Delivering Results Pursuing Opportunities
Our diverse businesses turned in solid operational and financial performances. We are implementing innovative solutions and operational efficiencies that are producing significant results for our customers and shareholders.
Delivering Results Pursuing Opportunities
By investing in our energy delivery infrastructure and technology, we are strongly positioned for success. We have the financial strength, the right assets, the right employees and the right capabilities to pursue strategic opportunities.

Electric Transmission
& Distribution

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About
Our electric transmission & distribution utility serves approximately 2.1 million metered customers in a 5,000-square-mile service territory in the Houston metropolitan area.
2011 Overview
Together, smart meters and the intelligent grid will enable a new energy future. With leading-edge technology, we are making significant improvements to modernize our electric infrastructure. Consumers will have the ability to better monitor and manage their electric use. We will have the ability to reroute power automatically, allowing our intelligent grid to reduce outage duration and frequency. More…
Delivering Results
  • $623 million in operating income, consisting of $496 million from the electric utility and $127 million related to transition and system restoration bonds
  • Added 45,000+ customers
  • Remotely completed nearly 2 million routine orders
  • Spent nearly $38 million on system reliability, including tree trimming and circuit and pole inspections
  • In the second quarter of 2012, we plan to complete our three-year deployment of 2+ million smart meters
Pursuing Opportunities
  • Continue to implement new technology including grid automation and enhanced communication with customers
  • Build infrastructure to meet the needs of our growing service territory, including new substations and high-voltage transmission lines
  • Provide an essential level of redundancy with a secondary control and data center

Natural Gas
Distribution

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About
Our natural gas distribution business serves approximately 3.3 million customers in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma and Texas.
2011 Overview
We continue to improve our natural gas distribution operations, implement rate designs that align both our shareholders’ and our customers’ interests and make intelligent investments in technology. We are installing a drive-by meter reading system that will provide significant efficiencies and serve as a foundation for on-demand usage information. New online and phone self-service options further enhance the customer experience. More…
Delivering Results
  • $226 million in operating income
  • Added 19,000+ customers
  • Decreased bad debt expense by $8 million. Our bad debt-to-revenue ratio is now less than 1 percent, compared to the national average of 2 percent
  • Invested $295 million in capital, in part for system safety and reliability
  • Launched My Energy Analyzer, a free online tool that helps customers better understand their bill
  • Expanded conservation programs and achieved record-setting participation
  • Earned a J.D. Power and Associates first-place ranking in the Midwest region
Pursuing Opportunities
  • Increase capital spending to approximately $350 million in 2012 to enhance system integrity and operations
  • In 2013, expect to complete the $98 million upgrade of 1.3 million meters in Houston and South Texas to drive-by metering, which will significantly improve meter reading productivity
  • Promote the adoption of natural gas vehicles

Interstate
Pipelines

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About
Our interstate natural gas pipelines business has approximately 8,200 miles of pipe and the capacity to transport more than 9.5 billion cubic feet (Bcf) per day.
2011 Overview
Through technology advancements, we are improving the management of pipeline capacity across our entire system, offering enhanced customer service, innovation and communication, and providing timely information on pipeline flows and capacity availability. We continue to pursue opportunities to serve power generation conversions from coal to natural gas. More…
Delivering Results
  • $248 million in operating income
  • $21 million in earned equity income from our 50 percent interest in the Southeast Supply Header
  • Added 40 new industrial customers, and renewed contracts with several key customers
  • Began offering a new premium service to natural gas-fired power plants that provides swing-load service during high-demand periods
  • Made upgrades, such as adding state-of-the-art system control technology to optimize real-time operations
Pursuing Opportunities
  • Secure power generation business through existing service upgrades and new power generation load contracts
  • Continue rate and cost recovery strategy to improve long-term earnings potential while pursuing contract extensions

Field
Services

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About
Our natural gas gathering and processing business operates approximately 3,900 miles of gathering lines. We gathered 823 Bcf of natural gas in 2011.
2011 Overview
We continue to see volume growth and return on investments made in the Fayetteville and Haynesville shales. Our long-term agreements provide steady, fee-based revenue and help mitigate the impacts of production volume fluctuations due to declining natural gas prices. We are the largest non-producer gatherer in the Haynesville Shale in terms of system capacity. More…
Delivering Results
  • $189 million in operating income
  • $9 million in equity income from our 50 percent interest in a gathering and processing joint venture
  • Total daily throughput increased nearly 30 percent
  • Added nearly 100 miles of pipeline to our gas gathering system
  • Expanded our treating and compression facilities that serve the Fayetteville, Haynesville and Woodford shales
Pursuing Opportunities
  • Pursue new gathering and processing opportunities within and outside our current footprint
  • Test new processes at our amine facilities that allow the system to remain in service during plant maintenance
  • Provide greater daily optimization opportunities through upgraded technology applications

Competitive Natural
Gas Sales & Services

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About
Our natural gas sales and services business provides energy solutions to retail and wholesale customers in 21 states. We delivered approximately 558 Bcf in 2011.
2011 Overview
We provide comprehensive energy solutions, including procurement, transportation and risk management. We buy natural gas directly from small- to mid-size producers and provide gas supply services to marketers, utilities, municipalities, and commercial and industrial customers. Continuing to build strong relationships, we are committed to aligning our asset portfolio to meet our customers’ needs. More…
Delivering Results
  • $6 million in operating income
  • Accelerated our strategy of releasing unprofitable pipeline capacity contracts
  • Expanded into four new states
  • Invested in our intrastate pipeline system to serve new industrial customers along the Gulf Coast
  • Introduced Green Balance, a carbon-neutral gas purchase program that gives customers the ability to offset carbon emissions
  • Launched our Premier Partners program for national accounts
Pursuing Opportunities
  • Focus on retail customer growth through continued geographic expansion and increased market share
  • Increase service offerings through Mobile Energy Solutions, which provides temporary natural gas supplies