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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2007
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD FROM  TO
 Commission File Number 333-91093
 CenterPoint Energy Transition Bond Company, LLC
  Delaware(State or other jurisdiction of
    
    76-0624152(I.R.S. Employer Identification Number)incorporation or organization)1111 Louisiana, Suite 4667Houston, Texas 77002
    
    (713) 207-8272(Address and zip code of principal
    
    (Registrants telephone number, includingexecutive offices)
    
    area code)
 The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form
10-Q and is therefore filing this Form 10-Q with the reduced disclosure format.
 þ o
  o o þ
 o þ




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##### Table of Contents



CenterPoint Energy Transition Bond Company, LLC
 TABLE OF CONTENTS
 PART I.
    
    FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    1Statements of Income and Changes in Members EquityThree Months and Six Months Ended June 30, 2006 and 2007 (unaudited)
    
    
    1Balance SheetsDecember 31, 2006 and June 30, 2007 (unaudited)
    
    
    2Statements of Cash FlowsSix Months Ended June 30, 2006 and 2007 (unaudited)
    
    
    3Notes to Unaudited Financial Statements
    
    
    4Item 2. Managements Narrative Analysis of Results of Operations
    
    
    7Item 4. Controls and Procedures
    
    
    8PART II.
    
    OTHER INFORMATIONItem 1A. Risk Factors
    
    
    9Item 6.    Exhibits
    
    
    9Certification Pursuant to Section 302Certification Pursuant to Section 302Certification Pursuant to Section 906Certification Pursuant to Section 906Items Incorporated by Reference from Form 10-K
 i




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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
    
    
    changes in market demand and demographic patterns;
    
    weather variations and other natural phenomena affecting retail electric customer energy usage;
    
    the operating performance of CenterPoint Energy Houston Electric, LLCs
(CenterPoint Houston) facilities and third-party suppliers of electric energy in
CenterPoint Houstons service territory;
    
    state and federal legislative and regulatory actions or developments, including
deregulation, re-regulation, changes in or application of laws or regulations applicable to
the various aspects of CenterPoint Houstons business;
    
    the accuracy of the servicers forecast of electrical consumption or the payment of transition charges;
    
    non-payment of transition charges by retail electric providers;
    
    the reliability of the systems, procedures and other infrastructure necessary
to operate the retail electric business in CenterPoint Houstons service territory,
including the systems owned and operated by the independent system operator in the Electric
Reliability Council of Texas, Inc.; and
    
    other factors we discuss in Risk Factors in Item 1A of Part I of our Annual
Report on Form 10-K for the year ended December 31, 2006, which is incorporated herein by
reference, and our other Securities and Exchange Commission filings.
  ii




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PART I. FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 
 CENTERPOINT ENERGY TRANSITION BOND COMPANY, LLC
STATEMENTS OF INCOME
AND CHANGES IN MEMBERS EQUITY
(Unaudited)
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2006
    
    
    2007
    
    
    2006
    
    
    2007(in thousands)Revenues:Transition charge revenue
    
    $
    20,643
    
    
    $
    22,527
    
    
    $
    36,472
    
    
    $
    41,690Investment income
    
    
    388
    
    
    
    388
    
    
    
    774
    
    
    
    787Total operating revenues
    
    
    21,031
    
    
    
    22,915
    
    
    
    37,246
    
    
    
    42,477Expenses:Interest expense
    
    
    8,236
    
    
    
    7,567
    
    
    
    16,652
    
    
    
    15,333Amortization of transition property
    
    
    12,688
    
    
    
    15,502
    
    
    
    19,940
    
    
    
    26,763Amortization of transition bond discount
and issuance costs
    
    
    226
    
    
    
    227
    
    
    
    500
    
    
    
    465Administrative and general expenses
    
    
    (119
    )
    
    
    (381
    )
    
    
    154
    
    
    
    (84
    )Total operating expenses
    
    
    21,031
    
    
    
    22,915
    
    
    
    37,246
    
    
    
    42,477Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Members Equity at Beginning of Period
    
    
    3,745
    
    
    
    3,745
    
    
    
    3,745
    
    
    
    3,745Contributed Capital
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Members Equity at End of Period
    
    $
    3,745
    
    
    $
    3,745
    
    
    $
    3,745
    
    
    $
    3,745
  1




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CENTERPOINT ENERGY TRANSITION BOND COMPANY, LLC
 BALANCE SHEETS
(Unaudited)
 December 31, 2006
    
    
    June 30, 2007(in thousands)ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    32,119
    
    
    $
    36,014Restricted funds
    
    
    15,392
    
    
    
    14,019Transition charge receivable
    
    
    9,616
    
    
    
    12,280Current Assets
    
    
    57,127
    
    
    
    62,313Intangible transition property
    
    
    538,978
    
    
    
    512,215Unamortized debt issuance costs
    
    
    3,236
    
    
    
    2,788Total Assets
    
    $
    599,341
    
    
    $
    577,316LIABILITIES AND MEMBERS EQUITYCurrent Liabilities:Current portion of long-term debt
    
    $
    59,912
    
    
    $
    61,822Accrued interest
    
    
    9,198
    
    
    
    8,912Customer deposits
    
    
    11,582
    
    
    
    10,210Fees payable to servicer
    
    
    176
    
    
    
    162Current Liabilities
    
    
    80,868
    
    
    
    81,106Long-term debt:Transition bonds, net of unamortized discount
    
    
    514,728
    
    
    
    492,465Total Liabilities
    
    
    595,596
    
    
    
    573,571Members Equity:Contributed capital
    
    
    3,745
    
    
    
    3,745Retained earnings
    
    
    
    
    
    
    Total Members Equity
    
    
    3,745
    
    
    
    3,745Total Liabilities and Members Equity
    
    $
    599,341
    
    
    $
    577,316
  2




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CENTERPOINT ENERGY TRANSITION BOND COMPANY, LLC
 
 STATEMENTS OF CASH FLOWS
(Unaudited)
 Six Months EndedJune 30,2006
    
    
    2007(in thousands)Cash Flows from Operating Activities:Net income
    
    $
    
    
    
    $
    Adjustments for non-cash items:Amortization of transition property
    
    
    19,940
    
    
    
    26,763Amortization of transition bond discount and issuance costs
    
    
    500
    
    
    
    465Changes in other assets and liabilities:Transition charge receivable
    
    
    (1,482
    )
    
    
    (2,664
    )Accrued interest
    
    
    (259
    )
    
    
    (286
    )Customer deposits
    
    
    (172
    )
    
    
    (1,372
    )Fees payable to servicer
    
    
    (29
    )
    
    
    (14
    )Net cash provided by operating activities
    
    
    18,498
    
    
    
    22,892Cash Flows from Investing Activities:Restricted funds
    
    
    160
    
    
    
    1,373Net cash provided by investing activities
    
    
    160
    
    
    
    1,373Cash Flows from Financing Activities:Payments of long-term debt
    
    
    (18,460
    )
    
    
    (20,370
    )Net cash used in financing activities
    
    
    (18,460
    )
    
    
    (20,370
    )Net Increase in Cash and Cash Equivalents
    
    
    198
    
    
    
    3,895Cash and Cash Equivalents, Beginning of Period
    
    
    38,377
    
    
    
    32,119Cash and Cash Equivalents, End of Period
    
    $
    38,575
    
    
    $
    36,014Supplemental Disclosure of Cash Flow Information:Cash Payments:Interest
    
    $
    16,911
    
    
    $
    15,619
  3




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CENTERPOINT ENERGY TRANSITION BOND COMPANY, LLC
 
 NOTES TO UNAUDITED FINANCIAL STATEMENTS
 (1) Background and Basis of Presentation
 General.
 Background.
 Basis of Presentation.
  Amortization.
 (2) Transition Charges
  4




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2001
    
    2002
    
    2003
    
    2004
    
    2005
    
    2006
    
    2007January
    
    $
    
    
    
    $
    4,584
    
    
    $
    4,902
    
    
    $
    4,652
    
    
    $
    6,159
    
    
    $
    5,729
    
    
    $
    6,665February
    
    
    
    
    
    
    3,997
    
    
    
    4,693
    
    
    
    4,554
    
    
    
    7,804
    
    
    
    5,082
    
    
    
    5,970March
    
    
    
    
    
    
    4,297
    
    
    
    4,698
    
    
    
    5,798
    
    
    
    8,136
    
    
    
    5,916
    
    
    
    7,003April
    
    
    
    
    
    
    5,144
    
    
    
    4,986
    
    
    
    4,808
    
    
    
    6,582
    
    
    
    5,799
    
    
    
    6,349May
    
    
    
    
    
    
    3,678
    
    
    
    4,236
    
    
    
    3,754
    
    
    
    7,028
    
    
    
    5,176
    
    
    
    6,414June
    
    
    
    
    
    
    5,805
    
    
    
    5,378
    
    
    
    6,258
    
    
    
    7,952
    
    
    
    7,398
    
    
    
    7,019July
    
    
    
    
    
    
    5,892
    
    
    
    6,195
    
    
    
    6,039
    
    
    
    8,481
    
    
    
    7,792August
    
    
    
    
    
    
    7,091
    
    
    
    5,948
    
    
    
    6,668
    
    
    
    10,429
    
    
    
    8,785September
    
    
    
    
    
    
    7,195
    
    
    
    6,359
    
    
    
    7,217
    
    
    
    10,164
    
    
    
    7,942October
    
    
    2
    
    
    
    8,799
    
    
    
    6,403
    
    
    
    6,137
    
    
    
    9,619
    
    
    
    7,423November
    
    
    414
    
    
    
    6,119
    
    
    
    4,667
    
    
    
    7,055
    
    
    
    9,788
    
    
    
    7,253December
    
    
    1,937
    
    
    
    5,390
    
    
    
    5,516
    
    
    
    6,528
    
    
    
    7,273
    
    
    
    6,073
 (3) Cash and Cash Equivalents/Restricted Funds
  
    
    The General Subaccount is comprised of collections of transition charges and
interest earned from short term investments. These amounts accumulate in the General
Subaccount until they are transferred from the General Subaccount on each transition bond
payment date. The General Subaccount had a balance of $24.0 million at June 30, 2007.
    
    The Reserve Subaccount is maintained for the purpose of holding any transition
charges and investment earnings (other than investment earnings on amounts in the Capital
Subaccount) not otherwise used on the payment dates of the transition bonds for payment of
principal, interest, fees or expenses, or for funding the Capital Subaccount or the
Overcollateralization Subaccount. The Reserve Subaccount had a balance of $10.2 million at
June 30, 2007.
    
    The Overcollateralization Subaccount has a target funding level of
approximately $3.7 million (0.5% of the initial principal amount of the transition bonds),
and funding is scheduled to occur ratably over the life of the transition bonds. The
trustee may draw from this subaccount if the General Subaccount and Reserve Subaccount are
not sufficient on any payment date to make scheduled payments on the transition bonds and
payments of certain fees and expenses. The Overcollateralization Subaccount had a balance
of $1.7 million at June 30, 2007 with a scheduled level of $1.7 million.
    
    The Capital Subaccount received a deposit of approximately $3.7 million (0.5%
of the initial principal amount of the transition bonds) on the date of issuance of the
transition bonds. CenterPoint Houston contributed this amount to the Company. If amounts
available in the General, Reserve and Overcollateralization Subaccounts are not sufficient
on any payment date to make scheduled payments on the transition bonds and payments of
certain fees and expenses, the trustee will draw on amounts in the Capital Subaccount. As
of June 30, 2007, the Capital Subaccount had a balance of $3.8 million and is classified as
Restricted Funds in the Balance Sheets.
  (4) Long-Term Debt
  5




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Scheduled
    
    
    
    
    
    
    Interest
    
    
    AmountClass
    
    Final Payment Date
    
    
    Final Maturity Date
    
    
    Rate
    
    
    (in millions)A-2
    
    September 15, 2007
    
    September 15, 2009
    
    
    4.76
    %
    
    $
    38.5A-3
    
    September 15, 2009
    
    September 15, 2011
    
    
    5.16
    %
    
    
    130.0A-4
    
    September 15, 2013
    
    September 15, 2015
    
    
    5.63
    %
    
    
    385.9554.4Less: Current Maturities (scheduled payments)
    
    
    (61.8
    )Less: Unamortized Discount
    
    
    (0.1
    )Total Long-Term Debt, net
    
    $
    492.5
  Class A-1
    
    Class A-2
    
    Class A-3
    
    Class A-4Scheduled
    
    Actual
    
    Scheduled
    
    Actual
    
    Scheduled
    
    Actual
    
    Scheduled
    
    ActualMarch 15, 2002
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    September 15, 2002
    
    
    13,106
    
    
    
    13,106
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    March 15, 2003
    
    
    6,366
    
    
    
    6,366
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    September 15, 2003
    
    
    12,357
    
    
    
    12,357
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    March 15, 2004
    
    
    14,004
    
    
    
    14,004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    September 15, 2004
    
    
    27,185
    
    
    
    27,185
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    March 15, 2005
    
    
    15,914
    
    
    
    15,914
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    September 15, 2005
    
    
    26,068
    
    
    
    26,068
    *
    
    
    4,824
    
    
    
    4,824
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    March 15, 2006
    
    
    
    
    
    
    
    
    
    
    18,460
    
    
    
    18,460
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    September 15, 2006
    
    
    
    
    
    
    
    
    
    
    35,835
    
    
    
    35,835
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    March 15, 2007
    
    
    
    
    
    
    
    
    
    
    20,370
    
    
    
    20,370
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 *
    
    Final payment of principal on Class A-1 transition bonds was made on September 15, 2005. (5) Related Party Transactions and Major Customers
 Related Party Transactions.
 Major Customers.
 6




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Item 2. MANAGEMENTS NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
        7




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Item 4. CONTROLS AND PROCEDURES
   8




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PART II. OTHER INFORMATION
 
 Item 1A. Risk Factors
  
 Item 6. Exhibits
   SEC FileorExhibit
    
    
    
    
    
    
    
    Registration
    
    ExhibitNumber
    
    Description
    
    Report or Registration Statement
    
    Number
    
    Reference4.1
    
    
    
    Amended and Restated Limited Liability
Company Agreement of Reliant Energy
Transition Bond Company LLC
    
    Form 8-K dated October 23, 2001
    
    333-91093
    
    
    4.34.2
    
    
    
    Amended and Restated Certificate of
Formation of Reliant Energy Transition Bond
Company LLC
    
    Form 8-K dated October 23, 2001
    
    333-91093
    
    
    4.74.3
    
    
    
    Certificate of Amendment to the Certificate
of Formation of Reliant Energy Transition
Bond Company LLC
    
    Form 10-Q for the quarter ended June 30, 2003
    
    333-91093
    
    
    4.310.1
    
    
    
    Semiannual Servicers Certificate, dated as
of March 14, 2007, as to the transition bond
balances, the balances of the collection
account and its sub-accounts, and setting
forth transfers and payments to be made on
the March 15, 2007 payment date.
    
    Form 10-K for the year ended December 31,
2006
    
    333-91093
    
    
    10.7+31.1
    
    
    
    Section 302 Certification of Gary L.
Whitlock+31.2
    
    
    
    Section 302 Certification of Marc Kilbride+32.1
    
    
    
    Section 906 Certification of Gary L.
Whitlock+32.2
    
    
    
    Section 906 Certification of Marc Kilbride+99.1
    
    
    
    Items incorporated by reference from the
CenterPoint Energy Transition Bond Company,
LLC Form 10-K. Item 1A Risk Factors.
 9




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SIGNATURES
  CENTERPOINT ENERGY TRANSITION BOND COMPANY, LLC By:
    /s/ James S. BrianJames S. BrianSenior Vice President and Chief Accounting Officer  10




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EXHIBIT INDEX
  SEC FileorExhibit
    
    
    
    
    
    
    
    Registration
    
    ExhibitNumber
    
    Description
    
    Report or Registration Statement
    
    Number
    
    Reference4.1
    
    
    
    Amended and Restated Limited Liability
Company Agreement of Reliant Energy
Transition Bond Company LLC
    
    Form 8-K dated October 23, 2001
    
    333-91093
    
    
    4.34.2
    
    
    
    Amended and Restated Certificate of
Formation of Reliant Energy Transition Bond
Company LLC
    
    Form 8-K dated October 23, 2001
    
    333-91093
    
    
    4.74.3
    
    
    
    Certificate of Amendment to the Certificate
of Formation of Reliant Energy Transition
Bond Company LLC
    
    Form 10-Q for the quarter ended June 30, 2003
    
    333-91093
    
    
    4.310.1
    
    
    
    Semiannual Servicers Certificate, dated as
of March 14, 2007, as to the transition bond
balances, the balances of the collection
account and its sub-accounts, and setting
forth transfers and payments to be made on
the March 15, 2007 payment date.
    
    Form 10-K for the year ended December 31,
2006
    
    333-91093
    
    
    10.7+31.1
    
    
    
    Section 302 Certification of Gary L.
Whitlock+31.2
    
    
    
    Section 302 Certification of Marc Kilbride+32.1
    
    
    
    Section 906 Certification of Gary L.
Whitlock+32.2
    
    
    
    Section 906 Certification of Marc Kilbride+99.1
    
    
    
    Items incorporated by reference from the
CenterPoint Energy Transition Bond Company,
LLC Form 10-K. Item 1A Risk Factors.