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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 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 1-13265
 CenterPoint Energy Resources Corp.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    76-0511406(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification Number)1111 LouisianaHouston, Texas 77002
    
    (713) 207-1111(Address and zip code of principal 
executive offices)
    
    (Registrants telephone number,
including area code)
 Securities registered pursuant to Section 12(b) of the Act:
 Title of Each Class
    
    Name of Each Exchange On Which Registered6% Convertible Subordinated Debentures due 2012
    
    New York Stock Exchange
 Securities registered pursuant to Section 12(g) of the Act:
None
 CenterPoint Energy Resources Corp. meets the conditions set forth in General Instruction
I(1)(a) and (b) of Form 10-K and is therefore filing this Form 10-K with the reduced disclosure
format.
 o þ
 o þ
 þ o
 þ
  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




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##### 



TABLE OF CONTENTS
 PagePART IItem 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    13Item 1B. Unresolved Staff Comments
    
    
    18Item 2. Properties
    
    
    18Item 3. Legal Proceedings
    
    
    19Item 4. Submission of Matters to a Vote of Security Holders
    
    
    19PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    19Item 6. Selected Financial Data
    
    
    19Item 7. Managements Narrative Analysis of Results of Operations
    
    
    19Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    34Item 8. Financial Statements and Supplementary Data
    
    
    36Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    65Item 9A(T). Controls and Procedures
    
    
    65Item 9B. Other Information
    
    
    65PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    66Item 11. Executive Compensation
    
    
    66Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    66Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    66Item 14. Principal Accounting Fees and Services
    
    
    66PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    67Computation of Ratios of Earnings to Fixed ChargesConsent of Deloitte & Touche LLPCertification of David M. McClanahan Pursuant to Rule 13a-14(a)/15d-14(a)Certification of Gary L. Whitlock Pursuant to Rule 13a-14(a)/15d-14(a)Certification of David M. McClanahan Pursuant to Section 1350Certification of Gary L. Whitlock Pursuant to Section 1350




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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION




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PART I
 
 Item 1. Business
 OUR BUSINESS
 Overview
    www.centerpointenergy.com
 Natural Gas Distribution
    Supply and Transportation.
 1




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Assets
  Competition
  Competitive Natural Gas Sales and Services
   2




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Wholesale Operations.
 Retail Operations.
 Intrastate Pipeline Operations.
    Assets
  3




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Competition
  Interstate Pipelines
  
    
    CenterPoint Energy Gas Transmission Company (CEGT) is an interstate pipeline that
provides natural gas transportation, natural gas storage and pipeline services to customers
principally in Arkansas, Louisiana, Oklahoma and Texas; and
    
    CenterPoint Energy-Mississippi River Transmission Corporation (MRT) is an interstate
pipeline that provides natural gas transportation, natural gas storage and pipeline services
to customers principally in Arkansas and Missouri.
   Carthage to Perryville.
   4




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Southeast Supply Header.
  Assets
  Competition
  5




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Field Services
    Assets
  Competition
  Other Operations
  Financial Information About Segments
  REGULATION
  6




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Federal Energy Regulatory Commission
    State and Local Regulation
   Arkansas.
  7




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Texas.
 
  Minnesota.
  Department of Transportation
   8




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ENVIRONMENTAL MATTERS
  
    
    restricting the way we can handle or dispose of wastes;
    
    limiting or prohibiting construction activities in sensitive areas such as wetlands,
coastal regions, or areas inhabited by endangered species;
    
    requiring remedial action to mitigate pollution conditions caused by our operations, or
attributable to former operations; and
    
    enjoining the operations of facilities deemed in non-compliance with permits issued
pursuant to such environmental laws and regulations.
  
    
    construct or acquire new equipment;
    
    acquire permits for facility operations;
    
    modify or replace existing and proposed equipment; and
    
    clean up or decommission waste disposal areas, fuel storage and management facilities and
other locations and facilities.
   9




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Global Climate Change
  Air Emissions
  Water Discharges
  Hazardous Waste
  10




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Liability for Remediation
  Liability for Preexisting Conditions
 Hydrocarbon Contamination.
  Manufactured Gas Plant Sites.
  11




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Mercury Contamination.
 Asbestos.
 Other Environmental.
 EMPLOYEES
  Number Represented byUnions or OtherCollectiveBusiness Segment
    
    Number
    
    Bargaining GroupsNatural Gas Distribution
    
    
    3,685
    
    
    
    1,412Competitive Natural Gas Sales and Services
    
    
    117
    
    
    
    Interstate Pipelines
    
    
    611
    
    
    
    Field Services
    
    
    196
    
    
    
    Total
    
    
    4,609
    
    
    
    1,412
  12




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Item 1A. Risk Factors
  Risk Factors Affecting Our Businesses
 Rate regulation of our business may delay or deny our ability to earn a reasonable return and
fully recover our costs.
  Our businesses must compete with alternative energy sources, which could result in our marketing
less natural gas, and our interstate pipelines and field services businesses must compete directly
with others in the transportation, storage, gathering, treating and processing of natural gas,
which could lead to lower prices, either of which could have an adverse impact on our results of
operations, financial condition and cash flows.
   Our natural gas distribution and competitive natural gas sales and services businesses are subject
to fluctuations in natural gas pricing levels, which could affect the ability of our suppliers
and customers to meet their obligations or otherwise adversely affect our liquidity.
  If we were to fail to renegotiate a contract with one of our significant pipeline customers or if
we renegotiate the contract on less favorable terms, there could be an adverse impact on our
operations.
  13




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A decline in our credit rating could result in us having to provide collateral in order to
purchase gas.
  The revenues and results of operations of our interstate pipelines and field services businesses
are subject to fluctuations in the supply of natural gas.
  Our revenues and results of operations are seasonal.
  The actual cost of pipelines under construction and related compression facilities may be
significantly higher than our current estimates.
  The states in which we provide regulated local gas distribution may, either through legislation or
rules, adopt restrictions similar to or broader than those under the Public Utility Holding
Company Act of 1935 regarding organization, financing and affiliate transactions that could have
significant adverse impacts on our ability to operate.
  14




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Risk Factors Associated with Our Consolidated Financial Condition
 If we are unable to arrange future financings on acceptable terms, our ability to refinance
existing indebtedness could be limited.
  
    
    general economic and capital market conditions;
    
    credit availability from financial institutions and other lenders;
    
    investor confidence in us and the market in which we operate;
    
    maintenance of acceptable credit ratings;
    
    market expectations regarding our future earnings and probable cash flows;
    
    market perceptions of our and CenterPoint Energys ability to access capital markets on
reasonable terms; and
    
    provisions of relevant tax and securities laws.
  The financial condition and liquidity of our parent company could affect our access to capital,
our credit standing and our financial condition.
  We are an indirect wholly owned subsidiary of CenterPoint Energy. CenterPoint Energy can exercise
substantial control over our dividend policy and business and operations and could do so in a
manner that is adverse to our interests.
  15




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
    
    our payment of dividends;
    
    decisions on our financings and our capital raising activities;
    
    mergers or other business combinations; and
    
    our acquisition or disposition of assets.
  The use of derivative contracts by us and our subsidiaries in the normal course of business could
result in financial losses that negatively impact our results of operations and those of our
subsidiaries.
  We derive a substantial portion of our operating income from subsidiaries through which we hold a
substantial portion of our assets.
   Other Risks
 We are subject to operational and financial risks and liabilities arising from environmental laws
and regulations .
  
    
    restricting the way we can handle or dispose of wastes;
    
    limiting or prohibiting construction activities in sensitive areas such as wetlands,
coastal regions, or areas inhabited by endangered species;
 16




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
    
    requiring remedial action to mitigate pollution conditions caused by our operations, or
attributable to former operations; and
    
    enjoining the operations of facilities deemed in non-compliance with permits issued
pursuant to such environmental laws and regulations.
  
    
    construct or acquire new equipment;
    
    acquire permits for facility operations;
    
    modify or replace existing and proposed equipment; and
    
    clean up or decommission waste disposal areas, fuel storage and management facilities
and other locations and facilities.
  Our insurance coverage may not be sufficient. Insufficient insurance coverage and increased
insurance costs could adversely impact our results of operations, financial condition and cash
flows.
  We and CenterPoint Energy could incur liabilities associated with businesses and assets that we
have transferred to others.
   17




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Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
 Character of Ownership
  Natural Gas Distribution
  Competitive Natural Gas Sales and Services
  Interstate Pipelines
  Field Services
  18




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Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
    
 Item 6. Selected Financial Data
  
 Item 7. Managements Narrative Analysis of Results of Operations
 The following narrative analysis should be read in combination with our consolidated financial
statements and notes contained in Item 8 of this report.
 Background
  Business Segments
  19




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Natural Gas Distribution
  Competitive Natural Gas Sales and Services
  Interstate Pipelines
  Field Services
  Other Operations
  EXECUTIVE SUMMARY
 Significant Events in 2007 and 2008
 Debt Financing Transactions
    20




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Interstate Pipeline Expansion
 Carthage to Perryville.
  SESH.
  CERTAIN FACTORS AFFECTING FUTURE EARNINGS
  
    
    state and federal legislative and regulatory actions or developments, including
deregulation, re-regulation, environmental regulations, including regulations related to
global climate change, and changes in or application of laws or regulations applicable to
the various aspects of our business;
 
    
    timely and appropriate rate actions and increases, allowing recovery of costs and a
reasonable return on investment;
 21




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
    
    cost overruns on major capital projects that cannot be recouped in prices;
    
    industrial, commercial and residential growth in our service territory and changes in
market demand and demographic patterns;
    
    the timing and extent of changes in commodity prices, particularly natural gas;
    
    the timing and extent of changes in the supply of natural gas;
    
    the timing and extent of changes in natural gas basis differentials;
    
    weather variations and other natural phenomena;
    
    changes in interest rates or rates of inflation;
    
    commercial bank and financial market conditions, our access to capital, the cost of such
capital, and the results of our financing and refinancing efforts, including availability
of funds in the debt capital markets;
    
    actions by rating agencies;
    
    effectiveness of our risk management activities;
    
    inability of various counterparties to meet their obligations to us;
    
    the ability of Reliant Energy, Inc. (RRI) to satisfy its obligations to us in connection
with the contractual arrangements pursuant to which we are their guarantor;
    
    the outcome of litigation brought by or against us;
    
    our ability to control costs;
    
    the investment performance of CenterPoint Energys employee benefit plans;
    
    our potential business strategies, including acquisitions or dispositions of assets or
businesses, which we cannot assure will be completed or will have the anticipated benefits
to us; and
    
    other factors we discuss under Risk Factors in Item 1A of this report and in other
reports we file from time to time with the Securities and Exchange Commission.
 CONSOLIDATED RESULTS OF OPERATIONS
  22




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Year Ended December 31,2005
    
    
    2006
    
    
    2007Revenues
    
    $
    8,070
    
    
    $
    7,528
    
    
    $
    7,776Expenses:Natural gas
    
    
    6,509
    
    
    
    5,909
    
    
    
    5,995Operation and maintenance
    
    
    743
    
    
    
    798
    
    
    
    800Depreciation and amortization
    
    
    198
    
    
    
    200
    
    
    
    215Taxes other than income taxes
    
    
    156
    
    
    
    149
    
    
    
    140Total
    
    
    7,606
    
    
    
    7,056
    
    
    
    7,150Operating Income
    
    
    464
    
    
    
    472
    
    
    
    626Interest and other finance charges
    
    
    (176
    )
    
    
    (167
    )
    
    
    (187
    )Other income, net
    
    
    21
    
    
    
    18
    
    
    
    21Income Before Income Taxes
    
    
    309
    
    
    
    323
    
    
    
    460Income Tax Expense
    
    
    (116
    )
    
    
    (116
    )
    
    
    (173
    )Net Income
    
    $
    193
    
    
    $
    207
    
    
    $
    287
 2007 Compared to 2006.
  2006 Compared to 2005.
  RESULTS OF OPERATIONS BY BUSINESS SEGMENT
  Operating Income (Loss) by Business Segment
 Year Ended December 31,2005
    
    
    2006
    
    
    2007Natural Gas Distribution
    
    $
    175
    
    
    $
    124
    
    
    $
    218Competitive Natural Gas Sales and Services
    
    
    60
    
    
    
    77
    
    
    
    75Interstate Pipelines
    
    
    165
    
    
    
    181
    
    
    
    237Field Services
    
    
    70
    
    
    
    89
    
    
    
    99Other Operations
    
    
    (6
    )
    
    
    1
    
    
    
    (3
    )Total Consolidated Operating Income
    
    $
    464
    
    
    $
    472
    
    
    $
    626
 23




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Natural Gas Distribution
  Year Ended December 31,2005
    
    
    2006
    
    
    2007Revenues
    
    $
    3,846
    
    
    $
    3,593
    
    
    $
    3,759Expenses:Natural gas
    
    
    2,841
    
    
    
    2,598
    
    
    
    2,683Operation and maintenance
    
    
    551
    
    
    
    594
    
    
    
    579Depreciation and amortization
    
    
    152
    
    
    
    152
    
    
    
    155Taxes other than income taxes
    
    
    127
    
    
    
    125
    
    
    
    124Total expenses
    
    
    3,671
    
    
    
    3,469
    
    
    
    3,541Operating Income
    
    $
    175
    
    
    $
    124
    
    
    $
    218Throughput (in Bcf):Residential
    
    
    160
    
    
    
    152
    
    
    
    172Commercial and industrial
    
    
    215
    
    
    
    224
    
    
    
    232Total Throughput
    
    
    375
    
    
    
    376
    
    
    
    404Average number of customers:Residential
    
    
    2,839,947
    
    
    
    2,883,927
    
    
    
    2,931,523Commercial and industrial
    
    
    244,782
    
    
    
    243,265
    
    
    
    246,993Total
    
    
    3,084,729
    
    
    
    3,127,192
    
    
    
    3,178,516
 2007 Compared to 2006.
 2006 Compared to 2005.
  24




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Competitive Natural Gas Sales and Services
  Year Ended December 31,2005
    
    
    2006
    
    
    2007Revenues
    
    $
    4,129
    
    
    $
    3,651
    
    
    $
    3,579Expenses:Natural gas
    
    
    4,033
    
    
    
    3,540
    
    
    
    3,467Operation and maintenance
    
    
    30
    
    
    
    30
    
    
    
    31Depreciation and amortization
    
    
    2
    
    
    
    1
    
    
    
    5Taxes other than income taxes
    
    
    4
    
    
    
    3
    
    
    
    1Total expenses
    
    
    4,069
    
    
    
    3,574
    
    
    
    3,504Operating Income
    
    $
    60
    
    
    $
    77
    
    
    $
    75Throughput (in Bcf):Wholesale  third parties
    
    
    304
    
    
    
    335
    
    
    
    314Wholesale  affiliates
    
    
    27
    
    
    
    36
    
    
    
    9Retail
    
    
    156
    
    
    
    149
    
    
    
    192Pipeline
    
    
    51
    
    
    
    35
    
    
    
    7Total Throughput
    
    
    538
    
    
    
    555
    
    
    
    522Average number of customers:Wholesale
    
    
    138
    
    
    
    140
    
    
    
    235Retail
    
    
    6,328
    
    
    
    6,452
    
    
    
    6,789Pipeline
    
    
    142
    
    
    
    138
    
    
    
    12Total
    
    
    6,608
    
    
    
    6,730
    
    
    
    7,036
 2007 Compared to 2006.
 2006 Compared to 2005.
 25




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Interstate Pipelines
  Year Ended December 31,2005
    
    
    2006
    
    
    2007Revenues
    
    $
    386
    
    
    $
    388
    
    
    $
    500Expenses:Natural gas
    
    
    47
    
    
    
    31
    
    
    
    83Operation and maintenance
    
    
    121
    
    
    
    120
    
    
    
    125Depreciation and amortization
    
    
    36
    
    
    
    37
    
    
    
    44Taxes other than income taxes
    
    
    17
    
    
    
    19
    
    
    
    11Total expenses
    
    
    221
    
    
    
    207
    
    
    
    263Operating Income
    
    $
    165
    
    
    $
    181
    
    
    $
    237Throughput (in Bcf):Transportation
    
    
    914
    
    
    
    939
    
    
    
    1,216Other
    
    
    2
    
    
    
    1
    
    
    
    5Total Throughput
    
    
    916
    
    
    
    940
    
    
    
    1,221
 2007 Compared to 2006.
 2006 Compared to 2005.
 Field Services
  Year Ended December 31,2005
    
    
    2006
    
    
    2007Revenues
    
    $
    120
    
    
    $
    150
    
    
    $
    175Expenses:Natural gas
    
    
    (10
    )
    
    
    (10
    )
    
    
    (4
    )Operation and maintenance
    
    
    49
    
    
    
    59
    
    
    
    66Depreciation and amortization
    
    
    9
    
    
    
    10
    
    
    
    11Taxes other than income taxes
    
    
    2
    
    
    
    2
    
    
    
    3Total expenses
    
    
    50
    
    
    
    61
    
    
    
    76Operating Income
    
    $
    70
    
    
    $
    89
    
    
    $
    99Throughput (in Bcf):Gathering
    
    
    353
    
    
    
    375
    
    
    
    398
 26




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2007 Compared to 2006.
 2006 Compared to 2005.
  Fluctuations in Commodity Prices and Derivative Instruments
  LIQUIDITY
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012Natural Gas Distribution
    
    $
    191
    
    
    $
    209
    
    
    $
    192
    
    
    $
    193
    
    
    $
    196
    
    
    $
    203Competitive Natural Gas Sales and Services
    
    
    7
    
    
    
    18
    
    
    
    2
    
    
    
    2
    
    
    
    2
    
    
    
    2Interstate Pipelines
    
    
    308
    
    
    
    209
    
    
    
    133
    
    
    
    77
    
    
    
    72
    
    
    
    76Field Services
    
    
    74
    
    
    
    154
    
    
    
    83
    
    
    
    93
    
    
    
    94
    
    
    
    85Total
    
    $
    580
    
    
    $
    590
    
    
    $
    410
    
    
    $
    365
    
    
    $
    364
    
    
    $
    366
  2013 andContractual Obligations
    
    Total
    
    
    2008
    
    
    2009-2010
    
    
    2011-2012
    
    
    thereafterLong-term debt
    
    $
    2,952
    
    
    $
    307
    
    
    $
    12
    
    
    $
    738
    
    
    $
    1,895Interest payments  long-term debt(1)
    
    
    1,696
    
    
    
    195
    
    
    
    369
    
    
    
    297
    
    
    
    835Short-term borrowings
    
    
    232
    
    
    
    232
    
    
    
    
    
    
    
    
    
    
    
    Operating leases(2)
    
    
    64
    
    
    
    15
    
    
    
    22
    
    
    
    13
    
    
    
    14Benefit obligations(3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchase obligations(4)
    
    
    27
    
    
    
    27
    
    
    
    
    
    
    
    
    
    
    
    Non-trading derivative liabilities
    
    
    74
    
    
    
    60
    
    
    
    14
    
    
    
    
    
    
    
    Other commodity commitments(5)
    
    
    3,027
    
    
    
    743
    
    
    
    563
    
    
    
    550
    
    
    
    1,171Joint venture obligations(6)
    
    
    294
    
    
    
    294
    
    
    
    
    
    
    
    
    
    
    
    Income taxes(7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total contractual cash obligations
    
    $
    8,366
    
    
    $
    1,873
    
    
    $
    980
    
    
    $
    1,598
    
    
    $
    3,915
 27




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(1)
    
    We calculated estimated interest payments for long-term debt as follows: for fixed-rate
debt and term debt, we calculated interest based on the applicable rates and payment dates;
for variable-rate debt and/or non-term debt, we used interest rates in place as of December
31, 2007. We typically expect to settle such interest payments with cash flows from
operations and short-term borrowings.(2)
    
    For a discussion of operating leases, please read Note 8(b) to our consolidated
financial statements.(3)
    
    We expect to contribute approximately $14 million to our postretirement benefits plan
in 2008 to fund a portion of our obligations in accordance with rate orders or to fund
pay-as-you-go costs associated with the plan.(4)
    
    Represents capital commitments for material in connection with the construction of a
new pipeline by our Interstate Pipelines business segment. This project has been included
in the table of capital expenditures presented above.(5)
    
    For a discussion of other commodity commitments, please read Note 8(a) to our
consolidated financial statements.(6)
    
    We anticipate SESH to be in-service mid-year 2008 and ultimately will be funded with
approximately 50% debt.(7)
    
    As of December 31, 2007, the Company had a receivable for uncertain tax positions of
$11 million. Arkansas Public Service Commission (APSC), Affiliate Transaction Rulemaking Proceeding.
  Off-Balance Sheet Arrangements.
  28




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Senior Notes
  Credit and Receivables Facilities.
    29




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##### Table of Contents



Amount Utilized atDate Executed
    
    Company
    
    Type of Facility
    
    Size of Facility
    
    February 15, 2008
    
    Termination DateJune 29, 2007
    
    CERC Corp.
    
    Revolver
    
    $         950
    

$            87 (1)
    
    June 29, 2012October 30, 2007
    
    CERC
    
    Receivables
    

375
    
    85
    
    October 28, 2008
 
 (1)
    
    Includes $74 million of borrowings under the credit facility and $13 million of outstanding
letters of credit.  Securities Registered with the SEC.
 Temporary Investments.
 Money Pool.
 Impact on Liquidity of a Downgrade in Credit Ratings.
 Moodys
    
    S&P
    
    FitchRating
    
    Outlook(1)
    
    Rating
    
    Outlook(2)
    
    Rating
    
    Outlook(3)Baa3
    
    Stable
    
    BBB
    
    Positive
    
    BBB
    
    Stable
 
 (1)
    
    A stable outlook from Moodys indicates that Moodys does not expect to put the
rating on review for an upgrade or downgrade within 18 months from when the outlook was
assigned or last affirmed.(2)
    
    An S&P rating outlook assesses the potential direction of a long-term credit rating
over the intermediate to longer term.(3)
    
    A stable outlook from Fitch encompasses a one-to-two year horizon as to the likely
ratings direction.  30




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##### Table of Contents



Cross Defaults.
 Other Factors that Could Affect Cash Requirements.
 
    
    cash collateral requirements that could exist in connection with certain contracts,
including gas purchases, gas price and weather hedging and gas storage activities of our
Natural Gas Distribution and Competitive Natural Gas Sales and Services business segments,
particularly given gas price levels and volatility;
    
    acceleration of payment dates on certain gas supply contracts under certain
circumstances, as a result of increased gas prices and concentration of natural gas
suppliers;
    
    increased costs related to the acquisition of natural gas;
    
    increases in interest expense in connection with debt refinancings and borrowings under
credit facilities;
    
    various regulatory actions;
    
    the ability of RRI and its subsidiaries to satisfy their obligations to us or in
connection with the contractual arrangement pursuant to which we are a guarantor;
 31




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##### Table of Contents




    
    slower customer payments and increased write-offs of receivables due to higher gas
prices or changing economic conditions;
    
    the outcome of litigation brought by and against us;
    
    contributions to benefit plans;
    
    restoration costs and revenue losses resulting from natural disasters such as
hurricanes; and
    
    various other risks identified in Risk Factors in Item 1A of this report.
 Certain Contractual Limits on Ability to Issue Securities and Borrow Money.
 Relationship with CenterPoint Energy.
 CRITICAL ACCOUNTING POLICIES
  Impairment of Long-Lived Assets and Intangibles
   32




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##### Table of Contents



Asset Retirement Obligations
   
    
    Inflation adjustment- The estimated cash flows are adjusted for inflation estimates for
labor, equipment, materials, and other disposal costs;
    
    Discount rate- The estimated cash flows include contingency factors that were used as a
proxy for the market risk premium; and
    
    Third party markup adjustments- Internal labor costs included in the cash flow
calculation were adjusted for costs that a third party would incur in performing the tasks
necessary to retire the asset.
  Unbilled Revenues
  NEW ACCOUNTING PRONOUNCEMENTS
  OTHER SIGNIFICANT MATTERS
 Pension Plans.
 33




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##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures About Market Risk
 Impact of Changes in Interest Rates and Energy Commodity Prices
  
    
    Commodity price risk results from exposures to changes in spot prices, forward prices and
price volatilities of commodities, such as natural gas and other energy commodities risk.
    
    Interest rate risk primarily results from exposures to changes in the level of borrowings
and changes in interest rates.
    
    Equity price risk results from exposures to changes in prices of individual equity
securities.
    Interest Rate Risk
    Commodity Price Risk From Non-Trading Activities
  34




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35




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data
 
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     DELOITTE & TOUCHE LLP
 
 36




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##### Table of Contents



MANAGEMENTS ANNUAL REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING
  
    
    Pertain to the maintenance of records that in reasonable detail accurately and fairly
reflect the transactions and dispositions of the assets of the company;
    
    Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and
    
    Provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the companys assets that could have a material effect on
the financial statements.
     /s/ DAVID M. MCCLANAHAN

President and Chief Executive Officer/s/ GARY L. WHITLOCK

Executive Vice President and ChiefFinancial Officer
  37




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CENTERPOINT ENERGY RESOURCES CORP. AND SUBSIDIARIES
(An Indirect Wholly Owned Subsidiary of CenterPoint Energy, Inc.)
 
 STATEMENTS OF CONSOLIDATED INCOME
 Year Ended December 31,2005
    
    
    2006
    
    
    2007(In Millions)Revenues
    
    $
    8,070
    
    
    $
    7,528
    
    
    $
    7,776Expenses:Natural gas
    
    
    6,509
    
    
    
    5,909
    
    
    
    5,995Operation and maintenance
    
    
    743
    
    
    
    798
    
    
    
    800Depreciation and amortization
    
    
    198
    
    
    
    200
    
    
    
    215Taxes other than income taxes
    
    
    156
    
    
    
    149
    
    
    
    140Total
    
    
    7,606
    
    
    
    7,056
    
    
    
    7,150Operating Income
    
    
    464
    
    
    
    472
    
    
    
    626Other Income (Expense):Interest and other finance charges
    
    
    (176
    )
    
    
    (167
    )
    
    
    (187
    )Other, net
    
    
    21
    
    
    
    18
    
    
    
    21Total
    
    
    (155
    )
    
    
    (149
    )
    
    
    (166
    )Income Before Income Taxes
    
    
    309
    
    
    
    323
    
    
    
    460Income tax expense
    
    
    (116
    )
    
    
    (116
    )
    
    
    (173
    )Net Income
    
    $
    193
    
    
    $
    207
    
    
    $
    287
  38




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CENTERPOINT ENERGY RESOURCES CORP. AND SUBSIDIARIES
(An Indirect Wholly Owned Subsidiary of CenterPoint Energy, Inc.)
 
 STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME
 Year Ended December 31,2005
    
    
    2006
    
    
    2007(In Millions)Net income
    
    $
    193
    
    
    $
    207
    
    
    $
    287Other comprehensive income (loss), net of tax:SFAS No. 158 adjustment (includes a tax benefit of $6)
    
    
    
    
    
    
    
    
    
    
    13Net deferred gain from cash flow hedges (net of tax
of $9, $11 and $6)
    
    
    17
    
    
    
    22
    
    
    
    12Reclassification of net deferred gain from cash flow
hedges realized in net income (net of tax of ($5),
($3) and ($20))
    
    
    (8
    )
    
    
    (7
    )
    
    
    (33
    )Other comprehensive income (loss)
    
    
    9
    
    
    
    15
    
    
    
    (8
    )Comprehensive income
    
    $
    202
    
    
    $
    222
    
    
    $
    279
  39




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##### Table of Contents



CENTERPOINT ENERGY RESOURCES CORP. AND SUBSIDIARIES
(An Indirect Wholly Owned Subsidiary of CenterPoint Energy, Inc.)
 
 CONSOLIDATED BALANCE SHEETS
 December 31,2006
    
    
    2007(In Millions)ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    5
    
    
    $
    1Accounts receivable, net
    
    
    846
    
    
    
    732Accrued unbilled revenue
    
    
    356
    
    
    
    456Accounts and notes receivable  affiliated companies
    
    
    198
    
    
    
    82Inventory
    
    
    336
    
    
    
    430Non-trading derivative assets
    
    
    98
    
    
    
    38Deferred tax asset
    
    
    2
    
    
    
    40Prepaid expenses
    
    
    14
    
    
    
    19Other
    
    
    346
    
    
    
    216Total current assets
    
    
    2,201
    
    
    
    2,014Property, Plant and Equipment, Net
    
    
    4,639
    
    
    
    5,031Other Assets:Goodwill
    
    
    1,705
    
    
    
    1,696Non-trading derivative assets
    
    
    21
    
    
    
    11Notes receivable from unconsolidated affiliates
    
    
    
    
    
    
    148Other
    
    
    249
    
    
    
    234Total other assets
    
    
    1,975
    
    
    
    2,089Total Assets
    
    $
    8,815
    
    
    $
    9,134LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Short-term borrowings
    
    $
    187
    
    
    $
    232Current portion of long-term debt
    
    
    7
    
    
    
    307Accounts payable
    
    
    928
    
    
    
    661Accounts and notes payable  affiliated companies
    
    
    386
    
    
    
    144Taxes accrued
    
    
    115
    
    
    
    118Interest accrued
    
    
    48
    
    
    
    59Customer deposits
    
    
    62
    
    
    
    59Non-trading derivative liabilities
    
    
    141
    
    
    
    60Other
    
    
    305
    
    
    
    186Total current liabilities
    
    
    2,179
    
    
    
    1,826Other Liabilities:Accumulated deferred income taxes, net
    
    
    662
    
    
    
    778Non-trading derivative liabilities
    
    
    80
    
    
    
    14Benefit obligations
    
    
    138
    
    
    
    116Regulatory liabilities
    
    
    456
    
    
    
    474Other
    
    
    213
    
    
    
    167Total other liabilities
    
    
    1,549
    
    
    
    1,549Long-Term Debt
    
    
    2,155
    
    
    
    2,645Commitments and Contingencies (Note 8)Stockholders Equity
    
    
    2,932
    
    
    
    3,114Total Liabilities And Stockholders Equity
    
    $
    8,815
    
    
    $
    9,134
  40




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CENTERPOINT ENERGY RESOURCES CORP. AND SUBSIDIARIES
(An Indirect Wholly Owned Subsidiary of CenterPoint Energy, Inc.)
 
 STATEMENTS OF CONSOLIDATED CASH FLOWS
 Year Ended December 31,2005
    
    
    2006
    
    
    2007(In Millions)Cash Flows from Operating Activities:Net income
    
    $
    193
    
    
    $
    207
    
    
    $
    287Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    198
    
    
    
    200
    
    
    
    215Deferred income taxes
    
    
    32
    
    
    
    17
    
    
    
    64Amortization of deferred financing costs
    
    
    9
    
    
    
    8
    
    
    
    8Write-down of natural gas inventory
    
    
    
    
    
    
    66
    
    
    
    11Changes in other assets and liabilities:Accounts receivable and unbilled revenues, net
    
    
    (393
    )
    
    
    248
    
    
    
    14Accounts receivable/payable, affiliates
    
    
    10
    
    
    
    (19
    )
    
    
    (8
    )Inventory
    
    
    (109
    )
    
    
    (78
    )
    
    
    (105
    )Taxes receivable
    
    
    39
    
    
    
    
    
    
    
    Accounts payable
    
    
    326
    
    
    
    (262
    )
    
    
    (175
    )Fuel cost recovery
    
    
    (129
    )
    
    
    111
    
    
    
    (93
    )Interest and taxes accrued
    
    
    (23
    )
    
    
    (4
    )
    
    
    23Net non-trading derivative assets and liabilities
    
    
    (12
    )
    
    
    (18
    )
    
    
    13Margin deposits, net
    
    
    51
    
    
    
    (156
    )
    
    
    65Other current assets
    
    
    (5
    )
    
    
    (80
    )
    
    
    (27
    )Other current liabilities
    
    
    54
    
    
    
    29
    
    
    
    (16
    )Other assets
    
    
    8
    
    
    
    1
    
    
    
    (20
    )Other liabilities
    
    
    30
    
    
    
    18
    
    
    
    (12
    )Other, net
    
    
    (3
    )
    
    
    (15
    )
    
    
    (3
    )Net cash provided by operating activities
    
    
    276
    
    
    
    273
    
    
    
    241Cash Flows from Investing Activities:Capital expenditures
    
    
    (403
    )
    
    
    (599
    )
    
    
    (676
    )Decrease in affiliate notes receivable
    
    
    42
    
    
    
    
    
    
    
    Increase in notes receivable from unconsolidated affiliates
    
    
    
    
    
    
    
    
    
    
    (148
    )Investment in unconsolidated affiliates
    
    
    
    
    
    
    (13
    )
    
    
    (39
    )Other, net
    
    
    (11
    )
    
    
    (9
    )
    
    
    (10
    )Net cash used in investing activities
    
    
    (372
    )
    
    
    (621
    )
    
    
    (873
    )Cash Flows from Financing Activities:Increase in short-term borrowings, net
    
    
    
    
    
    
    187
    
    
    
    45Long-term revolving credit facilities, net
    
    
    
    
    
    
    
    
    
    
    150Payments of long-term debt
    
    
    (372
    )
    
    
    (152
    )
    
    
    (7
    )Proceeds from long-term debt
    
    
    
    
    
    
    324
    
    
    
    650Increase (decrease) in notes with affiliates, net
    
    
    288
    
    
    
    (103
    )
    
    
    (107
    )Contribution from parent
    
    
    171
    
    
    
    168
    
    
    
    Dividends to parent
    
    
    (100
    )
    
    
    (100
    )
    
    
    (100
    )Debt issuance costs
    
    
    (1
    )
    
    
    (1
    )
    
    
    (6
    )Other, net
    
    
    
    
    
    
    (1
    )
    
    
    3Net cash provided by (used in) financing activities
    
    
    (14
    )
    
    
    322
    
    
    
    628Net Decrease in Cash and Cash Equivalents
    
    
    (110
    )
    
    
    (26
    )
    
    
    (4
    )Cash and Cash Equivalents at Beginning of the Year
    
    
    141
    
    
    
    31
    
    
    
    5Cash and Cash Equivalents at End of the Year
    
    $
    31
    
    
    $
    5
    
    
    $
    1Supplemental Disclosure of Cash Flow Information:Cash Payments:Interest, net of capitalized interest
    
    $
    181
    
    
    $
    162
    
    
    $
    167Income taxes (refunds)
    
    
    87
    
    
    
    (25
    )
    
    
    106Non-cash transactions:Increase in accounts payable related to capital expenditures
    
    $
    14
    
    
    $
    108
    
    
    $
    
  41




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##### Table of Contents



CENTERPOINT ENERGY RESOURCES CORP. AND SUBSIDIARIES
(An Indirect Wholly Owned Subsidiary of CenterPoint Energy, Inc.)
 
 STATEMENTS OF CONSOLIDATED STOCKHOLDERS EQUITY
 2005
    
    
    2006
    
    
    2007Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount(In millions, except share amounts)Common StockBalance, beginning of year
    
    
    1,000
    
    
    $
    
    
    
    
    1,000
    
    
    $
    
    
    
    
    1,000
    
    
    $
    Balance, end of year
    
    
    1,000
    
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    1,000
    
    
    
    Additional Paid-in-CapitalBalance, beginning of year
    
    
    
    
    
    
    2,232
    
    
    
    
    
    
    
    2,404
    
    
    
    
    
    
    
    2,403Contribution from (to) parent
    
    
    
    
    
    
    171
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    3Balance, end of year
    
    
    
    
    
    
    2,404
    
    
    
    
    
    
    
    2,403
    
    
    
    
    
    
    
    2,406Retained EarningsBalance, beginning of year
    
    
    
    
    
    
    305
    
    
    
    
    
    
    
    398
    
    
    
    
    
    
    
    505Net income
    
    
    
    
    
    
    193
    
    
    
    
    
    
    
    207
    
    
    
    
    
    
    
    287Dividend to parent
    
    
    
    
    
    
    (100
    )
    
    
    
    
    
    
    (100
    )
    
    
    
    
    
    
    (100
    )Balance, end of year
    
    
    
    
    
    
    398
    
    
    
    
    
    
    
    505
    
    
    
    
    
    
    
    692Accumulated Other Comprehensive IncomeBalance, end of year:Net deferred gain from cash flow hedges
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    26
    
    
    
    
    
    
    
    5SFAS
No. 158 impact
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    11Total accumulated other comprehensive
income, end of year
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    24
    
    
    
    
    
    
    
    16Total Stockholders Equity
    
    
    
    
    
    $
    2,813
    
    
    
    
    
    
    $
    2,932
    
    
    
    
    
    
    $
    3,114
  42




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##### Table of Contents



CENTERPOINT ENERGY RESOURCES CORP. AND SUBSIDIARIES
(An Indirect Wholly Owned Subsidiary of CenterPoint Energy, Inc.)
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Background and Basis of Presentation
   Basis of Presentation
  2. Summary of Significant Accounting Policies
 (a) Use of Estimates
  (b) Principles of Consolidation
  (c) Revenues
  43




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##### Table of Contents



(d) Long-Lived Assets and Intangibles
  WeightedAverage Useful
    
    
    December 31,Lives
    
    
    2006
    
    
    2007(Years)
    
    
    (In millions)Natural Gas Distribution
    
    
    31
    
    
    $
    2,875
    
    
    $
    3,065Competitive Natural Gas Sales and Services
    
    
    24
    
    
    
    53
    
    
    
    59Interstate Pipelines
    
    
    57
    
    
    
    1,943
    
    
    
    2,194Field Services
    
    
    51
    
    
    
    429
    
    
    
    493Other property
    
    
    13
    
    
    
    36
    
    
    
    26Total
    
    
    
    
    
    
    5,336
    
    
    
    5,837Accumulated depreciation and amortization:Natural Gas Distribution
    
    
    
    
    
    
    462
    
    
    
    590Competitive Natural Gas Sales and Services
    
    
    
    
    
    
    9
    
    
    
    9Interstate Pipelines
    
    
    
    
    
    
    176
    
    
    
    160Field Services
    
    
    
    
    
    
    31
    
    
    
    29Other property
    
    
    
    
    
    
    19
    
    
    
    18Total accumulated depreciation and amortization
    
    
    
    
    
    
    697
    
    
    
    806Property, plant and equipment, net
    
    
    
    
    
    $
    4,639
    
    
    $
    5,031
  December 31,2006
    
    
    2007Natural Gas Distribution
    
    $
    746
    
    
    $
    746Interstate Pipelines
    
    
    579
    
    
    
    579Competitive Natural Gas Sales and Services
    
    
    335
    
    
    
    335Field Services
    
    
    25
    
    
    
    25Other Operations (1)
    
    
    20
    
    
    
    11Total
    
    $
    1,705
    
    
    $
    1,696
 
 (1)
    
    In December 2007, the Company determined that $9 million of tax benefits not previously
established were associated with a prior year acquisition. In accordance with Emerging
Issues Task Force (EITF) Issue No. 93-7, Uncertainties Related to Income Taxes in a
Purchase Business Combination, the adjustment was applied to decrease the remaining
goodwill attributable to that acquisition.    44




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##### Table of Contents



(e) Regulatory Assets and Liabilities
   December 31,2006
    
    
    2007(In millions)Regulatory assets in other long-term assets
    
    $
    50
    
    
    $
    53Regulatory liabilities
    
    
    (456
    )
    
    
    (474
    )Net
    
    $
    (406
    )
    
    $
    (421
    )
   (f) Depreciation and Amortization Expense
   Year Ended December 31,2005
    
    
    2006
    
    
    2007(In millions)Depreciation expense
    
    $
    180
    
    
    $
    181
    
    
    $
    193Amortization expense
    
    
    18
    
    
    
    19
    
    
    
    22Total depreciation and amortization expense
    
    $
    198
    
    
    $
    200
    
    
    $
    215
 45




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##### Table of Contents



(g) Capitalization of Interest and Allowance for Funds Used During Construction
  (h) Income Taxes
    (i) Accounts Receivable and Allowance for Doubtful Accounts
    (j) Inventory
  46




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##### Table of Contents



December 31,2006
    
    
    2007(In millions)Materials and supplies
    
    $
    31
    
    
    $
    35Natural gas
    
    
    305
    
    
    
    395Total inventory
    
    $
    336
    
    
    $
    430
 (k) Derivative Instruments
    (l) Environmental Costs
  (m) Statements of Consolidated Cash Flows
  (n) New Accounting Pronouncements
  47




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##### Table of Contents



.
  (o) Employee Benefit Plans
 Pension Plans
   48




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##### Table of Contents



Savings Plan
  Postretirement Benefits
    Year Ended December 31,2005
    
    
    2006
    
    
    2007(In millions)Service cost  benefits earned during the period
    
    $
    1
    
    
    $
    1
    
    
    $
    1Interest cost on projected benefit obligation
    
    
    8
    
    
    
    7
    
    
    
    7Expected return on plan assets
    
    
    (2
    )
    
    
    (1
    )
    
    
    (1
    )Amortization of prior service cost
    
    
    2
    
    
    
    2
    
    
    
    2Other
    
    
    1
    
    
    
    1
    
    
    
    Net postretirement benefit cost
    
    $
    10
    
    
    $
    10
    
    
    $
    9
  Year EndedDecember 31,2005
    
    2006
    
    2007Discount rate
    
    
    5.75
    %
    
    
    5.70
    %
    
    
    5.85
    %Expected return on plan assets
    
    
    8.00
    %
    
    
    4.80
    %
    
    
    4.50
    %
   49




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##### Table of Contents



Year EndedDecember 31,2006
    
    
    2007(In millions)Change in Benefit ObligationAccumulated benefit obligation, beginning of year
    
    $
    132
    
    
    $
    134Service cost
    
    
    1
    
    
    
    1Interest cost
    
    
    7
    
    
    
    7Benefit enhancement
    
    
    1
    
    
    
    Benefits paid
    
    
    (22
    )
    
    
    (20
    )Plan amendment
    
    
    8
    
    
    
    Medicare reimbursement
    
    
    3
    
    
    
    3Participant contributions
    
    
    4
    
    
    
    4Actuarial loss
    
    
    
    
    
    
    (10
    )Accumulated benefit obligation, end of year
    
    $
    134
    
    
    $
    119Change in Plan AssetsPlan assets, beginning of year
    
    $
    20
    
    
    $
    20Benefits paid
    
    
    (22
    )
    
    
    (20
    )Employer contributions
    
    
    16
    
    
    
    15Participant contributions
    
    
    4
    
    
    
    4Actual investment return
    
    
    2
    
    
    
    1Plan assets, end of year
    
    $
    20
    
    
    $
    20Amounts Recognized in Balance SheetsCurrent liabilities-other
    
    $
    (7
    )
    
    $
    (6
    )Other liabilities-benefit obligations
    
    
    (107
    )
    
    
    (93
    )Net liability, end of year
    
    $
    (114
    )
    
    $
    (99
    )Actuarial AssumptionsDiscount rate
    
    
    5.85
    %
    
    
    6.40
    %Expected long-term return on assets
    
    
    4.50
    %
    
    
    4.50
    %Healthcare cost trend rate assumed for the next year
    
    
    7.00
    %
    
    
    7.00
    %Prescription cost trend rate assumed for the next year
    
    
    13.00
    %
    
    
    13.00
    %Rate to which the cost trend rate is assumed to decline (ultimate trend rate)
    
    
    5.50
    %
    
    
    5.50
    %Year that the healthcare rate reaches the ultimate trend rate
    
    
    2011
    
    
    
    2012Year that the prescription drug rate reaches the ultimate trend rate
    
    
    2014
    
    
    
    2015
     Year EndedDecember 31,2006
    
    
    2007(In millions)Unrecognized actuarial loss
    
    $
    8
    
    
    $
    3Unrecognized prior service cost
    
    
    14
    
    
    
    1222
    
    
    
    15Less
deferred tax benefit (1)
    
    
    (20
    )
    
    
    (26
    )Net amount
recognized in accumulated other comprehensive (income) loss
    
    $
    2
    
    
    $
    (11
    )
 50




---



##### Table of Contents



(1)
    
    The Companys postretirement benefit obligation is
reduced by the impact of non-taxable government subsidies under the
Medicare Prescription Drug Act. Because the subsidies are
non-taxable, the temporary difference used in measuring the deferred
tax impact is determined on the unrecognized losses excluding such
subsidies. Accordingly, the unrecognized losses used for determining
deferred taxes were $54 million and $64 million as of
December 31, 2006 and 2007, respectively.  PostretirementBenefits(In millions)Net gain
    
    $
    (5
    )Amortization of prior service cost
    
    
    (2
    )Total
recognized in other comprehensive income
    
    $
    (7
    )
   PostretirementBenefits(In millions)Unrecognized prior service cost
    
    $
    2Amounts in
other comprehensive income to be recognized as net
periodic cost in 2008
    
    $
    2
  1%
    
    
    1%Increase
    
    
    Decrease(In millions)Effect on the postretirement benefit obligation
    
    $
    5
    
    
    $
    (4
    )Effect on the total of service and interest cost
    
    
    
    
    
    
    
  December 31,2006
    
    
    2007Domestic equity securities
    
    
    6
    %
    
    
    6
    %Debt securities
    
    
    93
    
    
    
    93Cash
    
    
    1
    
    
    
    1Total
    
    
    100
    %
    
    
    100
    %
  51




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##### Table of Contents



Domestic equity securities
    
    
    0-10
    %Debt securities
    
    
    90-100
    %Cash
    
    
    0-2
    %
  Postretirement Benefit PlanMedicareBenefit
    
    SubsidyPayments
    
    Receipts(in millions)2008
    
    $
    10
    
    
    $
    (1
    )2009
    
    
    10
    
    
    
    (1
    )2010
    
    
    10
    
    
    
    (1
    )2011
    
    
    11
    
    
    
    (2
    )2012
    
    
    11
    
    
    
    (2
    )2013-2017
    
    
    58
    
    
    
    (9
    )
 Postemployment Benefits
  Other Non-Qualified Plans
  (p) Other Current Assets and Liabilities
  3. Regulatory Matters
 (a) Rate Cases
 Arkansas.
 52




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##### Table of Contents



Texas.
 
  Minnesota.
  4. Related Party Transactions
  53




---



##### Table of Contents



5. Derivative Instruments
  (a) Non-Trading Activities
 Cash Flow Hedges.
  Other Derivative Instruments.
 54




---



##### Table of Contents



Weather Derivatives.
  ( b) Credit Risks
  December 31, 2006
    
    
    December 31, 2007Investment
    
    
    
    
    
    
    InvestmentGrade(1)
    
    
    Total
    
    
    Grade(1)
    
    
    TotalEnergy marketers
    
    $
    22
    
    
    $
    27
    
    
    $
    16
    
    
    $
    18Financial institutions
    
    
    51
    
    
    
    51
    
    
    
    25
    
    
    
    25Other
    
    
    41
    
    
    
    41
    
    
    
    3
    
    
    
    7Total
    
    $
    114
    
    
    $
    119
    
    
    $
    44
    
    
    $
    50
 
 (1)
    
    Investment grade is primarily determined using publicly available credit ratings along
with the consideration of credit support (such as parent company guaranties) and collateral,
which encompass cash and standby letters of credit. For unrated counterparties, the Company
performs financial statement analysis, considering contractual rights and restrictions and
collateral, to create a synthetic credit rating. 6. Short-term Borrowings and Long-term Debt
 December 31, 2006
    
    
    December 31, 2007Long-Term
    
    
    Current(1)
    
    
    Long-Term
    
    
    Current(1)(In millions)Short-term borrowings:CERC Corp. receivables facility
    
    $
    
    
    
    $
    187
    
    
    $
    
    
    
    $
    232Long-term debt:Convertible subordinated debentures 6.00% due 2012
    
    
    56
    
    
    
    7
    
    
    
    50
    
    
    
    7Senior notes 5.95% to 7.875% due 2008 to 2016
    
    
    2,097
    
    
    
    
    
    
    
    2,447
    
    
    
    300Bank loans due 2012(2)
    
    
    
    
    
    
    
    
    
    
    150
    
    
    
    Unamortized discount and premium(3)
    
    
    2
    
    
    
    
    
    
    
    (2
    )
    
    
    Total long-term debt
    
    
    2,155
    
    
    
    7
    
    
    
    2,645
    
    
    
    307Total debt
    
    $
    2,155
    
    
    $
    194
    
    
    $
    2,645
    
    
    $
    539
 
 (1)
    
    Includes amounts due or exchangeable within one year of the date noted.(2)
    
    Classified as long-term debt because the termination date of the facility under which
the funds were borrowed is more than one year beyond the dates referenced in the table.(3)
    
    Debt acquired in business acquisitions is adjusted to fair market value as of the
acquisition date. Included in long-term debt is additional unamortized premium related to
fair value adjustments of long-term debt of $4 million and $3 million at December 31, 2006
and 2007, respectively, which is being amortized over the respective remaining term of the
related long-term debt. 55




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##### Table of Contents



(a) Short-term Borrowings
  (b) Long-term Debt
 Senior Notes
  Revolving Credit Facility.
  Maturities.
 7. Income Taxes
  Year Ended December 31,2005
    
    
    2006
    
    
    2007(In millions)Current:Federal
    
    $
    82
    
    
    $
    97
    
    
    $
    81State
    
    
    2
    
    
    
    36
    
    
    
    28Total current
    
    
    84
    
    
    
    133
    
    
    
    109Deferred:Federal
    
    
    1
    
    
    
    (22
    )
    
    
    58State
    
    
    31
    
    
    
    5
    
    
    
    6Total deferred
    
    
    32
    
    
    
    (17
    )
    
    
    64Income tax expense
    
    $
    116
    
    
    $
    116
    
    
    $
    173
 56




---



##### Table of Contents



Year Ended December 31,2005
    
    
    2006
    
    
    2007(In millions)Income before income taxes
    
    $
    309
    
    
    $
    323
    
    
    $
    460Federal statutory rate
    
    
    35
    %
    
    
    35
    %
    
    
    35
    %Income tax expense at statutory rate
    
    
    108
    
    
    
    113
    
    
    
    161Increase (decrease) in tax resulting from:State income taxes, net of valuation allowances and
federal income tax benefit
    
    
    22
    
    
    
    27
    
    
    
    22Decrease in settled and uncertain income tax positions
    
    
    (13
    )
    
    
    (20
    )
    
    
    (8
    )Other, net
    
    
    (1
    )
    
    
    (4
    )
    
    
    (2
    )Total
    
    
    8
    
    
    
    3
    
    
    
    12Income tax expense
    
    $
    116
    
    
    $
    116
    
    
    $
    173Effective income tax rate
    
    
    37.4
    %
    
    
    36.1
    %
    
    
    37.6
    %
  December 31,2006
    
    
    2007(In millions)Deferred tax assets:Current:Allowance for doubtful accounts
    
    $
    16
    
    
    $
    16Deferred gas costs
    
    
    
    
    
    
    26Total current deferred tax assets
    
    
    16
    
    
    
    42Non-current:Employee benefits
    
    
    78
    
    
    
    87Operating and capital loss carryforwards
    
    
    27
    
    
    
    24Deferred gas costs
    
    
    58
    
    
    
    Other
    
    
    48
    
    
    
    24Total non-current deferred tax assets before valuation allowance
    
    
    211
    
    
    
    135Valuation allowance
    
    
    (22
    )
    
    
    (18
    )Total non-current deferred tax assets
    
    
    189
    
    
    
    117Total deferred tax assets
    
    
    205
    
    
    
    159Deferred tax liabilities:Current:Non-trading derivative liabilities, net
    
    
    14
    
    
    
    2Total current deferred tax liabilities
    
    
    14
    
    
    
    2Non-current:Depreciation
    
    
    822
    
    
    
    851Regulatory liability, net
    
    
    13
    
    
    
    16Other
    
    
    16
    
    
    
    28Total non-current deferred tax liabilities
    
    
    851
    
    
    
    895Total deferred tax liabilities
    
    
    865
    
    
    
    897Accumulated deferred income taxes, net
    
    $
    660
    
    
    $
    738
  Tax Attribute Carryforwards and Valuation Allowance.
 57




---



##### Table of Contents



Uncertain Income Tax Positions
 Balance at January 1, 2007
    
    $
    1Tax positions related to prior years:Reductions
    
    
    (10
    )Settlements
    
    
    (2
    )Balance at December 31, 2007
    
    $
    (11
    )
  Tax Audits and Settlements.
  8. Commitments and Contingencies
 (a) Natural Gas Supply Commitments
  (b) Lease Commitments
  2008
    
    $
    152009
    
    
    132010
    
    
    92011
    
    
    72012
    
    
    62013 and beyond
    
    
    14Total
    
    $
    64
 58




---



##### Table of Contents



(c) Capital Commitments
 Carthage to Perryville.
   Southeast Supply Header.
  (d) Legal, Environmental and Other Matters
 Legal Matters
 Natural Gas Measurement Lawsuits.
 59




---



##### Table of Contents



Gas Cost Recovery Litigation.
  60




---



##### Table of Contents



Storage Facility Litigation.
 Environmental Matters
 Hydrocarbon Contamination.
  61




---



##### Table of Contents



Manufactured Gas Plant Sites.
   Mercury Contamination.
 Asbestos.
 Other Environmental.
 62




---



##### Table of Contents



Other Proceedings
  Guaranties
   9. Estimated Fair Value of Financial Instruments
  December 31, 2006
    

December
31, 2007Carrying
    
    Fair
    
    Carrying
    
    FairAmount
    
    Value
    
    Amount
    
    Value(In millions)Financial liabilities:Long-term debt
    
    $
    2,162
    
    
    $
    2,311
    
    
    $
    2,952
    
    
    $
    3,079
 63




---



##### Table of Contents



10. Unaudited Quarterly Information
  Year Ended December 31, 2006First Quarter
    
    Second Quarter
    
    Third Quarter
    
    Fourth Quarter(In millions)Revenues
    
    $
    2,690
    
    
    $
    1,384
    
    
    $
    1,400
    
    
    $
    2,054Operating income
    
    
    200
    
    
    
    65
    
    
    
    69
    
    
    
    138Net income
    
    
    97
    
    
    
    23
    
    
    
    13
    
    
    
    74
 Year Ended December 31, 2007First Quarter
    
    Second Quarter
    
    Third Quarter
    
    Fourth Quarter(In millions)Revenues
    
    $
    2,697
    
    
    $
    1,566
    
    
    $
    1,351
    
    
    $
    2,162Operating income
    
    
    250
    
    
    
    83
    
    
    
    91
    
    
    
    202Net income
    
    
    131
    
    
    
    30
    
    
    
    28
    
    
    
    98
 11. Reportable Business Segments
     Revenues
    
    
    
    
    
    Depreciation
    
    Operating
    
    
    
    
    
    Expendituresfrom External
    
    Inter-segment
    
    and
    
    Income
    
    
    
    
    
    for Long-Customers
    
    Revenues
    
    Amortization
    
    (Loss)
    
    Total Assets
    
    Lived AssetsAs of and for the year
ended December 31,
2005:Natural Gas Distribution
    
    $
    3,837
    
    
    $
    9
    
    
    $
    152
    
    
    $
    175
    
    
    $
    4,612
    
    
    $
    249Competitive Natural Gas
Sales and Services
    
    
    3,884
    
    
    
    245
    
    
    
    2
    
    
    
    60
    
    
    
    1,849
    
    
    
    12Interstate Pipelines
    
    
    255
    
    
    
    131
    
    
    
    36
    
    
    
    165
    
    
    
    2,400
    
    
    
    118Field Services
    
    
    91
    
    
    
    29
    
    
    
    9
    
    
    
    70
    
    
    
    529
    
    
    
    38Other
    
    
    3
    
    
    
    7
    
    
    
    (1
    )
    
    
    (6
    )
    
    
    743
    
    
    
    Reconciling Eliminations
    
    
    
    
    
    
    (421
    )
    
    
    
    
    
    
    
    
    
    
    (1,832
    )
    
    
    Consolidated
    
    $
    8,070
    
    
    $
    
    
    
    $
    198
    
    
    $
    464
    
    
    $
    8,301
    
    
    $
    417
 64




---



##### Table of Contents



Revenues
    
    
    
    
    
    Depreciation
    
    Operating
    
    
    
    
    
    Expendituresfrom External
    
    Inter-segment
    
    and
    
    Income
    
    
    
    
    
    for Long-Customers
    
    Revenues
    
    Amortization
    
    (Loss)
    
    Total Assets
    
    Lived AssetsAs of and for the year
ended December 31,
2006:Natural Gas Distribution
    
    $
    3,582
    
    
    $
    11
    
    
    $
    152
    
    
    $
    124
    
    
    $
    4,463
    
    
    $
    187Competitive Natural Gas
Sales and Services
    
    
    3,572
    
    
    
    79
    
    
    
    1
    
    
    
    77
    
    
    
    1,501
    
    
    
    18Interstate Pipelines
    
    
    255
    
    
    
    133
    
    
    
    37
    
    
    
    181
    
    
    
    2,738
    
    
    
    437Field Services
    
    
    119
    
    
    
    31
    
    
    
    10
    
    
    
    89
    
    
    
    608
    
    
    
    65Other
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    1
    
    
    
    1,086
    
    
    
    Reconciling Eliminations
    
    
    
    
    
    
    (259
    )
    
    
    
    
    
    
    
    
    
    
    (1,581
    )
    
    
    Consolidated
    
    $
    7,528
    
    
    $
    
    
    
    $
    200
    
    
    $
    472
    
    
    $
    8,815
    
    
    $
    707As of and for the year
ended December 31,
2007:Natural Gas Distribution
    
    $
    3,749
    
    
    $
    10
    
    
    $
    155
    
    
    $
    218
    
    
    $
    4,332
    
    
    $
    191Competitive Natural Gas
Sales and Services
    
    
    3,534
    
    
    
    45
    
    
    
    5
    
    
    
    75
    
    
    
    1,221
    
    
    
    7Interstate Pipelines
    
    
    357
    
    
    
    143
    
    
    
    44
    
    
    
    237
    
    
    
    3,007
    
    
    
    308Field Services
    
    
    136
    
    
    
    39
    
    
    
    11
    
    
    
    99
    
    
    
    669
    
    
    
    74Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    670
    
    
    
    Reconciling Eliminations
    
    
    
    
    
    
    (237
    )
    
    
    
    
    
    
    
    
    
    
    (765
    )
    
    
    Consolidated
    
    $
    7,776
    
    
    $
    
    
    
    $
    215
    
    
    $
    626
    
    
    $
    9,134
    
    
    $
    580
 Year Ended December 31,2005
    
    
    2006
    
    
    2007(In millions)Revenues by Products and Services:Retail gas sales
    
    $
    4,871
    
    
    $
    4,546
    
    
    $
    4,941Wholesale gas sales
    
    
    2,410
    
    
    
    2,331
    
    
    
    2,196Gas transport
    
    
    684
    
    
    
    550
    
    
    
    532Energy products and services
    
    
    105
    
    
    
    101
    
    
    
    107Total
    
    $
    8,070
    
    
    $
    7,528
    
    
    $
    7,776
 
 Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
  
 Item 9A(T).
    
    Controls and Procedures.
 Disclosure Controls and Procedures
   
 Item 9B.
    
    Other Information
  65




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##### Table of Contents



PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance
  
 Item 11.
    
    Executive Compensation
  
 Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  
 Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
  
 Item 14.
    
    Principal Accounting Fees and Services
  Year Ended December 31,2006
    
    
    2007Audit fees
    
    $
    1,108,600
    
    
    $
    1,205,900Audit-related fees
    
    
    178,500
    
    
    
    93,720Total audit and audit-related fees
    
    
    1,287,100
    
    
    
    1,299,620Tax fees
    
    
    
    
    
    
    All other fees
    
    
    
    
    
    
    Total fees
    
    $
    1,287,100
    
    
    $
    1,299,620
  66




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##### Table of Contents



PART IV
 
 Item 15.
    
    Exhibits and Financial Statement Schedules
 (a)(1) Financial Statements.Report of Independent Registered Public Accounting Firm
    
    
    36Statements of Consolidated Income for the Three Years Ended December 31, 2007
    
    
    38Statements of Consolidated Comprehensive Income for the Three Years Ended December 31, 2007
    
    
    39Consolidated Balance Sheets at December 31, 2006 and 2007
    
    
    40Statements of Consolidated Cash Flows for the Three Years Ended December 31, 2007
    
    
    41Statements of Consolidated Stockholders Equity for the Three Years Ended December 31, 2007
    
    
    42Notes to Consolidated Financial Statements
    
    
    43(a)(2) Financial Statement Schedules for the Three Years Ended December 31, 2007.Report of Independent Registered Public Accounting Firm
    
    
    68II Qualifying Valuation Accounts
    
    
    69
     67




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
   
 68




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##### Table of Contents



CENTERPOINT ENERGY RESOURCES CORP. AND SUBSIDIARIES
(An Indirect Wholly Owned Subsidiary of CenterPoint Energy, Inc.)
 
 SCHEDULE II  QUALIFYING VALUATION ACCOUNTS
For the Three Years Ended December 31, 2007
 Column A
    
    Column B
    
    Column C
    
    Column D
    
    Column EAdditionsBalance At
    
    
    
    
    
    Deductions
    
    Balance AtBeginning
    
    Charged
    
    From
    
    End OfDescription
    
    of Period
    
    to Income
    
    Reserves(1)
    
    PeriodYear Ended December 31, 2007:Accumulated provisions:Uncollectible accounts receivable
    
    $
    32
    
    
    $
    42
    
    
    $
    37
    
    
    $
    37Deferred tax asset valuation allowance
    
    
    22
    
    
    
    (4
    )
    
    
    
    
    
    
    18Year Ended December 31, 2006:Accumulated provisions:Uncollectible accounts receivable
    
    
    38
    
    
    
    37
    
    
    
    43
    
    
    
    32Deferred tax asset valuation allowance
    
    
    21
    
    
    
    1
    
    
    
    
    
    
    
    22Year Ended December 31, 2005:Accumulated provisions:Uncollectible accounts receivable
    
    
    28
    
    
    
    37
    
    
    
    27
    
    
    
    38Deferred tax asset valuation allowance
    
    
    20
    
    
    
    1
    
    
    
    
    
    
    
    21
 
 (1)
    
    Deductions from reserves represent losses or expenses for which the respective
reserves were created. In the case of the uncollectible accounts reserve, such
deductions are net of recoveries of amounts previously written off. 69




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##### Table of Contents



SIGNATURES
  CENTERPOINT ENERGY RESOURCES CORP.
(Registrant)By:
/s/ DAVID M. MCCLANAHANDavid M. McClanahanPresident and Chief Executive Officer
  Signature
    
    Title/s/ DAVID M. MCCLANAHAN
    
    Chairman, President and Chief Executive Officer(David M. McClanahan)
    
    (Principal
Executive Officer and Director)/s/ GARY L. WHITLOCK
    
    Executive Vice President and Chief Financial Officer(Gary L. Whitlock)
    
    (Principal
Financial Officer)/s/ WALTER L. FITZGERALD
    
    Senior Vice President and Chief Accounting Officer(Walter L. Fitzgerald)
    
    (Principal
Accounting Officer)
 70




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##### Table of Contents



CENTERPOINT ENERGY RESOURCES CORP. AND SUBSIDIARIES
 EXHIBITS TO THE ANNUAL REPORT ON FORM 10-K
For Fiscal Year Ended December 31, 2007
 INDEX OF EXHIBITS
  SEC File orExhibit
    
    
    
    
    
    
    
    Registration
    
    ExhibitNumber
    
    
    
    Description
    
    Report or Registration Statement
    
    Number
    
    Reference2(a)(1)
    
    
    
    Agreement and Plan of Merger
among the Company, HL&P, HI
Merger, Inc. and NorAm dated
August 11, 1996
    
    HIs Form 8-K dated August 11,
1996
    
    1-7629
    
    
    22(a)(2)
    
    
    
    Amendment to Agreement and
Plan of Merger among the
Company, HL&P, HI Merger,
Inc. and NorAm dated August
11,1996
    
    Registration Statement on Form
S-4
    
    333-11329
    
    
    2
    (c)2(b)
    
    
    
    Agreement and Plan of Merger
dated December 29, 2000
merging Reliant Resources
Merger Sub, Inc. with and
into Reliant Energy Services,
Inc.
    
    Registration Statement on Form
S-3
    
    333-54526
    
    
    23(a)(1)
    
    
    
    Certificate of Incorporation
of RERC Corp.
    
    Form 10-K for the year ended
December 31, 1997
    
    1-3187
    
    
    3(a
    )(1)3(a)(2)
    
    
    
    Certificate of Merger merging
former NorAm Energy Corp.
with and into HI Merger, Inc.
dated August 6, 1997
    
    Form 10-K for the year ended
December 31, 1997
    
    1-3187
    
    
    3(a
    )(2)3(a)(3)
    
    
    
    Certificate of Amendment
changing the name to Reliant
Energy Resources Corp.
    
    Form 10-K for the year ended
December 31, 1998
    
    1-3187
    
    
    3(a
    )(3)3(a)(4)
    
    
    
    Certificate of Amendment
changing the name to
CenterPoint Energy Resources
Corp.
    
    Form 10-Q for the quarter ended
June 30, 2003
    
    1-13265
    
    
    3(a
    )(4)3(b)
    
    
    
    Bylaws of RERC Corp.
    
    Form 10-K for the year ended
December 31, 1997
    
    1-3187
    
    
    3
    (b)4(a)(1)
    
    
    
    Indenture, dated as of March 31,
1987, between NorAm and
Chase Manhattan Bank, N.A.,
as Trustee, authorizing 6%
Convertible Subordinated
Debentures due 2012
    
    NorAms Registration Statement
on Form S-3
    
    33-14586
    
    4.204(a)(2)
    
    
    
    Supplemental Indenture to
Exhibit 4(a)(1) dated as of
August 6, 1997
    
    Form 10-K for the year ended
December 31, 1997
    
    1-3187
    
    
    4(b
    )(2)4(b)(1)
    
    
    
    Indenture, dated as of
February 1, 1998, between
RERC Corp. and Chase Bank of
Texas, National Association,
as Trustee
    
    Form 8-K dated February 5, 1998
    
    1-13265
    
    
    4.1
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##### Table of Contents



SEC File orExhibit
    
    
    
    
    
    
    
    Registration
    
    ExhibitNumber
    
    
    
    Description
    
    Report or Registration Statement
    
    Number
    
    Reference4(b)(2)
    
    
    
    Supplemental Indenture No. 1,
dated as of February 1, 1998,
providing for the issuance of
RERC Corp.s 6 1/2%
Debentures due February 1,
2008
    
    Form 8-K dated February 5, 1998
    
    1-13265
    
    
    4.24(b)(3)
    
    
    
    Supplemental Indenture No. 2,
dated as of November 1, 1998,
providing for the issuance of
RERC Corp.s 6 3/8% Term
Enhanced ReMarketable
Securities
    
    Form 8-K dated November 9, 1998
    
    1-13265
    
    
    4.14(b)(4)
    
    
    
    Supplemental Indenture No. 3,
dated as of July 1, 2000,
providing for the issuance of
RERC Corp.s 8.125% Notes due
2005
    
    Registration Statement on Form
S-4
    
    333-49162
    
    
    4.24(b)(5)
    
    
    
    Supplemental Indenture No. 4,
dated as of February 15,
2001, providing for the
issuance of RERC Corp.s
7.75% Notes due 2011
    
    Form 8-K dated February 21, 2001
    
    1-13265
    
    
    4.14(b)(6)
    
    
    
    Supplemental Indenture No. 5,
dated as of March 25,
2003, providing for the
issuance of CERC Corp.s
7.875% Senior Notes due 2013
    
    Form 8-K dated March 18, 2003
    
    1-13265
    
    
    4.14(b)(7)
    
    
    
    Supplemental Indenture No. 6,
dated as of April 14,
2003, providing for the
issuance of CERC Corp.s
7.875% Senior Notes due 2013
    
    Form 8-K dated April 7, 2003
    
    1-13265
    
    
    4.24(b)(8)
    
    
    
    Supplemental Indenture No. 7,
dated as of November 3,
2003, providing for the
issuance of CERC Corp.s
5.95% Senior Notes due 2014
    
    Form 8-K dated October 29, 2003
    
    1-13265
    
    
    4.24(b)(9)
    
    
    
    Supplemental Indenture No. 8,
dated as of December 28,
2005, providing for the
issuance of CERC Corp.s
6 1/2% Debentures due 2008
    
    CNPs Form 10-K for the year
ended December 31, 2005
    
    1-31447
    
    
    4(f
    )(9)4(b)(10)
    
    
    
    Supplemental Indenture No. 9,
dated as of May 18,
2006, providing for the
issuance of CERC Corp.s
6.15% Senior Notes due 2016
    
    CNPs Form 10-Q for the quarter
ended June 30, 2006
    
    1-31447
    
    
    4.74(b)(11)
    
    
    
    Supplemental Indenture No. 10,
dated as of February 6,
2007, providing for the
issuance of CERC Corp.s
6.25% Senior Notes due 2037
    
    CNPs Form 10-K for the year
ended December 31, 2007
    
    1-31447
    
    
    4(f
    )(11)4(b)(12)
    
    
    
    Supplemental Indenture No. 11
dated as of October 23, 2007,
providing for the issuance of
CERC Corp.s 6.125% Senior
Notes due 2017
    
    CNPs Form 10-Q for quarter
ended September 30, 2007
    
    1-31447
    
    
    4.84(b)(13)
    
    
    
    Supplemental Indenture No. 12
dated as of October 23, 2007,
providing for the issuance of
CERC Corp.s 6.625% Senior
Notes due 2037
    
    CNPs Form 10-Q for quarter
ended September 30, 2007
    
    1-31447
    
    
    4.94(c)
    
    
    
    $950,000,000 Second Amended
and Restated Credit Agreement
dated as of June 29, 2007,
among CERC Corp., as
Borrower, and the banks named
therein
    
    CNPs Form 10-Q for the quarter
ended June 30, 2007
    
    1-31447
    
    
    4.5
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##### Table of Contents



SEC File orExhibit
    
    
    
    
    
    Report or Registration
    
    Registration
    
    ExhibitNumber
    
    
    
    Description
    
    Statement
    
    Number
    
    Reference10(a)
    
    
    
    Service Agreement by and
between Mississippi River
Transmission Corporation and
Laclede Gas Company dated
August 22, 1989
    
    NorAms Form 10-K for the year
ended December 31, 1989
    
    1-13265
    
    
    10.20+12
    
    
    
    Computation of Ratios of Earnings
to Fixed Charges+23
    
    
    
    Consent of Deloitte & Touche
LLP+31.1
    
    
    
    Rule 13a-14(a)/15d-14(a)
Certification of David M.
McClanahan+31.2
    
    
    
    Rule 13a-14(a)/15d-14(a)
Certification of Gary L.
Whitlock+32.1
    
    
    
    Section 1350 Certification of David
M. McClanahan+32.2
    
    
    
    Section 1350 Certification of Gary
L. Whitlock
 73