
|
(18
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|
(1
|
)
|
|
(2
|
)
|
||||||
Amounts reclassified from accumulated other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Prior service cost
(2)
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Actuarial losses
(2)
|
6
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||||
Tax benefit (expense)
|
6
|
|
|
4
|
|
|
(1
|
)
|
|
(4
|
)
|
|
—
|
|
|
(3
|
)
|
||||||
Net current period other comprehensive income (loss)
|
(25
|
)
|
|
(14
|
)
|
|
—
|
|
|
3
|
|
|
(1
|
)
|
|
3
|
|
||||||
Adoption of ASU 2018-02
|
(15
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Ending Balance
|
$
|
(108
|
)
|
|
$
|
(14
|
)
|
|
$
|
5
|
|
|
$
|
(68
|
)
|
|
$
|
—
|
|
|
$
|
6
|
|
(1)
|
Gains and losses are reclassified from Accumulated other comprehensive income into income when the hedged transactions affect earnings. The reclassification amounts are included in Interest and other finance charges in each of the Registrant’s respective Statements of Consolidated Income. Amounts are less than
$1 million
for each of the years ended December 31, 2018 and 2017, respectively.
|
(2)
|
Amounts are included in the computation of net periodic cost and are reflected in Other, net in each of the Registrants’ respective Statements of Consolidated Income.
|
|
December 31,
2018 |
|
December 31,
2017 |
||||||||||||
|
Long-Term
|
|
Current
(1)
|
|
Long-Term
|
|
Current
(1)
|
||||||||
|
(in millions)
|
||||||||||||||
CERC
(2)
:
|
|
|
|
|
|
|
|
||||||||
Short-term borrowings:
|
|
|
|
|
|
|
|
||||||||
Inventory financing
(3)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39
|
|
Total short-term borrowings
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
||||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Senior notes 3.55% to 6.625% due 2021 to 2047
|
2,193
|
|
|
—
|
|
|
1,593
|
|
|
—
|
|
||||
Commercial paper
(4)
|
210
|
|
|
—
|
|
|
898
|
|
|
—
|
|
||||
Unamortized debt issuance costs
|
(15
|
)
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
||||
Unamortized discount and premium, net
|
(17
|
)
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
||||
Total CERC long-term debt
|
2,371
|
|
|
—
|
|
|
2,457
|
|
|
—
|
|
||||
Total CERC debt
|
2,371
|
|
|
—
|
|
|
2,457
|
|
|
39
|
|
||||
Houston Electric:
|
|
|
|
|
|
|
|
|
|
|
|
||||
First mortgage bonds 9.15% due 2021
|
102
|
|
|
—
|
|
|
102
|
|
|
—
|
|
||||
General mortgage bonds 1.85% to 6.95% due 2021 to 2048
|
3,212
|
|
|
—
|
|
|
2,812
|
|
|
—
|
|
||||
Restoration Bond Company:
|
|
|
|
|
|
|
|
||||||||
System restoration bonds 4.243% due 2022
|
197
|
|
|
59
|
|
|
256
|
|
|
56
|
|
||||
Bond Company II:
|
|
|
|
|
|
|
|
||||||||
Transition bonds 5.302% due 2019
|
—
|
|
|
208
|
|
|
208
|
|
|
194
|
|
||||
Bond Company III:
|
|
|
|
|
|
|
|
||||||||
Transition bonds 5.234% due 2020
|
29
|
|
|
56
|
|
|
85
|
|
|
53
|
|
||||
Bond Company IV:
|
|
|
|
|
|
|
|
||||||||
Transition bonds 2.161% to 3.028% due 2020 to 2024
|
753
|
|
|
135
|
|
|
888
|
|
|
131
|
|
||||
Unamortized debt issuance costs
|
(24
|
)
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
||||
Unamortized discount and premium, net
|
(11
|
)
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
||||
Total Houston Electric debt
|
4,258
|
|
|
458
|
|
|
4,319
|
|
|
434
|
|
||||
CenterPoint Energy:
|
|
|
|
|
|
|
|
||||||||
ZENS due 2029
(5)
|
—
|
|
|
24
|
|
|
—
|
|
|
122
|
|
||||
Senior notes 2.50% to 4.25% due 2021 to 2028
|
2,000
|
|
|
—
|
|
|
500
|
|
|
—
|
|
||||
Pollution control bonds 5.125% due 2028
(6)
|
68
|
|
|
—
|
|
|
68
|
|
|
50
|
|
||||
Commercial paper
(4)
|
—
|
|
|
—
|
|
|
855
|
|
|
—
|
|
||||
Unamortized debt issuance costs
|
(13
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
||||
Unamortized discount and premium, net
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total CenterPoint Energy long-term debt
|
8,682
|
|
|
482
|
|
|
8,195
|
|
|
606
|
|
||||
Total CenterPoint Energy debt
|
$
|
8,682
|
|
|
$
|
482
|
|
|
$
|
8,195
|
|
|
$
|
645
|
|
(1)
|
Includes amounts due or exchangeable within one year of the date noted.
|
(2)
|
Issued by CERC Corp.
|
(3)
|
CenterPoint Energy’s and CERC’s NGD has AMAs associated with its utility distribution service in Arkansas, Louisiana, Mississippi, Oklahoma and Texas. In March 2018, NGD’s third-party AMAs in Arkansas, Louisiana and Oklahoma
|
(4)
|
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.
|
(5)
|
CenterPoint Energy’s ZENS obligation is bifurcated into a debt component and an embedded derivative component. For additional information regarding ZENS, see Note 12(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.
|
(6)
|
$68 million
and
$118 million
of these series of debt were secured by general mortgage bonds of Houston Electric as of
December 31, 2018
and
2017
, respectively.
|
Registrant
|
|
Retirement Date
|
|
Debt Instrument
|
|
Aggregate Principal Amount
(1)
|
|
Interest Rate
|
|
Maturity Date
|
||
|
|
|
|
|
|
(in millions)
|
|
|
|
|
||
CenterPoint Energy
|
|
November 2018
|
|
Pollution control bonds
|
|
$
|
50
|
|
|
5.050%
|
|
2018
|
(1)
|
Secured by general mortgage bonds of Houston Electric.
|
Registrant
|
|
Issuance Date
|
|
Debt Instrument
|
|
Aggregate Principal Amount
|
|
Interest Rate
|
|
Maturity Date
|
||
|
|
|
|
|
|
(in millions)
|
|
|
|
|
||
Houston Electric
(1)
|
|
February 2018
|
|
General mortgage bonds
|
|
$
|
400
|
|
|
3.95%
|
|
2048
|
CERC
(1) (2)
|
|
March 2018
|
|
Unsecured senior notes
|
|
300
|
|
|
3.55%
|
|
2023
|
|
CERC
(1) (2)
|
|
March 2018
|
|
Unsecured senior notes
|
|
300
|
|
|
4.00%
|
|
2028
|
|
CenterPoint Energy
(3)
|
|
October 2018
|
|
Unsecured senior notes
|
|
500
|
|
|
3.60%
|
|
2021
|
|
CenterPoint Energy
(3)
|
|
October 2018
|
|
Unsecured senior notes
|
|
500
|
|
|
3.85%
|
|
2024
|
|
CenterPoint Energy
(3)
|
|
October 2018
|
|
Unsecured senior notes
|
|
500
|
|
|
4.25%
|
|
2028
|
|
Houston Electric
(1)
|
|
January 2019
|
|
General mortgage bonds
|
|
700
|
|
|
4.25%
|
|
2049
|
(1)
|
Proceeds from these debt issuances were used for general limited liability company and corporate purposes, as applicable, including capital expenditures, repayment of portions of outstanding commercial paper and borrowings under CenterPoint Energy’s money pool.
|
(2)
|
Issued by CERC Corp.
|
(3)
|
Proceeds from these debt issuances were used to fund a portion of the Merger and to pay related fees and expenses.
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||||||||
|
|
Size of
Facility |
|
Loans
|
|
Letters
of Credit |
|
Commercial
Paper |
|
Weighted Average Interest Rate
|
|
Size of
Facility |
|
Loans
|
|
Letters
of Credit |
|
Commercial
Paper |
|
Weighted Average Interest Rate
|
||||||||||||||||||
|
|
(in millions, except weighted average interest rate)
|
|
|
||||||||||||||||||||||||||||||||||
CenterPoint Energy
|
|
$
|
3,300
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,700
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
855
|
|
|
1.88
|
%
|
Houston Electric
|
|
300
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
300
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||||||
CERC
(1)
|
|
900
|
|
|
—
|
|
|
1
|
|
|
210
|
|
|
2.93
|
%
|
|
900
|
|
|
—
|
|
|
1
|
|
|
898
|
|
|
1.72
|
%
|
||||||||
Total
|
|
$
|
4,500
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
210
|
|
|
|
|
$
|
2,900
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
1,753
|
|
|
|
(1)
|
Issued by CERC Corp.
|
Registrant
|
|
Issuance Date
|
|
Debt Instrument
|
|
Aggregate Principal Amount
|
|
Weighted Average Interest Rate
|
||
|
|
|
|
|
|
(in millions)
|
|
|
||
CenterPoint Energy
(1) (2)
|
|
January 2019
|
|
Commercial paper
|
|
$
|
1,660
|
|
|
2.88%
|
(1)
|
Proceeds from these commercial paper issuances were used to fund a portion of the Merger and to pay related fees and expenses and were contributed to Vectren for its payment of its stub period cash dividend, long-term incentive payments and to fund the repayment of indebtedness of Vectren subsidiaries redeemed at the option of the holder as a result of the closing of the Merger.
|
(2)
|
The commercial paper notes were issued at various times in January 2019 with maturities up to and including
90
days as of the time of issuance, and, prior to their use as described in connection with the closing of the Merger, the net proceeds of such issuances were invested in short-term investments.
|
Execution
Date
|
|
Registrant
|
|
Size of
Facility
|
|
Draw Rate of LIBOR plus
(1)
|
|
Financial Covenant Limit on Debt for Borrowed Money to Capital Ratio
(2)
|
|
Debt for Borrowed Money to Capital
Ratio as of
December 31, 2018
(3)
|
|
Termination
Date
(4)
|
||
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
||
March 3, 2016
|
|
CenterPoint Energy
|
|
$
|
3,300
|
|
(5)
|
1.250%
|
|
65%
|
|
44.9%
|
|
March 3, 2022
|
March 3, 2016
|
|
Houston Electric
|
|
300
|
|
|
1.125%
|
|
65%
|
|
49.2%
|
|
March 3, 2022
|
|
March 3, 2016
|
|
CERC
(6)
|
|
900
|
|
|
1.125%
|
|
65%
|
|
46.8%
|
|
March 3, 2022
|
(1)
|
Based on credit ratings as of December 31, 2018.
|
(2)
|
For CenterPoint Energy and Houston Electric, 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.
|
(3)
|
As defined in the revolving credit facility agreement, excluding Securitization Bonds.
|
(4)
|
Amended on June 16, 2017 to extend the termination date.
|
(5)
|
Pursuant to the amendment entered into in May 2018, the aggregate commitments under the CenterPoint Energy revolving credit facility increased to
$3.3 billion
on October 5, 2018 as a result of the satisfaction of certain conditions described above.
|
(6)
|
Issued by CERC Corp.
|
|
CenterPoint
Energy
(1)
|
|
Houston
Electric
(1)
|
|
CERC
|
|
Securitization Bonds
|
||||||||
|
(in millions)
|
||||||||||||||
2019
|
$
|
458
|
|
|
$
|
458
|
|
|
$
|
—
|
|
|
$
|
458
|
|
2020
|
231
|
|
|
231
|
|
|
—
|
|
|
231
|
|
||||
2021
|
1,706
|
|
|
613
|
|
|
593
|
|
|
211
|
|
||||
2022
|
1,230
|
|
|
519
|
|
|
210
|
|
|
219
|
|
||||
2023
|
656
|
|
|
356
|
|
|
300
|
|
|
156
|
|
(1)
|
These maturities include Securitization Bonds principal repayments on scheduled payment dates.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
CenterPoint Energy
|
|
|
|
|
|
||||||
Current income tax expense:
|
|
|
|
|
|
||||||
Federal
|
$
|
89
|
|
|
$
|
32
|
|
|
$
|
23
|
|
State
|
9
|
|
|
9
|
|
|
18
|
|
|||
Total current expense
|
98
|
|
|
41
|
|
|
41
|
|
|||
Deferred income tax expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
(25
|
)
|
|
(806
|
)
|
|
185
|
|
|||
State
|
73
|
|
|
36
|
|
|
28
|
|
|||
Total deferred expense (benefit)
|
48
|
|
|
(770
|
)
|
|
213
|
|
|||
Total income tax expense (benefit)
|
$
|
146
|
|
|
$
|
(729
|
)
|
|
$
|
254
|
|
Houston Electric
|
|
|
|
|
|
||||||
Current income tax expense:
|
|
|
|
|
|
||||||
Federal
|
$
|
109
|
|
|
$
|
70
|
|
|
$
|
165
|
|
State
|
18
|
|
|
19
|
|
|
18
|
|
|||
Total current expense
|
127
|
|
|
89
|
|
|
183
|
|
|||
Deferred income tax benefit:
|
|
|
|
|
|
||||||
Federal
|
(38
|
)
|
|
(98
|
)
|
|
(34
|
)
|
|||
Total deferred benefit
|
(38
|
)
|
|
(98
|
)
|
|
(34
|
)
|
|||
Total income tax expense (benefit)
|
$
|
89
|
|
|
$
|
(9
|
)
|
|
$
|
149
|
|
CERC - Continuing Operations
|
|
|
|
|
|
||||||
Current income tax expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
$
|
(9
|
)
|
|
$
|
(31
|
)
|
|
$
|
21
|
|
State
|
—
|
|
|
(10
|
)
|
|
4
|
|
|||
Total current expense (benefit)
|
(9
|
)
|
|
(41
|
)
|
|
25
|
|
|||
Deferred income tax expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
10
|
|
|
(249
|
)
|
|
41
|
|
|||
State
|
21
|
|
|
25
|
|
|
15
|
|
|||
Total deferred expense (benefit)
|
31
|
|
|
(224
|
)
|
|
56
|
|
|||
Total income tax expense (benefit)
|
$
|
22
|
|
|
$
|
(265
|
)
|
|
$
|
81
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
CERC - Discontinued Operations
|
|
|
|
|
|
||||||
Current income tax expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
$
|
9
|
|
|
$
|
31
|
|
|
$
|
(21
|
)
|
State
|
4
|
|
|
11
|
|
|
2
|
|
|||
Total current expense (benefit)
|
13
|
|
|
42
|
|
|
(19
|
)
|
|||
Deferred income tax expense:
|
|
|
|
|
|
||||||
Federal
|
29
|
|
|
56
|
|
|
90
|
|
|||
State
|
4
|
|
|
6
|
|
|
10
|
|
|||
Total deferred expense
|
33
|
|
|
62
|
|
|
100
|
|
|||
Total income tax expense
|
$
|
46
|
|
|
$
|
104
|
|
|
$
|
81
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
CenterPoint Energy
(1) (2) (3)
|
|
|
|
|
|
||||||
Income before income taxes
|
$
|
514
|
|
|
$
|
1,063
|
|
|
$
|
686
|
|
Federal statutory income tax rate
|
21
|
%
|
|
35
|
%
|
|
35
|
%
|
|||
Expected federal income tax expense
|
108
|
|
|
372
|
|
|
240
|
|
|||
Increase (decrease) in tax expense resulting from:
|
|
|
|
|
|
||||||
State income tax expense, net of federal income tax
|
22
|
|
|
26
|
|
|
27
|
|
|||
State valuation allowance, net of federal income tax
|
11
|
|
|
3
|
|
|
3
|
|
|||
State law change, net of federal income tax
|
32
|
|
|
—
|
|
|
—
|
|
|||
Federal income tax rate reduction
|
—
|
|
|
(1,113
|
)
|
|
—
|
|
|||
Excess deferred income tax amortization
|
(24
|
)
|
|
—
|
|
|
—
|
|
|||
Other, net
|
(3
|
)
|
|
(17
|
)
|
|
(16
|
)
|
|||
Total
|
38
|
|
|
(1,101
|
)
|
|
14
|
|
|||
Total income tax expense (benefit)
|
$
|
146
|
|
|
$
|
(729
|
)
|
|
$
|
254
|
|
Effective tax rate
|
28
|
%
|
|
(69
|
)%
|
|
37
|
%
|
|||
Houston Electric
(4) (5)
|
|
|
|
|
|
||||||
Income before income taxes
|
$
|
425
|
|
|
$
|
424
|
|
|
$
|
425
|
|
Federal statutory income tax rate
|
21
|
%
|
|
35
|
%
|
|
35
|
%
|
|||
Expected federal income tax expense
|
89
|
|
|
148
|
|
|
149
|
|
|||
Increase (decrease) in tax expense resulting from:
|
|
|
|
|
|
||||||
State income tax expense, net of federal income tax
|
14
|
|
|
12
|
|
|
12
|
|
|||
Federal income tax rate reduction
|
—
|
|
|
(158
|
)
|
|
—
|
|
|||
Excess deferred income tax amortization
|
(9
|
)
|
|
—
|
|
|
—
|
|
|||
Other, net
|
(5
|
)
|
|
(11
|
)
|
|
(12
|
)
|
|||
Total
|
—
|
|
|
(157
|
)
|
|
—
|
|
|||
Total income tax expense (benefit)
|
$
|
89
|
|
|
$
|
(9
|
)
|
|
$
|
149
|
|
Effective tax rate
|
21
|
%
|
|
(2
|
)%
|
|
35
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
CERC - Continuing Operations
(6) (7)
|
|
|
|
|
|
||||||
Income before income taxes
|
$
|
92
|
|
|
$
|
319
|
|
|
$
|
199
|
|
Federal statutory income tax rate
|
21
|
%
|
|
35
|
%
|
|
35
|
%
|
|||
Expected federal income tax expense
|
19
|
|
|
112
|
|
|
70
|
|
|||
Increase (decrease) in tax expense resulting from:
|
|
|
|
|
|
||||||
State income tax expense, net of federal income tax
|
5
|
|
|
6
|
|
|
4
|
|
|||
State law change, net of federal income tax
|
—
|
|
|
—
|
|
|
6
|
|
|||
State valuation allowance, net of federal income tax
|
11
|
|
|
3
|
|
|
2
|
|
|||
Federal income tax rate reduction
|
—
|
|
|
(396
|
)
|
|
—
|
|
|||
Excess deferred income tax amortization
|
(15
|
)
|
|
—
|
|
|
—
|
|
|||
Tax basis balance sheet adjustment
|
—
|
|
|
11
|
|
|
—
|
|
|||
Other, net
|
2
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Total
|
3
|
|
|
(377
|
)
|
|
11
|
|
|||
Total income tax expense (benefit)
|
$
|
22
|
|
|
$
|
(265
|
)
|
|
$
|
81
|
|
Effective tax rate
|
24
|
%
|
|
(83
|
)%
|
|
41
|
%
|
|||
CERC - Discontinued Operations
(7)
|
|
|
|
|
|
||||||
Income before income taxes
|
$
|
184
|
|
|
$
|
265
|
|
|
$
|
208
|
|
Federal statutory income tax rate
|
21
|
%
|
|
35
|
%
|
|
35
|
%
|
|||
Expected federal income tax expense
|
39
|
|
|
93
|
|
|
73
|
|
|||
Increase in tax expense resulting from:
|
|
|
|
|
|
||||||
State income tax expense, net of federal income tax
|
7
|
|
|
11
|
|
|
8
|
|
|||
Total
|
7
|
|
|
11
|
|
|
8
|
|
|||
Total income tax expense
|
$
|
46
|
|
|
$
|
104
|
|
|
$
|
81
|
|
Effective tax rate
|
25
|
%
|
|
39
|
%
|
|
39
|
%
|
(1)
|
Recognized a
$32 million
deferred tax expense due to state law changes that resulted in remeasurement of state deferred taxes in those jurisdictions. Also recorded an additional
$11 million
valuation allowance on certain state net operating loss deferred tax assets that are no longer expected to be utilized prior to expiration after the Internal Spin. These items are partially offset by
$24 million
of amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions beginning in 2018.
|
(2)
|
Recognized a
$1.1 billion
deferred tax benefit from the remeasurement of CenterPoint Energy’s ADFIT liability as a result of the enactment of the TCJA on December 22, 2017, which reduced the U.S. corporate income tax rate from
35%
to
21%
. For additional information on the 2017 impacts of the TCJA, please see the discussion following the deferred tax assets and liabilities table below.
|
(3)
|
Recognized a
$6 million
deferred tax expense in 2016 due to Louisiana state law change and recorded an additional
$3 million
valuation allowance on certain state carryforwards.
|
(4)
|
Recognized
$9 million
of amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions beginning in 2018.
|
(5)
|
Recognized a
$158 million
deferred tax benefit from the remeasurement of Houston Electric’s ADFIT liability as a result of the enactment of the TCJA on December 22, 2017, which reduced the U.S. corporate income tax rate from
35%
to
21%
. For additional information on the 2017 impacts of the TCJA, please see the discussion following the deferred tax assets and liabilities table below.
|
(6)
|
Recorded an additional
$11 million
valuation allowance on certain state net operating loss deferred tax assets that are no longer expected to be utilized prior to expiration after the Internal Spin. This item is partially offset by
$15 million
of amortization of the net regulatory EDIT liability in certain jurisdictions as decreed by regulators beginning in 2018.
|
(7)
|
Recognized a
$396 million
deferred tax benefit from the remeasurement of CERC’s ADFIT liability as a result of the enactment of the TCJA on December 22, 2017, which reduced the U.S. corporate income tax rate from
35%
to
21%
. ASC 740 requires tax impacts of changes in tax laws or rates be reported in continuing operations. Therefore, CERC’s federal income tax benefit generated by the remeasurement of the ADFIT liability for Enable during 2017 and state law changes during 2016 associated with its investment in Enable are reported in continuing operations on CERC’s Statements of Consolidated Income. The ADFIT liability associated with CERC’s investment in Enable is reported as discontinued operations on CERC’s Consolidated Balance Sheets.
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
CenterPoint Energy
|
|
|
|
||||
Deferred tax assets:
|
|
|
|
||||
Benefits and compensation
|
$
|
160
|
|
|
$
|
162
|
|
Regulatory liabilities
|
356
|
|
|
347
|
|
||
Loss and credit carryforwards
|
84
|
|
|
90
|
|
||
Asset retirement obligations
|
62
|
|
|
68
|
|
||
Other
|
29
|
|
|
16
|
|
||
Valuation allowance
|
(18
|
)
|
|
(7
|
)
|
||
Total deferred tax assets
|
673
|
|
|
676
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Property, plant and equipment
|
1,894
|
|
|
1,808
|
|
||
Investment in unconsolidated affiliates
|
987
|
|
|
927
|
|
||
Regulatory assets
|
395
|
|
|
473
|
|
||
Investment in marketable securities and indexed debt
|
478
|
|
|
502
|
|
||
Indexed debt securities derivative
|
27
|
|
|
13
|
|
||
Other
|
131
|
|
|
127
|
|
||
Total deferred tax liabilities
|
3,912
|
|
|
3,850
|
|
||
Net deferred tax liabilities
|
$
|
3,239
|
|
|
$
|
3,174
|
|
Houston Electric
|
|
|
|
||||
Deferred tax assets:
|
|
|
|
||||
Regulatory liabilities
|
$
|
205
|
|
|
$
|
198
|
|
Benefits and compensation
|
17
|
|
|
28
|
|
||
Asset retirement obligations
|
7
|
|
|
7
|
|
||
Other
|
12
|
|
|
3
|
|
||
Total deferred tax assets
|
241
|
|
|
236
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Property, plant and equipment
|
1,087
|
|
|
1,030
|
|
||
Regulatory assets
|
177
|
|
|
265
|
|
||
Total deferred tax liabilities
|
1,264
|
|
|
1,295
|
|
||
Net deferred tax liabilities
|
$
|
1,023
|
|
|
$
|
1,059
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
CERC - Continuing Operations
|
|
|
|
||||
Deferred tax assets:
|
|
|
|
||||
Benefits and compensation
|
$
|
27
|
|
|
$
|
27
|
|
Regulatory liabilities
|
150
|
|
|
150
|
|
||
Loss and credit carryforwards
|
259
|
|
|
288
|
|
||
Asset retirement obligations
|
54
|
|
|
60
|
|
||
Other
|
20
|
|
|
18
|
|
||
Valuation allowance
|
(18
|
)
|
|
(7
|
)
|
||
Total deferred tax assets
|
492
|
|
|
536
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Property, plant and equipment
|
773
|
|
|
745
|
|
||
Regulatory assets
|
41
|
|
|
38
|
|
||
Other
|
84
|
|
|
115
|
|
||
Total deferred tax liabilities
|
898
|
|
|
898
|
|
||
Net deferred tax liabilities
|
$
|
406
|
|
|
$
|
362
|
|
CERC - Discontinued Operations
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Investment in unconsolidated affiliates
|
—
|
|
|
927
|
|
||
Net deferred tax liabilities
|
$
|
—
|
|
|
$
|
927
|
|
|
|
||
|
(in millions)
|
||
2019
|
$
|
454
|
|
2020
|
430
|
|
|
2021
|
343
|
|
|
2022
|
231
|
|
|
2023
|
154
|
|
|
2024 and beyond
|
1,446
|
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||
|
(in millions)
|
||||||||||
2019
|
$
|
6
|
|
|
$
|
1
|
|
|
$
|
5
|
|
2020
|
6
|
|
|
—
|
|
|
5
|
|
|||
2021
|
5
|
|
|
—
|
|
|
4
|
|
|||
2022
|
4
|
|
|
—
|
|
|
4
|
|
|||
2023
|
3
|
|
|
—
|
|
|
3
|
|
|||
2024 and beyond
|
12
|
|
|
—
|
|
|
11
|
|
|||
Total
|
$
|
36
|
|
|
$
|
1
|
|
|
$
|
32
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||||||||
|
(in millions)
|
|
|
||||||||||||||||||||||||||||||||
Lease expense
|
$
|
9
|
|
|
$
|
1
|
|
|
$
|
8
|
|
|
$
|
10
|
|
|
$
|
1
|
|
|
$
|
9
|
|
|
$
|
10
|
|
|
$
|
1
|
|
|
$
|
9
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions, except per share and share amounts)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Income available to common shareholders - basic
(1)
|
$
|
333
|
|
|
$
|
1,792
|
|
|
$
|
432
|
|
Add back: Series B Preferred Stock dividend
|
—
|
|
|
—
|
|
|
—
|
|
|||
Income available to common shareholders - diluted
(1)
|
$
|
333
|
|
|
$
|
1,792
|
|
|
$
|
432
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Weighted average common shares outstanding - basic
|
448,829,000
|
|
|
430,964,000
|
|
|
430,606,000
|
|
|||
Plus: Incremental shares from assumed conversions:
|
|
|
|
|
|
|
|
|
|||
Restricted stock
(2)
|
3,636,000
|
|
|
3,344,000
|
|
|
2,997,000
|
|
|||
Series B Preferred Stock
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Weighted average common shares outstanding - diluted
|
452,465,000
|
|
|
434,308,000
|
|
|
433,603,000
|
|
|||
|
|
|
|
|
|
||||||
Earnings per common share:
|
|
|
|
|
|
||||||
Basic earnings per common share
|
$
|
0.74
|
|
|
$
|
4.16
|
|
|
$
|
1.00
|
|
Diluted earnings per common share
|
$
|
0.74
|
|
|
$
|
4.13
|
|
|
$
|
1.00
|
|
(1)
|
Income available to common shareholders for the year ended December 31, 2017 includes a reduction in income tax expense of
$1,113 million
due to tax reform. See
Note 15
for further discussion of the impacts of the TCJA.
|
(2)
|
The potentially dilutive impact from restricted stock awards applies the treasury stock method. Under this method, an increase in the average fair market value of Common Stock can result in a greater dilutive impact from these securities.
|
(3)
|
The potentially dilutive impact from Series B Preferred Stock applies the if-converted method in calculating diluted earnings per common share. Under this method, diluted earnings per common share is adjusted for the more dilutive effect of the Series B Preferred Stock as a result of either its accumulated dividend for the period in the numerator or the assumed-converted common share equivalent in the denominator. The computation of diluted earnings per common share outstanding for the year ended December 31, 2018 excludes
8,885,000
potentially dilutive shares because to include them would be anti-dilutive. However, these shares could be potentially dilutive in the future.
|
|
Year Ended December 31, 2018
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
(in millions, except per share amounts)
|
||||||||||||||
CenterPoint Energy
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
3,155
|
|
|
$
|
2,186
|
|
|
$
|
2,212
|
|
|
$
|
3,036
|
|
Operating income
|
251
|
|
|
187
|
|
|
226
|
|
|
167
|
|
||||
Income (loss) available to common shareholders
|
165
|
|
|
(75
|
)
|
|
153
|
|
|
90
|
|
||||
Basic earnings (loss) per common share
(1)
|
0.38
|
|
|
(0.17
|
)
|
|
0.35
|
|
|
0.18
|
|
||||
Diluted earnings (loss) per common share
(1)
|
0.38
|
|
|
(0.17
|
)
|
|
0.35
|
|
|
0.18
|
|
|
Year Ended December 31, 2018
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
(in millions, except per share amounts)
|
||||||||||||||
Houston Electric
|
|
|
|
|
|
|
|
||||||||
Revenues
|
755
|
|
|
854
|
|
|
897
|
|
|
728
|
|
||||
Operating income
|
119
|
|
|
181
|
|
|
227
|
|
|
98
|
|
||||
Net income
|
52
|
|
|
101
|
|
|
143
|
|
|
40
|
|
||||
CERC
(4)
|
|
|
|
|
|
|
|
||||||||
Revenues
|
2,400
|
|
|
1,328
|
|
|
1,312
|
|
|
2,303
|
|
||||
Operating income (loss)
|
131
|
|
|
22
|
|
|
(7
|
)
|
|
76
|
|
||||
Income (loss) from continuing operations
|
78
|
|
|
(8
|
)
|
|
(35
|
)
|
|
35
|
|
||||
Income (loss) from discontinued operations
|
52
|
|
|
44
|
|
|
44
|
|
|
(2
|
)
|
||||
Net income
|
130
|
|
|
36
|
|
|
9
|
|
|
33
|
|
|
Year Ended December 31, 2017
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter |
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
(in millions, except per share amounts)
|
||||||||||||||
CenterPoint Energy
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
2,735
|
|
|
$
|
2,143
|
|
|
$
|
2,098
|
|
|
$
|
2,638
|
|
Operating income
(2)
|
291
|
|
|
240
|
|
|
297
|
|
|
308
|
|
||||
Income available to common shareholders
(3)
|
192
|
|
|
135
|
|
|
169
|
|
|
1,296
|
|
||||
Basic earnings per common share
(1)
|
0.45
|
|
|
0.31
|
|
|
0.39
|
|
|
3.01
|
|
||||
Diluted earnings per common share
(1)
|
0.44
|
|
|
0.31
|
|
|
0.39
|
|
|
2.99
|
|
||||
Houston Electric
|
|
|
|
|
|
|
|
||||||||
Revenues
|
638
|
|
|
752
|
|
|
843
|
|
|
765
|
|
||||
Operating income
(2)
|
85
|
|
|
171
|
|
|
254
|
|
|
127
|
|
||||
Net income
(3)
|
18
|
|
|
75
|
|
|
130
|
|
|
210
|
|
||||
CERC
(4)
|
|
|
|
|
|
|
|
||||||||
Revenues
|
2,093
|
|
|
1,387
|
|
|
1,251
|
|
|
1,872
|
|
||||
Operating income
(2)
|
199
|
|
|
59
|
|
|
31
|
|
|
178
|
|
||||
Income (loss) from continuing operations
|
102
|
|
|
17
|
|
|
(4
|
)
|
|
469
|
|
||||
Income from discontinued operations
|
45
|
|
|
37
|
|
|
42
|
|
|
37
|
|
||||
Net income
(3)
|
147
|
|
|
54
|
|
|
38
|
|
|
506
|
|
(1)
|
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.
|
(2)
|
Recast to reflect the adoption of ASU 2017-07. See Note 2(r) for further information.
|
(3)
|
Income available to common shareholders and Net income for the fourth quarter 2017 include a reduction in income tax expense of
$1,113 million
,
$158 million
and
$396 million
for CenterPoint Energy, Houston Electric and CERC, respectively, due to the TCJA. See
Note 15
for further discussion of the impacts of tax reform implementation.
|
(4)
|
Amounts have been recast to reflect discontinued operations in all periods presented.
|
|
|
Electric Transmission & Distribution
|
|
Natural Gas Distribution
|
|
Energy
Services
|
|
Midstream Investments
|
|
Other Operations
|
CenterPoint Energy
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
Houston Electric
|
|
X
|
|
|
|
|
|
|
|
|
CERC
|
|
|
|
X
|
|
X
|
|
(1)
|
|
X
|
(1)
|
On September 4, 2018, CERC completed the Internal Spin. Previously, CERC’s equity method investment in Enable was included in CERC’s Midstream Investments reportable segment. CERC’s equity in earnings in Enable, net of basis difference amortization and income tax, have been classified as discontinued operations for all periods presented. See
Note 11
for further discussion on the Internal Spin and the associated discontinued operations presentation.
|
|
Revenues
from
External
Customers
|
|
Intersegment
Revenues
|
|
Depreciation
and
Amortization
|
|
Operating
Income
|
|
Total
Assets
|
|
Expenditures
for Long-Lived
Assets
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
As of and for the year ended December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Electric Transmission & Distribution
|
$
|
3,232
|
|
(1)
|
$
|
—
|
|
|
$
|
917
|
|
|
$
|
623
|
|
|
$
|
10,509
|
|
|
$
|
952
|
|
Natural Gas Distribution
|
2,931
|
|
|
36
|
|
|
277
|
|
|
266
|
|
|
6,956
|
|
|
638
|
|
||||||
Energy Services
|
4,411
|
|
|
110
|
|
|
16
|
|
|
(47
|
)
|
|
1,558
|
|
|
20
|
|
||||||
Midstream Investments (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,482
|
|
|
—
|
|
||||||
Other Operations
|
15
|
|
|
—
|
|
|
33
|
|
|
(11
|
)
|
|
6,156
|
|
(3)
|
110
|
|
||||||
Eliminations
|
—
|
|
|
(146
|
)
|
|
—
|
|
|
—
|
|
|
(652
|
)
|
|
—
|
|
||||||
Consolidated
|
$
|
10,589
|
|
|
$
|
—
|
|
|
$
|
1,243
|
|
|
$
|
831
|
|
|
$
|
27,009
|
|
|
1,720
|
|
|
Reconciling items
|
|
|
|
|
|
|
|
|
|
|
(69
|
)
|
|||||||||||
Capital expenditures per Statements of Consolidated Cash Flows
|
|
|
|
|
|
|
|
|
|
|
$
|
1,651
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
from
External
Customers
|
|
Intersegment
Revenues
|
|
Depreciation
and
Amortization
|
|
Operating
Income
|
|
Total
Assets
|
|
Expenditures
for Long-Lived
Assets
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
As of and for the year ended December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Electric Transmission & Distribution
|
$
|
2,997
|
|
(1)
|
$
|
—
|
|
|
$
|
724
|
|
|
$
|
636
|
|
|
$
|
10,292
|
|
|
$
|
924
|
|
Natural Gas Distribution
|
2,606
|
|
|
33
|
|
|
260
|
|
|
348
|
|
|
6,608
|
|
|
523
|
|
||||||
Energy Services
|
3,997
|
|
|
52
|
|
|
19
|
|
|
126
|
|
|
1,521
|
|
|
11
|
|
||||||
Midstream Investments (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,472
|
|
|
—
|
|
||||||
Other Operations
|
14
|
|
|
—
|
|
|
33
|
|
|
26
|
|
|
2,497
|
|
(3)
|
36
|
|
||||||
Eliminations
|
—
|
|
|
(85
|
)
|
|
—
|
|
|
—
|
|
|
(654
|
)
|
|
—
|
|
||||||
Consolidated
|
$
|
9,614
|
|
|
$
|
—
|
|
|
$
|
1,036
|
|
|
$
|
1,136
|
|
|
$
|
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
|
|
(1)
|
$
|
—
|
|
|
$
|
838
|
|
|
$
|
653
|
|
|
$
|
10,211
|
|
|
$
|
858
|
|
Natural Gas Distribution
|
2,380
|
|
|
29
|
|
|
242
|
|
|
321
|
|
|
6,099
|
|
|
510
|
|
||||||
Energy Services
|
2,073
|
|
|
26
|
|
|
7
|
|
|
21
|
|
|
1,102
|
|
|
5
|
|
||||||
Midstream Investments (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,505
|
|
|
—
|
|
||||||
Other Operations
|
15
|
|
|
—
|
|
|
39
|
|
|
28
|
|
|
2,681
|
|
(3)
|
33
|
|
||||||
Eliminations
|
—
|
|
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
(769
|
)
|
|
—
|
|
||||||
Consolidated
|
$
|
7,528
|
|
|
$
|
—
|
|
|
$
|
1,126
|
|
|
$
|
1,023
|
|
|
$
|
21,829
|
|
|
1,406
|
|
|
Reconciling items
|
|
|
|
|
|
|
|
|
|
|
8
|
|
|||||||||||
Capital expenditures per Statements of Consolidated Cash Flows
|
|
|
|
|
|
|
|
|
|
|
$
|
1,414
|
|
(1)
|
CenterPoint Energy’s and Houston Electric’s Electric Transmission & Distribution revenues from major customers are as follows:
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
(in millions)
|
||||||||||
Affiliates of NRG
|
|
$
|
705
|
|
|
$
|
713
|
|
|
$
|
698
|
|
Affiliates of Vistra Energy Corp.
|
|
251
|
|
|
229
|
|
|
220
|
|
(2)
|
CenterPoint Energy’s Midstream Investments’ equity earnings, net are as follows:
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
(in millions)
|
||||||||||
Enable
|
|
$
|
307
|
|
|
$
|
265
|
|
|
$
|
208
|
|
(3)
|
Total assets included pension and other postemployment-related regulatory assets of
$665 million
,
$600 million
and
$759 million
as of
December 31, 2018
,
2017
and
2016
, respectively. Additionally, total assets as of December 31, 2018 included
$3.9 billion
of temporary investments included in Cash and cash equivalents on CenterPoint Energy’s Consolidated Balance Sheets.
|
|
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, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Natural Gas Distribution
|
$
|
2,931
|
|
|
$
|
36
|
|
|
$
|
277
|
|
|
$
|
266
|
|
|
$
|
6,956
|
|
|
$
|
638
|
|
Energy Services
|
4,411
|
|
|
110
|
|
|
16
|
|
|
(47
|
)
|
|
1,558
|
|
|
20
|
|
||||||
Other Operations
|
1
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
66
|
|
|
—
|
|
||||||
Eliminations
|
—
|
|
|
(146
|
)
|
|
—
|
|
|
—
|
|
|
(366
|
)
|
|
—
|
|
||||||
Consolidated
|
$
|
7,343
|
|
|
$
|
—
|
|
|
$
|
293
|
|
|
$
|
222
|
|
|
$
|
8,214
|
|
|
658
|
|
|
Reconciling items
|
|
|
|
|
|
|
|
|
|
|
(25
|
)
|
|||||||||||
Capital expenditures per Statements of Consolidated Cash Flows
|
|
|
|
|
|
|
|
|
|
|
$
|
633
|
|
||||||||||
As of and for the year ended December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Natural Gas Distribution
|
$
|
2,606
|
|
|
$
|
33
|
|
|
$
|
260
|
|
|
$
|
348
|
|
|
$
|
6,608
|
|
|
$
|
523
|
|
Energy Services
|
3,997
|
|
|
52
|
|
|
19
|
|
|
126
|
|
|
1,521
|
|
|
11
|
|
||||||
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,472
|
|
(1)
|
—
|
|
||||||
Other Operations
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
70
|
|
|
—
|
|
||||||
Eliminations
|
—
|
|
|
(85
|
)
|
|
—
|
|
|
—
|
|
|
(559
|
)
|
|
—
|
|
||||||
Consolidated
|
$
|
6,603
|
|
|
$
|
—
|
|
|
$
|
279
|
|
|
$
|
467
|
|
|
$
|
10,112
|
|
|
534
|
|
|
Reconciling items
|
|
|
|
|
|
|
|
|
|
|
(21
|
)
|
|||||||||||
Capital expenditures per Statements of Consolidated Cash Flows
|
|
|
|
|
|
|
|
|
|
|
$
|
513
|
|
||||||||||
As of and for the year ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Natural Gas Distribution
|
$
|
2,380
|
|
|
$
|
29
|
|
|
$
|
242
|
|
|
$
|
321
|
|
|
$
|
6,099
|
|
|
$
|
510
|
|
Energy Services
|
2,073
|
|
|
26
|
|
|
7
|
|
|
21
|
|
|
1,102
|
|
|
5
|
|
||||||
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,505
|
|
(1)
|
—
|
|
||||||
Other Operations
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
75
|
|
|
—
|
|
||||||
Eliminations
|
—
|
|
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
(563
|
)
|
|
—
|
|
||||||
Consolidated
|
$
|
4,454
|
|
|
$
|
—
|
|
|
$
|
249
|
|
|
$
|
341
|
|
|
$
|
9,218
|
|
|
515
|
|
|
Reconciling items
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|||||||||||
Capital expenditures per Statements of Consolidated Cash Flows
|
|
|
|
|
|
|
|
|
|
|
$
|
517
|
|
(1)
|
On September 4, 2018, CERC completed the Internal Spin. For further information regarding the Internal Spin, see
Note 11
.
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||||||||
Revenues by Products and Services:
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||||||||||||||
Electric delivery
|
|
$
|
3,232
|
|
|
$
|
3,234
|
|
|
$
|
—
|
|
|
$
|
2,997
|
|
|
$
|
2,998
|
|
|
$
|
—
|
|
|
$
|
3,060
|
|
|
$
|
3,059
|
|
|
$
|
—
|
|
Retail gas sales
|
|
4,161
|
|
|
—
|
|
|
4,161
|
|
|
3,634
|
|
|
—
|
|
|
3,634
|
|
|
3,329
|
|
|
—
|
|
|
3,329
|
|
|||||||||
Wholesale gas sales
|
|
3,008
|
|
|
—
|
|
|
3,008
|
|
|
2,811
|
|
|
—
|
|
|
2,811
|
|
|
977
|
|
|
—
|
|
|
977
|
|
|||||||||
Gas transportation and processing
|
|
32
|
|
|
—
|
|
|
32
|
|
|
29
|
|
|
—
|
|
|
29
|
|
|
23
|
|
|
—
|
|
|
23
|
|
|||||||||
Energy products and services
|
|
156
|
|
|
—
|
|
|
142
|
|
|
143
|
|
|
—
|
|
|
129
|
|
|
139
|
|
|
—
|
|
|
125
|
|
|||||||||
Total
|
|
$
|
10,589
|
|
|
$
|
3,234
|
|
|
$
|
7,343
|
|
|
$
|
9,614
|
|
|
$
|
2,998
|
|
|
$
|
6,603
|
|
|
$
|
7,528
|
|
|
$
|
3,059
|
|
|
$
|
4,454
|
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||||||
Cash Payments/Receipts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Interest, net of capitalized interest
|
$
|
363
|
|
|
$
|
200
|
|
|
$
|
105
|
|
|
$
|
378
|
|
|
$
|
205
|
|
|
$
|
116
|
|
|
$
|
406
|
|
|
$
|
209
|
|
|
$
|
116
|
|
Income taxes (refunds), net
|
89
|
|
|
154
|
|
|
3
|
|
|
15
|
|
|
76
|
|
|
4
|
|
|
(104
|
)
|
|
128
|
|
|
3
|
|
|||||||||
Non-cash transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Accounts payable related to capital expenditures
|
201
|
|
|
124
|
|
|
80
|
|
|
144
|
|
|
104
|
|
|
56
|
|
|
87
|
|
|
65
|
|
|
35
|
|
|||||||||
Capital distribution associated with the Internal Spin
|
—
|
|
|
—
|
|
|
1,473
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Cash and cash equivalents
(1) (2)
|
$
|
4,231
|
|
|
$
|
335
|
|
|
$
|
14
|
|
|
$
|
260
|
|
|
$
|
238
|
|
|
$
|
12
|
|
Restricted cash included in Prepaid expenses and other current assets
|
46
|
|
|
34
|
|
|
11
|
|
|
35
|
|
|
35
|
|
|
—
|
|
||||||
Restricted cash included in Other
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
||||||
Total cash, cash equivalents and restricted cash shown in Statements of Consolidated Cash Flows
|
$
|
4,278
|
|
|
$
|
370
|
|
|
$
|
25
|
|
|
$
|
296
|
|
|
$
|
274
|
|
|
$
|
12
|
|
(1)
|
CenterPoint Energy’s Cash and cash equivalents as of December 31, 2018 included
$3.9 billion
of temporary investments resulting from the Merger financings. CenterPoint Energy recorded interest income of
$28 million
,
$2 million
and
$1 million
for the years ended
December 31, 2018
,
2017
and
2016
, respectively, in Other, net on CenterPoint Energy’s Statements of Consolidated Income. See Notes 13 and 14 for further details related to the Merger financings.
|
(2)
|
Houston Electric’s Cash and cash equivalents as of December 31, 2018 and 2017 included
$335 million
and
$230 million
, respectively, of cash related to the Bond Companies. Houston Electric recorded interest income of
$4 million
,
$2 million
and
$1 million
for the years ended
December 31, 2018
,
2017
and
2016
, respectively, in Other, net on Houston Electric’s Statement of Consolidated Income.
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Houston Electric
|
|
CERC
|
|
Houston Electric
|
|
CERC
|
||||||||
|
(in millions)
|
||||||||||||||
Money pool investments (borrowings)
(1)
|
$
|
(1
|
)
|
|
$
|
114
|
|
|
$
|
(60
|
)
|
|
$
|
(570
|
)
|
Weighted average interest rate
|
2.42
|
%
|
|
2.42
|
%
|
|
1.90
|
%
|
|
1.90
|
%
|
(1)
|
Included in Accounts and notes receivable (payable)–affiliated companies in Houston Electric’s and CERC’s Consolidated Balance Sheets.
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
|
Houston Electric
|
|
CERC
|
|
Houston Electric
|
|
CERC
|
|
Houston Electric
|
|
CERC
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Interest income (expense), net (1)
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
(1)
|
Interest income is included in Other, net and interest expense is included in Interest and other finance charges on Houston Electric’s and CERC’s respective Statements of Consolidated Income.
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
|
Houston Electric
|
|
CERC
|
|
Houston Electric
|
|
CERC
|
|
Houston Electric
|
|
CERC
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Corporate service charges
|
$
|
190
|
|
|
$
|
147
|
|
|
$
|
188
|
|
|
$
|
128
|
|
|
$
|
179
|
|
|
$
|
125
|
|
Net affiliate service charges (billings)
|
(17
|
)
|
|
17
|
|
|
(9
|
)
|
|
9
|
|
|
(8
|
)
|
|
8
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
|
Houston Electric
|
|
CERC
|
|
Houston Electric
|
|
CERC
|
|
Houston Electric
|
|
CERC
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Cash dividends paid to parent
|
$
|
209
|
|
|
$
|
360
|
|
|
$
|
180
|
|
|
$
|
601
|
|
|
$
|
135
|
|
|
$
|
643
|
|
Cash contribution from parent
|
200
|
|
|
960
|
|
|
—
|
|
|
38
|
|
|
374
|
|
|
72
|
|
||||||
Capital distribution to parent associated with the Internal Spin
|
—
|
|
|
1,473
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Equity Instrument
|
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Per Unit Distribution
|
|
Expected Cash Distribution
|
||||
|
|
|
|
|
|
|
|
|
|
(in millions)
|
||||
Common units
|
|
February 8, 2019
|
|
February 19, 2019
|
|
February 26, 2019
|
|
$
|
0.318
|
|
|
$
|
74
|
|
Enable Series A Preferred Units
|
|
February 8, 2019
|
|
February 8, 2019
|
|
February 14, 2019
|
|
0.625
|
|
|
9
|
|
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
|
•
|
Revised eligibility requirements to provide clarity with respect to participants employed for a portion of the applicable plan year;
|
•
|
Amended methodology for calculating payments upon retirement;
|
•
|
Removed manager discretion with respect to terminations after the plan year but before the payment date to conform to operational practice; and
|
•
|
Deleted provisions related to Section 162(m) of the Internal Revenue Code to reflect current legislative changes.
|
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
|
|
Year Ended December 31,
|
||||||||||||||
|
2018
|
|
2017
|
||||||||||||
|
Houston Electric
|
|
CERC
|
|
Houston Electric
|
|
CERC
|
||||||||
Audit fees
(1)
|
$
|
859,950
|
|
|
$
|
1,360,800
|
|
|
$
|
819,364
|
|
|
$
|
1,296,576
|
|
Audit-related fees
(2)
|
529,000
|
|
|
121,000
|
|
|
516,000
|
|
|
106,000
|
|
||||
Total audit and audit-related fees
|
1,388,950
|
|
|
1,481,800
|
|
|
1,335,364
|
|
|
1,402,576
|
|
||||
Tax fees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
All other fees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total fees
|
$
|
1,388,950
|
|
|
$
|
1,481,800
|
|
|
$
|
1,335,364
|
|
|
$
|
1,402,576
|
|
(1)
|
For
2018
and
2017
, amounts include fees for services provided by the principal accounting firm relating to the integrated audit of financial statements and internal control over financial reporting, statutory audits, attest services, and regulatory filings.
|
(2)
|
For
2018
and
2017
, includes fees for consultations concerning financial accounting and reporting standards and various agreed-upon or expanded procedures related to accounting records to comply with financial accounting or regulatory reporting matters.
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
CenterPoint Energy
|
|
Report of Independent Registered Public Accounting Firm
|
|
Statements of Consolidated Income for the Three Years Ended December 31, 2018
|
|
Statements of Consolidated Comprehensive Income for the Three Years Ended December 31, 2018
|
|
Consolidated Balance Sheets as of December 31, 2018 and 2017
|
|
Statements of Consolidated Cash Flows for the Three Years Ended December 31, 2018
|
|
Statements of Consolidated Changes in Equity for the Three Years Ended December 31, 2018
|
|
Houston Electric
|
|
Report of Independent Registered Public Accounting Firm
|
|
Statements of Consolidated Income for the Three Years Ended December 31, 2018
|
|
Statements of Consolidated Comprehensive Income for the Three Years Ended December 31, 2018
|
|
Consolidated Balance Sheets as of December 31, 2018 and 2017
|
|
Statements of Consolidated Cash Flows for the Three Years Ended December 31, 2018
|
|
Statements of Consolidated Changes in Equity for the Three Years Ended December 31, 2018
|
|
CERC
|
|
Report of Independent Registered Public Accounting Firm
|
|
Statements of Consolidated Income for the Three Years Ended December 31, 2018
|
|
Statements of Consolidated Comprehensive Income for the Three Years Ended December 31, 2018
|
|
Consolidated Balance Sheets as of December 31, 2018 and 2017
|
|
Statements of Consolidated Cash Flows for the Three Years Ended December 31, 2018
|
|
Statements of Consolidated Changes in Equity for the Three Years Ended December 31, 2018
|
|
Combined Notes to Consolidated Financial Statements
|
Exhibit
Number
|
|
Description
|
|
Report or Registration Statement
|
|
SEC File or
Registration
Number
|
|
Exhibit
Reference
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
2(a)
|
—
|
|
CenterPoint Energy’s Form 8-K dated July 21, 2004
|
|
1-31447
|
|
10.1
|
|
X
|
|
|
|
|
|
2(b)**
|
—
|
|
|
CenterPoint Energy’s Form 8-K dated April 21, 2018
|
|
1-31447
|
|
2.1
|
|
X
|
|
|
|
|
2(c)(1)
|
|
Agreement and Plan of Merger among CERC, Houston Lighting and Power Company (“HL&P”), HI Merger, Inc. and NorAm Energy Corp. (“NorAm”) dated August 11, 1996
|
|
Houston Industries’ (“HI’s”) Form 8-K dated August 11, 1996
|
|
1-7629
|
|
2
|
|
|
|
|
|
X
|
2(c)(2)
|
|
Amendment to Agreement and Plan of Merger among CERC, HL&P, HI Merger, Inc. and NorAm dated August 11, 1996
|
|
Registration Statement on Form S-4
|
|
333-11329
|
|
2(c)
|
|
|
|
|
|
X
|
2(d)
|
|
Agreement and Plan of Merger dated December 29, 2000 merging Reliant Resources Merger Sub, Inc. with and into Reliant Energy Services, Inc.
|
|
Registration Statement on Form S-3
|
|
333-54526
|
|
2
|
|
|
|
|
|
X
|
2(e)
|
|
|
CenterPoint Energy’s Form 8-K dated March 14, 2013
|
|
1-31447
|
|
2.1
|
|
X
|
|
|
|
X
|
|
3(a)
|
—
|
|
CenterPoint Energy’s Form 8-K dated July 24, 2008
|
|
1-31447
|
|
3.2
|
|
X
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
Report or Registration Statement
|
|
SEC File or
Registration
Number
|
|
Exhibit
Reference
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
3(b)
|
|
|
Houston Electric’s Form 8-K dated August 31, 2002
|
|
1-3187
|
|
3(a)
|
|
|
|
X
|
|
|
|
3(c)
|
—
|
|
|
Houston Electric’s Form 10-Q for the quarter ended June 30, 2011
|
|
1-3187
|
|
3.1
|
|
|
|
X
|
|
|
3(d)
|
—
|
Certificate of Incorporation of RERC Corp.
|
|
CERC Form 10-K for the year ended December 31, 1997
|
|
1-13265
|
|
3(a)(1)
|
|
|
|
|
|
X
|
3(e)
|
—
|
Certificate of Merger merging former NorAm Energy Corp. with and into HI Merger, Inc. dated August 6, 1997
|
|
CERC Form 10-K for the year ended December 31, 1997
|
|
1-13265
|
|
3(a)(2)
|
|
|
|
|
|
X
|
3(f)
|
—
|
Certificate of Amendment changing the name to Reliant Energy Resources Corp.
|
|
CERC Form 10-K for the year ended December 31, 1998
|
|
1-13265
|
|
3(a)(3)
|
|
|
|
|
|
X
|
3(g)
|
—
|
|
|
CERC Form 10-Q for the quarter ended June 30, 2003
|
|
1-13265
|
|
3(a)(4)
|
|
|
|
|
|
X
|
3(h)
|
—
|
|
CenterPoint Energy’s Form 8-K dated February 21, 2017
|
|
1-31447
|
|
3.1
|
|
X
|
|
|
|
|
|
3(i)
|
—
|
|
|
Houston Electric’s Form 10-Q for the quarter ended June 30, 2011
|
|
1-3187
|
|
3.2
|
|
|
|
X
|
|
|
3(j)
|
—
|
Bylaws of RERC Corp.
|
|
CERC Form 10-K for the year ended December 31, 1997
|
|
1-13265
|
|
3(b)
|
|
|
|
|
|
X
|
3(k)
|
—
|
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2011
|
|
1-31447
|
|
3(c)
|
|
X
|
|
|
|
|
3(l)
|
—
|
|
|
CenterPoint Energy’s Form 8-K dated August 22, 2018
|
|
1-31447
|
|
3.1
|
|
X
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
Report or Registration Statement
|
|
SEC File or
Registration
Number
|
|
Exhibit
Reference
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
3(m)
|
—
|
|
|
CenterPoint Energy’s Form 8-K dated September 25, 2018
|
|
1-31447
|
|
3.1
|
|
X
|
|
|
|
|
4(a)
|
—
|
|
CenterPoint Energy’s Registration Statement on Form S-4
|
|
333-69502
|
|
4.1
|
|
X
|
|
|
|
|
|
4(b)
|
|
|
|
CenterPoint Energy’s Form 8-K dated August 22, 2018
|
|
1-31447
|
|
4.1
|
|
X
|
|
|
|
|
4(c)
|
|
|
|
CenterPoint Energy’s Form 8-K dated September 25, 2018
|
|
1-31447
|
|
4.1
|
|
X
|
|
|
|
|
4(d)
|
|
|
|
CenterPoint Energy’s Form 8-K dated September 25, 2018
|
|
1-31447
|
|
4.2
|
|
X
|
|
|
|
|
4(e)
|
|
|
|
CenterPoint Energy’s Form 8-K dated September 25, 2018
|
|
1-31447
|
|
4.3
|
|
X
|
|
|
|
|
4(f)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2001
|
|
1-31447
|
|
4.3
|
|
X
|
|
|
|
|
|
4(g)(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)
|
|
X
|
|
X
|
|
|
4(g)(2)
|
—
|
Twenty-First through Fiftieth Supplemental Indentures to Exhibit 4(g)(1)
|
|
HL&P’s Form 10-K for the year ended December 31, 1989
|
|
1-3187
|
|
4(a)(2)
|
|
X
|
|
X
|
|
|
Exhibit
Number
|
|
Description
|
|
Report or Registration Statement
|
|
SEC File or
Registration
Number
|
|
Exhibit
Reference
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
4(g)(3)
|
—
|
Fifty-First Supplemental Indenture to Exhibit 4(g)(1) dated as of March 25, 1991
|
|
HL&P’s Form 10-Q for the quarter ended June 30, 1991
|
|
1-3187
|
|
4(a)
|
|
X
|
|
X
|
|
|
4(g)(4)
|
—
|
Fifty-Second through Fifty-Fifth Supplemental Indentures to Exhibit 4(g)(1) each dated as of March 1, 1992
|
|
HL&P’s Form 10-Q for the quarter ended March 31, 1992
|
|
1-3187
|
|
4
|
|
X
|
|
X
|
|
|
4(g)(5)
|
—
|
Fifty-Sixth and Fifty-Seventh Supplemental Indentures to Exhibit 4(g)(1) each dated as of October 1, 1992
|
|
HL&P’s Form 10-Q for the quarter ended September 30, 1992
|
|
1-3187
|
|
4
|
|
X
|
|
X
|
|
|
4(g)(6)
|
—
|
Fifty-Eighth and Fifty-Ninth Supplemental Indentures to Exhibit 4(g)(1) each dated as of March 1, 1993
|
|
HL&P’s Form 10-Q for the quarter ended March 31, 1993
|
|
1-3187
|
|
4
|
|
X
|
|
X
|
|
|
4(g)(7)
|
—
|
Sixtieth Supplemental Indenture to Exhibit 4(g)(1) dated as of July 1, 1993
|
|
HL&P’s Form 10-Q for the quarter ended June 30, 1993
|
|
1-3187
|
|
4
|
|
X
|
|
X
|
|
|
4(g)(8)
|
—
|
Sixty-First through Sixty-Third Supplemental Indentures to Exhibit 4(g)(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)
|
|
X
|
|
X
|
|
|
4(g)(9)
|
—
|
Sixty-Fourth and Sixty-Fifth Supplemental Indentures to Exhibit 4(g)(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)
|
|
X
|
|
X
|
|
|
4(h)(1)
|
—
|
|
Houston Electric’s Form 10-Q for the quarter ended September 30, 2002
|
|
1-3187
|
|
4(j)(1)
|
|
X
|
|
X
|
|
|
|
4(h)(2)
|
—
|
|
Houston Electric’s Form 10- Q for the quarter ended September 30, 2002
|
|
1-3187
|
|
4(j)(3)
|
|
X
|
|
X
|
|
|
|
4(h)(3)
|
—
|
|
Houston Electric’s Form 10-Q for the quarter ended September 30, 2002
|
|
1-3187
|
|
4(j)(4)
|
|
X
|
|
X
|
|
|
|
4(h)(4)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2003
|
|
1-31447
|
|
4(e)(10)
|
|
X
|
|
X
|
|
|
Exhibit
Number
|
|
Description
|
|
Report or Registration Statement
|
|
SEC File or
Registration
Number
|
|
Exhibit
Reference
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
4(h)(5)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2002
|
|
1-31447
|
|
4(e)(10)
|
|
X
|
|
X
|
|
|
|
4(h)(6)
|
—
|
|
CenterPoint Energy’s Form 8-K dated March 13, 2003
|
|
1-31447
|
|
4.1
|
|
X
|
|
X
|
|
|
|
4(h)(7)
|
—
|
|
CenterPoint Energy’s Form 8-K dated March 13, 2003
|
|
1-31447
|
|
4.2
|
|
X
|
|
X
|
|
|
|
4(h)(8)
|
—
|
|
CenterPoint Energy’s Form 8-K dated May 16, 2003
|
|
1-31447
|
|
4.2
|
|
X
|
|
X
|
|
|
|
4(h)(9)
|
—
|
|
CenterPoint Energy’s Form 8-K dated May 16, 2003
|
|
1-31447
|
|
4.1
|
|
X
|
|
X
|
|
|
|
4(h)(10)
|
—
|
|
Houston Electric’s Form 8-K dated January 6, 2009
|
|
1-3187
|
|
4.2
|
|
X
|
|
X
|
|
|
|
4(h)(11)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2012
|
|
1-31447
|
|
4(e)(33)
|
|
X
|
|
X
|
|
|
|
4(h)(12)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2012
|
|
1-31447
|
|
4(e)(34)
|
|
X
|
|
X
|
|
|
|
4(h)(13)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended March 31, 2014
|
|
1-31447
|
|
4.10
|
|
X
|
|
X
|
|
|
|
4(h)(14)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended March 31, 2014
|
|
1-31447
|
|
4.11
|
|
X
|
|
X
|
|
|
|
4(h)(15)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended June 30, 2016
|
|
1-31447
|
|
4.5
|
|
X
|
|
X
|
|
|
|
4(h)(16)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended June 30, 2016
|
|
1-31447
|
|
4.6
|
|
X
|
|
X
|
|
|
Exhibit
Number
|
|
Description
|
|
Report or Registration Statement
|
|
SEC File or
Registration
Number
|
|
Exhibit
Reference
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
4(h)(17)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2016
|
|
1-31447
|
|
4.5
|
|
X
|
|
X
|
|
|
|
4(h)(18)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2016
|
|
1-31447
|
|
4.6
|
|
X
|
|
X
|
|
|
|
4(h)(19)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2016
|
|
1-31447
|
|
4(e)(41)
|
|
X
|
|
X
|
|
|
|
4(h)(20)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2016
|
|
1-31447
|
|
4(e)(42)
|
|
X
|
|
X
|
|
|
|
4(h)(21)
|
—
|
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended March 30, 2018
|
|
1-31447
|
|
4.9
|
|
X
|
|
X
|
|
|
4(h)(22)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended March 30, 2018
|
|
1-31447
|
|
4.10
|
|
X
|
|
X
|
|
|
|
4(h)(23)
|
|
|
Houston Electric’s Form 8-K dated January 10, 2019
|
|
1-3187
|
|
4.4
|
|
X
|
|
X
|
|
|
|
†4(h)(24)
|
—
|
|
|
|
|
|
|
|
X
|
|
X
|
|
|
|
4(i)(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
|
|
X
|
|
|
|
X
|
4(i)(2)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2006
|
|
1-31447
|
|
4(f)(11)
|
|
X
|
|
|
|
X
|
|
4(i)(3)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended June 30, 2008
|
|
1-31447
|
|
4.9
|
|
X
|
|
|
|
X
|
Exhibit
Number
|
|
Description
|
|
Report or Registration Statement
|
|
SEC File or
Registration
Number
|
|
Exhibit
Reference
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
4(i)(4)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2010
|
|
1-31447
|
|
4(f)(15)
|
|
X
|
|
|
|
X
|
|
4(i)(5)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2010
|
|
1-31447
|
|
4(f)(16)
|
|
X
|
|
|
|
X
|
|
4(i)(6)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2017
|
|
1-31447
|
|
4.11
|
|
X
|
|
|
|
X
|
|
4(i)(7)
|
—
|
|
|
CERC’s Form 10-Q for the quarter ended March 31, 2018
|
|
1-13265
|
|
4.4
|
|
X
|
|
|
|
X
|
4(j)(1)
|
—
|
|
CenterPoint Energy’s Form 8-K dated May 19, 2003
|
|
1-31447
|
|
4.1
|
|
X
|
|
|
|
|
|
4(j)(2)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2017
|
|
1-31447
|
|
4.9
|
|
X
|
|
|
|
|
|
4(j)(3)
|
—
|
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2018
|
|
1-31447
|
|
4.14
|
|
X
|
|
|
|
|
4(k)(1)
|
—
|
Subordinated Indenture dated as of September 1, 1999
|
|
Reliant Energy’s Form 8-K dated September 1, 1999
|
|
1-3187
|
|
4.1
|
|
X
|
|
|
|
|
4(k)(2)
|
—
|
Supplemental Indenture No. 1 dated as of September 1, 1999, between Reliant Energy and Chase Bank of Texas (supplementing Exhibit 4(k)(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
|
|
X
|
|
|
|
|
4(k)(3)
|
—
|
|
CenterPoint Energy’s Form 8-K12B dated August 31, 2002
|
|
1-31447
|
|
4(e)
|
|
X
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
Report or Registration Statement
|
|
SEC File or
Registration
Number
|
|
Exhibit
Reference
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
4(k)(4)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2005
|
|
1-31447
|
|
4(h)(4)
|
|
X
|
|
|
|
|
|
4(l)(1)
|
—
|
|
CenterPoint Energy’s Form 8-K dated March 3, 2016
|
|
1-31447
|
|
4.1
|
|
X
|
|
|
|
|
|
4(l)(2)
|
—
|
|
|
CenterPoint Energy’s Form 8-K dated June 16, 2017
|
|
1-31447
|
|
4.1
|
|
X
|
|
|
|
|
4(l)(3)
|
|
|
|
CenterPoint Energy’s Form 8-K dated May 25, 2018
|
|
1-31447
|
|
4.1
|
|
X
|
|
|
|
|
4(m)(1)
|
—
|
|
CenterPoint Energy’s Form 8-K dated March 3, 2016
|
|
1-31447
|
|
4.2
|
|
X
|
|
X
|
|
|
|
4(m)(2)
|
—
|
|
CenterPoint Energy’s Form 8-K dated June 16, 2017
|
|
1-31447
|
|
4.2
|
|
X
|
|
X
|
|
|
|
4(n)(1)
|
—
|
|
CenterPoint Energy’s Form 8-K dated March 3, 2016
|
|
1-31447
|
|
4.3
|
|
X
|
|
|
|
X
|
|
4(n)(2)
|
—
|
|
CenterPoint Energy’s Form 8-K dated June 16, 2017
|
|
1-31447
|
|
4.3
|
|
X
|
|
|
|
X
|
Exhibit
Number
|
|
Description
|
|
Report or Registration Statement
|
|
SEC File or
Registration
Number
|
|
Exhibit
Reference
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
*10(a)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended March 31, 2011
|
|
1-31447
|
|
10.3
|
|
X
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
Report or Registration Statement
|
|
SEC File or
Registration
Number
|
|
Exhibit
Reference
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
*10(b)(1)
|
—
|
|
CenterPoint Energy’s Form 8-K dated December 22, 2008
|
|
1-31447
|
|
10.1
|
|
X
|
|
|
|
|
|
*10(b)(2)
|
—
|
|
CenterPoint Energy’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011
|
|
1-31447
|
|
10.4
|
|
X
|
|
|
|
|
|
*10(c)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2003
|
|
1-31447
|
|
10.1
|
|
X
|
|
|
|
|
|
*10(d)(1)
|
—
|
|
CenterPoint Energy’s Form 8-K dated December 22, 2008
|
|
1-31447
|
|
10.4
|
|
X
|
|
|
|
|
|
*10(d)(2)
|
—
|
|
CenterPoint Energy’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011
|
|
1-31447
|
|
10.5
|
|
X
|
|
|
|
|
|
*10(e)(1)
|
—
|
|
CenterPoint Energy’s Form 8-K dated December 22, 2008
|
|
1-31447
|
|
10.3
|
|
X
|
|
|
|
|
|
*10(e)(2)
|
—
|
|
CenterPoint Energy’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011
|
|
1-31447
|
|
10.6
|
|
X
|
|
|
|
|
|
*10(f)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2003
|
|
1-31447
|
|
10.5
|
|
X
|
|
|
|
|
|
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
|
|
X
|
|
|
|
|
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)
|
|
X
|
|
|
|
|
†10(h)
|
—
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
10(i)(1)
|
—
|
|
Reliant Energy’s Form 10-Q for the quarter ended March 31, 2001
|
|
1-3187
|
|
10.1
|
|
X
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
Report or Registration Statement
|
|
SEC File or
Registration
Number
|
|
Exhibit
Reference
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
10(i)(2)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2002
|
|
1-31447
|
|
10(bb)(5)
|
|
X
|
|
|
|
|
|
10(i)(3)
|
—
|
|
Reliant Energy’s Form 10-Q for the quarter ended March 31, 2001
|
|
1-3187
|
|
10.5
|
|
X
|
|
|
|
|
|
10(i)(4)
|
—
|
|
Reliant Energy’s Form 10-Q for the quarter ended March 31, 2001
|
|
1-3187
|
|
10.6
|
|
X
|
|
|
|
|
|
10(i)(5)
|
—
|
|
Reliant Energy’s Form 10-Q for the quarter ended March 31, 2001
|
|
1-3187
|
|
10.8
|
|
X
|
|
|
|
|
|
10(j)(1)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2002
|
|
1-31447
|
|
10(cc)(1)
|
|
X
|
|
|
|
|
|
10(j)(2)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2002
|
|
1-31447
|
|
10(cc)(2)
|
|
X
|
|
|
|
|
|
10(j)(3)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2002
|
|
1-31447
|
|
10(cc)(3)
|
|
X
|
|
|
|
|
|
*10(k)(1)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended June 30, 2003
|
|
1-31447
|
|
10.2
|
|
X
|
|
|
|
|
|
*10(k)(2)
|
—
|
|
CenterPoint Energy’s Form 8-K dated February 20, 2008
|
|
1-31447
|
|
10.4
|
|
X
|
|
|
|
|
|
*10(l)(1)
|
—
|
|
CenterPoint Energy’s Form 8-K dated February 20, 2008
|
|
1-31447
|
|
10.3
|
|
X
|
|
|
|
|
|
*10(l)(2)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2008
|
|
1-31447
|
|
10.1
|
|
X
|
|
|
|
|
|
†*10(m)
|
—
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
Report or Registration Statement
|
|
SEC File or
Registration
Number
|
|
Exhibit
Reference
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
*10(n)
|
—
|
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended March 31, 2018
|
|
1-31447
|
|
10.1
|
|
X
|
|
|
|
|
10(o)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended June 30, 2005
|
|
1-31447
|
|
10.1
|
|
X
|
|
X
|
|
|
|
10(p)(1)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2008
|
|
1-31447
|
|
10.2
|
|
X
|
|
|
|
|
|
10(p)(2)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended September 30, 2008
|
|
1-31447
|
|
10.3
|
|
X
|
|
|
|
|
|
*10(q)(1)
|
—
|
|
CenterPoint Energy’s Schedule 14A dated March 13, 2009
|
|
1-31447
|
|
A
|
|
X
|
|
|
|
|
|
*10(q)(2)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended March 31, 2018
|
|
1-31447
|
|
10.3
|
|
X
|
|
|
|
|
|
*10(q)(3)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended March 31, 2018
|
|
1-31447
|
|
10.4
|
|
X
|
|
|
|
|
|
*10(q)(4)
|
—
|
|
CenterPoint Energy’s Form 8-K dated February 28, 2012
|
|
1-31447
|
|
10.2
|
|
X
|
|
|
|
|
|
*10(q)(5)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended March 31, 2018
|
|
1-31447
|
|
10.5
|
|
X
|
|
|
|
|
|
*10(q)(6)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended March 31, 2018
|
|
1-31447
|
|
10.6
|
|
X
|
|
|
|
|
|
*10(q)(7)
|
—
|
|
CenterPoint Energy’s Form 10-Q for the quarter ended March 31, 2018
|
|
1-31447
|
|
10.7
|
|
X
|
|
|
|
|
|
†10(r)
|
—
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
†10(s)
|
—
|
|
|
|
|
|
|
|
X
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
Report or Registration Statement
|
|
SEC File or
Registration
Number
|
|
Exhibit
Reference
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
10(t)
|
—
|
|
CenterPoint Energy’s Form 8-K dated April 27, 2017
|
|
1-31447
|
|
10.1
|
|
X
|
|
|
|
|
|
10(u)
|
—
|
|
CenterPoint Energy’s Form 10-K for the year ended December 31, 2013
|
|
1-31447
|
|
10(zz)
|
|
X
|
|
|
|
|
|
10(v)
|
—
|
|
CenterPoint Energy’s Form 8-K dated March 14, 2013
|
|
1-31447
|
|
2.1
|
|
X
|
|
|
|
|
|
10(w)
|
—
|
|
CenterPoint Energy’s Form 8-K dated November 14, 2017
|
|
1-31447
|
|
10.1
|
|
X
|
|
|
|
|
|
10(x)
|
—
|
|
CenterPoint Energy’s Form 8-K dated June 22, 2016
|
|
1-31447
|
|
10.2
|
|
X
|
|
|
|
|
|
10(y)
|
—
|
|
CenterPoint Energy’s Form 8-K dated May 1, 2013
|
|
1-31447
|
|
10.3
|
|
X
|
|
|
|
|
|
10(z)
|
—
|
|
CenterPoint Energy’s Form 8-K dated May 1, 2013
|
|
1-31447
|
|
10.4
|
|
X
|
|
|
|
|
|
10(aa)
|
|
|
|
CERC’s Form 8-K dated May 27, 2014
|
|
1-13265
|
|
10.1
|
|
|
|
|
|
X
|
10(bb)
|
|
|
|
CERC’s Form 8-K dated May 27, 2014
|
|
1-13265
|
|
10.2
|
|
|
|
|
|
X
|
10(cc)
|
|
|
CERC’s Form 8-K dated May 27, 2014
|
|
1-13265
|
|
10.3
|
|
|
|
|
|
X
|
Exhibit
Number
|
|
Description
|
|
Report or Registration Statement
|
|
SEC File or
Registration
Number
|
|
Exhibit
Reference
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
10(dd)
|
—
|
|
CenterPoint Energy’s Form 8-K dated January 28, 2016
|
|
1-31447
|
|
10.1
|
|
X
|
|
|
|
|
|
10(ee)
|
—
|
|
CenterPoint Energy’s Form 8-K dated February 18, 2016
|
|
1-31447
|
|
10.2
|
|
X
|
|
|
|
|
|
10(ff)
|
|
|
CenterPoint Energy’s Form 8-K dated April 21, 2018
|
|
1-31447
|
|
10.1
|
|
X
|
|
|
|
|
|
†21
|
—
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
†23.1.1
|
—
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
†23.1.2
|
—
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
†23.1.3
|
—
|
|
|
|
|
|
|
|
|
|
|
|
X
|
|
†23.2
|
—
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
†31.1.1
|
—
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
†31.1.2
|
—
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
†31.1.3
|
—
|
|
|
|
|
|
|
|
|
|
|
|
X
|
|
†31.2.1
|
—
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
†31.2.2
|
—
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
†31.2.3
|
—
|
|
|
|
|
|
|
|
|
|
|
|
X
|
|
†32.1.1
|
—
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
†32.1.2
|
—
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
†32.1.3
|
—
|
|
|
|
|
|
|
|
|
|
|
|
X
|
|
†32.2.1
|
—
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
†32.2.2
|
—
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
†32.2.3
|
—
|
|
|
|
|
|
|
|
|
|
|
|
X
|
Exhibit
Number
|
|
Description
|
|
Report or Registration Statement
|
|
SEC File or
Registration
Number
|
|
Exhibit
Reference
|
|
CenterPoint Energy
|
|
Houston Electric
|
|
CERC
|
99.1
|
—
|
|
Part II, Item 8 of Enable Midstream Partners, LP’s Form 10-K for the year ended December 31, 2018
|
|
001-36413
|
|
Item 8
|
|
X
|
|
|
|
|
|
†101.INS
|
—
|
XBRL Instance Document
|
|
|
|
|
|
|
|
X
|
|
X
|
|
X
|
†101.SCH
|
—
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
X
|
|
X
|
|
X
|
†101.CAL
|
—
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
X
|
|
X
|
|
X
|
†101.DEF
|
—
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
X
|
|
X
|
|
X
|
†101.LAB
|
—
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
|
|
|
|
|
X
|
|
X
|
|
X
|
†101.PRE
|
—
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
X
|
|
X
|
|
X
|
|
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/ LESLIE D. BIDDLE
|
|
Director
|
Leslie D. Biddle
|
|
|
|
|
|
/s/ SCOTT J. MCLEAN
|
|
Director
|
Scott J. McLean
|
|
|
|
|
|
/s/ MARTIN H. NESBITT
|
|
Director
|
Martin H. Nesbitt
|
|
|
|
|
|
/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
|
|
|
|
|
|
|
CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
|
|
(Registrant)
|
|
|
By:
|
/s/ SCOTT M. PROCHAZKA
|
|
Scott M. Prochazka
|
|
Manager
|
Signature
|
|
Title
|
|
|
|
/s/ SCOTT M. PROCHAZKA
|
|
Manager and Chairman
|
(Scott M. Prochazka)
|
|
(Principal Executive Officer)
|
|
|
|
/s/ WILLIAM D. ROGERS
|
|
Executive Vice President and Chief Financial Officer
|
(William D. Rogers)
|
|
(Principal Financial Officer)
|
|
|
|
/s/ KRISTIE L. COLVIN
|
|
Senior Vice President and Chief Accounting Officer
|
(Kristie L. Colvin)
|
|
(Principal Accounting Officer)
|
|
CENTERPOINT ENERGY RESOURCES CORP.
|
|
(Registrant)
|
|
|
By:
|
/s/ SCOTT M. PROCHAZKA
|
|
Scott M. Prochazka
|
|
President and Chief Executive Officer
|
Signature
|
|
Title
|
|
|
|
/s/ SCOTT M. PROCHAZKA
|
|
Chairman, President and Chief Executive Officer
|
(Scott M. Prochazka)
|
|
(Principal Executive Officer and Director)
|
|
|
|
/s/ WILLIAM D. ROGERS
|
|
Executive Vice President and Chief Financial Officer
|
(William D. Rogers)
|
|
(Principal Financial Officer)
|
|
|
|
/s/ KRISTIE L. COLVIN
|
|
Senior Vice President and Chief Accounting Officer
|
(Kristie L. Colvin)
|
|
(Principal Accounting Officer)
|
|
|
/s/ Carla A. Kneipp
|
|
|
Carla A. Kneipp
|
|
|
Vice President and Treasurer
|
|
|
|
Acknowledged and Received as
|
|
|
of the date first written above
|
|
|
|
|
|
THE BANK OF NEW YORK
|
|
|
MELLON TRUST COMPANY,
|
|
|
NATIONAL ASSOCIATION,
|
|
|
As Trustee
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Julie Hoffman-Ramos
|
|
|
Julie Hoffman-Ramos
|
|
|
Vice President
|
|
|
Original Interest Accrual Date: January 15, 2019
Stated Maturity: February 1, 2049
Interest Rate: 4.25%
Interest Payment Dates: February 1 and August 1
Regular Record Dates: January 15 and July 15 immediately preceding the respective Interest Payment Date
|
Redeemable: Yes [X] No [ ]
Redemption Date: At any time.
Redemption Price: on any date prior to August 1, 2048 at a price equal to the greater of (i) 100% of the principal amount of this Security or the portion hereof to be redeemed or (ii) the sum of the present values of the remaining scheduled payments of principal and interest on this Security or the portion thereof to be redeemed that would be due if this Security matured on August 1, 2048 but for the redemption (not including any portion of such payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis at the applicable Treasury Rate plus 20 basis points; plus, in each case, accrued and unpaid interest to the Redemption Date on the principal amount being redeemed; or on or after August 1, 2048, at a price equal to 100% of the principal amount of this Security or the portion thereof to be redeemed plus accrued and unpaid interest to the Redemption Date on the principal amount being redeemed.
|
By:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Principal
|
|
|
|
|
|
|
|
|
Amount of Securities
|
|
|
|
|
Decrease in Aggregate
|
|
Increase in Aggregate
|
|
Remaining After
|
|
Notation by
|
Date of
|
|
Principal Amount of
|
|
Principal Amount of
|
|
Such Decrease or
|
|
Security
|
Adjustment
|
|
Securities
|
|
Securities
|
|
Increase
|
|
Registrar
|
Original Interest Accrual Date: January 15, 2019
Stated Maturity: February 1, 2049
Interest Rate: 4.25%
Interest Payment Dates: February 1 and August 1
Regular Record Dates: January 15 and July 15 immediately preceding the respective Interest Payment Date
|
Redeemable: Yes [X] No [ ]
Redemption Date: At any time.
Redemption Price: on any date prior to August 1, 2048 at a price equal to the greater of (i) 100% of the principal amount of this Security or the portion hereof to be redeemed or (ii) the sum of the present values of the remaining scheduled payments of principal and interest on this Security or the portion thereof to be redeemed that would be due if this Security matured on August 1, 2048 but for the redemption (not including any portion of such payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis at the applicable Treasury Rate plus 20 basis points; plus, in each case, accrued and unpaid interest to the Redemption Date on the principal amount being redeemed; or on or after August 1, 2048, at a price equal to 100% of the principal amount of this Security or the portion thereof to be redeemed plus accrued and unpaid interest to the Redemption Date on the principal amount being redeemed.
|
By:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Principal
|
|
|
|
|
|
|
|
|
Amount of Securities
|
|
|
|
|
Decrease in Aggregate
|
|
Increase in Aggregate
|
|
Remaining After
|
|
Notation by
|
Date of
|
|
Principal Amount of
|
|
Principal Amount of
|
|
Such Decrease or
|
|
Security
|
Adjustment
|
|
Securities
|
|
Securities
|
|
Increase
|
|
Registrar
|
•
|
Mr. Carroll’s annual base salary is increased from $710,000 to $760,000 effective as of April 1, 2019 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
|
•
|
Mr. Carroll’s long-term incentive compensation target is increased from a target equal to 300% of base salary to a target equal to 325% of base salary.
|
|
CENTERPOINT ENERGY, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Scott M. Prochazka
|
|
|
Scott M. Prochazka
|
|
|
President and Chief Executive Officer
|
ATTEST:
|
|
|
|
|
|
|
|
|
/s/ Vincent A. Mercaldi
|
|
|
Vincent A. Mercaldi
|
|
|
Assistant Corporate Secretary
|
|
|
•
|
Annual retainer fee of $100,000 for Board membership, paid quarterly in arrears;
|
•
|
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 |
|
$
|
1,323,000
|
|
William D. Rogers* Executive Vice President and Chief Financial Officer |
|
$
|
595,000
|
|
Tracy B. Bridge Executive Vice President and President Electric Division |
|
$
|
560,000
|
|
Dana C. O’Brien Executive Vice President and General Counsel |
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$
|
545,000
|
|
•
|
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 435% to 450%;
|
•
|
No changes were made to Mr. Rogers’s long-term incentive target of 200%*;
|
•
|
No changes were made to Mr. Bridge’s long-term incentive target of 170%; and
|
•
|
Ms. O’Brien’s long-term incentive target was increased from 160% to 170%.
|
(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
|
1.
|
I have reviewed this annual report on Form 10-K of CenterPoint Energy Houston Electric, LLC;
|
(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
|
|
Chairman (Principal Executive Officer)
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ 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
|
(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
|
(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 28, 2019
|
|
/s/ Scott M. Prochazka
|
|
Scott M. Prochazka
|
|
Chairman (Principal Executive Officer)
|
|
February 28, 2019
|
|
/s/ Scott M. Prochazka
|
Scott M. Prochazka
|
President and Chief Executive Officer
|
February 28, 2019
|
/s/ William D. Rogers
|
|
William D. Rogers
|
|
Executive Vice President and Chief Financial Officer
|
|
February 28, 2019
|
|
/s/ William D. Rogers
|
|
William D. Rogers
|
|
Executive Vice President and Chief Financial Officer
|
|
February 28, 2019
|
|
/s/ William D. Rogers
|
William D. Rogers
|
Executive Vice President and Chief Financial Officer
|
February 28, 2019
|