100 - CONDENSED STATEMENTS OF C
100 - CONDENSED STATEMENTS OF CONSOLIDATED INCOME (Unaudited, USD $) | ||||
In Millions | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
Condensed Statements Of Consolidated Income | ||||
Revenues | $1,640 | $2,670 | $4,406 | $6,033 |
Expenses: | ||||
Natural gas | 710 | 1,750 | 2,499 | 4,143 |
Operation and maintenance | 398 | 342 | 811 | 707 |
Depreciation and amortization | 188 | 188 | 354 | 346 |
Taxes other than income taxes | 91 | 93 | 204 | 204 |
Total | 1,387 | 2,373 | 3,868 | 5,400 |
Operating Income | 253 | 297 | 538 | 633 |
Other Income (Expense): | ||||
Gain (loss) on marketable securities | 55 | 17 | 21 | (37) |
Gain (loss) on indexed debt securities | (46) | (17) | (24) | 33 |
Interest and other finance charges | (129) | (114) | (258) | (230) |
Interest on transition bonds | (33) | (35) | (66) | (68) |
Equity in earnings of unconsolidated affiliates | 11 | 14 | 11 | 23 |
Other, net | 18 | 0 | 22 | 4 |
Total | (124) | (135) | (294) | (275) |
Income Before Income Taxes | 129 | 162 | 244 | 358 |
Income tax expense | (43) | (61) | (91) | (135) |
Net Income | $86 | $101 | $153 | $223 |
Basic Earnings Per Share | 0.24 | 0.3 | 0.44 | 0.68 |
Diluted Earnings Per Share | 0.24 | 0.3 | 0.44 | 0.66 |
200 - CONDENSED CONSOLIDATED BA
200 - CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, USD $) | ||
In Millions | Jun. 30, 2009
| Dec. 31, 2008
|
Current Assets: | ||
Cash and cash equivalents | $151 | $167 |
Investment in marketable securities | 239 | 218 |
Accounts receivable, net | 689 | 1,009 |
Accrued unbilled revenues | 180 | 541 |
Natural gas inventory | 83 | 441 |
Materials and supplies | 148 | 128 |
Non-trading derivative assets | 83 | 118 |
Prepaid expenses and other current assets | 355 | 413 |
Total current assets | 1,928 | 3,035 |
Property, Plant and Equipment: | ||
Property, plant and equipment | 14,327 | 14,006 |
Less accumulated depreciation and amortization | 3,803 | 3,710 |
Property, plant and equipment, net | 10,524 | 10,296 |
Other Assets: | ||
Goodwill | 1,696 | 1,696 |
Regulatory assets | 3,606 | 3,684 |
Non-trading derivative assets | 16 | 20 |
Investment in unconsolidated affiliates | 352 | 345 |
Notes receivable from unconsolidated affiliates | 323 | 323 |
Other | 272 | 277 |
Total other assets | 6,265 | 6,345 |
Total Assets | 18,717 | 19,676 |
Current Liabilities: | ||
Short-term borrowings | 75 | 153 |
Current portion of transition bond long-term debt | 211 | 208 |
Current portion of other long-term debt | 133 | 125 |
Indexed debt securities derivative | 157 | 133 |
Accounts payable | 363 | 897 |
Taxes accrued | 109 | 189 |
Interest accrued | 191 | 180 |
Non-trading derivative liabilities | 59 | 87 |
Accumulated deferred income taxes, net | 395 | 372 |
Other | 401 | 504 |
Total current liabilities | 2,094 | 2,848 |
Other Liabilities: | ||
Accumulated deferred income taxes, net | 2,607 | 2,608 |
Unamortized investment tax credits | 20 | 24 |
Non-trading derivative liabilities | 50 | 47 |
Benefit obligations | 844 | 849 |
Regulatory liabilities | 874 | 821 |
Other | 360 | 276 |
Total other liabilities | 4,755 | 4,625 |
Long-term Debt: | ||
Transition bonds | 2,274 | 2,381 |
Other | 7,357 | 7,800 |
Total long-term debt | 9,631 | 10,181 |
Shareholders’ Equity: | ||
Common stock (346,088,548 shares and 364,392,928 shares outstanding at December 31, 2008 and June 30, 2009, respectively) | 4 | 3 |
Additional paid-in capital | 3,346 | 3,158 |
Accumulated deficit | (988) | (1,008) |
Accumulated other comprehensive loss | (125) | (131) |
Total shareholders’ equity | 2,237 | 2,022 |
Total Liabilities and Shareholders’ Equity | $18,717 | $19,676 |
300 - CONDENSED STATEMENTS OF C
300 - CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (Unaudited, USD $) | ||
In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
Cash Flows from Operating Activities: | ||
Net income | $153 | $223 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 354 | 346 |
Amortization of deferred financing costs | 20 | 15 |
Deferred income taxes | 78 | 12 |
Unrealized loss on marketable securities | (21) | 37 |
Unrealized gain on indexed debt securities | 24 | (33) |
Write- down of natural gas inventory | 6 | 0 |
Equity in earnings of unconsolidated affiliates, net of distributions | (8) | (23) |
Changes in other assets and liabilities: | ||
Accounts receivable and unbilled revenues, net | 641 | 196 |
Inventory | 332 | 65 |
Accounts payable | (502) | 20 |
Fuel cost over (under) recovery | (34) | 3 |
Non-trading derivatives, net | 18 | 21 |
Margin deposits, net | 39 | 95 |
Interest and taxes accrued | (70) | (51) |
Net regulatory assets and liabilities | 19 | 14 |
Other current assets | 13 | (93) |
Other current liabilities | (29) | 78 |
Other assets | (1) | (6) |
Other liabilities | 20 | (53) |
Other, net | 4 | 2 |
Net cash provided by operating activities | 1,056 | 868 |
Cash Flows from Investing Activities: | ||
Capital expenditures | (504) | (419) |
Decrease (increase) in restricted cash of transition bond companies | 6 | (7) |
Increase in notes receivable from unconsolidated affiliates | 0 | (96) |
Investment in unconsolidated affiliates | 1 | (162) |
Other, net | (7) | (16) |
Net cash used in investing activities | (504) | (700) |
Cash Flows from Financing Activities: | ||
Increase (decrease) in short-term borrowings, net | (78) | (32) |
Long-term revolving credit facilities, net | (932) | 61 |
Proceeds from commercial paper, net | 0 | 130 |
Proceeds from long-term debt | 500 | 1,088 |
Payments of long-term debt | (110) | (1,291) |
Debt issuance costs | (4) | (10) |
Payment of common stock dividends | (133) | (120) |
Proceeds from issuance of common stock, net | 188 | 26 |
Other, net | 1 | 1 |
Net cash used in financing activities | (568) | (147) |
Net Increase (Decrease) in Cash and Cash Equivalents | (16) | 21 |
Cash and Cash Equivalents at Beginning of Period | 167 | 129 |
Cash and Cash Equivalents at End of Period | 151 | 150 |
Cash Payments: | ||
Interest, net of capitalized interest | 298 | 287 |
Income taxes | 55 | 142 |
Non-cash transactions: | ||
Accounts payable related to capital expenditures | $64 | $57 |
600 - Background and Basis of P
600 - Background and Basis of Presentation (Unaudited) | |
6 Months Ended
Jun. 30, 2009 | |
Background and Basis of Presentation | |
Background and Basis of Presentation | (1) Background and Basis of Presentation General. Included in this Quarterly Report on Form 10-Q (Form 10-Q) of CenterPoint Energy, Inc. are the condensed consolidated interim financial statements and notes (Interim Condensed Financial Statements) of CenterPoint Energy, Inc. and its subsidiaries (collectively, CenterPoint Energy). The Interim Condensed Financial Statements are unaudited, omit certain financial statement disclosures and should be read with the Annual Report on Form10-K of CenterPoint Energy for the year ended December31, 2008 (CenterPoint Energy Form 10-K). Background. CenterPoint Energy, Inc. is a public utility holding company. CenterPoint Energys operating subsidiaries own and operate electric transmission and distribution facilities, natural gas distribution facilities, interstate pipelines and natural gas gathering, processingand treating facilities. As of June30, 2009, CenterPoint Energys indirect wholly owned subsidiaries included: CenterPoint Energy Houston Electric, LLC (CenterPoint Houston), which engages in the electric transmission and distribution business in a 5,000-square mile area of the Texas Gulf Coast that includes Houston; and CenterPoint Energy Resources Corp. (CERC Corp., and, together with its subsidiaries, CERC), which owns and operates natural gas distribution systems in six states. Subsidiaries of CERC Corp. own interstate natural gas pipelines and gas gathering systems and provide various ancillary services. A wholly owned subsidiary of CERC Corp. offers variable and fixed-price physical natural gas supplies primarily to commercial and industrial customers and electric and gas utilities. Basis of Presentation. The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. CenterPoint Energys Interim Condensed Financial Statements reflect all normal recurring adjustments that are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the respective periods. Amounts reported in CenterPoint Energys Condensed Statements of Consolidated Incomeare not necessarily indicative of amounts expected for a full-year period due to the effects of, among other things, (a)seasonal fluctuations in demand for energy and energy services, (b) changes in energy commodity prices, (c) timing of maintenance and other expenditures and (d) acquisitions and dispositions of businesses, assets and other interests. For a description of CenterPoint Energys reportable business segments, reference is made to Note 15. |
601 - New Accounting Pronouncem
601 - New Accounting Pronouncements (Unaudited) | |
6 Months Ended
Jun. 30, 2009 | |
New Accounting Pronouncements | |
New Accounting Pronouncements | (2) New Accounting Pronouncements Effective January 1, 2009, CenterPoint Energy adopted Statement of Financial Accounting Standards (SFAS) No.161, Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No.133(SFAS No.161). SFAS No.161 amends SFASNo. 133, Accounting for Derivative Instrumentsand Hedging Activities (SFAS No. 133) which requires enhanced disclosures of derivative instruments and hedging activities such as the fair value of derivative instruments and presentation of their gains or losses in tabular format, as well as disclosures regarding credit risks and strategies and objectives for using derivative instruments.These disclosures are included as part of CenterPoint Energys Derivatives Instruments footnote (see Note 5). In May 2008, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) No. APB 14-1 Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement) (FSP APB 14-1) which changed the accounting treatment for convertible securities that the issuer may settlefully or partially in cash. Under FSP APB 14-1, cash settled convertible securities are separated into their debt and equity components. The value assigned to the debt component is the estimated fair value, as of the issuance date, of a similar debt instrument without the conversion feature, and the difference between the proceeds for the convertible debt and the amount reflected as a debt liability is recorded as additional paid-incapital. As a result, the debt is recorded at a discount reflecting its below-market coupon interest rate. The debt is then subsequently accreted to its par value over its expected life, with the rate of interest that reflects the market rate at issuance being reflected on the income statement. CenterPoint Energy adopted FSP APB 14-1 effective January 1, 2009, which required retrospective application to all periods presented. CenterPoint Energy currently has no convertible debt that is within the scope of FSPAPB14-1, but did during prior periods presented. Accordingly, the implementation of FSP APB 14-1 had a non-cash effect on net income for prior periods and the consolidated balance sheets when CenterPoint Energy had contingently convertible debt outstanding. There was no effect on net income for the three months ended June30, 2008. The effect on net income for the six months ended June30, 2008 was a decrease in net income of $1million. There was no impact on basic or diluted earnings pershare. Upon adoption of FSP APB 14-1, the effect on the balance sheet as of January 1, 2009 was a credit to Additional Paid-In-Capital of $23million, with an offsetting debit to retained earnings. In December 2008, the FASB issued FSP No. FAS 132(R)-1, Employers Disclosures about Postretirement Benefit Plan Assets (FSP 132(R)-1), which amends SFAS No. 132(R), Employers Disclosures about Pensions and Other Postretirement Benefits.FSP 132(R)-1 expands the disclosures about employers plan assets to include more detaileddisclosures about the employers investment strategies, major categories of plan assets, concentrations of |
602 - Employee Benefit Plans
602 - Employee Benefit Plans (Unaudited) | |
6 Months Ended
Jun. 30, 2009 | |
Employee Benefit Plans | |
Employee Benefit Plans | (3) Employee Benefit Plans CenterPoint Energys net periodic cost includes the following components relating to pension and postretirement benefits: Three Months Ended June30, 2008 2009 Pension Benefits Postretirement Benefits Pension Benefits (1) Postretirement Benefits (in millions) Service cost $ 7 $ 1 $ 6 $ 1 Interest cost 26 7 29 7 Expected return on plan assets (37 ) (3 ) (25 ) (3 ) Amortization of prior service cost (2 ) 1 1 1 Amortization of net loss 6 17 Amortization of transition obligation 1 1 Net periodic cost $ $ 7 $ 28 $ 7 Six Months Ended June30, 2008 2009 Pension Benefits Postretirement Benefits Pension Benefits (1) Postretirement Benefits (in millions) Service cost $ 15 $ 1 $ 12 $ 1 Interest cost 51 14 57 14 Expected return on plan assets (74 ) (6 ) (49 ) (5 ) Amortization of prior service cost (4 ) 2 2 2 Amortization of net loss 12 34 Amortization of transition obligation 3 3 Net periodic cost $ $ 14 $ 56 $ 15 (1) Net periodic cost in these tables is before considering amounts subject to overhead allocations for capital expenditure projects or for amounts subject to deferral for regulatory purposes.CenterPoint Houstons actuarially determined pension expense for 2009 in excess of the amount currently being recovered in base rates will be deferred until its next general rate case pursuant to Texas regulatory provisions.CenterPointHouston deferred as a regulatory asset $9million and $13million in pension expense during the three and six months ended June30, 2009, respectively. CenterPoint Energy expects to contribute approximately $22million to its pension plans in 2009, of which $15million and $17million, respectively, was contributed during the three and six months ended June30, 2009. CenterPoint Energy expects to contribute approximately $20million to its postretirement benefits plan in 2009, of which $6million and $12million, respectively, was contributed during the three and six months ended June30, 2009. Effective January 1, 2008, CenterPoint Energy adopted Emerging Issues Task Force Issue No. 06-04 (EITF 06-04), Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements, which required CenterPoint Energy to recognize the effect of implementation through a cumulativeeffect adjustment to retained earnings or other components of equity as of the beginning of the year of adoption. CenterPoint Energy calculated the impact as negligible at the time of adoption on January 1, 2008.During the quarter ended June30, 2009, CenterPoint Energy determined that its adoption calculation had omitted the impact that increasing future premium costs would have on the liability and, therefore, it recorded as a cumulative effect adjustment a $15million correction to increase other non-current liabilities and accumulated deficit as of January 1, 2008.The effects of the co |
603 - Regulatory Matters
603 - Regulatory Matters (Unaudited) | |
6 Months Ended
Jun. 30, 2009 | |
Regulatory Matters | |
Regulatory Matters | (4) Regulatory Matters (a) Hurricane Ike CenterPoint Houstons electric delivery system suffered substantial damage as a result of Hurricane Ike, which struck the upper Texas coast in September2008. As is common with electric utilities serving coastal regions, the poles, towers, wires, street lights and pole mounted equipment that comprise CenterPoint Houstons transmission and distribution system are not covered by property insurance, but office buildings and warehouses and their contents and substations are covered by insurancethat provides for a maximum deductible of $10million. Current estimates are that total losses to property covered by this insurance were approximately $17million. CenterPoint Houston deferred the uninsured system restoration costs as management believes it is probable that such costs will be recovered through the regulatory process. As a result, system restoration costs did not affect CenterPoint Energys or CenterPoint Houstons reported net income for 2008 or the first six months of 2009. As ofJune30, 2009, CenterPoint Houston had balances of $163million in property, plant and equipment and $442million in regulatory assets related to restoration costs incurred through June30, 2009.In April 2009, CenterPoint Houston filed with the Public Utility Commission of Texas (Texas Utility Commission) an application for review and approval for recovery of approximately $608million in system restoration costs identified as of the end of February 2009, plus $2millionin regulatory expenses, $13million in certain debt issuance costs, and $55million in projected carrying costs, pursuant to the legislation described below.CenterPoint Houston expects to incur additional costs, currently estimated at $12million, related to Hurricane Ike, principally related to the reconstruction of certain substations on Galveston Island, and will seek to recover those costs through the regulatory process at a later date. In April 2009, the Texas Legislature enacted legislation that authorizes the Texas Utility Commission to conduct proceedings to determine the amount of system restoration costs and related costs associated with hurricanes or other major storms that utilities are entitled to recover, and to issue financing orders that would permit a utilitylike CenterPoint Houston to recover the distribution portion of those costs and related carrying costs through the issuance of non-recourse system restoration bonds similar to the securitization bonds issued previously.The legislation also allows such a utility to recover, or defer for future recovery, the transmission portion of its system restoration costs through the existing mechanisms established to recover transmission level costs.The legislation requires the Texas Utility Commissionto make its determination of recoverable system restoration costs within 150 days of the filing of a utilitys application and to rule on a utilitys application for a financing order for the issuance of system restoration bonds within 90 days of the filing of that application.The time periods for the Texas Utility Commission to act on the two applications can run concurrently, but the Texas Utility Commission |
604 - Derivative Instruments
604 - Derivative Instruments (Unaudited) | |
6 Months Ended
Jun. 30, 2009 | |
Derivative Instruments | |
Derivative Instruments | (5) Derivative Instruments CenterPoint Energy is exposed to various market risks. These risks arise from transactions entered into in the normal course of business.CenterPoint Energy utilizes derivative instruments such as physical forward contracts, swaps and options to mitigate the impact of changes in commodity prices and weather on its operatingresults and cash flows. Such derivatives are recognized in CenterPoint Energys Condensed Consolidated Balance Sheets at their fair value unless CenterPoint Energy elects the normal purchase and sales exemption for qualified physical transactions. A derivative may be designated as a normal purchase or sale if the intent is to physically receive or deliver the product for use or sale in the normal course of business. In prior years, CenterPoint Energy entered into certain derivative instruments that were designated as cash flow hedges under SFASNo.133. The objective of these derivative instruments was to hedge the price risk associated with natural gas purchases and sales to reduce cash flow variability related to meeting CenterPoint Energys wholesale and retail customer obligations. If derivatives are designated as a cash flow hedge according to SFAS No. 133, the effective portions of the changes in their fair values are reflected initially as a separate component ofshareholders equity and subsequently recognized in income at the same time the hedged items impact earnings. The ineffective portions of changes in fair values of derivatives designated ashedges are immediately recognized in income. Changes in derivatives not designated as normal or as cash flow hedges are recognized in income as they occur. CenterPoint Energy does not enter into or hold derivative instruments for trading purposes. CenterPoint Energy has a Risk Oversight Committee composed of corporate and business segment officers that oversees all commodity price, weather and credit risk activities, including CenterPoint Energys marketing, risk management services and hedging activities.The committees duties are to establish CenterPoint Energys commodity risk policies, allocate board-approved commercial risk limits, approve use of new products and commodities, monitor positions and ensure compliance with CenterPoint Energys risk management policies and procedures and limits established by CenterPoint Energys board of directors. CenterPoint Energys policies prohibit the use of leveraged financial instruments. A leveraged financial instrument, for this purpose, is a transaction involving a derivative whose financial impact will be based on an amount other than the notional amount or volume of the instrument. (a) Non-Trading Activities Derivative Instruments. CenterPoint Energy enters into certain derivative instruments to manage physical commodity price risks that do not qualify or are not designated as cash flow or fair value hedges under SFASNo.133. CenterPoint Energy utilizes these financial instrumentsto manage physical commodity price risks and does not engage in proprietary or speculative commodity trading. During the three months ended June30, 2008, CenterPoint Energy recorded increased natural gas revenues from u |
605 - Fair Value Measurements
605 - Fair Value Measurements (Unaudited) | |
6 Months Ended
Jun. 30, 2009 | |
Fair Value Measurements | |
Fair Value Measurements | (6) Fair Value Measurements Effective January1, 2008, CenterPoint Energy adopted SFAS No. 157, "Fair Value Measurements" (SFAS No. 157), which requires additional disclosures about CenterPoint Energys financial assets and liabilities that are measured at fair value.Effective January1, 2009, CenterPoint Energy adopted SFAS No. 157 for nonfinancialassets and liabilities, which adoption had no impact on CenterPoint Energys financial position, results of operations or cash flows.Beginning in January 2008, assets and liabilities recorded at fair value in the Consolidated Balance Sheet are categorized based upon the level of judgment associated with the inputs used to measure their value. Hierarchical levels, as defined in SFAS No. 157 and directly related to the amount of subjectivity associated with the inputs to fair valuations of these assetsand liabilities are as follows: Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.The types of assets carried at Level 1 fair value generally are financial derivatives, investments and equity securities listed in active markets. Level 2: Inputs, other than quoted prices included in Level 1, are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, and inputs other than quoted prices that are observable for the asset or liability.Fair value assets and liabilities that are generally included in this category are derivatives with fair values based on inputs from actively quoted markets. Level 3: Inputs are unobservable for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Unobservable inputs reflect CenterPoint Energys judgments about the assumptions market participants would use in pricing the asset or liability since limited market data exists. CenterPoint Energy develops these inputs based on the best information available, including CenterPoint Energys own data.CenterPoint Energys Level 3 derivativeinstruments primarily consist of options that are not traded on recognized exchanges and are valued using option pricing models. The following tables present information about CenterPoint Energys assets and liabilities (including derivatives that are presented net) measured at fair value on a recurring basis as of December 31, 2008 and June30, 2009, and indicate the fair value hierarchy of the valuation techniques utilized by CenterPoint Energy to determinesuch fair value. Quoted Prices in Active Markets forIdentical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Netting Adjustments (1) Balance as of December 31, 2008 |
606 - Goodwill
606 - Goodwill (Unaudited) | |
6 Months Ended
Jun. 30, 2009 | |
Goodwill | |
Goodwill | (7) Goodwill Goodwill by reportable business segment as of both December31, 2008 and June30, 2009 is as follows (in millions): Natural Gas Distribution $ 746 Interstate Pipelines 579 Competitive Natural Gas Sales and Services 335 Field Services 25 Other Operations 11 Total $ 1,696 |
607 - Comprehensive Income
607 - Comprehensive Income (Unaudited) | |
6 Months Ended
Jun. 30, 2009 | |
Comprehensive Income | |
Comprehensive Income | (8) Comprehensive Income The following table summarizes the components of total comprehensive income (net of tax): For the Three Months Ended June30, For the Six Months Ended June30, 2008 2009 2008 2009 (in millions) Net income $ 101 $ 86 $ 223 $ 153 Other comprehensive income (loss): Adjustment to pension and other postretirement plans (net of tax of $-0-, $1, $1 and $3) 1 4 3 6 Net deferred gain (loss) from cash flow hedges (net of tax of $3, $-0-, $1 and $-0-) 6 (3 ) Reclassification of deferred gain from cash flow hedges realized in net income (net of tax of $-0-, $-0-, $2 and $-0-) (4 ) Total 7 4 (4 ) 6 Comprehensive income $ 108 $ 90 $ 219 $ 159 The following table summarizes the components of accumulated other comprehensive loss: December31, 2008 June30, 2009 (in millions) Adjustment to pension and postretirement plans $ (127 ) $ (121 ) Net deferred loss from cash flow hedges (4 ) (4 ) Total accumulated other comprehensive loss $ (131 ) $ (125 ) |
608 - Capital Stock
608 - Capital Stock (Unaudited) | |
6 Months Ended
Jun. 30, 2009 | |
Capital Stock | |
Capital Stock | (9) Capital Stock CenterPoint Energy has 1,020,000,000 authorized shares of capital stock, comprised of 1,000,000,000shares of $0.01 par value common stock and 20,000,000shares of $0.01 par value preferred stock. At December31, 2008, 346,088,714shares of CenterPoint Energy common stock were issued and 346,088,548shares were outstanding. At June30, 2009, 364,393,094shares of CenterPoint Energy common stock were issued and 364,392,928shares were outstanding. Outstanding common shares exclude 166 treasury shares at both December31, 2008 and June30, 2009. During the six months ended June30, 2009, CenterPoint Energy received proceeds of approximately $36million from the sale of approximately 3.2million common shares to its defined contribution plan and proceeds of approximately $7million from the sale of approximately 0.7million common shares to participants in its enhanced dividend reinvestment plan. In February 2009, CenterPoint Energy entered into a continuous offering program equity distribution agreement with Citigroup Global Markets Inc. (Citi) covering the issuance of up to $150million of its common stock.Pursuant to that agreement, CenterPoint Energy issued 13.8million shares of its common stock during the quarter ended June30, 2009 through Citi as its sales agent at a weighted average price of $10.51. Proceeds (before expenses) from the issuance of common stock were $145million. Compensation payable to Citi in connection with the issuance of such shares was approximately $2million. |
term Borrowings and Long-term D
term Borrowings and Long-term Debt (Unaudited) | |
6 Months Ended
Jun. 30, 2009 | |
Short-term Borrowings and Long-term Debt | |
Short-term Borrowings and Long-term Debt | (10) Short-term Borrowings and Long-term Debt (a) Short-term Borrowings Receivables Facility. On November 25, 2008, CERC replaced a receivables facility that had terminated onOctober 28, 2008 with a new 364-day receivables facility. Availability under the new facility ranges from $128million to $375million, reflecting seasonal changesin receivables balances.At December31, 2008 and June30, 2009 the facility size was $128million and $265million, respectively. As of December31, 2008 and June30, 2009, advances under the receivables facilities were $78million and $75million, respectively. Inventory Financing. In December 2008, CERC entered into an asset management agreement whereby it sold $110million of its natural gas in storage and agreed to repurchase an equivalent amount of natural gas during the 2008-2009 winter heating season for payments totaling $114million.This transaction was accounted for as a financing and, as of December31, 2008 and June30, 2009, CenterPoint Energys financial statements reflect natural gas inventory of $75million and $-0-, respectively, and a financing obligation of $75million and $-0-, respectively, related to this transaction. Revolving Credit Facility. CenterPoint Houstons $600million 364-day credit facility is secured by a pledge of $600million of general mortgage bonds issued by CenterPoint Houston. Borrowing costs for the London Interbank Offered Rate (LIBOR)-based loans under such facilitywill be at a margin of 2.25percent above LIBOR rates, based on CenterPoint Houstons current ratings. In addition, CenterPoint Houston will pay lenders, based on current ratings, a per annum commitment fee of 0.5percent for their commitments under the facility and a quarterly duration fee of 0.75percent on the average amount of outstanding borrowings during the quarter. The spread to LIBOR and the commitment fee fluctuate based on CenterPoint Houstons credit rating. The facility contains covenants,including a debt (excluding transition and other securitization bonds) to total capitalization covenant. Bank fees associated with the establishment of this credit facility aggregated approximately $13million.From inception through June30, 2009, there have been no borrowings under the credit facility. In April 2009, the Texas Legislature enacted legislation that authorizes the Texas Utility Commission to conduct proceedings to determine the amount of system restoration costs associated with hurricanes or other major storms that utilities are entitled to recover.The legislation authorizes the Texas Utility Commissionto issue a financing order that would permit a utility like CenterPoint Houston to recover the distribution portion of those costs through the issuance of non-recourse system restoration bonds similar to the securitization bonds issued previously. CenterPoint Houston filed an application for a financing order in July 2009 and expects to issue such bonds during 2009.CenterPoint Houstons $600million credit facility will terminate prior to its November 24, 2009 scheduled expiration date if bondsare issued to securitize costs incurred as a result of Hurricane Ike. (b) Long-term Debt General Mortgage Bonds |
610 - Commitments and Contingen
610 - Commitments and Contingencies (Unaudited) | |
6 Months Ended
Jun. 30, 2009 | |
Commitments and Contingencies | |
Commitments and Contingencies | (11) Commitments and Contingencies (a) Natural Gas Supply Commitments Natural gas supply commitments include natural gas contracts related to CenterPoint Energys Natural Gas Distribution and Competitive Natural Gas Sales and Services business segments, which have various quantity requirements and durations, that are not classified as non-trading derivative assets and liabilities in CenterPoint EnergysConsolidated Balance Sheets as of December31, 2008 and June30, 2009 as these contracts meet the SFAS No. 133 exception to be classified as normal purchases contracts or do not meet the definition of a derivative. Natural gas supply commitments also include natural gas transportation contracts that do not meet the definition of a derivative. As of June30, 2009, minimum payment obligations for natural gas supply commitments are approximately $234million for the remaining six months in2009, $514million in 2010, $525million in 2011, $380million in 2012, $369million in 2013 and $783million after 2013. (b) Legal, Environmental and Other Regulatory Matters Legal Matters Gas Market Manipulation Cases. CenterPoint Energy, CenterPoint Houston or their predecessor, Reliant Energy, Incorporated (Reliant Energy), and certain of their former subsidiaries are named as defendants in several lawsuits described below. Under a master separation agreement betweenCenterPoint Energy and RRI (formerly known as Reliant Resources, Inc. and Reliant Energy, Inc.), CenterPoint Energy and its subsidiaries are entitled to be indemnified by RRI for any losses, including attorneys fees and other costs, arising out of these lawsuits.Pursuant to the indemnification obligation, RRI is defending CenterPoint Energy and its subsidiaries to the extent named in these lawsuits.A large number of lawsuits were filed against numerous gas market participants in a numberof federal and western state courts in connection with the operation of the natural gas markets in 2000-2002. CenterPoint Energys former affiliate, RRI, was a participant in gas trading in the California and Western markets. These lawsuits, many of which have been filed as class actions, allege violations of state and federal antitrust laws. Plaintiffs in these lawsuits are seeking a variety of forms of relief, including, among others, recovery of compensatory damages (in some cases in excess of $1billion),a trebling of compensatory damages, full consideration damages and attorneys fees. CenterPoint Energy and/or Reliant Energy were named in approximately 30 of these lawsuits, which were instituted between 2003 and 2009. CenterPoint Energy and its affiliates have been released or dismissed from all but two of such cases. CenterPoint Energy Services, Inc. (CES), a subsidiary of CERC Corp., is a defendant in a case now pending in federal court in Nevada alleging a conspiracy to inflate Wisconsin natural gas pricesin 2000-2002.Additionally, CenterPoint Energy was a defendant in a lawsuit filed in state court in Nevada that was dismissed in 2007, but the plaintiffs have indicated that they will appeal the dismissal. CenterPoint Energy believes that neither it nor CES is a proper defendant in these remaining cases and |
611 - Income Taxes
611 - Income Taxes (Unaudited) | |
6 Months Ended
Jun. 30, 2009 | |
Income Taxes | |
Income Taxes | (12) Income Taxes During each of the three and six months ended June30, 2008, the effective tax rate was 38%. During the three months and six months ended June30, 2009, the effective tax rate was 33% and 37%, respectively.Deferred state income taxes affected the comparability of the effective tax rate for the three months endedJune30, 2008 and 2009. The following table summarizes CenterPoint Energys uncertain tax positions in accordance with FASB Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes an Interpretation of FASB Statement No. 109, at December31, 2008 and June30, 2009: December31, 2008 June30, 2009 (in millions) Liability for uncertain tax positions $ 117 $ 173 Portion of liability for uncertain tax positions that, if recognized, would reduce the effective income tax rate 14 16 Interest accrued on uncertain tax positions 10 18 In July 2009, CenterPoint Energy settled its federal income tax returns for tax years 2004 and 2005.As a result of the settlement, CenterPoint Energy expects to recognize a reduction in the liability for uncertain tax positions of approximately $38million. |
612 - Estimated Fair Value of F
612 - Estimated Fair Value of Financial Instruments (Unaudited) | |
6 Months Ended
Jun. 30, 2009 | |
Estimated Fair Value of Financial Instruments | |
Estimated Fair Value of Financial Instruments | (13) Estimated Fair Value of Financial Instruments The fair values of cash and cash equivalents, investments in debt and equity securities classified as available-for-sale and trading in accordance with SFASNo.115, Accounting for Certain Investments in Debt and Equity Securities, and short-term borrowings are estimated to be approximately equivalent to carrying amountsand have been excluded from the table below. The fair values of non-trading derivative assets and liabilities are equivalent to their carrying amounts in the Consolidated Balance Sheets at December 31, 2008 and June30, 2009 and have been determined using quoted market prices for the same or similar instruments when available or other estimation techniques (see Notes 5 and 6). Therefore, these financial instruments are stated at fair value and are excluded from the table below.The fair valueof each debt instrument is determined by multiplying the principal amount of each debt instrument by the market price. December 31, 2008 June30, 2009 Carrying Amount Fair Value Carrying Amount Fair Value (in millions) Financial liabilities: Long-term debt (excluding capital leases) $ 10,396 $ 9,875 $ 9,855 $ 9,763 |
613 - Earnings Per Share
613 - Earnings Per Share (Unaudited) | |
6 Months Ended
Jun. 30, 2009 | |
Earnings Per Share | |
Earnings Per Share | (14) Earnings Per Share The following table reconciles numerators and denominators of CenterPoint Energys basic and diluted earnings per share calculations: Three Months Ended June30, Six Months Ended June30, 2008 2009 2008 2009 (in millions, except share and per share amounts) Basic earnings per share calculation: Net income $ 101 $ 86 $ 223 $ 153 Weighted average shares outstanding 331,354,000 352,461,000 329,316,000 346,660,000 Basic earnings per share: Net income $ 0.30 $ 0.24 $ 0.68 $ 0.44 Diluted earnings per share calculation: Net income $ 101 $ 86 $ 223 $ 153 Weighted average shares outstanding 331,354,000 352,461,000 329,316,000 346,660,000 Plus: Incremental shares from assumed conversions: Stock options (1) 881,000 396,000 860,000 439,000 Restricted stock 1,334,000 1,423,000 1,334,000 1,423,000 3.75% convertible senior notes 8,458,000 9,363,000 Weighted average shares assuming dilution 342,027,000 354,280,000 340,873,000 348,522,000 Diluted earnings per share: Net income $ 0.30 $ 0.24 $ 0.66 $ 0.44 __________ (1) Options to purchase 2,760,792shares and 2,762,913shares were outstanding for the three and six months ended June30, 2008, respectively, and options to purchase 3,528,676shares and 2,590,400shares were outstanding for the three and six months ended June30, 2009, respectively, but were not included in the computation of diluted earnings per share because the options exercise pricewas greater than the average market price of the common shares for the respective periods. Substantially all of the 3.75% contingently convertible senior notes provided for settlement of the principal portion in cash rather than stock. In accordance with EITF Issue No. 04-8, Accounting Issues related to Certain Features of Contingently Convertible Debt and the Effect on Diluted Earnings Per Share, the portion of the conversionvalue of such notes that must be settled in cash rather than stock is excluded from the computation of diluted earnings per share from continuing operations. CenterPoint Energy included the conversion spread in the calculation of diluted earnings per share when the average market price of CenterPoint Energys common stock in the respective reporting period exceeded the conversion price. In April 2008, CenterPoint Energy called its 3.75% convertible seniornotes for redemption on May30, 2008. Substantially all of CenterPoint Energys 3.75% convertible senior notes were submitted for conversion on or prior to the May 30, 2008 redemption date. |
614 - Reportable Business Segme
614 - Reportable Business Segments (Unaudited) | |
6 Months Ended
Jun. 30, 2009 | |
Reportable Business Segments | |
Reportable Business Segments | (15) Reportable Business Segments CenterPoint Energys determination of reportable business segments considers the strategic operating units under which CenterPoint Energy manages sales, allocates resources and assesses performance of various products and services to wholesale or retail customers in differing regulatory environments. The accounting policies of the businesssegments are the same as those described in the summary of significant accounting policies except that some executive benefit costs have not been allocated to business segments. CenterPoint Energy uses operating income as the measure of profit or loss for its business segments. CenterPoint Energys reportable business segments include the following: Electric Transmission Distribution, Natural Gas Distribution, Competitive Natural Gas Sales and Services, Interstate Pipelines, Field Services and Other Operations. The electric transmission and distribution function (CenterPoint Houston) is reported in theElectric Transmission Distribution business segment. Natural Gas Distribution consists of intrastate natural gas sales to, and natural gas transportation and distribution for, residential, commercial, industrial and institutional customers. Competitive Natural Gas Sales and Services represents CenterPoint Energys non-rate regulated gas sales and services operations, which consist of three operational functions: wholesale, retail and intrastate pipelines. The Interstate Pipelines business segment includes the interstate natural gas pipeline operations. The Field Services businesssegment includes the natural gas gathering operations. Other Operations consists primarily of other corporate operations which support all of CenterPoint Energys business operations. Financial data for business segments and products and services are as follows (in millions): For the Three Months Ended June30, 2008 Revenues from External Customers Net Intersegment Revenues Operating Income (Loss) Electric Transmission Distribution $ 510 (1) $ $ 164 (2) Natural Gas Distribution 724 2 4 Competitive Natural Gas Sales and Services 1,234 9 (5 ) Interstate Pipelines 150 42 101 (3) Field Services 50 12 32 Other Operations 2 1 Eliminations (65 ) Consolidated $ 2,670 $ $ 297 For the Three Months Ended June30, 2009 Revenues from External Customers Net Intersegment Revenues Operating Income (Loss) Electric Transmission Distribution $ 521 (1) $ $ 162 Natural Gas Distribution 516 2 2 Competitive Natural Gas Sales and Services 430 2 6 Interstate Pipelines 119 36 61 Field Services 51 5 23 Other Operations 3 (1 ) Eliminations (45 ) Consolidated $ 1,640 $ $ 253 For the Six Months Ended June30, 2008 Revenues from External Customers Net Intersegment Revenues Operating Income Total Assets as of December31, 2008 Electric Transmission Distribution $ 919 (1) $ $ 255 (2) $ 8,880 Natural Gas Distribution 2,421 5 125 |
615 - Subsequent Events
615 - Subsequent Events (Unaudited) | |
6 Months Ended
Jun. 30, 2009 | |
Subsequent Events | |
Subsequent Events | (16) Subsequent Events On July23, 2009, CenterPoint Energys board of directors declared a regular quarterly cash dividend of $0.19 per share of common stock payable on September10, 2009, to shareholders of record as of the close of business on August14, 2009. CenterPoint Energy has evaluated all subsequent events through the date these Interim Condensed Financial Statements were issued, which was August 5, 2009. |
Document Information
Document Information (Unaudited) | |
6 Months Ended
Jun. 30, 2009 | |
Document Information [Line Items] | |
Document Type | 10-Q |
Document Period End Date | 2009-06-30 |
Amendment Flag | false |
Entity Information
Entity Information (Unaudited, USD $) | ||
6 Months Ended
Jun. 30, 2009 | Jun. 30, 2008
| |
Entity Information [Line Items] | ||
Entity Registrant Name | CenterPoint Energy, Inc. | |
Entity Central Index Key | 0001130310 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Public Float | $5,451,652,076 | |
Entity Common Stock, Shares Outstanding | 364,392,928 |