CenterPoint Energy 2013 Annual Report Download - page 126
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104
The ZENS obligation is bifurcated into a debt component and a derivative component (the holder’s option to receive the
appreciated value of the reference shares at maturity). The bifurcated debt component accretes through interest charges at 17.3%
annually up to the contingent principal amount of the ZENS in 2029. Such accretion will be reduced by annual cash interest
payments, as described above. The derivative component is recorded at fair value and changes in the fair value of the derivative
component are recorded in CenterPoint Energy’s Statements of Consolidated Income. Changes in the fair value of the TW Securities
held by CenterPoint Energy are expected to substantially offset changes in the fair value of the derivative component of the ZENS.
The following table sets forth summarized financial information regarding CenterPoint Energy’s investment in TW Securities
and each component of CenterPoint Energy’s ZENS obligation (in millions).
TW
Securities
Debt
Component
of ZENS
Derivative
Component
of ZENS
Balance at December 31, 2010 ....................................................................... $ 367 $ 126 $ 232
Accretion of debt component of ZENS ........................................................ —22—
2% interest paid ............................................................................................ —(17)—
Gain on indexed debt securities.................................................................... ——
(35)
Gain on TW Securities.................................................................................. 19——
Balance at December 31, 2011........................................................................ 386 131 197
Accretion of debt component of ZENS ........................................................ —24—
2% interest paid ............................................................................................ —(17)—
Loss on indexed debt securities .................................................................... ——71
Gain on TW Securities.................................................................................. 154——
Balance at December 31, 2012 ....................................................................... 540 138 268
Accretion of debt component of ZENS ........................................................ —24—
2% interest paid ............................................................................................ —(17)—
Sale of TW securities.................................................................................... (9)— —
Redemption of indexed debt securities......................................................... —(2)(6)
Loss on indexed debt securities .................................................................... — — 193
Gain on TW Securities.................................................................................. 236——
Balance at December 31, 2013 ....................................................................... $ 767 $ 143 $ 455
(11) Equity
Capital Stock
CenterPoint Energy has 1,020,000,000 authorized shares of capital stock, comprised of 1,000,000,000 shares of $0.01 par
value common stock and 20,000,000 shares of $0.01 par value cumulative preferred stock.
Dividends Declared
CenterPoint Energy declared dividends per share of $0.83, $0.81 and $0.79, respectively, during the years ended December
31, 2013, 2012 and 2011.