Reportable Business Segments

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Reportable Business Segments

Reportable Business Segments

Because CERC is an indirect wholly owned subsidiary of CenterPoint Energy, CERC’s determination of reportable business segments considers the strategic operating units under which CenterPoint Energy manages sales, allocates resources and assesses performance of various products and services to wholesale or retail customers in differing regulatory environments. CERC uses operating income as the measure of profit or loss for its business segments.

CERC’s reportable business segments include the following: Natural Gas Distribution, Energy Services, Midstream Investments and Other Operations.  Natural Gas Distribution consists of intrastate natural gas sales to, and natural gas transportation and distribution for, residential, commercial, industrial and institutional customers. Energy Services represents CERC’s non-rate regulated gas sales and services operations. Midstream Investments consists primarily of CERC’s investment in Enable and its retained interest in SESH. The Other Operations business segment includes unallocated corporate costs and inter-segment eliminations.

Prior to May 1, 2013, CERC also reported an Interstate Pipelines business segment, which included CERC’s interstate natural gas pipeline operations, and a Field Services business segment, which included CERC’s non-rate regulated natural gas gathering, processing and treating operations. The formation of Enable closed on May 1, 2013. Enable now owns substantially all of CERC’s former Interstate Pipelines and Field Services business segments, except for a 0.1% interest in SESH. As a result, effective May 1, 2013, CERC reports equity earnings associated with its interest in Enable and equity earnings associated with its interest in SESH under the Midstream Investments segment, and no longer has Interstate Pipelines and Field Services reporting segments prospectively.

Financial data for business segments is as follows (in millions):

	For the Three Months Ended September 30, 2014
	Revenues from External Customers		Inter-segment Revenues			Operating Income (Loss)
Natural Gas Distribution	$	375	$	7		$	(8	)
Energy Services	589		15			6
Midstream Investments (1)	—		—			—
Other	—		—			(1		)
Reconciling Eliminations	—		(22		)	—
Consolidated	$	964	$	—		$	(3	)
	For the Three Months Ended September 30, 2013
	Revenues from External Customers		Inter-segment Revenues			Operating Income (Loss)
Natural Gas Distribution	$	375	$	6		$	5
Energy Services	516		4			2
Midstream Investments (1)	—		—			—
Other	—		—			(3		)
Reconciling Eliminations	—		(10		)	—
Consolidated	$	891	$	—		$	4
	For the Nine Months Ended September 30, 2014
	Revenues from External Customers		Inter-segment Revenues			Operating Income (Loss)			Total Assets as of September 30, 2014
Natural Gas Distribution	$	2,379	$	22		$	184		$	5,059
Energy Services	2,298		66			43			882
Midstream Investments (1)	—		—			—			4,525
Other	1		—			(3		)	769
Reconciling Eliminations	—		(88		)	—			(690		)
Consolidated	$	4,678	$	—		$	224		$	10,545
	For the Nine Months Ended September 30, 2013
	Revenues from External Customers		Inter-segment Revenues			Operating Income (Loss)			Total Assets as of December 31, 2013
Natural Gas Distribution	$	1,942	$	19		$	169		$	4,976
Energy Services	1,726		19			12			895
Interstate Pipelines (2)	133		53			72			—
Field Services (2)	178		18			73			—
Midstream Investments (1)	—		—			—			4,518
Other	—		—			(16		)	1,149
Reconciling Eliminations	—		(109		)	—			(996		)
Consolidated	$	3,979	$	—		$	310		$	10,542

(1) Midstream Investments reported equity earnings of $79 million from Enable and less than $1 million of equity earnings from CERC’s retained interest in SESH for the three months ended September 30, 2014. Midstream Investments reported equity earnings of $236 million from Enable and $5 million of equity earnings from CERC’s retained interest in SESH for the nine months ended September 30, 2014. Midstream Investments reported equity earnings of $77 million from Enable and $3 million of equity earnings from CERC’s interest in SESH for the three months ended September 30, 2013. Midstream Investments reported equity earnings of $110 million from Enable and $5 million of equity earnings from CERC’s interest in SESH for the five months ended September 30, 2013. Included in total assets of Midstream Investments as of September 30, 2014 and December 31, 2013 is $4,524 million and $4,319 million, respectively, related to CERC’s investment in Enable and $1 million and $199 million, respectively, related to CERC’s interest in SESH.

(2) Results reflected in the nine months ended September 30, 2013 represent only January 2013 through April 2013.