CenterPoint Energy 2015 Annual Report Download - page 89

AsofDecember 31,2015,CERCCorp.andOGEalsoown 40%and60%,respectively, oftheincentive distributionrightsheldbythegeneralpartnerof
Enable.Enableisexpectedtopayaminimumquarterlydistributionof$0.2875perunitonitsoutstandingunitstotheextentithassufficientcashfromoperations
afterestablishmentofcashreservesandpaymentoffeesandexpenses,includingpaymentstoitsgeneralpartneranditsaffiliates,within45daysaftertheendof
each quarter. If cash distributions to Enable’s unitholders exceed $0.330625 per unit in any quarter, the general partner will receive increasing percentages or
incentivedistributionsrights,upto50%,ofthecashEnabledistributesinexcessofthatamount.IncertaincircumstancesthegeneralpartnerofEnablewillhave
therighttoresettheminimumquarterlydistributionandthetargetdistributionlevelsatwhichtheincentivedistributionsreceiveincreasingpercentagestohigher
levelsbasedonEnable’scashdistributionsatthetimeoftheexerciseofthisresetelection.
Otherinvestments,excludingmarketablesecurities,arecarriedatcost.
As of December 31, 2015 , CenterPoint Energy had VIEs consisting of transition and system restoration bond companies, which it consolidates. The
consolidatedVIEsarewholly-ownedbankruptcyremotespecialpurposeentitiesthatwereformedspecificallyforthepurposeofsecuritizingtransitionandsystem
restorationrelatedproperty.CreditorsofCenterPointEnergyhavenorecoursetoanyassetsorrevenuesofthetransitionandsystemrestorationbondcompanies.
Thebonds issued by theseVIEsare payable only fromandsecuredby transition and system restoration propertyandthe bondholders have norecoursetothe
generalcreditofCenterPointEnergy.
(c) Revenues
CenterPointEnergy recordsrevenue forelectricitydelivery andnaturalgassalesand servicesunder theaccrualmethod andthese revenuesarerecognized
upondeliverytocustomers.Electricitydeliveriesnotbilledbymonth-endareaccruedbasedonactualadvancedmeteringsystemdata,dailysupplyvolumesand
applicablerates.Naturalgassalesnotbilledbymonth-endareaccruedbaseduponestimatedpurchasedgasvolumes,estimatedlostandunaccountedforgasand
currentlyeffectivetariffrates.
(d) Long-lived Assets and Intangibles
CenterPointEnergyrecordsproperty,plantandequipmentathistoricalcost.CenterPointEnergyexpensesrepairandmaintenancecostsasincurred.
CenterPointEnergyperiodicallyevaluateslong-livedassets,includingproperty,plantandequipment,andspecificallyidentifiableintangibles,wheneventsor
changesin circumstances indicate that the carryingvalueofthese assets maynotberecoverable. The determination of whetheranimpairment has occurred is
basedonanestimateofundiscountedcashflowsattributabletotheassetscomparedtothecarryingvalueoftheassets.
(e) Regulatory Assets and Liabilities
CenterPointEnergyappliestheguidanceforaccountingforregulatedoperationstotheElectricTransmission&DistributionbusinesssegmentandtheNatural
Gas Distribution business segment.CenterPoint Energy’s rate-regulated subsidiaries may collect revenuessubject to refund pending finaldetermination in rate
proceedings. In connection with such revenues, estimated rate refund liabilities are recorded which reflect management’s current judgment of the ultimate
outcomesoftheproceedings.
CenterPointEnergy’srate-regulatedbusinessesrecognizeremovalcostsasacomponentofdepreciationexpenseinaccordancewithregulatorytreatment.As
of December 31, 2015 and 2014 , these removal costs of $980 million and $958 million , respectively, are classified as regulatory liabilities in CenterPoint
Energy’sConsolidatedBalanceSheets.Inaddition,aportionoftheamountofremovalcoststhatrelatetoassetretirementobligationshasbeenreclassifiedfroma
regulatoryliabilitytoanassetretirementliabilityinaccordancewithaccountingguidanceforassetretirementobligations.
(f) Depreciation and Amortization Expense
Depreciationand amortization iscomputedusing thestraight-linemethodbased oneconomiclives orregulatory-mandatedrecoveryperiods. Amortization
expenseincludesamortizationofregulatoryassetsandotherintangibles.
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