##### Table of Contents



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 MARCH 31, 2008
 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 333-121505
 CenterPoint Energy Transition Bond Company II, LLC
  Delaware
    
    59-3790472(State or other jurisdiction of
    
    (I.R.S. Employer Identification Number)incorporation or organization)1111 Louisiana, Suite 4655BHouston, Texas 77002
    
    (713) 207-5222(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
  Large accelerated filer
o

  
  Accelerated filer
o

  
  Non-accelerated filer
þ
(Do not check if a smaller reporting company)

  
  Smaller reporting company
o
 o þ




---



##### 



CenterPoint Energy Transition Bond Company II, LLC
  
 TABLE OF CONTENTS
 PART I. FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    1Statements of Income and Changes in Members Equity
Three Months Ended March 31, 2007 and 2008 (unaudited)
    
    
    1Balance Sheets
December 31, 2007 and March 31, 2008 (unaudited)
    
    
    2Statements of Cash Flows
Three Months Ended March 31, 2007 and 2008 (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
    
    
    8Item 6. Exhibits
    
    
    8Section 302 Certification of Gary L. WhitlockSection 302 Certification of Marc KilbrideSection 906 Certification of Gary L. WhitlockSection 906 Certification of Marc KilbrideItems Incorporated by Reference from Form 10-K
  i




---



##### Table of Contents



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, 2007, which is incorporated herein by reference,
and our other Securities and Exchange Commission filings.
  ii




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 CENTERPOINT ENERGY TRANSITION BOND COMPANY II, LLC
 
 STATEMENTS OF INCOME
 AND CHANGES IN MEMBERS EQUITY(Unaudited)
 Three Months Ended March 31,2007
    
    
    2008(in thousands)Revenues:Transition charge revenue
    
    $
    39,647
    
    
    $
    37,146Investment income
    
    
    458
    
    
    
    386Total operating revenues
    
    
    40,105
    
    
    
    37,532Expenses:Interest expense
    
    
    22,996
    
    
    
    21,920Amortization of transition property
    
    
    16,021
    
    
    
    14,517Amortization of transition bond discount and issuance costs
    
    
    516
    
    
    
    440Administrative and general expenses
    
    
    572
    
    
    
    655Total operating expenses
    
    
    40,105
    
    
    
    37,532Net Income
    
    
    
    
    
    
    Members Equity at Beginning of Period
    
    
    9,256
    
    
    
    9,256Contributed Capital
    
    
    
    
    
    
    Members Equity at End of Period
    
    $
    9,256
    
    
    $
    9,256
  1




---



##### Table of Contents



CENTERPOINT ENERGY TRANSITION BOND COMPANY II, LLC
 
 BALANCE SHEETS
 (Unaudited)
 December 31, 2007
    
    
    March 31, 2008(in thousands)ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    97,891
    
    
    $
    38,004Restricted funds
    
    
    34,198
    
    
    
    33,931Transition charge receivable
    
    
    25,352
    
    
    
    22,650Current Assets
    
    
    157,441
    
    
    
    94,585Intangible transition property
    
    
    1,651,080
    
    
    
    1,636,563Unamortized debt issuance costs
    
    
    8,522
    
    
    
    8,095Total Assets
    
    $
    1,817,043
    
    
    $
    1,739,243LIABILITIES AND MEMBERS EQUITYCurrent Liabilities:Current portion of long-term debt
    
    $
    93,696
    
    
    $
    97,850Accrued interest
    
    
    37,267
    
    
    
    14,466Customer deposits
    
    
    24,701
    
    
    
    24,588Fees payable to servicer
    
    
    451
    
    
    
    207Current Liabilities
    
    
    156,115
    
    
    
    137,111Long-term debt:Transition bonds, net of unamortized discount
    
    
    1,651,672
    
    
    
    1,592,876Total Liabilities
    
    
    1,807,787
    
    
    
    1,729,987Members Equity:Contributed capital
    
    
    9,256
    
    
    
    9,256Retained earnings
    
    
    
    
    
    
    Total Members Equity
    
    
    9,256
    
    
    
    9,256Total Liabilities and Members Equity
    
    $
    1,817,043
    
    
    $
    1,739,243
  2




---



##### Table of Contents



CENTERPOINT ENERGY TRANSITION BOND COMPANY II, LLC
 
 STATEMENTS OF CASH FLOWS
 (Unaudited)
 Three Months Ended March 31,2007
    
    
    2008(in thousands)Cash Flows from Operating Activities:Net income
    
    $
    
    
    
    $
    Adjustments for non-cash items:Amortization of transition bond discount and issuance costs
    
    
    516
    
    
    
    440Amortization of transition property
    
    
    16,021
    
    
    
    14,517Changes in other assets and liabilities:Transition charge receivable
    
    
    1,176
    
    
    
    2,702Accrued interest
    
    
    (23,827
    )
    
    
    (22,801
    )Customer deposits
    
    
    282
    
    
    
    (113
    )Fees payable to servicer
    
    
    (953
    )
    
    
    (244
    )Net cash used in operating activities
    
    
    (6,785
    )
    
    
    (5,499
    )Cash Flows from Investing Activities:Restricted funds
    
    
    (157
    )
    
    
    267Net cash provided by (used in) investing activities
    
    
    (157
    )
    
    
    267Cash Flows from Financing Activities:Payments of long-term debt
    
    
    (51,527
    )
    
    
    (54,655
    )Net cash used in financing activities
    
    
    (51,527
    )
    
    
    (54,655
    )Net Decrease in Cash and Cash Equivalents
    
    
    (58,469
    )
    
    
    (59,887
    )Cash and Cash Equivalents, Beginning of Period
    
    
    90,827
    
    
    
    97,891Cash and Cash Equivalents, End of Period
    
    $
    32,358
    
    
    $
    38,004Supplemental Disclosure of Cash Flow Information:Cash Payments:Interest
    
    $
    46,823
    
    
    $
    44,721
  3




---



##### Table of Contents



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




---



##### Table of Contents



Transition Charges
  2006
    
    2007
    
    2008January
    
    $
    402
    
    
    $
    13,525
    
    
    $
    14,309February
    
    
    8,525
    
    
    
    12,489
    
    
    
    12,599March
    
    
    13,257
    
    
    
    14,582
    
    
    
    12,589April
    
    
    11,862
    
    
    
    12,956May
    
    
    12,589
    
    
    
    13,322June
    
    
    16,704
    
    
    
    12,987July
    
    
    16,302
    
    
    
    16,309August
    
    
    19,329
    
    
    
    19,958September
    
    
    18,528
    
    
    
    17,331October
    
    
    18,118
    
    
    
    20,728November
    
    
    17,263
    
    
    
    17,227December
    
    
    13,646
    
    
    
    13,999
 (3) Cash and Cash Equivalents/Restricted Funds
  
    
    The General Subaccount is comprised of collections of transition charges remitted to the
trustees administrative agent by the servicer with respect to the transition bonds. 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
$25.8 million at March 31, 2008.
    
    The Excess Funds Subaccount is maintained for the purpose of holding any collected
transition charges and earnings on amounts in the collection account (other than earnings
on amounts allocated to 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. The Excess Funds Subaccount had a balance of $12.2 million at
March 31, 2008.
    
    The Capital Subaccount received a deposit of approximately $9.3 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 and Excess Funds 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s administrative agent will draw on amounts in the Capital Subaccount. As of March
31, 2008, the Capital Subaccount had a balance of $9.3 million and is classified as
Restricted Funds in the Balance Sheets.
   5




---



##### Table of Contents



(4) Long-Term Debt
    Scheduled
    
    
    
    Interest
    
    AmountTranche
    
    Final Payment Date
    
    Final Maturity Date
    
    Rate
    
    (in millions)A-1
    
    February 1, 2009
    
    February 1, 2011
    
    4.84%
    
    $90A-2
    
    August 1, 2012
    
    August 1, 2014
    
    4.97%
    
    368A-3
    
    February 1, 2014
    
    August 1, 2015
    
    5.09%
    
    252A-4
    
    August 1, 2017
    
    August 1, 2019
    
    5.17%
    
    519A-5
    
    August 1, 2019
    
    August 1, 2020
    
    5.302%
    
    4621,691Less: Current Maturities (scheduled payments)
    
    
    
    (98)Total Long-Term Debt, net
    
    
    
    $1,593
  Tranche A-1
    

    Tranche A-2



    Tranche A-3
    

    Tranche A-4
    

    Tranche A-5Scheduled

    Actual
    

    Scheduled
    

    Actual


    Scheduled
    

    Actual


    Scheduled
    

    Actual
    

    Scheduled
    

    ActualAugust 1, 2006
    
    $
    18,565
    

    $
    18,565
    
    
$
    
    
$
    

    $
    
    
$
    

    $
    
    
$
    
    
$
    
    
$
    February 1, 2007
    
    
    51,527
    

    
    51,527
    
    

    
    

    

    
    
    

    

    
    
    

    
    

    
    

    August 1, 2007
    
    
    35,337
    

    
    35,337
    
    

    
    

    

    
    
    

    

    
    
    

    
    

    
    

    February 1, 2008
    
    
    54,655
    

    
    54,655
    
    

    
    

    

    
    
    

    

    
    
    

    
    

    
    

    
 (5) Related Party Transactions and Major Customers
 Related Party Transactions.
 Major Customers.
 6




---



##### Table of Contents



Item 2. MANAGEMENTS NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
 This analysis should be read in combination with the Interim Financial Statements included in
Item 1 of this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2007
(2007 Form 10-K ).
         7




---



##### Table of Contents



Item 4. CONTROLS AND PROCEDURES
   
 PART II. OTHER INFORMATION
 
 Item 1A. Risk Factors
  
 Item 6. Exhibits
   Report or Registration
    
    SEC File orExhibit Number
    
    Description
    
    Statement
    
    Registration Number
    
    Exhibit References4.1
    
    Amended and
Restated
Certificate of
Formation of
CenterPoint Energy
Transition Bond
Company II, LLC
    
    Current Report on
Form 8-K filed with
the SEC on December
16, 2005
    
    333-121505
    
    
    3.14.2
    
    Amended and
Restated Limited
Liability Company
Agreement of
CenterPoint Energy
Transition Bond
Company II, LLC
    
    Current Report on
Form 8-K filed with
the SEC on December
16, 2005
    
    333-121505
    
    
    3.210.1
    
    Semiannual
Servicers
Certificate dated
as of January 30,
2008, 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 February 1,
2008 payment date
    
    Form 10-K for the
year ended December
31, 2007
    
    333-121505
    
    
    10.5+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
 8




---



##### Table of Contents



Report or Registration
    
    SEC File orExhibit Number
    
    Description
    
    Statement
    
    Registration Number
    
    Exhibit References+32.2
    
    Section 906
Certification of
Marc Kilbride+99.1
    
    Items incorporated
by reference from
the CenterPoint
Energy Transition
Bond Company II,
LLC Form 10-K.
Item 1A Risk
Factors.
 9




---



##### Table of Contents



SIGNATURES
  CENTERPOINT ENERGY TRANSITION BOND COMPANY II, LLCBy:
    
    /s/ WALTER L. FITZGERALD

Walter L. FitzgeraldSenior Vice President and Chief Accounting Officer
  10




---



##### Table of Contents



Report or Registration
    
    SEC File orExhibit Number
    
    Description
    
    Statement
    
    Registration Number
    
    Exhibit References4.1
    
    Amended and
Restated
Certificate of
Formation of
CenterPoint Energy
Transition Bond
Company II, LLC
    
    Current Report on
Form 8-K filed with
the SEC on December
16, 2005
    
    333-121505
    
    
    3.14.2
    
    Amended and
Restated Limited
Liability Company
Agreement of
CenterPoint Energy
Transition Bond
Company II, LLC
    
    Current Report on
Form 8-K filed with
the SEC on December
16, 2005
    
    333-121505
    
    
    3.210.1
    
    Semiannual
Servicers
Certificate dated
as of January 30,
2008, 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 February 1,
2008 payment date
    
    Form 10-K for the
year ended December
31, 2007
    
    333-121505
    
    
    10.5+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 II,
LLC Form 10-K.
Item 1A Risk
Factors.
 11