
•	the timing and extent of changes in commodity prices, particularly natural gas and coal, and the effects of geographic and seasonal commodity price differentials on CERC and Enable;

the ability of CenterPoint Energy’s and CERC’s non-utility business operating in the Energy Services reportable segment to effectively optimize opportunities related to natural gas price volatility and ~~the effects of geographic and seasonal commodity price differentials on CERC and Enable~~;

storage activities, including weather-related impacts;

actions by credit rating agencies, including any potential downgrades to credit ratings;

changes in interest rates and their impact on costs of borrowing and the valuation of CenterPoint Energy’s pension benefit obligation;

problems with regulatory approval, legislative actions, construction, implementation of necessary technology or other issues with respect to major capital projects that result in delays or cancellation or in cost overruns that cannot be recouped in rates;

the availability and prices of raw materials and services and changes in labor for current and future construction projects;

local, state and federal legislative and regulatory actions or developments relating to the environment, including, among others, those related to global climate ~~change;~~change, air emissions, carbon, waste water discharges and the handling and disposal of CCR that could impact the continued operation, and/or cost recovery of generation plant costs and related assets;

the impact of unplanned facility ~~outages;~~outages or other closures;

any direct or indirect effects on our or Enable’s facilities, operations and financial condition resulting from terrorism, cyber-attacks, data security breaches or other attempts to disrupt our businesses or the businesses of third parties, or other catastrophic events such as fires, ice, earthquakes, explosions, leaks, floods, droughts, hurricanes, tornadoes, pandemic health events or other occurrences;

our ability to invest planned capital and the timely recovery of our ~~investment in capital;~~investments, including those related to Indiana Electric’s generation transition plan;

our ability to successfully construct and operate electric generating facilities, including complying with applicable environmental standards and the implementation of a well-balanced energy and resource mix, as appropriate;

our ability to control operation and maintenance costs;

the sufficiency of our insurance coverage, including availability, cost, coverage and terms and ability to recover claims;

the investment performance of CenterPoint Energy’s pension and postretirement benefit plans;

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;

changes in rates of inflation;

inability of various counterparties to meet their obligations to us;

non-payment for our services due to financial distress of our customers;

the extent and effectiveness of our and Enable’s risk management and hedging activities, including, but not limited to financial and weather hedges and commodity risk management activities;

timely and appropriate regulatory actions, which include actions allowing securitization, for any future hurricanes or natural disasters or other recovery of costs, including costs associated with Hurricane Harvey;

CenterPoint ~~Energy, CERC~~Energy’s or Enable’s potential business strategies and strategic initiatives, including restructurings, joint ventures and acquisitions or dispositions of assets or businesses, (including a reduction of CenterPoint Energy’s and CERC’s interests in Enable, if any, whether through their decision to sell all or a portion of the Enable common units they own in the public equity markets or otherwise, subject to certain limitations), which CenterPoint Energy ~~CERC~~ and Enable cannot assure ~~you~~ will be completed or will have the anticipated benefits to usCenterPoint Energy or Enable;

the performance of projects undertaken by our non-utility businesses and the success of efforts to realize value from, invest in and develop new opportunities and other factors affecting those non-utility businesses, including, but not limited to, the level of success in bidding contracts, fluctuations in volume and mix of contracted work, mix of projects received under blanket contracts, failure to properly estimate cost to construct projects or unanticipated cost increases in completion of the contracted work, changes in energy prices that affect demand for construction services and projects and cancellation and/or reductions in the scope of projects by customers and obligations related to warranties and guarantees;

vii

acquisition and merger activities involving us or our competitors, including the ability to successfully complete merger, acquisition and divestiture plans;

our or Enable’s ability to recruit, effectively transition and retain management and key employees and maintain good labor relations;

the outcome of litigation;

the ability of REPs, including REP affiliates of NRG and Vistra Energy Corp., formerly known as TCEH Corp., to satisfy their obligations to CenterPoint Energy and Houston Electric;

the ability of GenOn (formerly known as RRI Energy, Inc., Reliant Energy and RRI), a wholly-owned subsidiary of NRG, and its subsidiaries, currently the subject of bankruptcy proceedings, to satisfy their obligations to us, including indemnity obligations;

changes in technology, particularly with respect to efficient battery storage or the emergence or growth of new, developing or alternative sources of generation;

the timing and outcome of any audits, disputes and other proceedings related to taxes;

the effective tax rates;

the transition to a replacement for the LIBOR benchmark interest rate;

the effect of changes in and application of accounting standards and pronouncements; and


•	other factors discussed in “Risk Factors” in Item 1A of Part I of the Registrants’ combined 2018 Form 10-K, which are incorporated herein by reference, and other reports the Registrants file from time to time with the SEC.

other factors discussed in “Risk Factors” in Item 1A of Part I of each of the Registrants’ 2017 Form 10-K and in Item 1A of Part II of CenterPoint Energy’s First Quarter 2018 Form 10-Q, which are incorporated herein by reference, and other reports the Registrants file from time to time with the SEC.

You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and the Registrants undertake no obligation to update or revise any forward-looking statements. Investors should note that the Registrants announce material financial information in SEC filings, press releases and public conference calls. Based on guidance from the SEC, the Registrants may use the Investors section of CenterPoint Energy’s website (www.centerpointenergy.com) to communicate with investors about the Registrants. It is possible that the financial and other information posted there could be deemed to be material information. The information on CenterPoint Energy’s website is not part of this combined Form 10-Q.

~~vii~~viii

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

CENTERPOINT ENERGY, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED INCOME

~~(In Millions, Except Per Share Amounts)~~

(Unaudited)


	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
	June 30,						June 30,						June 30,						June 30,
	2018			2017			2018			2017			2019			2018			2019			2018
													(in millions, except per share amounts)
Revenues:
Utility revenues	$	1,341		$	1,222		$	3,235		$	2,768		$	1,555		$	1,341		$	3,716		$	3,235
Non-utility revenues	845			921			2,106			2,110			1,243			845			2,613			2,106
Total	2,186			2,143			5,341			4,878			2,798			2,186			6,329			5,341

Expenses:
Utility natural gas	188			150			825			600
Non-utility natural gas	790			882			2,063			2,011
Utility natural gas, fuel and purchased power													264			188			999			825
Non-utility cost of revenues, including natural gas													910			790			2,161			2,063
Operation and maintenance	578			518			1,147			1,061			884			578			1,745			1,147
Depreciation and amortization	342			254			656			480			340			342			653			656
Taxes other than income taxes	101			99			212			195			113			101			239			212
Total	1,999			1,903			4,903			4,347			2,511			1,999			5,797			4,903
Operating Income	187			240			438			531			287			187			532			438

Other Income (Expense):
Gain on marketable securities	22			23			23			67			64			22			147			23
Loss on indexed debt securities	(254		)	(13		)	(272		)	(23		)	(68		)	(254		)	(154		)	(272		)
Interest and other finance charges	(91		)	(77		)	(169		)	(155		)	(134		)	(91		)	(255		)	(169		)
Interest on Securitization Bonds	(14		)	(20		)	(30		)	(40		)	(10		)	(14		)	(22		)	(30		)
Equity in earnings of unconsolidated affiliate, net	58			59			127			131
Other, net	4			(1		)	7			(1		)
Equity in earnings of unconsolidated affiliates, net													74			58			136			127
Other income, net													11			4			31			7
Total	(275		)	(29		)	(314		)	(21		)	(63		)	(275		)	(117		)	(314		)

Income (Loss) Before Income Taxes	(88		)	211			124			510			224			(88		)	415			124
Income tax expense (benefit)	(13		)	76			34			183			29			(13		)	51			34
Net Income (Loss)	$	(75	)	$	135		$	90		$	327		195			(75		)	364			90
Preferred stock dividend requirement													30			—			59			—
Income (Loss) Available to Common Shareholders													$	165		$	(75	)	$	305		$	90

Basic Earnings (Loss) Per Share	$	(0.17	)	$	0.31		$	0.21		$	0.76

Diluted Earnings (Loss) Per Share	$	(0.17	)	$	0.31		$	0.21		$	0.75

Dividends Declared Per Share	$	0.2775		$	0.2675		$	0.2775		$	0.5350

Weighted Average Shares Outstanding, Basic	432			431			431			431

Weighted Average Shares Outstanding, Diluted	432			434			434			434
Basic Earnings (Loss) Per Common Share													$	0.33		$	(0.17	)	$	0.61		$	0.21
Diluted Earnings (Loss) Per Common Share													$	0.33		$	(0.17	)	$	0.61		$	0.21
Weighted Average Common Shares Outstanding, Basic													502			432			502			431
Weighted Average Common Shares Outstanding, Diluted													505			432			504			434

(1)

CenterPoint Energy’s lower effective tax rate for the three and six months ended June 30, 2019 compared to the same periods for 2018 was primarily due to the following: an increase in the amount of amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions; the impact of state tax law changes that resulted in the remeasurement of state deferred taxes; and the release of a valuation allowance on certain state net operating losses that are now expected to be utilized prior to expiration due to a current period law change.


(2)	Houston Electric’s lower effective tax rate for the three and six months ended June 30, 2019 compared to the same periods for 2018 was primarily due to an increase in the amount of amortization of the net regulatory EDIT liability as decreed by regulators.

(3)

CERC’s lower effective tax rate on income from continuing operations for the three and six months ended June 30, 2019 compared to the same periods for 2018 was primarily due to the following: an increase in the amount of amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions; the impact of state tax law changes that resulted in the remeasurement of state deferred taxes; and the release of a valuation allowance on certain state net operating losses that are now expected to be utilized prior to expiration due to a current period law change. The state law changes and valuation allowance release resulted in a lower than expected effective tax rate for the three months ended June 30, 2019 as compared to the three months ended June 30, 2018.


(4)	CERC’s effective tax rate on income from discontinued operations for the three and six months ended June 30, 2018 was a result of the 21% federal income tax rate plus allocable state income taxes. There are no comparable periods in 2019 since the Internal Spin was completed in the third quarter of 2018.

The Registrants reported a net uncertain tax liability inclusive of interest and penalties of less than $1 million for the three months ended June 30, ~~2018 compared to~~2019, which reflects a release of approximately $1 million following the same periods for 2017 was primarily due to the reduction in the federal corporate income tax rate from 35% to 21% effective January 1, 2018 as prescribed by the TCJA, and partially offset by the impactanticipated completion of state tax law changes which resulted in re-measurement of state deferred taxes. The state tax law changes combined with the lower earnings for the period result in the lower than expected effective tax rate for the current quarter and higher than expected six-month effective tax rate.

Houston Electric’s and CERC’s lower effective tax rate for the three and six months ended June 30, 2018 compared to the same periods for 2017 was primarily due to the reduction in the federal corporate income tax rate from 35% to 21% effective January 1, 2018 as prescribed by the TCJA.

~~The Registrants reported no uncertain tax liability as of June 30, 2018 and expect no~~Vectren’s 2016 IRS audit. No significant changes to the uncertain tax liability are expected over the next twelve months. ~~Tax~~For legacy CenterPoint Energy, tax years through 2016 have been audited and settled with the IRS; however, during 2018, CenterPoint Energy filed an amended 2014 tax return to claim additional tax credits that is currently under review by the IRS. For the 2017 ~~and 2018~~– 2019 tax years, CenterPoint Energy is a participant in the IRS’s Compliance Assurance Process.

(14) Commitments and Contingencies


(a)	~~Natural Gas Supply Commitments~~Purchase Obligations (CenterPoint Energy and CERC)

~~Natural gas supply commitments~~Commitments include ~~natural gas contracts~~minimum purchase obligations related to CenterPoint Energy’s and CERC’s Natural Gas Distribution and Energy Services ~~business~~reportable segments ~~which~~and CenterPoint Energy’s Indiana Electric Integrated reportable segment. Contracts with minimum payment provisions have various quantity requirements and durations ~~that~~and are not classified as non-trading derivative assets and liabilities in CenterPoint Energy’s and CERC’s Condensed Consolidated Balance Sheets as of June 30, ~~2018~~2019 and December 31, ~~2017 as these~~2018. These contracts meet an exception as “normal purchases contracts” or do not meet the definition of a derivative. Natural gas and coal supply commitments also include ~~natural gas~~ transportation contracts that do not meet the definition of a derivative.

As of June 30, ~~2018,~~2019, minimum ~~payment~~purchase obligations ~~for natural gas supply commitments~~ are approximately:



	CenterPoint Energy		CERC
	(in millions)
Remaining six months of 2019	$	399	$	276
2020	658		459
2021	488		308
2022	576		402
2023	350		197
2024	228		132
2025 and beyond	1,639		1,276

(in millions)
Remaining six months of 2018 $ 185
2019 264
2020 168
2021 82
2022 51
2023 and beyond 123

Indiana Electric Integrated also has other purchased power agreements that do not have minimum thresholds but do require payment when energy is generated by the provider. Costs arising from certain of these commitments are pass-through costs, generally collected dollar-for-dollar from retail customers through regulator-approved cost recovery mechanisms.


(b)	Guarantees and Product Warranties (CenterPoint Energy)

In the normal course of business, ESG enters into contracts requiring it to timely install infrastructure, operate facilities, pay vendors and subcontractors and support warranty obligations and, at times, issue payment and performance bonds and other forms of assurance in connection with these contracts.

Specific to ESG’s role as a general contractor in the performance contracting industry, as of June 30, 2019, there were 68 open surety bonds supporting future performance with an aggregate face amount of approximately $705 million. ESG’s exposure is less than the face amount of the surety bonds and is limited to the level of uncompleted work under the contracts. As of June 30, 2019, approximately 40% of the work was yet to be completed on projects with open surety bonds. Further, various subcontractors issue surety bonds to ESG. In addition to these performance obligations, ESG also warrants the functionality of certain installed infrastructure generally for one year and the associated energy savings over a specified number of years. Since ESG’s inception in 1994, CenterPoint Energy believes ESG has had a history of generally meeting its performance obligations and energy savings guarantees and its installed products operating effectively. CenterPoint Energy assessed the fair value of its obligation for such guarantees as of June 30, 2019 and no amounts were recorded on CenterPoint Energy’s Condensed Consolidated Balance Sheets. The Merger purchase price allocation, including the fair value of liabilities for guarantees on the Merger Date, remains preliminary. See Note 3.

CenterPoint Energy issues parent company level guarantees to certain vendors, customers and other commercial counterparties of ESG. These guarantees do not represent incremental consolidated obligations, but rather, represent guarantees of subsidiary obligations to allow those subsidiaries to conduct business without posting other forms of assurance. As of June 30, 2019, CenterPoint Energy, primarily through Vectren, has issued parent company level guarantees supporting ESG’s obligations. For those obligations where potential exposure can be estimated, management estimates the maximum exposure under these guarantees to be approximately $489 million as of June 30, 2019. This exposure primarily relates to energy savings guarantees on federal energy savings performance contracts. Other parent company level guarantees, certain of which do not contain a cap on potential liability, have been issued in support of federal operations and maintenance projects for which a maximum exposure cannot be estimated based on the nature of the projects. While there can be no assurance that performance under any of these parent company guarantees will not be required in the future, CenterPoint Energy considers the likelihood of a material amount being incurred as remote.


~~(b)~~(c)	Legal, Environmental and Other Matters

Legal Matters

Gas Market Manipulation ~~Cases.~~Cases (CenterPoint Energy and CERC). CenterPoint Energy, ~~Houston Electric or their~~its predecessor, Reliant Energy, and certain of their former subsidiaries ~~have been~~were named as defendants in ~~certain~~a large number of lawsuits filed against numerous gas market participants in a number of federal and western state courts in connection with the operation of the natural gas markets in 2000-2002. CenterPoint Energy and its affiliates were released or dismissed from all such cases, except for one case pending in federal court in Nevada in which CES, a subsidiary of CERC, is a defendant. Plaintiffs in that case allege a conspiracy to inflate Wisconsin natural gas prices in 2000-2002. In May 2016, the district court granted CES’s motion for summary judgment, dismissing CES from the case. In August 2018, the Ninth Circuit Court of Appeals reversed that ruling, and CES requested further appellate review of that decision (which review has been stayed pending approval of the settlement agreement described ~~below.~~ below).

Under a master separation agreement between CenterPoint Energy and a former subsidiary, RRI, CenterPoint Energy and its subsidiaries are entitled to be indemnified by RRI and its successors for any losses, including certain attorneys’ fees and other costs, arising out of these lawsuits. ~~In May 2009,~~Through a series of transactions, RRI ~~sold its Texas retail business to a subsidiary of NRG~~became known as GenOn and RRI changed its name to RRI Energy, Inc. In December 2010, Mirant Corporation merged with and became a wholly-owned subsidiary of RRI, and RRI changed its name to GenOn. In December 2012, NRG acquired GenOn through a merger in which GenOn became a wholly-owned subsidiary of NRG. None of ~~the sale of the retail business, the merger with Mirant Corporation, or the acquisition of GenOn by NRG~~those transactions alters ~~RRI’s (now GenOn’s)~~GenOn’s contractual obligations to indemnify CenterPoint Energy and its subsidiaries ~~including Houston Electric,~~ for certain liabilities, including their indemnification obligations regarding the gas market manipulation litigation.

A large number of lawsuits were filed against numerous gas market participants in a number of federal and western state courts in connection with the operation of the natural gas markets in 2000–2002. CenterPoint Energy and its affiliates have since been released or dismissed from all such cases. CES, a subsidiary of CERC Corp., was a defendant in a case now pending in federal court in Nevada alleging a conspiracy to inflate Wisconsin natural gas prices in 2000–2002. On May 24, 2016, the district court granted CES’s motion for summary judgment, dismissing CES from the case. The plaintiffs have appealed that ruling. CenterPoint Energy and CES intend to continue vigorously defending against the plaintiffs’ claims. In June 2017, however, GenOn and various affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code. In December ~~2017,~~2018, GenOn ~~received court approval of a restructuring plan~~completed its reorganization and ~~is expected to emerge~~emerged from Chapter ~~11 in 2018.~~11. CenterPoint Energy, CERC, and CES submitted proofs of claim in the bankruptcy proceedings to protect their indemnity rights. IfIn October 2018, CES, GenOn, ~~were unable~~and the plaintiffs reached an agreement to meet its indemnity obligations or satisfy a liability that has been assumed in the gas market manipulation litigation, then CenterPoint Energy, Houston Electric or CERC could incur liability and be responsible for satisfying the liability. CenterPoint Energy does not expect the ultimate outcome of the casesettle all claims against CES and CES’s indemnity claims against GenOn, subject to approvals by the bankruptcy court and the federal district court. In January 2019, the bankruptcy court approved the settlement between CES and GenOn, and in August 2019, the federal district court issued final approval. CES will now complete the settlement payments, and the matter should be concluded later this year. This settlement did not have a material adverse effect on ~~its~~CenterPoint Energy’s or CERC’s financial condition, results of operations or cash flows.

Minnehaha Academy (CenterPoint Energy and CERC). On August 2, 2017, a natural gas explosion occurred at the Minnehaha Academy in Minneapolis, Minnesota, resulting in the deaths of two school employees, serious injuries to others and significant property damage to the school. CenterPoint Energy, certain of its subsidiaries, including CERC, and the contractor company working in the school have been named in litigation arising out of this incident. CenterPoint Energy ~~has~~and CERC have reached confidential settlement agreements with some claimants. Additionally, CenterPoint Energy isand CERC are cooperating with the ongoing investigation conducted by the National Transportation Safety Board. Further, CenterPoint Energy ~~is contesting~~and CERC contested and have since reached a settlement regarding approximately $200,000 in fines imposed by the Minnesota Office of Pipeline Safety. In early 2018, the Minnesota Occupational Safety and Health Administration concluded its investigation without any adverse findings against CenterPoint ~~Energy.~~Energy or CERC. CenterPoint Energy’s and CERC’s general and excess liability insurance policies provide coverage for third party bodily injury and property damage claims.

Litigation Related to the Merger (CenterPoint Energy). With respect to the Merger, in July 2018, seven separate lawsuits were filed against Vectren and the individual directors of Vectren’s Board of Directors in the U.S. District Court for the Southern District of Indiana. These lawsuits allege violations of Sections 14(a) of the Exchange Act and SEC Rule 14a-9 on the grounds that the Vectren Proxy Statement filed on June 18, 2018 was materially incomplete because it omitted material information concerning the Merger. The lawsuits also seek certification as class actions. In August 2018, the seven lawsuits were consolidated, and the Court denied the plaintiffs’ request for a preliminary injunction. The plaintiffs filed their Consolidated Amended Class Action Complaint in October 2018, which the defendants have moved to dismiss and which motion remains pending. The plaintiffs filed their response in opposition to the motion to dismiss in January 2019, and Vectren filed its reply in support of the motion to dismiss in February 2019. In December 2018, two plaintiffs voluntarily dismissed their lawsuits, for which the Court entered an order approving the voluntary dismissal and dismissed without prejudice in January 2019. The defendants believe that the allegations asserted are without merit and intend to vigorously defend themselves against the claims raised. CenterPoint Energy does not expect the ultimate outcome of this matter to have a material adverse effect on its financial condition, results of operations or cash flows.

Environmental Matters

MGP ~~Sites (CenterPoint~~Sites. CenterPoint Energy, ~~and CERC).~~ CERC and ~~its~~their predecessors operated MGPs in the past. ~~With respect~~In addition, certain of CenterPoint Energy’s subsidiaries acquired through the Merger operated MGPs in the past. The costs CenterPoint Energy or CERC, as applicable, expect to certain Minnesota MGP sites, CERC has completed state-ordered remediation and continues state-ordered monitoring and water treatment. As of June 30, 2018, CERC had a recorded liability of $7 million for continued monitoring and any future remediation requiredincur to fulfill their respective obligations are estimated by ~~regulators in Minnesota. The estimated range of possible remediation costs for the sites for which CERC believes it may have responsibility was $4 million to $30 million~~management using assumptions based on ~~remediation continuing for 30~~actual costs incurred, the timing of expected future payments and inflation factors, among others. While CenterPoint Energy and CERC have recorded

all costs which they presently expect to ~~50 years.~~ incur in connection with activities at these sites, it is possible that future events may require remedial activities which are not presently foreseen, and those costs may not be subject to PRP or insurance recovery.

(i)

Minnesota MGPs (CenterPoint Energy and CERC). With respect to certain Minnesota MGP sites, CenterPoint Energy and CERC have completed state-ordered remediation and continue state-ordered monitoring and water treatment. CenterPoint Energy and CERC recorded a liability as reflected in the table below for continued monitoring and any future remediation required by regulators in Minnesota. The estimated range of possible remediation costs for the sites for which CenterPoint Energy and CERC believe they may have responsibility was based on remediation continuing for the time frame given in the table below.



	June 30, 2019
	CenterPoint Energy		CERC
	(in millions, except years)
Amount accrued for remediation	$	7	$	7
Minimum estimated remediation costs	4		4
Maximum estimated remediation costs	32		32
Minimum years of remediation	30		30
Maximum years of remediation	50		50

The cost estimates are based on studies of a site or industry average costs for remediation of sites of similar size. The actual remediation costs will depend on the number of sites to be remediated, the participation of other PRPs, if any, and the remediation methods used.

(ii)

Indiana MGPs (CenterPoint Energy). In the Indiana Gas service territory, the existence, location and certain general characteristics of 26 gas manufacturing and storage sites have been identified for which CenterPoint Energy may have some remedial responsibility. A remedial investigation/feasibility study was completed at one of the sites under an agreed upon order between Indiana Gas and the IDEM, and a Record of Decision was issued by the IDEM in January 2000. The remaining sites have been submitted to the IDEM’s VRP. CenterPoint Energy has also identified its involvement in five manufactured gas plant sites in SIGECO’s service territory, all of which are currently enrolled in the IDEM’s VRP. CenterPoint Energy is currently conducting some level of remedial activities, including groundwater monitoring at certain sites.

As of June 30, 2019, approximately $2 million of accrued costs related to these sites are included in Other liabilities on CenterPoint Energy’s Condensed Consolidated Balance Sheets. Total costs that may be incurred in connection with addressing these sites cannot be determined at this time. The estimated accrued costs are limited to CenterPoint Energy’s share of the remediation efforts and are therefore net of exposures of other PRPs.

~~In addition to the Minnesota sites, the EPA and other regulators have investigated MGP sites that were owned or operated by CERC or may have been owned by one of its former affiliates.~~


(iii)	Other MGPs(CenterPoint Energy and CERC). In addition to the Minnesota and Indiana sites, the EPA and other regulators have investigated MGP sites that were owned or operated by CenterPoint Energy or CERC or may have been owned by one of their former affiliates.

CenterPoint Energy and CERC do not expect the ultimate outcome of these matters to have a material adverse effect on the financial condition, results of operations or cash flows of either CenterPoint Energy or CERC.

Asbestos.Some facilities owned by the Registrants or their predecessors ~~in interest~~ contain or have contained asbestos insulation and other asbestos-containing materials. The Registrants are from time to time named, along with numerous others, as defendants in lawsuits filed by a number of individuals who claim injury due to exposure to asbestos, and the Registrants anticipate that additional claims may be asserted in the future. Although their ultimate outcome cannot be predicted at this time, the Registrants do not expect these matters, either individually or in the aggregate, to have a material adverse effect on their financial condition, results of operations or cash flows.

CCR Rule (CenterPoint Energy). In April 2015, the EPA finalized its CCR Rule, which regulates ash as non-hazardous material under the RCRA. The final rule allows beneficial reuse of ash, and the majority of the ash generated by Indiana Electric’s generating plants will continue to be reused. In July 2018, the EPA released its final CCR Rule Phase I Reconsideration which extended the deadline to October 31, 2020 for ceasing placement of ash in ponds that exceed groundwater protections standards or that fail to meet location restrictions. While the EPA Phase I Reconsideration moves forward, the existing CCR compliance obligations remain in effect.

Under the existing CCR Rule, Indiana Electric is required to perform integrity assessments, including ground water monitoring, at its F.B. Culley and A.B. Brown generating stations. The ground water studies are necessary to determine the remaining service life of the ponds and whether a pond must be retrofitted with liners or closed in place, with bottom ash handling conversions completed. Indiana Electric’s Warrick generating unit is not included in the scope of the CCR Rule as this unit has historically been part of a larger generating station that predominantly serves an adjacent industrial facility. In March 2018, Indiana Electric began posting ground water data monitoring reports annually to its public website in accordance with the requirements of the CCR Rule. This data preliminarily indicates potential groundwater impacts very close to Indiana Electric’s ash impoundments, and further analysis is ongoing. The CCR Rule required companies to complete location restriction determinations by October 18, 2018. Indiana Electric completed its evaluation and determined that one F.B. Culley pond and the A.B. Brown pond fail the aquifer placement location restriction. As a result of this failure, Indiana Electric is required to cease disposal of new ash in the ponds and commence closure of the ponds by October 31, 2020. CenterPoint Energy plans to seek extensions available under the CCR Rule that would allow Indiana Electric to continue to use the ponds through December 31, 2023. The inability to take these extensions may result in increased and potentially significant operational costs in connection with the accelerated implementation of an alternative ash disposal system or adversely impact Indiana Electric’s future operations. Failure to comply with these requirements could also result in an enforcement proceeding including the imposition of fines and penalties. On April 24, 2019, Indiana Electric received an order from the IURC approving recovery in rates of costs associated with the closure of one of the ponds at F.B. Culley. CenterPoint Energy believes the language in the IURC order is favorable for future recovery of closure costs for Indiana Electric’s remaining ponds.

Indiana Electric continues to refine site specific estimates of closure costs. In March 2019, Indiana Electric entered into agreements with third parties for the excavation and beneficial reuse of the ash at the A.B. Brown ash pond. In July 2018, Indiana Electric filed a Complaint for Damages and Declaratory Relief against its insurers seeking reimbursement of defense, investigation and pond closure costs incurred to comply with the CCR Rule, and has since reached a confidential settlement agreement with one of the insurers. Any proceeds received will offset costs that have been and will be incurred to close the ponds.

As of June 30, 2019, CenterPoint Energy has recorded an approximate $90 million ARO, which represents the discounted value of future cash flow estimates to close the ponds at A.B. Brown and F.B. Culley. The fair value of the ARO assumed on the Merger Date is preliminary. This estimate is also subject to change in the near term due to the contractual arrangements; continued assessments of the ash, closure methods, and the timing of closure; implications of Indiana Electric’s generation transition plan; changing environmental regulations; and the anticipated outcome of the aforementioned insurance proceeding. In addition to these removal costs, Indiana Electric also anticipates equipment purchases of between $60 million and $80 million to complete the A.B. Brown closure project.

Other Environmental. From time to time, the Registrants identify the presence of environmental contaminants during operations or on property where ~~predecessor companies~~their predecessors have conducted operations. Other such sites involving contaminants may be identified in the future. The Registrants have and expect to continue to remediate any identified sites consistent with state and federal legal obligations. From time to time, the Registrants have received notices, and may receive notices in the future, from regulatory authorities or others regarding status as a PRP in connection with sites found to require remediation due to the presence of environmental contaminants. In addition, the Registrants have been, or may be, named from time to time as defendants in litigation related to such sites. Although the ultimate outcome of such matters cannot be predicted at this time, the Registrants do not expect these matters, either individually or in the aggregate, to have a material adverse effect on their financial condition, results of operations or cash flows.

Other Proceedings

The Registrants are involved in other legal, environmental, tax and regulatory proceedings before various courts, regulatory commissions and governmental agencies regarding matters arising in the ordinary course of business. From time to time, the Registrants are also defendants in legal proceedings with respect to claims brought by various plaintiffs against broad groups of participants in the energy industry. Some of these proceedings involve substantial amounts. The Registrants regularly analyze current information and, as necessary, provide accruals for probable and reasonably estimable liabilities on the eventual disposition of these matters. The Registrants do not expect the disposition of these matters to have a material adverse effect on the Registrants’ financial condition, results of operations or cash flows.

(15) Earnings Per Share (CenterPoint Energy)

The following table reconciles numerators and denominators of CenterPoint Energy’s basic and diluted earnings ~~(loss)~~ per common share. Basic earnings per common share ~~calculations:~~

Three Months Ended June 30, Six Months Ended June 30,
2018 2017 2018 2017
(in millions, except share and per share amounts)
Net income (loss) $ (75 ) $ 135
$ 90
$ 327

Basic weighted average shares outstanding 431,523,000
430,996,000
431,378,000
430,896,000
Plus: Incremental shares from assumed conversions:
Restricted stock (1)
—
2,801,000
3,029,000
2,801,000
Diluted weighted average shares 431,523,000
433,797,000
434,407,000
433,697,000
Basic earnings (loss) per share
Net income (loss) $ (0.17 ) $ 0.31
$ 0.21
$ 0.76
Diluted earnings (loss) per share
Net income (loss) $ (0.17 ) $ 0.31
$ 0.21
$ 0.75

~~(1)3,029,000 incremental~~is determined by dividing Income available to common shareholders - basic by the Weighted average common shares ~~from assumed conversions of restricted stock have not been included in the computation of diluted earnings (loss) per share~~outstanding - basic for the ~~three months ended June 30, 2018 as their~~applicable period. Diluted earnings per common share is determined by the inclusion ~~would be anti-dilutive.~~of potentially dilutive common stock equivalent shares that may occur if securities to issue Common Stock were exercised or converted into Common Stock.



	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019		2018
	(in millions, except share and per share amounts)
Numerator:
Income (loss) available to common shareholders - basic	$	165	$	(75	)	$	305	$	90
Add back: Series B Preferred Stock dividend	—		—			—		—
Income (loss) available to common shareholders - diluted	$	165	$	(75	)	$	305	$	90

Denominator:
Weighted average common shares outstanding - basic	502,200,000		431,523,000			501,862,000		431,378,000
Plus: Incremental shares from assumed conversions:
Restricted stock (1)	2,631,000		—			2,631,000		3,029,000
Series B Preferred Stock (2)	—		—			—		—
Weighted average common shares outstanding - diluted	504,831,000		431,523,000			504,493,000		434,407,000

Earnings per common share:
Basic earnings (loss) per common share	$	0.33	$	(0.17	)	$	0.61	$	0.21
Diluted earnings (loss) per common share	$	0.33	$	(0.17	)	$	0.61	$	0.21

(1)

The potentially dilutive impact from restricted stock awards applies the treasury stock method. Under this method, an increase in the average fair market value of Common Stock can result in a greater dilutive impact from these securities. 3,029,000 incremental shares from assumed conversions of restricted stock have not been included in the computation of diluted earnings (loss) per share for the three months ended June 30, 2018, as their inclusion would be anti-dilutive.

(2)

The potentially dilutive impact from Series B Preferred Stock applies the if-converted method in calculating diluted earnings per common share. Under this method, diluted earnings per common share is adjusted for the more dilutive effect of the Series B Preferred Stock as a result of either its accumulated dividend for the period in the numerator or the assumed-converted common share equivalent in the denominator. The computation of diluted earnings per common share outstanding for the three and six months ended June 30, 2019 excludes 32,121,000 and 32,121,000 potentially dilutive shares, respectively, because to include them would be anti-dilutive. However, these shares could be potentially dilutive in the future.

(16) Reportable ~~Business~~ Segments

The Registrants’ determination of reportable ~~business~~ segments considers the strategic operating units under which the Registrants manage sales, allocate resources and assess performance of various products and services to wholesale or retail customers in differing regulatory environments. The Registrants use operating income as the measure of profit or loss for the ~~business~~reportable segments other than Midstream Investments, where equity in earnings is used.

~~Reportable business~~As of June 30, 2019, reportable segments by Registrant ~~are~~were as follows:

Registrants

Houston Electric ~~Transmission & Distribution~~T&D

Indiana Electric Integrated

Natural Gas Distribution

Energy

Services

Infrastructure Services

Midstream Investments

Corporate and Other ~~Operations~~

CenterPoint Energy

Houston Electric

CERC

The Houston Electric ~~Transmission & Distribution~~T&D reportable segment consists of ~~the~~ electric transmission and distribution ~~function.~~services in the Texas Gulf Coast area.

The Indiana Electric Integrated reportable segment consists of electric transmission and distribution services primarily to southwestern Indiana and includes power generation and wholesale power operations.

CenterPoint Energy’s Natural Gas Distribution reportable segment consists of intrastate natural gas sales to, and natural gas transportation and distribution for, residential, commercial, industrial and institutional ~~customers.~~customers in Arkansas, Indiana, Louisiana, Minnesota, Mississippi, Ohio, Oklahoma and Texas.

CERC’s Natural Gas Distribution reportable segment consists of intrastate natural gas sales to, and natural gas transportation and distribution for, residential, commercial, industrial and institutional customers in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma and Texas.

•The Energy Services reportable segment consists of non-rate regulated natural gas sales and services operations.

•The Infrastructure Services reportable segment consists of underground pipeline construction and repair services.

The Midstream Investments reportable segment consists of the equity investment in Enable (excluding the Enable Series A Preferred Units).

CenterPoint Energy’s Corporate and Other ~~Operations~~reportable segment consists ~~primarily~~ of energy performance contracting and sustainable infrastructure services through ESG and other corporate operations which support all of the business ~~operations.~~operations of CenterPoint Energy.

~~Houston Electric~~CERC’s Corporate and Other reportable segment consists primarily of ~~a single reportable~~corporate operations which support all of the business ~~segment and therefore is not included in the tabular business segment presentation below. Operating income (loss) amounts for 2017 have been recast to reflect the adoption~~operations of ~~ASU 2017-07 (see Note 2 for further information).~~CERC.

Financial data for ~~business~~reportable segments is as follows:

CenterPoint Energy


	Three Months Ended June 30,																	Three Months Ended June 30,
	2018									2017								2019									2018
	Revenues from External Customers			Net Intersegment Revenues			Operating Income (Loss)			Revenues from External Customers			Net Intersegment Revenues			Operating Income		Revenues from External Customers			Net Intersegment Revenues			Operating Income (Loss)			Revenues from External Customers			Net Intersegment Revenues			Operating Income
	(in millions)																	(in millions)
Electric Transmission & Distribution	$	854	(1)	$	—		$	181		$	752	(1)	$	—		$	171
Houston Electric T&D																		$	765	(1)	$	—		$	169		$	854	(1)	$	—		$	181
Indiana Electric Integrated																		140			—			25			—			—			—
Natural Gas Distribution	487			8			7			470			7			42		650			10			47			487			8			7
Energy Services	841			19			15			918			13			16		838			17			29			841			19			15
Infrastructure Services																		325			1			24			—			—			—
Midstream Investments (2)	—			—			—			—			—			—		—			—			—			—			—			—
Other Operations	4			—			(16		)	3			—			11
Corporate and Other																		80			—			(7		)	4			—			(16		)
Eliminations	—			(27		)	—			—			(20		)	—		—			(28		)	—			—			(27		)	—
Consolidated	$	2,186		$	—		$	187		$	2,143		$	—		$	240	$	2,798		$	—		$	287		$	2,186		$	—		$	187



	Six Months Ended June 30,
	2019									2018
	Revenues from External Customers			Net Intersegment Revenues			Operating Income (Loss)			Revenues from External Customers			Net Intersegment Revenues			Operating Income (Loss)
	(in millions)
Houston Electric T&D	$	1,454	(1)	$	—		$	253		$	1,605	(1)	$	—		$	296
Indiana Electric Integrated	223			—			16			—			—			—
Natural Gas Distribution	2,039			20			214			1,630			18			163
Energy Services	2,020			81			62			2,098			47			(11		)
Infrastructure Services	471			1			8			—			—			—
Midstream Investments (2)	—			—			—			—			—			—
Corporate and Other	122			—			(21		)	8			—			(10		)
Eliminations	—			(102		)	—			—			(65		)	—
Consolidated	$	6,329		$	—		$	532		$	5,341		$	—		$	438

Six Months Ended June 30,
2018 2017

Revenues from
External
Customers

Net
Intersegment
Revenues

Operating
Income
(Loss)

Revenues from
External
Customers

Net
Intersegment
Revenues
Operating
Income
(in millions)
Electric Transmission & Distribution $ 1,605
(1) $ —
$ 296
$ 1,391
(1) $ —
$ 257
Natural Gas Distribution 1,630
18
163
1,377
16
210
Energy Services 2,098
47
(11 ) 2,103
24
51
Midstream Investments (2)
—
—
—
—

^—

—
Other Operations 8
—
(10 ) 7
—
13
Eliminations —
(65 ) —
—
(40 ) —
Consolidated $ 5,341
$ —
$ 438
$ 4,878
$ —
$ 531


(1)	~~CenterPoint Energy’s and~~ Houston ~~Electric’s~~ Electric ~~Transmission & Distribution~~T&D revenues from major external customers are as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(in millions)
Affiliates of NRG	$	165	$	169	$	316	$	330
Affiliates of Vistra Energy Corp.	59		59		113		113

Three Months Ended June 30, Six Months Ended June 30,
2018 2017 2018 2017
(in millions)
Affiliates of NRG $ 169
$ 167
$ 330
$ 319
Affiliates of Vistra Energy Corp. 59
53
113
100

~~CERC~~

Three Months Ended June 30,
2018 2017
Revenues from
External
Customers Net
Intersegment
Revenues Operating
Income Revenues from
External
Customers Net
Intersegment
Revenues Operating
Income
(in millions)
Natural Gas Distribution $ 487
$ 8
$ 7
$ 470
$ 7
$ 42
Energy Services 841
19
15
918
13
16
Midstream Investments (2)
—
—
—
—
—
—
Other Operations —
—
—
(1 ) —
1
Eliminations —
(27 ) —
—
(20 ) —
Consolidated $ 1,328
$ —
$ 22
$ 1,387
$ —
$ 59

Six Months Ended June 30,
2018 2017

Revenues from
External
Customers

Net
Intersegment
Revenues

Operating
Income
(Loss)

Revenues from
External
Customers

Net
Intersegment
Revenues

Operating
Income
(Loss)
(in millions)
Natural Gas Distribution $ 1,630
$ 18
$ 163
$ 1,377
$ 16
$ 210
Energy Services 2,098
47
(11 ) 2,103
24
51
Midstream Investments (2)
—
—
—
—

^—

—
Other Operations —
—
1
—
—
(3 )
Eliminations —
(65 ) —
—
(40 ) —
Consolidated $ 3,728
$ —
$ 153
$ 3,480
$ —
$ 258


(2)	CenterPoint Energy’s ~~and CERC’s~~ Midstream Investments’ equity earnings, net are as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(in millions)
Enable	$	74	$	58	$	136	$	127

Three Months Ended June 30, Six Months Ended June 30,
2018 2017 2018 2017
(in millions)
Enable $ 58
$ 59
$ 127
$ 131

Houston Electric

~~CenterPoint Energy and CERC~~

Houston Electric consists of a single reportable segment; therefore, a tabular reportable segment presentation has not been

Total Assets
June 30, 2018 December 31, 2017

CenterPoint
Energy
CERC CenterPoint
Energy CERC
(in millions)
Electric Transmission & Distribution $ 10,430
$ —
$ 10,292
$ —
Natural Gas Distribution 6,501
6,501
6,608
6,608
Energy Services 1,256
1,256
1,521
1,521
Midstream Investments 2,451
2,451
2,472
2,472
Other Operations 2,311
(3) 89
2,497
(3) 70
Eliminations (841 ) (655 ) (654 ) (559 )
Consolidated $ 22,108
$ 9,642
$ 22,736
$ 10,112
included.


~~(3)~~(1)	Houston Electric T&D revenues from major external customers are as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(in millions)
Affiliates of NRG	$	165	$	169	$	316	$	330
Affiliates of Vistra Energy Corp.	59		59		113		113

CERC



	Three Months Ended June 30,
	2019							2018
	Revenues from External Customers		Net Intersegment Revenues			Operating Income (Loss)		Revenues from External Customers		Net Intersegment Revenues			Operating Income (Loss)
	(in millions)
Natural Gas Distribution	$	503	$	10		$	28	$	487	$	8		$	7
Energy Services	839		16			29		841		19			15
Other Operations	—		—			1		—		—			—
Eliminations	—		(26		)	—		—		(27		)	—
Consolidated	$	1,342	$	—		$	58	$	1,328	$	—		$	22



	Six Months Ended June 30,
	2019							2018
	Revenues from External Customers		Net Intersegment Revenues			Operating Income (Loss)		Revenues from External Customers		Net Intersegment Revenues			Operating Income (Loss)
	(in millions)
Natural Gas Distribution	$	1,688	$	20		$	192	$	1,630	$	18		$	163
Energy Services	2,021		80			62		2,098		47			(11		)
Corporate and Other	1		—			—		—		—			1
Eliminations	—		(100		)	—		—		(65		)	—
Consolidated	$	3,710	$	—		$	254	$	3,728	$	—		$	153

CenterPoint Energy and CERC



	Total Assets
	June 30, 2019							December 31, 2018
	CenterPoint Energy				CERC			CenterPoint Energy				CERC
	(in millions)
Houston Electric T&D	$	11,478			$	—		$	10,509			$	—
Indiana Electric Integrated (1)	2,989				—			—				—
Natural Gas Distribution (1)	12,946				6,843			6,956				6,956
Energy Services	1,262				1,262			1,558				1,558
Infrastructure Services (1)	1,303				—			—				—
Midstream Investments	2,915				—			2,482				—
Corporate and Other (1)	4,278			(2)	108			6,156			(2)	66
Eliminations	(2,982		)		(398		)	(652		)		(366		)
Consolidated	$	34,189			$	7,815		$	27,009			$	8,214


(1)	Total assets by reportable segment include assets acquired in the Merger, which are based on preliminary estimates and allocations and are subject to change. See Note 3.


(2)	Includes pension and other postemployment-related regulatory assets of ~~$577~~$639 million and ~~$600~~$665 million, respectively, as of June 30, ~~2018~~2019 and December 31, ~~2017.~~2018. Additionally, total assets as of December 31, 2018 included $3.9 billion of temporary investments included in Cash and cash equivalents on CenterPoint Energy’s Consolidated Balance Sheets.

(17) Supplemental Disclosure of Cash Flow Information

The table below provides supplemental disclosure of cash flow information:


	Six Months Ended June 30,												Six Months Ended June 30,
	2018						2017						2019						2018
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
	(in millions)												(in millions)
Cash Payments/Receipts:
Interest, net of capitalized interest	$	167	$	90	$	50	$	182	$	94	$	56	$	231	$	113	$	55	$	167	$	90	$	50
Income taxes, net	88		120		3		11		76		3
Income taxes (refunds), net													142		73		3		88		120		3
Non-cash transactions:
Accounts payable related to capital expenditures	133		75		69		106		75		44		173		86		72		133		75		69
ROU assets obtained in exchange for lease liabilities (1)													42		1		28		—		—		—



(Mark One)
þ☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	~~FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2018~~



Texas			74-0694415
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

1111 Louisiana	Houston	Texas	77002
(Address of Principal Executive Offices)			(Zip Code)



Texas			22-3865106
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

1111 Louisiana	Houston	Texas	77002
(Address of Principal Executive Offices)			(Zip Code)



Delaware			76-0511406
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

1111 Louisiana	Houston	Texas	77002
(Address of Principal Executive Offices)			(Zip Code)



	~~Registrant, State or Other Jurisdiction of Incorporation or Organization~~
~~Commission file number~~Securities registered pursuant to Section 12(b) of the Act:
Registrant	~~Address~~Title of ~~Principal Executive Offices, Zip Code and Telephone Number~~each class	~~I.R.S. Employer Identification No.~~Trading Symbol(s)	Name of each exchange on which registered
CenterPoint Energy, Inc.	Common Stock, $0.01 par value	CNP	The New York Stock Exchange
			Chicago Stock Exchange, Inc.
~~1-31447~~	CenterPoint Energy, Inc.	~~74-0694415~~Depositary Shares for 1/20 of 7.00% Series B Mandatory Convertible Preferred Stock, $0.01 par value	CNP/PB	The New York Stock Exchange
	~~(a Texas corporation)~~
	~~1111 Louisiana~~
	~~Houston, Texas 77002~~
	~~(713-207-1111)~~

~~1-3187~~	CenterPoint Energy Houston Electric, LLC	~~22-3865106~~9.15% First Mortgage Bonds due 2021	n/a	The New York Stock Exchange
CenterPoint Energy Houston Electric, LLC	~~(a Texas limited liability company)~~6.95% General Mortgage Bonds due 2033	n/a	The New York Stock Exchange
	~~1111 Louisiana~~
	~~Houston, Texas 77002~~
	~~(713-207-1111)~~

~~1-13265~~	CenterPoint Energy Resources Corp.	~~76-0511406~~
6.625% Senior Notes due 2037	(n/a ~~Delaware corporation)~~
	~~1111 Louisiana~~
	~~Houston, Texas 77002~~
	~~(713-207-1111)~~	The New York Stock Exchange



o☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE TRANSITION PERIOD FROM __________________ TO __________________



	Large accelerated filer	Accelerated filer	Non-accelerated filer	Smaller reporting company	Emerging growth company
CenterPoint Energy, Inc.	~~Large accelerated filer~~ þ	~~Accelerated filer~~ o	~~Non-accelerated filer~~ o	~~Smaller reporting company~~ o ☐	~~Emerging growth company~~ o ☐
CenterPoint Energy Houston Electric, LLC	~~Large accelerated filer~~ o	~~Accelerated filer~~ o	~~Non-accelerated filer~~ þ	~~Smaller reporting company~~ o ☐	~~Emerging growth company~~ o ☐
CenterPoint Energy Resources Corp.	~~Large accelerated filer~~ o	~~Accelerated filer~~ o	~~Non-accelerated filer~~ þ	~~Smaller reporting company~~ o ☐	~~Emerging growth company~~ o ☐



CenterPoint Energy, Inc.	~~431,553,691~~ 502,218,696	shares of common stock outstanding, excluding 166 shares held as treasury stock
CenterPoint Energy Houston Electric, LLC	1,000	common shares outstanding, all held by Utility Holding, LLC, a wholly-owned subsidiary of CenterPoint Energy, Inc.
CenterPoint Energy Resources Corp.	1,000	shares of common stock outstanding, all held by Utility Holding, LLC, a wholly-owned subsidiary of CenterPoint Energy, Inc.



PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	CenterPoint Energy, Inc. Financial Statements (unaudited)	1
	CenterPoint Energy Houston Electric, LLC Financial Statements (unaudited)	67
	CenterPoint Energy Resources Corp. Financial Statements (unaudited)	1113
	Combined Notes to Unaudited Condensed Consolidated Financial Statements (unaudited)	1619
	(1) Background and Basis of Presentation	16
	~~(2) New Accounting Pronouncements~~	17
	~~(3) Proposed Merger with Vectren~~	19
	~~(4) Revenue Recognition~~(2) New Accounting Pronouncements	2021
	~~(5) Employee Benefit Plans~~(3) Mergers and Acquisitions	2221
	~~(6) Regulatory Accounting~~(4) Revenue Recognition	24
	~~(7) Derivative Instruments~~	25
	~~(8) Fair Value Measurements~~(5) Employee Benefit Plans	28
	~~(9) Unconsolidated Affiliate~~(6) Regulatory Accounting	3031
	~~(10) Goodwill and Other Intangibles~~(7) Derivative Instruments	3332
	(8) Fair Value Measurements	37
	(9) Unconsolidated Affiliates	40
	(10) Goodwill and Other Intangibles	44
	(11) Indexed Debt Securities (ZENS) and Securities Related to ZENS	3346
	(12) Short-term Borrowings and Long-term Debt	3446
	(13) Income Taxes	3649
	(14) Commitments and Contingencies	3650
	(15) Earnings Per Share	3854
	(16) Reportable ~~Business~~ Segments	3954
	(17) Supplemental Disclosure of Cash Flow Information	4158
	(18) Related Party Transactions	4258
	(19) ~~Subsequent Events~~Leases	4259
	(20) Equity	62
	(21) Subsequent Events	64
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4365
	Recent Events	4365
	Consolidated Results of Operations	4465
	Results of Operations by ~~Business~~Reportable Segment	4870
	Certain Factors Affecting Future Earnings	5481
	Liquidity and Capital Resources	5581
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	6492
Item 4.	Controls and Procedures	6593

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	6594
Item 1A.	Risk Factors	65
~~Item 5.~~	~~Other Information~~	6694
Item 6.	Exhibits	6694
	Signatures	6998



GLOSSARY
~~AEM~~ACE		~~Atmos~~Affordable Clean Energy ~~Marketing, LLC, previously a wholly-owned subsidiary of Atmos Energy Holdings, Inc., a wholly-owned subsidiary of Atmos Energy Corporation~~
ALJ		Administrative Law Judge
AMA		Asset Management Agreement
AMS		Advanced Metering System
APSC		Arkansas Public Service Commission
~~ARAM~~ARO		~~Average rate assumption method~~Asset retirement obligation
ARP		Alternative revenue program
ASC		Accounting Standards Codification
ASU		Accounting Standards Update
AT&T Common		AT&T Inc.
~~AT&T Common~~		~~AT&T~~ common stock
Bcf		Billion cubic feet
Bond Companies		Bond Company II, Bond Company III, Bond Company IV and Restoration Bond Company, each a wholly-owned, bankruptcy remote entity formed solely for the purpose of purchasing and owning transition or system restoration property through the issuance of Securitization Bonds
Bond Company II		CenterPoint Energy Transition Bond Company II, LLC, a wholly-owned subsidiary of Houston Electric
Bond Company III		CenterPoint Energy Transition Bond Company III, LLC, a wholly-owned subsidiary of Houston Electric
Bond Company IV		CenterPoint Energy Transition Bond Company IV, LLC, a wholly-owned subsidiary of Houston Electric
Brazos Valley Connection		A portion of the Houston region transmission project between Houston Electric’s Zenith substation and the Gibbons Creek substation owned by the Texas Municipal Power Agency
~~Bridge Facility~~CCR		~~A $5 billion 364-day senior unsecured bridge term loan facility~~Coal Combustion Residuals
CECA		Clean Energy Cost Adjustment
CECL		Current expected credit losses
CenterPoint Energy		CenterPoint Energy, Inc., and its subsidiaries
CERC ~~Corp.~~		~~CenterPoint Energy Resources Corp.~~
~~CERC~~		CERC Corp., together with its subsidiaries
CERC Corp.		CenterPoint Energy Resources Corp.
CES		CenterPoint Energy Services, Inc., a wholly-owned subsidiary of CERC Corp.
Charter Common		Charter Communications, Inc. common stock
CIP		Conservation Improvement Program
~~COLI~~CME		~~Corporate-owned life insurance~~Chicago Mercantile Exchange
~~Continuum~~CNP Midstream		~~The retail energy services business of Continuum Retail~~CenterPoint Energy ~~Services, LLC, including its~~Midstream, Inc., a wholly-owned subsidiary ~~Lakeshore~~of CenterPoint Energy ~~Services, LLC~~
Common Stock		CenterPoint Energy, Inc. common stock, par value $0.01 per share
CPCN		Certificate of Public Convenience and ~~the natural gas wholesale assets of Continuum Energy Services, LLC~~Necessity
CPP		Clean Power Plan
CSIA		Compliance and System Improvement Adjustment
DCRF		Distribution Cost Recovery Factor
DRR		Distribution Replacement Rider
DSMA		Demand Side Management Adjustment
ECA		Environmental Cost Adjustment
EDIT		Excess deferred income taxes
EECR		Energy Efficiency Cost Recovery
EECRF		Energy Efficiency Cost Recovery Factor
EEFC		Energy Efficiency Funding Component
EEFR		Energy Efficiency Funding Rider



GLOSSARY
ELG		Effluent Limitation Guidelines
EMV		Evaluation, measurement and valuation
Enable		Enable Midstream Partners, LP
Enable GP		Enable GP, LLC, Enable’s general partner
Enable Series A Preferred Units		Enable’s 10% Series A Fixed-to-Floating Non-Cumulative Redeemable Perpetual Preferred Units, representing limited partner interests in Enable
EPA		Environmental Protection Agency
ERCOT		Electric Reliability Council of Texas
~~FCC~~ESG		~~Federal Communications Commission~~Energy Systems Group, LLC, a wholly-owned subsidiary of Vectren
FERC		Federal Energy Regulatory Commission
Fitch		Fitch, Inc.
Form 10-Q		Quarterly Report on Form 10-Q
FRP		Formula Rate Plan



~~GLOSSARY~~
~~FTC~~		~~Federal Trade Commission~~
Gas Daily		Platts gas daily indices
GenOn		GenOn Energy, Inc.
GHG		Greenhouse gases
GRIP		Gas Reliability Infrastructure Program
GWh		Gigawatt-hours
Houston Electric		CenterPoint Energy Houston Electric, LLC and its subsidiaries
~~HSR~~IDEM		~~Hart-Scott-Rodino~~Indiana Department of Environmental Management
Indiana Electric		Operations of SIGECO’s electric transmission and distribution services, and includes its power generating and wholesale power operations
Indiana Gas		Indiana Gas Company, Inc., a wholly-owned subsidiary of Vectren
Indiana North		Gas operations of Indiana Gas
Indiana South		Gas operations of SIGECO
Indiana Utilities		The combination of Indiana Electric, Indiana North and Indiana South
Interim Condensed Financial Statements		Unaudited condensed consolidated interim financial statements and combined notes
Internal Spin		The series of internal transactions consummated on September 4, 2018 whereby CERC (i) contributed its equity investment in Enable consisting of Enable common units and its interests in Enable GP to CNP Midstream and (ii) transferred all of its interest in CNP Midstream to CenterPoint Energy
IRP		Integrated Resource Plan
IRS		Internal Revenue Service
IURC		Indiana Utility Regulatory Commission
kV		Kilovolt
LIBOR		London Interbank Offered Rate
~~Meredith~~MATS		~~Meredith Corporation~~Mercury and Air Toxics Standards
Merger		The merger of Merger Sub with and into Vectren on the terms and subject to the conditions set forth in the Merger Agreement, with Vectren continuing as the surviving corporation and as a wholly-owned subsidiary of CenterPoint Energy, Inc.
Merger Agreement		Agreement and Plan of Merger, dated as of April 21, 2018, among CenterPoint Energy, Vectren and Merger Sub
Merger Date		February 1, 2019
Merger Sub		Pacer Merger Sub, Inc., an Indiana corporation and wholly-owned subsidiary of CenterPoint Energy
MGP		Manufactured gas plant
MISO		Midcontinent Independent System Operator
MLP		Master Limited Partnership



GLOSSARY
MMBtu		One million British thermal units
Moody’s		Moody’s Investors Service, Inc.
MPSC		Mississippi Public Service Commission
MPUC		Minnesota Public Utilities Commission
MRT		Enable Mississippi River Transmission, LLC
MW		Megawatts
NGD		Natural gas distribution business
NGLs		Natural gas liquids
~~NOPR~~		~~Notice of Proposed Rulemaking~~
NRG		NRG Energy, Inc.
NYMEX		New York Mercantile Exchange
NYSE		New York Stock Exchange
OCC		Oklahoma Corporation Commission
OGE		OGE Energy Corp.
PBRC		Performance Based Rate Change
PRPs		Potentially responsible parties
PUCO		Public Utilities Commission of Ohio
PUCT		Public Utility Commission of Texas
Railroad Commission		Railroad Commission of Texas
RCRA		Resource Conservation and Recovery Act of 1976
Registrants		CenterPoint Energy, Houston Electric and CERC, collectively
Reliant Energy		Reliant Energy, Incorporated
REP		Retail electric provider
Restoration Bond Company		CenterPoint Energy Restoration Bond Company, LLC, a wholly-owned subsidiary of Houston Electric
Revised Policy Statement		Revised Policy Statement on Treatment of Income Taxes
ROE		Return on equity
ROU		Right of use
RRA		Rate Regulation Adjustment
RRI		Reliant Resources, Inc.
RSP		Rate Stabilization Plan
SEC		Securities and Exchange Commission



~~GLOSSARY~~
Securitization Bonds		Transition and system restoration bonds
Series A Preferred ~~Units~~Stock		~~Enable’s 10%~~CenterPoint Energy’s Series A Fixed-to-Floating ~~Non-Cumulative~~Rate Cumulative Redeemable Perpetual Preferred ~~Units, representing limited partner interests in Enable~~Stock, par value $0.01 per share, with a liquidation preference of $1,000 per share
Series B Preferred Stock		CenterPoint Energy’s 7.00% Series B Mandatory Convertible Preferred Stock, par value $0.01 per share, with a liquidation preference of $1,000 per share
SERP		Supplemental Executive Retirement Plan
SIGECO		Southern Indiana Gas and Electric Company, a wholly-owned subsidiary of Vectren
S&P		~~Standard & Poor’s~~S&P Global Ratings ~~Services, a division of The McGraw-Hill Companies~~
SRC		Sales Reconciliation Component
TBD		To be determined
TCEH Corp.		Formerly Texas Competitive Electric Holdings Company LLC, predecessor to Vistra Energy Corp. whose major subsidiaries include Luminant and TXU Energy
TCJA		Tax reform legislation informally called the Tax Cuts and Jobs Act of 2017
TCOS		Transmission Cost of Service



GLOSSARY
TDSIC		Transmission, Distribution and Storage System Improvement Charge
TDU		Transmission and distribution utility
~~Time~~		~~Time Inc.~~
~~Time Common~~		~~Time common stock~~
Transition Agreements		Services Agreement, Employee Transition Agreement, Transitional Seconding Agreement and other agreements entered into in connection with the formation of Enable
TWTSCR		~~Time Warner Inc.~~Tax Savings Credit Rider
~~TW Common~~Utility Holding		~~TW common stock~~Utility Holding, LLC, a wholly-owned subsidiary of CenterPoint Energy
VCC		Vectren Capital Corp., a wholly-owned subsidiary of Vectren
Vectren		Vectren Corporation, ~~an Indiana corporation~~a wholly-owned subsidiary of CenterPoint Energy as of the Merger Date
VEDO		Vectren Energy Delivery of Ohio, Inc., a wholly-owned subsidiary of Vectren
VIE		Variable interest entity
Vistra Energy Corp.		Texas-based energy company focused on the competitive energy and power generation markets
VRP		Voluntary Remediation Program
VUHI		Vectren Utility Holdings, Inc., a wholly-owned subsidiary of Vectren
ZENS		2.0% Zero-Premium Exchangeable Subordinated Notes due 2029
ZENS-Related Securities		As of both June 30, 2019 and December 31, 2018, consisted of AT&T Common and Charter Common ~~and as of December 31, 2017, consisted of Charter Common, Time Common and TW Common~~
~~2017~~2018 Form 10-K		Annual Report on Form 10-K for the fiscal year ended December 31, ~~2017~~2018


◦	recording of ~~non-cash~~ goodwill, long-lived asset or other than temporary impairment charges by or related to Enable;


					June 30, 2019		December 31, 2018
	June 30, 2018		December 31, 2017		(in millions)
Current Assets:
Cash and cash equivalents ($253 and $230 related to VIEs, respectively)	$	328	$	260
Cash and cash equivalents ($260 and $335 related to VIEs, respectively)					$	271	$	4,231
Investment in marketable securities	584		960		687		540
Accounts receivable ($112 and $73 related to VIEs, respectively), less bad debt reserve of $21 and $19, respectively	958		1,000
Accounts receivable ($77 and $56 related to VIEs, respectively), less bad debt reserve of $27 and $18, respectively					1,173		1,190
Accrued unbilled revenues	207		427		365		378
Natural gas inventory	152		222		212		194
Materials and supplies	192		175		267		200
Non-trading derivative assets	74		110		101		100
Taxes receivable	39		—		69		—
Prepaid expenses and other current assets ($37 and $35 related to VIEs, respectively)	167		241
Prepaid expenses and other current assets ($33 and $34 related to VIEs, respectively)					181		192
Total current assets	2,701		3,395		3,326		7,025

Property, Plant and Equipment:
Property, plant and equipment	19,585		19,031		29,552		20,267
Less: accumulated depreciation and amortization	6,188		5,974		9,620		6,223
Property, plant and equipment, net	13,397		13,057		19,932		14,044

Other Assets:
Goodwill	867		867		5,179		867
Regulatory assets ($1,293 and $1,590 related to VIEs, respectively)	2,067		2,347
Regulatory assets ($895 and $1,059 related to VIEs, respectively)					2,228		1,967
Notes receivable – unconsolidated affiliate					4		—
Non-trading derivative assets	46		44		44		38
Investment in unconsolidated affiliate	2,451		2,472
Investment in unconsolidated affiliates					2,470		2,482
Preferred units – unconsolidated affiliate	363		363		363		363
Intangible assets, net					370		65
Other	216		191		273		158
Total other assets	6,010		6,284		10,931		5,940

Total Assets	$	22,108	$	22,736	$	34,189	$	27,009


◦	competitive conditions in the midstream industry, and actions taken by Enable’s customers and competitors, including the extent and timing of the entry of additional competition in the markets served by Enable;


◦	the demand for crude oil, natural gas, NGLs and transportation and storage services;


◦	environmental and other governmental regulations, including the availability of drilling permits and the regulation of hydraulic fracturing;


◦	~~the availability and prices of raw materials and services for current and future construction projects;~~



Recently Adopted Accounting Standards
ASU Number and Name	Description	Date of Adoption	Financial Statement Impact upon Adoption
ASU ~~2014-09- Revenue from Contracts with Customers~~2016-02- Leases (Topic ~~606)~~842) and related amendments	~~This standard~~ASU 2016-02 provides a comprehensive new ~~revenue recognition~~lease model that requires ~~revenue~~lessees to ~~be recognized in a manner that depicts the transfer~~recognize assets and liabilities for most leases and would change certain aspects of ~~goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services.~~ lessor accounting. Transition method: modified retrospective	January 1, ~~2018~~	Note 4 addresses the disclosure requirements. Adoption of the standard did not result in significant changes to revenue recognition. A substantial amount of the Registrants’ revenues are tariff and/or derivative based, which were not significantly impacted by these ASUs.
ASU 2017-05- Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets	This standard clarifies when and how to apply ASC 610-20, which was issued as part of ASU 2014-09. It amends or supersedes the guidance in ASC 350 and ASC 360 on determining a gain or loss recognized upon the derecognition of nonfinancial assets. ~~Transition method:~~ ~~modified retrospective~~	~~January 1, 2018~~	ASU 2017-05 eliminates industry specific guidance, including ASC 360-20 Property, Plant, and Equipment - Real Estate Sales, for the recognition of gains or losses upon the sale of in-substance real estate. CenterPoint Energy and CERC elected to apply the practical expedient upon adoption to only evaluate transactions that were not determined to be complete as of the date of adoption. Subsequent to adoption, gains or losses on sales or dilution events in CenterPoint Energy’s or CERC’s investment in Enable may result in gains or losses recognized in earnings. See Note 9 for further discussion.
~~ASU 2016-01-Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities~~ ~~ASU 2018-03-Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities~~	This standard requires equity investments that do not result in consolidation and are not accounted for under the equity method to be measured at fair value and to recognize any changes in fair value in net income unless the investments qualify for the new practicability exception. It does not change the guidance for classifying and measuring investments in debt securities and loans. It also changes certain disclosure requirements and other aspects related to recognition and measurement of financial assets and financial liabilities. ~~Transition method:~~ ~~cumulative-effect adjustment to beginning retained earnings, and two features prospective~~	~~January 1, 2018~~2019	The ~~adoption~~Registrants adopted the standard and recognized a right-of-use asset and lease liability on their statement of ~~this standard did not have an~~financial position with no material impact on ~~the Registrants’ financial position,~~their results of operations orand cash flows. The Registrants elected the practicability exception for investments without a readily determinable fair value to be measured at cost. This includes the Series A Preferred Units in Enable, which were previously accounted for under the cost method. See Note 919 for ~~further discussion.~~
~~ASU 2016-15- Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~	This standard provides clarifying guidance on the classification of certain cash receipts and payments in the statement of cash flows and eliminates the variation in practice related to such classifications. ~~Transition method:retrospective~~	~~January 1, 2018~~	The adoption did not have a material impact on the Registrants’ financial position, results of operations or disclosures. However, CenterPoint Energy’s and Houston Electric’s Condensed Statements of Consolidated Cash Flows reflect an increase in investing activities and a corresponding decrease in operating activities of $1 million and $3 million for the six months ended June 30, 2018 and 2017, respectively, due to the requirement that cash proceeds from COLI policies be classified as cash inflows from investing activity.
~~ASU 2016-18- Statement of Cash Flows (Topic 230): Restricted Cash~~	This standard requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. As a result, the statement of cash flows will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more ~~than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet.~~ ~~Transition method:~~ ~~retrospective~~	~~January 1, 2018~~	The adoption of this standard did not have an impact on the Registrants’ financial position, results of operations or disclosures. However, CenterPoint Energy’s and Houston Electric’s Condensed Statements of Consolidated Cash Flows are reconciled to cash, cash equivalents and restricted cash, resulting in a decrease in investing activities of $2 million and an increase in investing activities of $8 million for the six months ended June 30, 2018 and 2017, respectively.information.



~~Recently Adopted Accounting Standards~~
~~ASU Number and Name~~	~~Description~~	~~Date of Adoption~~	~~Financial Statement Impact~~ ~~upon Adoption~~
~~ASU 2017-01- Business Combinations (Topic 805): Clarifying the Definition of a Business~~	This standard revises the definition of a business. If substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, then under ASU 2017-01, the asset or group of assets is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs to be more closely aligned with how outputs are described in ASC 606. ~~Transition method:~~ ~~prospective~~	~~January 1, 2018~~	The adoption of this revised definition will reduce the number of transactions that are accounted for as a business combination, and therefore may have a potential impact on the Registrants’ accounting for future acquisitions.
~~ASU 2017-04- Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~	This standard eliminates Step 2 of the goodwill impairment test, which required a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ~~Transition method:~~ ~~prospective~~	~~January 1, 2018~~	~~The adoption of this standard will have an impact on CenterPoint Energy’s and CERC’s future calculation of goodwill impairments if an impairment is identified.~~
~~ASU 2017-07- Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~	This standard requires an employer to report the service cost component of the net periodic pension cost and postretirement benefit cost in the same line item(s) as other employee compensation costs arising from services rendered during the period; all other components will be presented separately from the line item(s) that includes the service cost and outside of any subtotal of operating income. In addition, only the service cost component will be eligible for capitalization in assets. ~~Transition method:~~ ~~retrospective for the presentation of the service cost component and other components; prospective for the capitalization of the service cost component~~	~~January 1, 2018~~	The adoption of this standard did not have a material impact on the Registrants’ financial position, results of operations, cash flows or disclosures; however, it resulted in the increases to operating income and corresponding decreases to other income reported in the table below. Other components previously capitalized in assets will be recorded as regulatory assets in the Registrants’ rate-regulated businesses, prospectively.
~~ASU 2017-09- Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting~~	This standard clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as a modification. Entities will apply the modification accounting guidance if the value, vesting conditions or classification of the award changes. ~~Transition method:~~ ~~prospective~~	~~January 1, 2018~~	~~The adoption of this standard will have an impact on CenterPoint Energy’s accounting for future changes to share-based payment awards.~~



Issued, Not Yet Effective Accounting Standards
ASU Number and Name	Description	Effective Date ~~of Adoption~~	Financial Statement Impact upon Adoption
ASU ~~2016-02- Leases~~2016-13- Financial Instruments-Credit Losses (Topic ~~842)~~326): Measurement of Credit Losses on Financial Instruments	This standard, including standards amending this standard, requires a new model called CECL to estimate credit losses for (1) financial assets subject to credit losses and ~~related amendments~~measured at amortized cost and (2) certain off-balance sheet credit exposures. Upon initial recognition of the exposure, the CECL model requires an entity to estimate the credit losses expected over the life of an exposure based on historical information, current information and reasonable and supportable forecasts, including estimates of prepayments. ~~ASU 2018-01- Leases (Topic 842) Land Easement Practical Expedient for~~ Transition ~~to Topic 842~~method: modified retrospective	~~ASU 2016-02 provides a comprehensive new lease model that requires lessees to recognize assets and liabilities for most leases and would change certain aspects of lessor accounting.~~ ~~Transition method: modified retrospective~~ ASU 2018-01 allows entities to elect not to assess whether existing land easements that were not previously accounted for in accordance with ASC 840 Leases under ASC 842 Leases when transitioning to the new leasing standard.	January 1, ~~2019~~ 2020 Early adoption is permitted	The Registrants will elect the practical expedient on existing easements provided by ASU 2018-01 and are evaluating other available transitional practical expedients. The Registrants are in the process of reviewing contracts to identify leases as defined in ASU 2016-02 and expect to recognize on the statements of financial position right-of-use assets and lease liabilities for the majority of their respective leases that are currently ~~classified as operating leases. The Registrants are continuing to assess~~assessing the impact that ~~adoption of these standards~~this standard will have on their financial position, results of operations, cash flows and disclosures.
ASU ~~2017-12- Derivatives and Hedging~~2018-13- Fair Value Measurement (Topic ~~815)~~820): ~~Targeted Improvements~~Disclosure Framework-Changes to ~~Accounting~~the Disclosure Requirements for ~~Hedging Activities~~Fair Value Measurement	This standard ~~expands an entity’s ability to hedge nonfinancial~~eliminates, modifies and ~~financial risk components and reduce complexity in~~adds certain disclosure requirements for fair value hedges of interest rate risk. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness, eases certain documentation and assessment requirements and updates the presentation and disclosure requirements. measurements. Transition ~~method:~~ ~~cumulative-effect adjustment for elimination of the separate measurement of ineffectiveness;~~method: prospective for ~~presentation~~additions and ~~disclosure~~one modification and retrospective for all other amendments	Adoption of eliminations and modifications as of September 30, 2018; Additions will be adopted January 1, ~~2019~~ 2020	The adoption of this standard did not impact the Registrants’ financial position, results of operations or cash flows. Note 8 reflects the disclosures modified upon adoption.
ASU 2018-15- Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract	This standard aligns accounting for implementation costs incurred in a cloud computing arrangement that is accounted for as a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The update also prescribes the balance sheet, income statement, and cash flow classification of the capitalized implementation costs and related amortization expense and requires additional quantitative and qualitative disclosures. Transition method: retrospective or prospective	January 1, 2020 Early adoption is permitted	The adoption of this standard will allow the Registrants to capitalize certain implementation costs incurred in cloud computing arrangements that are accounted for as service contracts. The Registrants are currently assessing the impact that adoption of this standard will have on their financial position, results of operations, cash flows and disclosures.
~~ASU 2018-02-Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income~~	This standard allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA and requires entities to provide certain disclosures regarding stranded tax effects. ~~Transition method:~~ ~~either in the period of adoption or retrospective~~	~~January 1, 2019~~ ~~Early adoption is permitted~~	The adoption of this standard will allow the Registrants to reclass stranded deferred tax adjustments primarily related to benefit plans from other comprehensive income to retained earnings. The Registrants are currently assessing the impact that adoption of this standard will have on their financial position and disclosures.



Cash and cash equivalents	$	16
Other current assets	598
Property, plant and equipment, net	5,146
Identifiable intangibles	322
Regulatory assets	338
Other assets	151
Total assets acquired	6,571
Current liabilities	690
Regulatory liabilities	944
Other liabilities	860
Long-term debt	2,401
Total liabilities assumed	4,895
Net assets acquired	1,676
Goodwill	4,306
Total purchase price consideration	$	5,982



	Weighted Average Useful Lives	Estimated Fair Value
	(in years)	(in millions)
Operation and maintenance agreements	24	$	12
Customer relationships	18	220
Construction backlog	1	28
Trade names	10	62
Total		$	322



	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
	(in millions)
Operating revenues	$	688	$	1,161
Net income	38		19


(1)	Pro forma net income was adjusted to exclude $10 million and $27 million, respectively, of Vectren and CenterPoint Energy Merger-related transaction costs incurred in 2018 and reflected in the historical income statements.


(3)	Pro forma net income was adjusted to include $46 million and $1 million, respectively, of Vectren and CenterPoint Energy Merger-related transaction costs incurred from July 1, 2018 to June 30, 2019.



	Three Months Ended June 30, 2019
	Houston Electric T&D (1)			Indiana Electric Integrated (1)		Natural Gas Distribution (1)			Energy Services (2)			Infrastructure Services (2)			Corporate and Other (2)		Total
	(in millions)
Revenue from contracts	$	768		$	140	$	657		$	87		$	326		$	78	$	2,056
Derivatives income	—			—		—			768			—			—		768
Other (3)	(3		)	—		3			—			—			2		2
Eliminations	—			—		(10		)	(17		)	(1		)	—		(28		)
Total revenues	$	765		$	140	$	650		$	838		$	325		$	80	$	2,798

	Six Months Ended June 30, 2019
	Houston Electric T&D (1)			Indiana Electric Integrated (1) (4)		Natural Gas Distribution (1) (4)			Energy Services (2)			Infrastructure Services (2) (4)			Corporate and Other (2) (4)		Total
	(in millions)
Revenue from contracts	$	1,458		$	223	$	2,063		$	260		$	472		$	119	$	4,595
Derivatives income	3			—		—			1,841			—			—		1,844
Other (3)	(7		)	—		(4		)	—			—			3		(8		)
Eliminations	—			—		(20		)	(81		)	(1		)	—		(102		)
Total revenues	$	1,454		$	223	$	2,039		$	2,020		$	471		$	122	$	6,329


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended June 30, 2018
	2018			2017			2018			2017			Houston Electric T&D (1)			Indiana Electric Integrated (1)		Natural Gas Distribution (1)			Energy Services (2)			Infrastructure Services (2)		Corporate and Other (2)		Total
	(in millions)												(in millions)
Revenue from contracts	$	860		$	758		$	1,621		$	1,402		$	860		$	—	$	509		$	78		$	—	$	2	$	1,449
Derivatives income													—			—		—			782			—		—		782
Other (3)	(6		)	(6		)	(12		)	(12		)	(6		)	—		(14		)	—			—		2		(18		)
Eliminations													—			—		(8		)	(19		)	—		—		(27		)
Total revenues													$	854		$	—	$	487		$	841		$	—	$	4	$	2,186
	$	854		$	752		$	1,609		$	1,390
													Six Months Ended June 30, 2018
													Houston Electric T&D (1)			Indiana Electric Integrated (1)		Natural Gas Distribution (1)			Energy Services (2)			Infrastructure Services (2)		Corporate and Other (2)		Total
													(in millions)
Revenue from contracts													$	1,621		$	—	$	1,695		$	256		$	—	$	3	$	3,575
Derivatives income													(4		)	—		—			1,889			—		—		1,885
Other (3)													(12		)	—		(47		)	—			—		5		(54		)
Eliminations													—			—		(18		)	(47		)	—		—		(65		)
Total revenues													$	1,605		$	—	$	1,630		$	2,098		$	—	$	8	$	5,341


(1)	Reflected in Utility revenues in the Condensed Statements of Consolidated Income.


(2)	Reflected in Non-utility revenues in the Condensed Statements of Consolidated Income.


(4)	Reflects revenues from Vectren subsidiaries for the period from February 1, 2019 to June 30, 2019.



	Accounts Receivable		Other Accrued Unbilled Revenues			Contract Assets		Contract Liabilities
	(in millions)
Opening balance as of December 31, 2018 (1)	$	763	$	575		$	37	$	47
Closing balance as of June 30, 2019	831		362			56		54
Increase (decrease)	$	68	$	(213	)	$	19	$	7


(1)	Opening balances related to Vectren are as of February 1, 2019.



	Rolling 12 Months		Thereafter		Total
	(in millions)
Revenue expected to be recognized on contracts in place as of June 30, 2019:
Fixed price (bid)	$	317	$	—	$	317
	$	317	$	—	$	317