CenterPoint Energy 2015 Annual Report Download - page 121

CenterPoint Energy recognizes interest and penalties as a component of income tax expense.  CenterPoint Energy recognized $3 million of income tax
expenseand$3millionofincometaxbenefitrelatedtointerestonincometaxpositionsduring2014and2013,respectively.
Tax Audits and Settlements. Taxyearsthrough2013havebeenauditedandsettledwiththeIRS.Forthe2014and2015taxyears,CenterPointEnergyisa
participantintheIRS’sComplianceAssuranceProcess.CenterPointEnergyhasconsideredtheeffectsoftheseexaminationsinitsaccrualforsettledissuesand
liabilityforuncertainincometaxpositions(ifany)asofDecember31,2015.
(14) Commitments and Contingencies
(a) Natural Gas Supply Commitments
Natural gas supply commitments include natural gas contracts related to CenterPoint Energy’s Natural Gas Distribution and Energy Services business
segments,whichhavevariousquantityrequirementsanddurations,thatarenotclassifiedasnon-tradingderivativeassetsandliabilitiesinCenterPointEnergy’s
ConsolidatedBalanceSheetsasofDecember31,2015and2014asthesecontractsmeetanexceptionas“normalpurchasescontracts”ordonotmeetthedefinition
of a derivative. Natural gas supply commitments also include natural gas transportation contracts that do not meet the definition of a derivative. As of
December 31, 2015 , minimum payment obligations for natural gas supply commitments are approximately $478 million in 2016 , $457 million in 2017 ,
$405millionin2018,$217millionin2019,$90millionin2020and$38millionafter2020.
(b) Asset Management Agreements
NGD has asset management agreements (AMAs) associated withits utility distribution service in Arkansas, Louisiana, Mississippi, Oklahoma and Texas.
Generally,theseAMAsarecontractsbetweenNGDandanassetmanagerthatareintendedtotransfertheworkingcapitalobligationandmaximizetheutilization
oftheassets.IntheseAMAs,NGDagreedtoreleasetransportationandstoragecapacitytootherpartiestomanagegasstorage,supplyanddeliveryarrangements
forNGDandtousethereleasedcapacityforotherpurposeswhenitisnotneededforNGD.NGDiscompensatedbytheassetmanagerthroughpaymentsmade
overthelifeoftheAMAsbasedinpartontheresultsoftheassetoptimization.NGDhasanobligationtopurchaseitswinterstoragerequirementsthathavebeen
releasedtotheassetmanagerundertheseAMAs.TheAMAshavevaryingterms,thelongestofwhichexpiresin2019.
(c) Lease Commitments
ThefollowingtablesetsforthinformationconcerningCenterPointEnergy’sobligationsundernon-cancelablelong-termoperatingleasesasofDecember31,
2015,whichprimarilyconsistofrentalagreementsforbuildingspace,dataprocessingequipment,compressionequipmentandrights-of-way:


(in millions)
2016 $ 5
2017 4
2018 3
2019 3
2020 2
2021andbeyond 7
Total $ 24
Totalleaseexpenseforalloperatingleaseswas$9million,$11millionand$21millionduring2015,2014and2013,respectively.
(d) Legal, Environmental and Other Regulatory Matters
Legal Matters
Gas Market Manipulation Cases .CenterPointEnergy,CenterPointHoustonortheirpredecessor,ReliantEnergy,Incorporated(ReliantEnergy),andcertain
oftheirformersubsidiarieshavebeennamedasdefendantsincertainlawsuitsdescribedbelow.UnderamasterseparationagreementbetweenCenterPointEnergy
andaformersubsidiary,ReliantResources,Inc.(RRI),
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