CenterPoint Energy 2015 Annual Report Download - page 104

(d) Postemployment Benefits
CenterPointEnergyprovidespostemploymentbenefitsforcertainformerorinactiveemployees,theirbeneficiariesandcovereddependents,afteremployment
but before retirement (primarily healthcare and life insurance benefits for participants in the long-term disability plan). CenterPoint Energy recorded
postemploymentexpensesof$2million,$3millionand$4millionin2015,2014and2013,respectively.
IncludedinBenefitObligationsintheaccompanyingConsolidatedBalanceSheetsasofDecember 31, 2015and2014was$23millionand$28million,
respectively,relatingtopostemploymentobligations.
(e) Other Non-Qualified Plans
CenterPoint Energy has non-qualified deferred compensation plans that provide benefits payable to directors, officers and certain key employees or their
designatedbeneficiariesatspecifiedfuturedates,upontermination,retirementordeath.BenefitpaymentsaremadefromthegeneralassetsofCenterPointEnergy.
CenterPointEnergyrecordedbenefitexpenserelatingtotheseplansof$3million,$5millionand$5millionfortheyearsin2015,2014and2013,respectively.
Included in Benefit Obligations in the accompanying Consolidated Balance Sheets as of December 31, 2015 and 2014 was $51 million and $60 million ,
respectively,relatingtodeferredcompensationplans.
IncludedinBenefitObligationsinCenterPointEnergy’sConsolidatedBalanceSheetsasofDecember31,2015and2014was$32millionand$33million,
respectively,relatingtosplit-dollarlifeinsurancearrangements.
(f) Change in Control Agreements and Other Employee Matters
CenterPointEnergyhadchangeincontrolagreementswithcertainofitsofficers,whichexpiredDecember31,2014.Inlieuoftheseagreements,ourBoardof
Directorsapprovedanewchangeincontrolplan,whichwaseffectiveJanuary1,2015.Theplan,liketheexpiredagreements,generallyprovides,totheextent
applicable,inthecaseofachangeincontrolofCenterPointEnergyandterminationofemployment,forseverancebenefitsofuptothreetimesannualbasesalary
plusbonus,andotherbenefits.Ourofficers,includingourExecutiveChairman,areparticipantsundertheplan.
As of December 31, 2015 , approximately 35% of CenterPoint Energy’s employees were subject to collective bargaining agreements. The collective
bargaining agreement with the International Brotherhood of Electrical Workers Local 66 and the two collective bargaining agreements with Professional
EmployeesInternationalUnionLocal12,whichcollectivelycoverapproximately21%ofouremployees,arescheduledtoexpireinMarchandMayof2016.We
believewehavegoodrelationshipswiththesebargainingunitsandexpecttonegotiatenewagreementsin2016.
(7) Derivative Instruments
CenterPointEnergyisexposedtovariousmarketrisks.Theserisksarisefromtransactionsenteredintointhenormalcourseofbusiness.CenterPointEnergy
utilizesderivativeinstrumentssuchasphysicalforwardcontracts,swapsandoptionstomitigatetheimpactofchangesincommoditypricesandweatheronits
operatingresultsandcashflows.
(a) Non-Trading Activities
Derivative Instruments. CenterPoint Energy enters into certain derivative instruments to manage physical commodity price risk and does not engage in
proprietaryorspeculativecommoditytrading.Thesefinancialinstrumentsdonotqualifyorarenotdesignatedascashfloworfairvaluehedges.
Weather Hedges. CenterPoint Energy has weather normalization or other rate mechanisms that mitigate the impact of weather on NGD in Arkansas,
Louisiana, Mississippi, Minnesota and Oklahoma. NGD and electric operations in Texas do not have such mechanisms, although fixed customer charges are
historicallyhigherinTexasforNGDcomparedtoCenterPointEnergy’sotherjurisdictions.Asaresult,fluctuationsfromnormalweathermayhaveapositiveor
negativeeffectonNGD’sresultsinTexasandonCenterPointHouston’sresultsinitsserviceterritory.
CenterPointEnergy hashistorically entered intoheating-degree day swapsfor certainNGDjurisdictions tomitigate theeffectof fluctuationsfromnormal
weatheron itsresultsof operationsandcash flowsforthe winterheatingseason, whichcontaineda bilateral dollarcapof $16millioninboth2013–2014and
2014–2015.However,NGDdidnotenterintoheating-degreedayswapsforthe2015–2016winterseasonasaresultofNGD’sMinnesotadivisionimplementinga
fulldecouplingpilotinJuly2015.CenterPointEnergyalsoenteredintoweatherhedgesfortheCenterPointHoustonserviceterritory,whichcontainedabilateral
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