CenterPoint Energy 2013 Annual Report Download - page 4

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ON POINT CenterPoint Energy  Annual Report
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and electric operations was  million, an increase of  million compared with
.This excludes a  million non-cash goodwill impairment charge recorded
in associated with the competitive energy services business.
Total shareholder returns last year were excellent as well. Including stock price appreciation
and annual dividends, CenterPoint Energy stock returned . percent andoutperformed
our peers, as measured by the S&P  Utilities Index, which returned . percent.
However, we lagged the broader market S&P  Index, which returned . percent.
Over the longer-term our three-year, five-year and -year total shareholder returns
haveexceeded those of our peers and the market as a whole.
Business Segment Results
We saw continued growth in our electric transmission and distribution business
lastyear.We added more than , new customers and recorded approximately
million in right-of-way revenues, which is substantially above historical levels of
million to  million per year. However, a milder summer and higher property taxes
reduced core operating income to  million, compared with  million in .
Our customers and company are seeing the benefits of our smart meter and intelligent
grid deployments. Smart meters provide faster, more accurate meter readings and enable
us to start, stop and transfer service without ever rolling a truck. Where intelligent grid
technology is in place, automated switches with line-sensing capabilities have led to
apercent reduction in customer outage minutes. Our smart meter deployment is
already complete, and we hope to have our intelligent grid technologies fully deployed
inthe next  years.
In , our natural gas distribution business set another record. Core operating
incomefor the year was  million, compared with  million in . Rate relief,
growth, cost management eorts and a return to more normal weather, were key drivers.
Our competitive energy services business contributed an additional  million in
operating income last year.
Eective rate designs across our service territories are providing us greater opportunity
fortimely cost recovery and to earn our authorized rates of return. Over the past several
years, we have made significant investments in system integrity in Minnesota, and as a
result we are requesting a . million increase in our base rates there. Interim rates
wentinto eect Oct. , and we expect a final decision in mid-.
Across the rest of our service territory, we continue to make substantial investments in
automation and pipeline integrity projects. Over the past decade, we have replaced half
ofthe cast iron pipe in our system and nearly a third of the bare steel pipe. In addition,
weare well on our way toward deploying advanced, drive-by meter reading technology
inall our jurisdictions. On average, this will allow a single employee to take , meter
readings per day, compared with  per day on foot.
Prior to the formation of Enable Midstream Partners on May , our midstream business
contributed  million in operating income and  million in equity income from our
investment in the Southeast Supply Header (SESH). Following the creation of the limited
partnership, our investment in Enable Midstream yielded  million in equity earnings,
with an additional  million from SESH. The partnership continues to do well in a
challenging operating environment characterized by low commodity prices and
compressed geographic price dierentials. Earnings from processing and wet gas
gathering continue togrow, although these are partially oset by reduced demand for
ancillary pipeline services and significantly reduced drilling activity in dry gas basins. In
January , EnableMidstream announced it had hired Lynn L. Bourdon III to be its
president and CEO.Enable Midstream remains on track for an initial public oering in the
firsthalf of .
SHAREHOLDER LETTER (cont)
 Highlights
 Our natural gas distribution business hadarecord
year with  million in operatingincome.
 We installed intelligent grid equipment
thatserves  percent of consumers, resultingin
a percent improvement in power outage
restoration.
 CenterPoint Energy owns a . percent limited
partner interest in Enable Midstream Partners,
one of the largest midstream companies in
America.
 Safety, while always our number one priority, was
added to our core values of integrity,
accountability, initiative and respect. These
values reflect the basic ethical principles that
guide our conduct every day.
 Commitment to our communities goes beyond
delivering energy. In , our employees, retirees,
family members and friends dedicated ,
volunteer hours, valued conservatively at 
million.
 CenterPoint Energy was recognized by the Edison
Electric Institute, Women’s Enterprise magazine
and Minority Business News USA forour supplier
diversity efforts.