CenterPoint Energy 2008 Annual Report Download - page 134

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112
In April 2008, the Company called its 3.75% convertible senior notes for redemption on May 30, 2008. At the
time of the announcement, the notes were convertible at the option of the holders, and substantially all of the notes
were submitted for conversion on or prior to the May 30, 2008 redemption date. During the year ended December
31, 2008, the Company issued 16.9 million shares of its common stock and paid cash of approximately $532 million
to settle conversions of approximately $535 million principal amount of its 3.75% convertible senior notes.
In December 2006, the Company called its 2.875% convertible senior notes for redemption on January 22, 2007.
The 2.875% convertible senior notes became immediately convertible at the option of the holders upon the call for
redemption and were convertible through the close of business on the redemption date. Substantially all the
$255 million aggregate principal amount of the 2.875% convertible senior notes were converted in January 2007.
The $255 million principal amount of the 2.875% convertible senior notes was settled in cash and the excess value
due converting holders of $97 million was settled by delivering approximately 5.6 million shares of the Company’s
common stock.
In April 2008, the Company purchased $175 million principal amount of pollution control bonds issued on its
behalf at 102% of their principal amount. Prior to the purchase, $100 million principal amount of such bonds had a
fixed rate of interest of 7.75% and $75 million principal amount of such bonds had a fixed rate of interest of 8%.
Depending on market conditions, the Company may remarket both series of bonds, at 100% of their principal
amounts, in 2009.
The Company’s maturities of long-term debt, excluding the ZENS obligation, are $-0- in 2009, $200 million in
2010, $19 million in 2011, $264 million in 2012 and $-0- in 2013.
(4) Guaranties. CenterPoint Energy Services, Inc. (CES) provides comprehensive natural gas sales and services
to industrial and commercial customers. In order to hedge their exposure to natural gas prices, CES has entered
standard purchase and sale agreements with various counterparties. CenterPoint Energy has guaranteed the payment
obligations of CES under certain of these agreements, typically for one-year terms. As of December 31, 2008,
CenterPoint Energy had guaranteed $15 million under these agreements.
(5) Investment in Subsidiaries. During 2008, the Company reduced its payables to subsidiaries, with no net asset
restrictions, by $430 million with a corresponding reduction in investment in subsidiaries.