CenterPoint Energy 2012 Annual Report Download - page 62

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40
Interstate Pipelines
The following table provides summary data of our Interstate Pipelines business segment for 2010, 2011 and 2012 (in millions,
except throughput data):
Year Ended December 31,
2010 2011 2012
Revenues......................................................................................................... $ 601 $ 553 $ 502
Expenses:
Natural gas.................................................................................................... 93 67 57
Operation and maintenance .......................................................................... 153 152 153
Depreciation and amortization...................................................................... 52 54 56
Taxes other than income taxes...................................................................... 33 32 29
Total expenses.......................................................................................... 331 305 295
Operating Income............................................................................................ $ 270 $ 248 $ 207
Equity in earnings of unconsolidated affiliates............................................... $ 19 $ 21 $ 26
Transportation throughput (in Bcf)................................................................. 1,693 1,579 1,367
2012 Compared to 2011. Our Interstate Pipeline business segment reported operating income of $207 million for 2012
compared to $248 million for 2011. Operating income decreased $41 million primarily due to lower margins resulting from a
backhaul contract that expired in 2011 ($16 million), as well as the associated reduction in compressor efficiency ($8 million) on
the Carthage to Perryville pipeline due to lower volumes, lower off-system transportation revenues ($8 million), lower seasonal
and market-sensitive transportation contracts ($7 million) and ancillary services ($7 million). These margin decreases were partially
offset by the effects of the 10-year agreement with our natural gas distribution affiliate ($5 million) which we restructured in 2010.
Operating income decreases due to higher operations and maintenance expenses ($1 million) and higher depreciation and
amortization expenses ($2 million) due to asset additions were offset by lower taxes other than income taxes ($3 million).
2011 Compared to 2010. Our Interstate Pipeline business segment reported operating income of $248 million for 2011
compared to $270 million for 2010. Operating income decreased $22 million primarily due to a backhaul contract that expired in
2011 ($22 million), as well as the effects of the restructured 10-year agreement with our natural gas distribution affiliate ($11 million)
and lower off-system revenues ($11 million). These margin decreases were partially offset by new firm transportation contracts
and higher ancillary revenues ($22 million). Operating income increases due to lower operation and maintenance expenses ($1
million) and lower taxes other than income ($1 million) were offset by increased depreciation and amortization expenses
($2 million) related to new assets.
Equity Earnings. In addition, this business segment recorded equity income of $19 million, $21 million and $26 million for
the years ended December 31, 2010, 2011 and 2012, respectively, from its 50% interest in Southeast Supply Header, LLC (SESH),
a jointly-owned pipeline. The 2012 increase in equity earnings primarily resulted from restructuring and extending a long-term
agreement with an anchor shipper at the end of 2011. These amounts are included in Equity in earnings of unconsolidated affiliates
under the Other Income (Expense) caption in the Statements of Consolidated Income.