CenterPoint Energy 2010 Annual Report Download - page 100

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78
(3) Property, Plant and Equipment
(a) Property, Plant and Equipment
Property, plant and equipment includes the following:
Weighted Average
December 31,
Useful Lives
(Years)
2009
2010
(in millions)
Electric Transmission & Distribution.......................................................................................
27
$ 7,325
$ 7,586
Natural Gas Distribution ..........................................................................................................
31
3,436
3,642
Competitive Natural Gas Sales and Services ...........................................................................
26
69
71
Interstate Pipelines ...................................................................................................................
58
2,524
2,594
Field Services ...........................................................................................................................
46
931
1,583
Other property ..........................................................................................................................
25
485
529
Total ................................................................................................................................
14,770
16,005
Accumulated depreciation and amortization:
Electric Transmission & Distribution ..................................................................................
2,737
2,805
Natural Gas Distribution .....................................................................................................
825
954
Competitive Natural Gas Sales and Services ......................................................................
13
16
Interstate Pipelines ..............................................................................................................
223
265
Field Services ......................................................................................................................
27
43
Other property .....................................................................................................................
157
190
Total accumulated depreciation and amortization ..........................................................
3,982
4,273
Property, plant and equipment, net ............................................................................
$ 10,788
$ 11,732
(b) Depreciation and Amortization
The following table presents depreciation and amortization expense for 2008, 2009 and 2010 (in millions).
2008
2009
2010
Depreciation expense .............................................................................................................................................
$ 478
$ 496
$ 531
Amortization expense ............................................................................................................................................
230
247
333
Total depreciation and amortization expense .....................................................................................................
$ 708
$ 743
$ 864
(c) Asset Retirement Obligations
A reconciliation of the changes in the asset retirement obligation (ARO) liability is as follows (in millions):
December 31,
2009
2010
Beginning balance .................................................................................................................................................
$ 63
$ 82
Accretion expense..................................................................................................................................................
7
5
Revisions in estimates of cash flows .....................................................................................................................
12
(3)
Ending balance .........................................................................................................................................................
$ 82
$ 84
The increase of $12 million in the ARO from the revision of estimate in 2009 is primarily attributable to the
decrease in the credit-adjusted risk-free rate used to value the liability as of the end of the period. The decrease of
$3 million in the ARO from the revision of the estimate in 2010 is primarily attributable to changes in the estimated
lives of some of the assets underlying the liability. There were no material additions or settlements during the years
ended December 31, 2009 and 2010.