Table of Directors effective immediately. Messrs. Lesar and Smitherman have been elected to serve as directors of CenterPoint Energy until the expiration of their respective terms on the date of its annual meeting of shareholders in 2021 and until their successors are elected and qualified. Messrs. Lesar and Smitherman are expected to stand for election as directors at the annual meeting of shareholders in 2021. Messrs. Lesar and Smitherman will serve on the Board of Directors’ newly established Business Review and Evaluation Committee, which will assist the Board in evaluating and optimizing the various businesses, assets and ownership interests currently held by CenterPoint Energy.Contents

CENTERPOINT ENERGY CONSOLIDATED RESULTS OF OPERATIONS

For information regarding factors that may affect the future results of our consolidated operations, please read “Risk Factors” in Item 1A of Part I of the Registrants’ combined 2019 Form 10-K and in Item 1A of Part II of this Form 10-Q.

Three Months Ended March 31,
2020 2019

Revenues $ 2,167
$ 2,229
Expenses 1,950
2,018
Operating Income 217
211
Interest Expense and Other Finance Charges (139 ) (121 )
Interest Expense on Securitization Bonds (8 ) (12 )
Equity in Earnings of Unconsolidated Affiliates, net (1,475 ) 62
Interest Income —
12
Interest Income from Securitization Bonds 1
2
Other Income (Expense), net 4
3
Income (Loss) from Continuing Operations Before Income Taxes (1,400 ) 157
Income Tax Expense (Benefit) (347 ) 14
Income (Loss) from Continuing Operations (1,053 ) 143
Income (Loss) from Discontinued Operations (net of tax expense (benefit) of ($17) and $8, respectively) (146 ) 26
Net Income (Loss) (1,199 ) 169
Preferred Stock Dividend Requirement 29
29
Income (Loss) Available to Common Shareholders $ (1,228 ) $ 140
Basic Earnings (Loss) Per Common Share:
Basic earnings (loss) per common share - continuing operations $ (2.15 ) $ 0.23
Basic earnings (loss) per common share - discontinued operations (0.29 ) 0.05
Basic Earnings (Loss) Per Common Share $ (2.44 ) $ 0.28
Diluted Earnings (Loss) Per Common Share:
Diluted earnings (loss) per common share - continuing operations $ (2.15 ) $ 0.23
Diluted earnings (loss) per common share - discontinued operations (0.29 ) 0.05
Diluted Earnings (Loss) Per Common Share $ (2.44 ) $ 0.28
Income (loss) available to common shareholders for the three and nine months ended September 30, 2020 and 2019 was as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2020		2019		Increase (Decrease)		2020		2019			Increase (Decrease)
	(in millions)
Houston Electric T&D	$	157	$	185	$	(28)	$	281	$	315		$	(34)
Indiana Electric Integrated	31		34		(3)		(121)		41		(1)	(162)
Natural Gas Distribution	5		6		(1)		242		149		(2)	93
Total Utility Operations	193		225		(32)		402		505			(103)
Midstream Investments (3)	(62)		50		(112)		(1,165)		124			(1,289)
Corporate & Other (4)	(56)		(53)		(3)		(155)		(172)			17
Discontinued Operations	(6)		19		(25)		(182)		89			(271)
Total CenterPoint Energy	$	69	$	241	(172)		$	(1,100)	$	546		(1,646)

(1)Represents February 1, 2019 through September 30, 2019 results only due to the Merger.

(2)Includes only February 1, 2019 through September 30, 2019 results of acquired natural gas businesses only due to the Merger.

(3)For a discussion of earnings from CenterPoint Energy’s equity investment in Enable, see Note 9 to the Interim Condensed Financial Statements.

(4)Includes energy performance contracting and sustainable infrastructure services through ESG, unallocated corporate costs, interest income and interest expense, intercompany eliminations and the reduction of income allocated to preferred shareholders.

Three months ended ~~March 31,~~September 30, 2020 compared to three months ended ~~March 31,~~September 30, 2019

~~CenterPoint Energy reported a loss~~Income available to common shareholders decreased $172 million primarily due to:

•our share of ~~$1,228 million ($2.44 loss per diluted common share) for~~Enable’s impairment of an equity method investment and decreased earnings at Enable further discussed in Note 9 to the ~~three~~Interim Condensed Financial Statements; and

•impacts related to COVID-19; and

•increased preferred stock dividend requirements.

These impacts were offset by the following:

•rate relief; and

•continued customer growth.

Nine months ended ~~March 31,~~September 30, 2020 compared to ~~income~~nine months ended September 30, 2019

Income available to common shareholders decreased $1,646 million primarily due to:

•the impairment of ~~$140 million ($0.28~~our investment in Enable, our share of Enable’s impairment of an equity method investment and decreased earnings at Enable further discussed in Note 9 to the Interim Condensed Financial Statements;

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•the impairment of Indiana Electric Integrated further discussed in Note 10 to the Interim Condensed Financial Statements;

•loss and impairments on held for sale of the Infrastructure Services and Energy Services Disposal Groups;

•impacts related to COVID-19; and

•increased preferred stock dividend requirements.

These impacts were offset by the following:

•rate relief;

•continued customer growth;

•operation and maintenance expense discipline; and

•the impact of nine months in 2020 versus eight months in 2019 for acquired businesses.

Discontinued Operations. On February 3, 2020, CenterPoint Energy, through its subsidiary VUSI, entered into the Securities Purchase Agreement to sell the Infrastructure Services Disposal Group. Accordingly, the previously reported Infrastructure Services reportable segment has been eliminated. The transaction closed on April 9, 2020. For further information, see Note 3 to the Interim Condensed Financial Statements.

Additionally, on February 24, 2020, CenterPoint Energy, through its subsidiary CERC Corp., entered into the Equity Purchase Agreement to sell the Energy Services Disposal Group. Accordingly, the previously reported Energy Services reportable segment has been eliminated. The transaction closed on June 1, 2020. For further information, see Note 3 to the Interim Condensed Financial Statements.

Income Tax Expense. For a discussion of effective tax rate per ~~diluted common share)~~period, see Note 13 to the Interim Condensed Financial Statements.

CENTERPOINT ENERGY’S RESULTS OF OPERATIONS BY REPORTABLE SEGMENT

As of January 1, 2020, each Registrant’s CODM views net income as the measure of profit or loss for the ~~three months ended March 31, 2019.~~

~~The decrease~~reportable segments rather than the previous measure of ~~$1,368 million~~operating income. Segment results include inter segment interest income and expense, which may result in ~~income available~~inter segment profit and loss. Certain prior year amounts have been reclassified to ~~common shareholders was primarily due~~conform to the ~~following key factors:~~current year presentation.

~~a $1,151 million decrease in net income from~~Following the ~~Midstream Investments reportable segment further discussed under Results~~divestiture of ~~Operations by Reportable Segment below;~~

~~a $172 million increase in loss from discontinued operations, net related to~~ the Infrastructure Services and Energy Services Disposal Groups, ~~further discussed~~which accounted for a substantial portion of CenterPoint Energy’s non-utility activities, CenterPoint Energy is now focused on its utility operations conducted through three reportable segments, Houston Electric T&D, Indiana Electric Integrated and Natural Gas Distribution, which are collectively referred to herein as Utility Operations. The following discussion of results of operations by reportable segment concentrates on CenterPoint Energy’s Utility Operations.

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Houston Electric T&D (CenterPoint Energy)

For information regarding factors that may affect the future results of operations of the Houston Electric T&D reportable segment, please read “Risk Factors — Risk Factors Associated with Our Consolidated Financial Condition,” “— Risk Factors Affecting Electric Generation, Transmission and Distribution Businesses” and “— Other Risk Factors Affecting Our Businesses or CenterPoint Energy’s Interests in Enable Midstream Partners, LP” in Item 1A of Part I of the Registrants’ combined 2019 Form 10-K and in Item 1A of Part II of this Form 10-Q.

The following table provides summary data of the Houston Electric T&D reportable segment:


	Three Months Ended September 30,									Nine Months Ended September 30,
	2020			2019			Increase (Decrease)			2020			2019			Increase (Decrease)
	(in millions, except operating statistics)
Revenues	$	828		$	859		$	(31)		$	2,186		$	2,313		$	(127)
Expenses:
Operation and maintenance	381			359			22			1,104			1,086			18
Depreciation and amortization	151			168			(17)			420			519			(99)
Taxes other than income taxes	64			63			1			192			186			6
Total expenses	596			590			6			1,716			1,791			(75)
Operating Income	232			269			(37)			470			522			(52)
Other Income (Expense)
Interest expense and other finance charges	(50)			(50)			—			(149)			(154)			(5)
Interest income	1			9			(8)			3			22			(19)
Other income (expense), net	—			(2)			2			4			(5)			9
Income from Continuing Operations Before Income Taxes	183			226			(43)			328			385			(57)
Income tax expense	26			41			(15)			47			70			(23)
Net Income (1)	$	157		$	185		(28)			$	281		$	315		(34)



Throughput (in GWh):
Residential	11,237			11,224			—		%	25,028			24,392			3		%
Total	28,031			28,379			(1)		%	71,293			71,417			—		%
Weather (percentage of 10-year average for service area):
Cooling degree days	106		%	110		%	(4)		%	109		%	106		%	3		%
Heating degree days	—		%	—		%	—		%	68		%	93		%	(25)		%
Number of metered customers at end of period:
Residential	2,291,038			2,232,740			3		%	2,291,038			2,232,740			3		%
Total	2,586,093			2,523,450			2		%	2,586,093			2,523,450			2		%

(1)Net income for CenterPoint Energy’s Houston Electric T&D reportable segment differs from net income for Houston Electric due to weather hedge gains (losses) recorded at CenterPoint Energy that are not recorded at Houston Electric. Utility revenues in CenterPoint Energy’s Condensed Statements of Consolidated Income included weather hedge gains (losses) of $-0- and $4 million for the three and nine months ended September 30, 2020, respectively, and $-0- and $3 million for the three and nine months ended September 30, 2019, respectively, for CenterPoint Energy’s Houston Electric T&D reportable segment. See Note 37(a) to the Interim Condensed Financial ~~Statements; and~~Statements for more information on weather hedges.

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The following table provides variance explanations by major income statement caption for the Houston Electric T&D reportable segment:


	Increase (Decrease)
	Three Months Ended September 30, 2020 vs 2019		Nine Months Ended September 30, 2020 vs 2019
	(in millions)
Revenues
Customer rates and impact of the change in rate design	$	(119)	$	(205)
Impacts of COVID-19	(15)		(32)
Weather impacts and other usage	2		3
Impacts from increased peak demand in 2019, collected in rates in 2020	4		11
Transmission Revenues, including TCOS and TCRF and impact of the change in rate design, inclusive of costs billed by transmission providers	126		230
Refund of protected and unprotected EDIT, offset in income tax expense	(14)		(22)
Equity return, related to the annual true-up of transition charges for amounts over or under collected in prior periods	(4)		(14)
Customer growth	11		27
Miscellaneous revenues, primarily related to service connections	3		4
AMS, offset in depreciation and amortization below	—		(2)
Bond Companies	(25)		(126)
Energy efficiency, offset in operation and maintenance	—		(1)
Total	$	(31)	$	(127)
Operation and maintenance
Transmission costs billed by transmission providers, offset in revenues	$	15	$	41
Labor and benefits, primarily due to timing of short-term incentive compensation	6		(2)
Contract services	(4)		(10)
Support services	6		1
All other operation and maintenance expense, including materials and supplies and insurance	(4)		(6)
Merger severance costs	3		(3)
Bond Companies	—		(2)
Energy efficiency, offset in revenues	—		(1)
Total	$	22	$	18
Depreciation and amortization
Ongoing additions to plant-in-service	$	7	$	21
AMS, offset by revenues	—		(2)
Bond Companies	(24)		(118)
Total	$	(17)	$	(99)
Taxes other than income taxes
Incremental capital projects placed in service	$	1	$	4
Franchise fees and other taxes	—		2
Total	$	1	$	6
Interest expense and other finance charges
Debt to fund incremental capital projects	$	2	$	5
Bond Companies	(2)		(10)
Total	$	—	$	(5)
Interest income
Investments in CenterPoint Energy Money Pool	$	(7)	$	(16)
Bond Companies	(1)		(3)
Total	$	(8)	$	(19)
Other income (expense), net
Reduction to non-service benefit cost	$	2	$	9

Total	$	2	$	9

Income Tax Expense. For a ~~$162 million decrease in net income from~~discussion of effective tax rate per period by Registrant, see Note 13 to the Interim Condensed Financial Statements.

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Indiana Electric Integrated (CenterPoint Energy)

For information regarding factors that may affect the future results of operations of the Indiana Electric Integrated reportable segment, ~~further discussed under Results~~please read “Risk Factors — Risk Factors Associated with Our Consolidated Financial Condition,” “— Risk Factors Affecting Electric Generation, Transmission and Distribution Businesses” and “— Other Risk Factors Affecting Our Businesses or CenterPoint Energy’s Interests in Enable Midstream Partners, LP” in Item 1A of ~~Operations~~Part I of the Registrants’ combined 2019 Form 10-K and in Item 1A of Part II of this Form 10-Q.

The following table provides summary data of CenterPoint Energy’s Indiana Electric Integrated reportable segment:


	Three Months Ended September 30,									Nine Months Ended September 30,
	2020			2019			Increase (Decrease)			2020			2019 (1)			Increase (Decrease)
	(in millions, except operating statistics)
Revenues	$	157		$	165		$	(8)		$	414		$	388		$	26
Utility natural gas, fuel and purchased power	41			46			(5)			108			112			(4)
Revenues less Utility natural gas, fuel and purchased power	116			119			(3)			306			276			30
Expenses:
Operation and maintenance	46			42			4			128			136			(8)
Depreciation and amortization	26			25			1			77			66			11
Taxes other than income taxes	4			4			—			12			10			2
Goodwill impairment	—			—			—			185			—			185
Total expenses	76			71			5			402			212			190
Operating Income	40			48			(8)			(96)			64			(160)
Other Income (Expense)
Interest expense and other finance charges	(5)			(6)			(1)			(16)			(16)			—

Other income, net	3			1			2			6			3			3
Income (Loss) from Continuing Operations Before Income Taxes	38			43			(5)			(106)			51			(157)
Income tax expense	7			9			(2)			15			10			5
Net Income (Loss)	$	31		$	34		(3)			$	(121)		$	41		(162)



Throughput (in GWh):
Residential	438			457			(4)		%	1,085			978			11		%
Total	1,421			1,555			(9)		%	3,630			3,568			2		%
Weather (percentage of 10-year average for service area):
Cooling degree days	104		%	113		%	(9)		%	104		%	114		%	(10)		%
Heating degree days	99		%	99		%	—		%	93		%	95		%	(2)		%
Number of metered customers at end of period:
Residential	129,817			128,381			1		%	129,817			128,381			1		%
Total	148,925			147,337			1		%	148,925			147,337			1		%

(1)Represents February 1, 2019 through September 30, 2019 results only due to the Merger.

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The following table provides variance explanations by ~~Reportable Segment below.~~major income statement caption for the Indiana Electric Integrated reportable segment:


	Increase (Decrease)
	Three Months Ended September 30, 2020 vs 2019		Nine Months Ended September 30, 2020 vs 2019
	(in millions)
Revenues less Utility natural gas, fuel and purchased power
Impacts of COVID-19	$	(4)	$	(10)
Weather impacts and other usage	(2)		(3)
Electric infrastructure revenue, primarily from TDSIC	3		9
Nine months in 2020 versus eight months in 2019	—		34
Total	$	(3)	$	30
Operation and maintenance
Generation plant, primarily from increased plant outages in 2019	$	2	$	(8)
Transmission and distribution electric operations and infrastructure	2		1
Support services	1		1
Merger-related severance and incentive compensation costs in 2019	(1)		(19)
Nine months in 2020 versus eight months in 2019	—		17
Total	$	4	$	(8)
Depreciation and amortization
Ongoing additions to plant-in-service	$	1	$	3
Nine months in 2020 versus eight months in 2019	—		8
Total	$	1	$	11
Taxes other than income taxes
Incremental capital projects placed in service	$	—	$	1
Nine months in 2020 versus eight months in 2019	—		1
Total	$	—	$	2
Goodwill impairment
See Note 10 for further information	$	—	$	185
Total	$	—	$	185
Interest expense and other finance charges
Debt refinancing at lower rates	$	(1)	$	—
Total	$	(1)	$	—
Other income (expense), net
AFUDC equity on capital projects	$	2	$	3
Total	$	2	$	3

~~These decreases were partially offset~~

Income Tax Expense. For a discussion of effective tax rate per period by Registrant, see Note 13 to the ~~following:~~Interim Condensed Financial Statements.

~~an $84 million increase~~

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Natural Gas Distribution (CenterPoint Energy)

For information regarding factors that may affect the future results of operations of CenterPoint Energy’s Natural Gas Distribution reportable segment, please read “Risk Factors — Risk Factors Associated with Our Consolidated Financial Condition,” “— Risk Factors Affecting Natural Gas Distribution and Competitive Energy Services Businesses” and “— Other Risk Factors Affecting Our Businesses or CenterPoint Energy’s Interests in ~~net~~Enable Midstream Partners, LP” in Item 1A of Part I of the Registrants’ combined 2019 Form 10-K and in Item 1A of Part II of this Form 10-Q.

The following table provides summary data of CenterPoint Energy’s Natural Gas Distribution reportable segment:


	Three Months Ended September 30,									Nine Months Ended September 30,
	2020			2019			Increase (Decrease)			2020			2019 (1)			Increase (Decrease)
	(in millions, except operating statistics)
Revenues	$	560		$	541		$	19		$	2,519		$	2,629		$	(110)
Cost of revenues (2)	131			136			(5)			888			1,145			(257)
Revenues less Cost of revenues	429			405			24			1,631			1,484			147
Expenses:
Operation and maintenance	239			226			13			738			780			(42)
Depreciation and amortization	115			108			7			339			310			29
Taxes other than income taxes	52			43			9			175			149			26
Total expenses	406			377			29			1,252			1,239			13
Operating Income	23			28			(5)			379			245			134
Other Income (Expense)
Interest expense and other finance charges	(29)			(24)			5			(90)			(71)			19
Interest income	2			5			(3)			5			6			(1)
Other expense, net	—			(5)			5			(2)			(6)			4
Income (Loss) from Continuing Operations Before Income Taxes	(4)			4			(8)			292			174			118
Income tax expense (benefit)	(9)			(2)			(7)			50			25			25
Net Income	$	5		$	6		(1)			$	242		$	149		93



Throughput (in BCF):
Residential	18			16			13		%	157			160			(2)		%
Commercial and Industrial	84			88			(5)		%	317			326			(3)		%
Total	102			104			(2)		%	474			486			(2)		%
Weather (percentage of 10-year average for service area):
Heating degree days	100		%	18		%	82		%	90		%	100		%	(10)		%
Number of metered customers at end of period:
Residential	4,295,169			4,194,232			2		%	4,295,169			4,194,232			2		%
Commercial and Industrial	346,641			344,858			1		%	346,641			344,858			1		%
Total	4,641,810			4,539,090			2		%	4,641,810			4,539,090			2		%

(1)Includes only February 1, 2019 through September 30, 2019 results of acquired natural gas businesses only due to the Merger.

(2)Includes Utility natural gas, fuel and purchased power and Non-utility cost of revenues, including natural gas.

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The following table provides variance explanations by major income ~~from~~statement caption for the Natural Gas Distribution reportable ~~segment further discussed under Results of Operations by Reportable Segment below;~~segment:


	Increase (Decrease)
	Three Months Ended September 30, 2020 vs 2019		Nine Months Ended September 30, 2020 vs 2019
	(in millions)
Revenues less Cost of revenues
Rate increases exclusive of the TCJA impact below	$	24	$	92
Impacts of COVID-19	(4)		(19)
Weather and usage, excluding impacts from COVID-19	(3)		(1)
Customer growth	5		14
Refund of protected and unprotected EDIT, offset in income tax expense	(2)		(1)
Nine months in 2020 versus eight months in 2019 in Indiana and Ohio jurisdictions	—		65
Non-volumetric and miscellaneous revenue, excluding impacts from COVID-19	2		4
Energy efficiency, offset in operation and maintenance below	1		—
Gross receipts tax, offset in taxes other than income taxes below	1		(7)
Total	$	24	$	147
Operation and maintenance
Labor and benefits, primarily from lower headcount in 2019	$	13	$	4
Contracted services	(8)		(16)
Support services	8		7
Other operating and maintenance expense, including material and supplies and insurance	(2)		(6)
Nine months in 2020 versus eight months in 2019 in Indiana and Ohio jurisdictions	—		14
Energy efficiency, offset in revenues less cost of revenues above	1		—
Merger severance costs	1		(45)
Total	$	13	$	(42)
Depreciation and amortization
Incremental capital projects placed in service	$	7	$	18
Nine months in 2020 versus eight months in 2019 in Indiana and Ohio jurisdictions	—		11
Total	$	7	$	29
Taxes other than income taxes
Gross receipts tax, offset in revenues less cost of revenues above	$	1	$	(7)
Nine months in 2020 versus eight months in 2019 in Indiana and Ohio jurisdictions	—		6
Incremental capital projects placed in service	8		27
Total	$	9	$	26
Interest expense and other finance charges
Debt to fund incremental capital projects	$	5	$	16
Nine months in 2020 versus eight months in 2019 in Indiana and Ohio jurisdictions	—		3

Total	$	5	$	19
Interest income
Money pool investments with CenterPoint Energy	$	(3)	$	(1)
Total	$	(3)	$	(1)
Other income (expense), net
Reduction to non-service benefit cost	$	5	$	4
Total	$	5	$	4

~~a $26 million increase in net income from Corporate and Other further discussed under Results of Operations by Reportable Segment below; and~~

~~a $7 million increase in net income from the Houston Electric T&D reportable segment further discussed under Results of Operations by Reportable Segment below.~~

Income Tax ~~Expense - Continuing Operations~~

~~CenterPoint Energy’s~~Expense. For a discussion of effective tax rate from continuing operations reported for the three months ended March 31, 2020 was 25% compared to 9% for the three months ended March 31, 2019. The higher effective tax rate for the three months ended March 31, 2020 was primarily due to lower earnings from the impairment of CenterPoint Energy’s investment in Enable. Other effective tax rate drivers include the non-deductible goodwill impairment at the Indiana Electric Integrated reporting unit, the impact of NOL carryback claims allowed under the CARES Act, and an increase in the amount of remeasurement of state deferred tax liabilities for changes in apportionment, the effects of which were compoundedper period by ~~the book loss in the three months ended March 31, 2020.~~

~~Income Tax Expense - Discontinued Operations~~

CenterPoint Energy’s effective tax rate from discontinued operations reported for the three months ended March 31, 2020 was 10% compared to 24% for the three months ended March 31, 2019. The lower effective tax rate for the three months ended March 31, 2020 was primarily dueRegistrant, see Note 13 to the ~~non-deductible portions~~Interim Condensed Financial Statements.

Table of ~~goodwill impairments on the Energy Services and Infrastructure Services Disposal Groups.~~Contents

HOUSTON ELECTRIC’S MANAGEMENT’S NARRATIVE ANALYSIS

OF CONSOLIDATED RESULTS OF OPERATIONS

Houston Electric’s results of operations are affected by seasonal fluctuations in the demand for electricity. Houston Electric’s results of operations are also affected by, among other things, the actions of various governmental authorities having jurisdiction over rates Houston Electric charges, debt service costs, income tax expense, Houston Electric’s ability to collect receivables from REPs and Houston Electric’s ability to recover its regulatory assets. For more information regarding factors that may affect the future results of operations of Houston Electric’s business, please read “Risk Factors — Risk Factors Associated with Our Consolidated Financial Condition,” “— Risk Factors Affecting Electric Generation, Transmission and Distribution Businesses” and “— Other Risk Factors Affecting Our Businesses or CenterPoint Energy’s Interests in Enable Midstream Partners, LP” in Item 1A of Part I of the Registrants’ combined 2019 Form 10-K and in Item 1A of Part II of this Form 10-Q.

Three Months Ended March 31,
2020 2019
(in millions)
Revenues (1)

$ 634

$ 686
Expenses
552

605
Operating Income
82

81
Interest Expense and Other Finance Charges (41 ) (40 )
Interest Expense on Securitization Bonds (8 ) (12 )
Interest Income 1
4
Interest Income from Securitization Bonds 1
2
Other Income (Expense), net 3
(2 )
Income before Income Taxes
38

33
Income Tax Expense 5
6
Net Income
$ 33

$ 27


	Three Months Ended September 30,						Nine Months Ended September 30,
	2020		2019		Increase (Decrease)		2020		2019		Increase (Decrease)
	(in millions)
Net income (1)	$	157	$	185	$	(28)	$	277	$	312	$	(35)


~~(1)~~	Excludes weather hedge gains of $4 million and $3 million for the three months ended March 31, 2020 and 2019, respectively, recorded in Utility revenues on CenterPoint Energy’s Condensed Statements of Consolidated Income. See Note 7(a) to the Interim Condensed Financial Statements for more information on the weather hedge.

(1)Excludes weather hedge gains of $-0- and $4 million for the three and nine months ended September 30, 2020, respectively, and weather hedge gains of $-0- and $3 million for the three and nine months ended September 30, 2019, respectively, recorded in Utility revenues on CenterPoint Energy’s Condensed Statements of Consolidated Income. See Note 7(a) to the Interim Condensed Financial Statements for more information on the weather hedge.

Three months ended ~~March 31,~~September 30, 2020 compared to three months ended ~~March 31,~~September 30, 2019

~~Houston Electric reported net~~Net income ~~of $33~~decreased $28 million ~~for~~primarily due to:

•changes in rates and rate design;

•impacts related to COVID-19;

•depreciation and property taxes related to ongoing additions to plant-in service; and

•reduced interest income from investments in the ~~three~~CenterPoint Energy money pool.

These impacts were offset by continued customer growth.

Nine months ended ~~March 31,~~September 30, 2020 compared to ~~net income of $27 million for the three~~nine months ended ~~March 31, 2019.~~ September 30, 2019

~~The increase of $6~~Net income decreased $35 million primarily due to:

•changes in ~~net~~rates and rate design;

•lower equity return;

•impacts related to COVID-19;

•depreciation and property taxes related to ongoing additions to plant-in service; and

•reduced interest income from investments in the ~~Houston Electric T&D reportable segment is discussed below in Results of Operations~~CenterPoint Energy money pool.

These impacts were offset by ~~Reportable Segment, exclusive of weather hedges recorded at CenterPoint Energy.~~the following:

•continued customer growth; and

•operation and maintenance expense discipline.

Income Tax ~~Expense~~

~~Houston Electric’s~~Expense. For a discussion of effective tax rate ~~reported for~~per period, see Note 13 to the three months ended March 31, 2020 was 13% compared to 18% for the three months ended March 31, 2019. The lower effective tax rate for the three months ended March 31, 2020 was primarily due to an increase in the amount of amortization of the net regulatory EDIT liability.Interim Condensed Financial Statements.

CERC’S MANAGEMENT’S NARRATIVE ANALYSIS OF CONSOLIDATED RESULTS OF OPERATIONS

CERC’s results of operations are affected by seasonal fluctuations in the demand for natural ~~gas and price movements of energy commodities as well as the optimization of margins through natural gas basis differentials.~~gas. CERC’s results of operations are also affected by, among other things, the actions of various federal, state and local governmental authorities having jurisdiction over rates CERC charges, ~~competition in CERC’s various business operations, the effectiveness of CERC’s risk management activities,~~ debt service costs, ~~and~~ income tax ~~expense.~~expense, CERC’s ability to collect receivables from customers and CERC’s ability to recover its regulatory assets. For more information regarding factors that may affect the future results of operations for CERC’s business, please read “Risk Factors — Risk Factors Associated with Our Consolidated Financial Condition,” “— Risk Factors Affecting Natural Gas Distribution and Competitive Energy Services Businesses” and “— Other Risk Factors Affecting Our Businesses or CenterPoint Energy’s Interests in Enable Midstream Partners, LP” in Item 1A of Part I of the Registrants’ combined 2019 Form 10-K and in Item 1A of Part II of this Form 10-Q.

Three Months Ended March 31,
2020 2019
(in millions)
Revenues $ 1,011
$ 1,212
Expenses 811
1,052
Operating Income 200
160
Interest Expense and Other Finance Charges (30 ) (29 )
Other Expense, net (4 ) (3 )
Income from Continuing Operations Before Income Taxes 166
128
Income Tax Expense 35
18
Income from Continuing Operations 131
110
Income (Loss) from Discontinued Operations (net of tax expense (benefit) of ($11) and $8, respectively) (64 ) 28
Net Income $ 67
$ 138
Net income (loss) for the three and nine months ended September 30, 2020 and 2019 was as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2020		2019		Increase (Decrease)		2020		2019		Increase (Decrease)
	(in millions, except per share amounts)
Natural Gas Distribution	$	1	$	5	$	(4)	$	155	$	134	$	21
Corporate & Other (1)	(7)		(15)		8		(13)		(32)		19
Discontinued Operations	2		3		(1)		(66)		57		(123)
Total CERC	$	(4)	$	(7)	$	3	$	76	$	159	$	(83)

(1)Includes unallocated corporate costs, interest income, interest expense and intercompany eliminations.

Three months ended ~~March 31,~~September 30, 2020 compared to three months ended ~~March 31,~~September 30, 2019

~~CERC reported net~~Net income ~~of $67~~increased $3 million ~~for the three months ended March 31, 2020 compared to net income of $138 million for the three months ended March 31, 2019.~~

~~The decrease in net income of $71 million was~~ primarily due ~~to a $92 million decrease in income from discontinued operations, net of tax, discussed further in Note 3 to the Interim Condensed Financial Statements.~~to:

~~This decrease in net income was partially~~•rate relief; and

•continued customer growth.

These impacts were offset by the following:

~~a $15 million increase~~•impacts related to COVID-19;

•labor and benefit costs associated with higher headcount; and

•costs associated with incremental capital projects placed in ~~net income from the Natural Gas Distribution reportable segment discussed further under Results of Operations by Reportable Segment below; and~~service.

~~a $6 million increase in net income from Corporate and Other.~~

~~Income Tax Expense - Continuing Operations~~

~~CERC’s effective tax rate on income from continuing operations for the three~~Nine months ended ~~March 31, 2020 was 21% compared to 14% for the three months ended March 31, 2019. CERC’s higher effective tax rate on income from continuing operations for the three months ended March 31,~~September 30, 2020 compared to ~~the three~~nine months ended ~~March 31,~~September 30, 2019 ~~was~~

Net income decreased $83 million primarily due to:

•impacts related to ~~a decrease~~COVID-19;

•costs associated with incremental capital projects placed in ~~the amount~~service; and

•impairment of ~~amortization of the net regulatory EDIT liability.~~

~~Income Tax Expense - Discontinued Operations~~

CERC’s effective tax rate from discontinued operations reported for the three months ended March 31, 2020 was 15% compared to 22% for the three months ended March 31, 2019. The lower effective tax rate for the three months ended March 31, 2020 was due to the non-deductible portion of goodwill impairment on the Energy Services Disposal Group.

These impacts were offset by the following:

~~RESULTS OF OPERATIONS BY REPORTABLE SEGMENT~~

•rate relief;

•continued customer growth; and

Table of January 1, 2020, the Registrants’ CODM views net income as the measure of profit or loss for the reportable segments rather than the previous measure of operating income. Certain prior year amounts have been reclassified to conform to the current year presentation.Contents

•operation and maintenance expense discipline.

~~Additionally, on~~ February 24, 2020, CenterPoint Energy, through its subsidiary CERC Corp., entered into the Equity Purchase Agreement to sell the Energy Services Disposal Group. Accordingly, the previously reported Energy Services reportable segment has been eliminated. The transaction ~~is expected to close in the second quarter of~~closed on June 1, 2020. For further information, see Note 3 to the Interim Condensed Financial Statements.

AsIncome Tax Expense. For a discussion of ~~March 31, 2020, reportable segments by Registrant were as follows:~~



~~Registrants~~	~~Houston Electric T&D~~	~~Indiana Electric Integrated~~	~~Natural Gas Distribution~~	~~Midstream Investments~~
~~CenterPoint Energy~~	X	X	X	X
~~Houston Electric~~	X
~~CERC~~			X

~~Included in revenues are intersegment sales, which are accounted for as if the sales were to third parties at current market prices. See~~effective tax rate per period, see Note 1613 to the Interim Condensed Financial ~~Statements for details of reportable segments by Registrant.~~

~~Houston Electric T&D (CenterPoint Energy)~~

~~The following table provides summary data of the Houston Electric T&D reportable segment:~~

Three Months Ended March 31,
2020 2019

Utility Revenues:
TDU (1)
$ 600
$ 595
Bond Companies 38
94
Total utility revenues 638
689
Expenses:
Operation and maintenance, excluding Bond Companies 358
366
Depreciation and amortization, excluding Bond Companies 99
93
Taxes other than income taxes 64
62
Bond Companies 31
84
Total expenses 552
605
Operating Income 86
84
Other Income (Expense)
Interest expense and other finance charges (41 ) (40 )
Interest expense on Securitization Bonds (8 ) (12 )
Interest income 1
4
Interest income from Securitization Bonds 1
2
Other income (expense), net 3
(2 )
Income from Continuing Operations Before Income Taxes 42
36
Income tax expense 5
6
Net Income (1)
$ 37
$ 30
Throughput (in GWh):
Residential 5,351
5,183
Total 20,102
19,019
Number of metered customers at end of period:
Residential 2,260,352
2,206,563
Total 2,552,739
2,494,761

~~(1)~~

Net income for CenterPoint Energy’s Houston Electric T&D reportable segment differs from net income for Houston Electric due to weather hedge gains (losses) recorded at CenterPoint Energy that are not recorded at Houston Electric. Utility revenues in CenterPoint Energy’s Condensed Statements of Consolidated Income included weather hedge gains (losses) of $4 million and $3 million for the three months ended March 31, 2020 and 2019, respectively, for CenterPoint Energy’s Houston Electric T&D reportable segment. See Note 7(a) to the Interim Condensed Financial Statements for more information on weather hedges.

Statements.

~~Three months ended March 31, 2020 compared to three months ended March 31, 2019~~

CenterPoint Energy’s Houston Electric T&D reportable segment reported net income of $37 million for the three months ended March 31, 2020, compared to $30 million for the three months ended March 31, 2019.

~~Net income increased $7 million, primarily due to the following key factors:~~

decreased operation and maintenance expenses of $17 million, inclusive of a $6 million decrease in severance costs, primarily due to lower labor and benefits costs, lower support services costs, and lower contract services costs;

CERC’S RESULTS OF OPERATIONS BY REPORTABLE SEGMENT

•
~~customer growth of $7 million from the addition of almost 58,000 customers; and~~

~~a $5 million increase in Other income (expense), net due to income associated with corporate-owned life insurance.~~

~~These increases to net income were partially offset by the following:~~

~~higher depreciation and amortization expense, primarily because of ongoing additions to plant in service, and other taxes of $9 million;~~

~~lower equity return of $5 million, primarily related to the annual true-up of transition charges to correct over-collections that occurred during the preceding 12 months;~~

~~lower miscellaneous revenues of $3 million, primarily related to right-of-way revenues;~~

~~decreased interest income of $3 million, primarily due to lower investments in the CenterPoint Energy money pool; and~~

~~higher transmission costs billed by transmission providers of $9 million, partially offset by higher transmission-related revenues of $7 million.~~

~~Lower depreciation and amortization expenses related to AMS of $1 million were offset by a corresponding decrease in related revenues.~~

~~Indiana Electric Integrated (CenterPoint Energy)~~

For information regarding factors that may affect the future results of operations of the Indiana Electric Integrated reportable segment, please read “Risk Factors — Risk Factors Associated with Our Consolidated Financial Condition,” “— Risk Factors Affecting Electric Generation, Transmission and Distribution Businesses” and “— Other Risk Factors Affecting Our Businesses or CenterPoint Energy’s Interests in Enable Midstream Partners, LP” in Item 1A of Part I of the Registrants’ combined 2019 Form 10-K and in Item 1A of Part II of this Form 10-Q.

~~The following table provides summary data of CenterPoint Energy’s Indiana Electric Integrated reportable segment:~~

Three Months Ended March 31,
2020
2019 (1)

Utility Revenues $ 129
$ 83
Expenses:
Utility natural gas, fuel and purchased power 35
26
Operation and maintenance 44
48
Depreciation and amortization 25
16
Taxes other than income taxes 4
2
Goodwill Impairment 185
—
Total expenses 293
92
Operating Loss (164 ) (9 )
Other Income (Expense):
Interest expense and other finance charges (6 ) (3 )
Other income (expense), net 2
1
Loss from Continuing Operations Before Income Taxes (168 ) (11 )
Income tax expense (benefit) 3
(2 )
Net Loss $ (171 ) $ (9 )
Throughput (in GWh):
Retail 1,078
704
Wholesale 63
58
Total 1,141
762
Number of metered customers at end of period:
Residential 129,233
128,194
Total 148,265
147,047


~~(1)~~	~~Represents February 1, 2019 through March 31, 2019 results only due to the Merger.~~

~~Three months ended March 31, 2020 compared to three months ended March 31, 2019~~

CenterPoint Energy’s Indiana Electric Integrated reportable segment reported a net loss of $171 million for the three months ended March 31, 2020, compared to $9 million for the three months ended March 31, 2019.

~~The net loss increased $162 million as a result of the following key factors:~~

~~a $185 million goodwill impairment charge further discussed in Note 10 to the Interim Condensed Financial Statements;~~

~~a $9 million increase in depreciation and amortization expense from the inclusion of expense for three months in 2020 versus two months included in 2019 due to the Merger on February 1, 2019;~~

~~a $5 million increase in state and federal income taxes driven by growth in earnings and the non-deductible goodwill impairment;~~

~~a $3 million decrease in customer margin due to unfavorable weather not protected by weather normalization mechanisms; and~~

~~a $3 million increase in interest expense from the inclusion of expense for three months in 2020 versus two months included in 2019 due to the Merger on February 1, 2019.~~

~~These increases were partially offset by the following:~~

~~a $34 million increase in electric margin from the inclusion of results for three months in 2020 versus two months included in 2019 due to the Merger on February 1, 2019;~~

~~a $3 million increase in margin associated with the Indiana Electric infrastructure replacement TDSIC program; and~~

a $4 million decrease in operation and maintenance expense inclusive of a $19 million reduction in Merger-related severance and incentive compensation costs in 2019 and a timing related reduction of plant maintenance expenditures of $2 million, partially offset by a $17 million increase from the inclusion of expense for three months in 2020 versus two months included in 2019 due to the Merger on February 1, 2019.

~~Natural Gas Distribution (CenterPoint Energy)~~

For information regarding factors that may affect the future results of operations of CenterPoint Energy’s Natural Gas Distribution reportable segment, please read “Risk Factors — Risk Factors Associated with Our Consolidated Financial Condition,” “— Risk Factors Affecting Natural Gas Distribution and Competitive Energy Services Businesses” and “— Other Risk Factors Affecting Our Businesses or CenterPoint Energy’s Interests in Enable Midstream Partners, LP” in Item 1A of Part I of the Registrants’ combined 2019 Form 10-K and in Item 1A of Part II of this Form 10-Q.

~~The following table provides summary data of CenterPoint Energy’s Natural Gas Distribution reportable segment:~~

Three Months Ended March 31,
2020 2019 (1)

Revenues:
Utility revenues $ 1,306
$ 1,399
Non-utility revenues 12
16
Total revenues 1,318
1,415
Expenses:
Utility natural gas 574
771
Non-utility cost of revenues, including natural gas 6
10
Operation and maintenance 267
310
Depreciation and amortization 111
95
Taxes other than income taxes 67
60
Total expenses 1,025
1,246
Operating Income 293
169
Other Income (Expense):
Interest expense and other finance charges (32 ) (23 )
Interest income 1
1
Other income (expense), net (2 ) (1 )
Income from Continuing Operations Before Income Taxes 260
146
Income tax expense 56
26
Net Income $ 204
$ 120
Throughput (in Bcf):
Residential 107
114
Commercial and industrial 146
136
Total Throughput 253
250
Number of customers at end of period:
Residential 4,266,685
4,219,795
Commercial and industrial 350,009
350,419
Total 4,616,694
4,570,214


~~(1)~~	~~Includes only February 1, 2019 through March 31, 2019 results of acquired natural gas businesses due to the Merger.~~

~~Three months ended March 31, 2020 compared to three months ended March 31, 2019~~

CenterPoint Energy’s Natural Gas Distribution reportable segment reported net income of $204 million for the three months ended March 31, 2020 compared to $120 million for the three months ended March 31, 2019.

~~Net income increased by $84 million primarily as a result of the following key factors:~~

~~a $65 million increase in margin related to an additional month of earnings in 2020 related to the Indiana and Ohio jurisdictions acquired in the Merger on February 1, 2019;~~

~~rate increases of $46 million in Minnesota, Arkansas and Texas, exclusive of the TCJA impact discussed below;~~

a $44 million reduction in operation and maintenance expense, primarily due to a $53 million decrease in Merger-related severance costs in 2019, offset by an additional month of operation and maintenance expense in the Indiana and Ohio jurisdictions acquired in the Merger on February 1, 2019;

~~a $5 million increase in revenues associated with customer growth from the addition of over 46,000 new customers; and~~

~~an increase in revenue of $4 million related to the impact of the TCJA in Arkansas, which was offset by lower TCJA revenue impacts in Texas, Indiana, Ohio and Mississippi.~~

~~These increases were partially offset by the following:~~

a $30 million increase in state and federal income taxes driven by growth in earnings and an additional month of expense in 2020 related to the Indiana and Ohio jurisdictions acquired in the Merger on February 1, 2019;

a $16 million increase in depreciation and amortization and a $12 million increase in other non-income related taxes, primarily due to capital projects placed in service in 2020 and an additional month of expense in 2020 related to the Indiana and Ohio jurisdictions acquired in the Merger on February 1, 2019;

~~$10 million of lower revenue attributed to milder weather and lower customer usage; and~~

a $9 million increase in interest expense due to incremental financing to fund capital projects and an additional month of expense in 2020 related to the Indiana and Ohio jurisdictions acquired in the Merger on February 1, 2019.

Increased operation and maintenance expenses related to energy efficiency programs of $1 million and decreased taxes other than income taxes of $5 million were offset by corresponding increases and decreases in the related revenues.

Natural Gas Distribution (CERC)

For information regarding factors that may affect the future results of operations of CERC’s Natural Gas Distribution reportable segment, please read “Risk Factors — Risk Factors Associated with Our Consolidated Financial Condition,” “— Risk Factors Affecting Natural Gas Distribution and Competitive Energy Services Businesses” and “— Other Risk Factors Affecting Our Businesses or CenterPoint Energy’s Interests in Enable Midstream Partners, LP” in Item 1A of Part I of the Registrants’ combined 2019 Form 10-K and in Item 1A of Part II of this Form 10-Q.

The following table provides summary data of CERC’s Natural Gas Distribution reportable segment:


	Three Months Ended September 30,									Nine Months Ended September 30,
	2020			2019			Increase (Decrease)			2020			2019			Increase (Decrease)
	(in millions, except operating statistics)
Revenues	$	422		$	415		$	7		$	1,910		$	2,152		$	(242)
Cost of revenues (1)	108			116			(8)			730			1,007			(277)
Revenues less Cost of revenues	314			299			15			1,180			1,145			35
Expenses:
Operation and maintenance	185			173			12			568			592			(24)
Depreciation and amortization	78			72			6			226			218			8
Taxes other than income taxes	39			34			5			133			120			13
Total expenses	302			279			23			927			930			(3)
Operating Income	12			20			(8)			253			215			38
Other Income (Expense)
Interest expense and other finance charges	(21)			(16)			5			(62)			(54)			8
Interest income	1			2			(1)			4			5			(1)
Other income (expense), net	(1)			(3)			2			(5)			(8)			3
Income from Continuing Operations Before Income Taxes	(9)			3			(12)			190			158			32
Income tax expense	(10)			(2)			(8)			35			24			11
Net Income	$	1		$	5		(4)			$	155		$	134		21



Throughput (in BCF):
Residential	14			12			17		%	110			125			(12)		%
Commercial and Industrial	48			53			(9)		%	189			214			(12)		%
Total	62			65			(5)		%	299			339			(12)		%
Weather (percentage of 10-year average for service area):
Heating degree days	100		%	18		%	82		%	90		%	100		%	(10)		%
Number of metered customers at end of period:
Residential	3,329,032			3,250,810			2		%	3,329,032			3,250,810			2		%
Commercial and Industrial	258,660			257,655			—		%	258,660			257,655			—		%
Total	3,587,692			3,508,465			2		%	3,587,692			3,508,465			2		%

(1)Includes Utility natural gas and Non-utility cost of revenues, including natural gas.

Table of Contents

Three Months Ended March 31,
2020 2019

Revenues:
Utility revenues $ 996
$ 1,195
Non-utility revenues 12
16
Total revenues 1,008
1,211
Expenses:

Utility natural gas 472
687
Non-utility cost of revenues, including natural gas 6
10
Operation and maintenance 204
227
Depreciation and amortization 74
73
Taxes other than income taxes 50
49
Total expenses 806
1,046
Operating Income 202
165
Other Income (Expense):
Interest expense and other finance charges (21 ) (19 )
Interest income 1
1
Other income (expense), net (4 ) (2 )
Income from Continuing Operations Before Income Taxes 178
145
Income tax expense 44
26
Net Income $ 134
$ 119
Throughput (in Bcf):
Residential 74
91
Commercial and industrial 90
98
Total Throughput 164
189
Number of customers at end of period:
Residential 3,299,011
3,261,669
Commercial and industrial 261,120
261,709
Total 3,560,131
3,523,378

~~Three months ended March 31, 2020 compared to three months ended March 31, 2019~~

The following table provides variance explanations by major income statement caption for CERC’s Natural Gas Distribution reportable ~~segment reported net income~~segment:


	Increase (Decrease)
	Three Months Ended September 30, 2020 vs 2019		Nine Months Ended September 30, 2020 vs 2019
	(in millions)
Revenues less Cost of revenues
Rate increases exclusive of the TCJA impact below	$	14	$	52
Impacts of COVID-19	(3)		(15)
Weather and usage, excluding impacts from COVID-19	(3)		(2)
Refund of protected and unprotected EDIT, offset in income tax expense	(2)		—
Customer growth	4		9
Non-volumetric and miscellaneous revenue, excluding impacts from COVID-19	3		3
Energy efficiency, offset in operation and maintenance below	1		(8)
Gross receipts tax, offset in taxes other than income taxes below	1		(4)
Total	$	15	$	35
Operation and maintenance
Labor and benefits, primarily from lower headcount in 2019	$	13	$	7
Contracted services	(7)		(17)
Support services	5		1
Other operating and maintenance expense, including material and supplies and insurance	—		(4)
Energy efficiency, offset in revenues less cost of revenues above	1		(8)
Merger severance costs	—		(3)
Total	$	12	$	(24)
Depreciation and amortization
Incremental capital projects placed in service	$	6	$	8
Total	$	6	$	8
Taxes other than income taxes
Gross receipts tax, offset in revenues less cost of revenues above	$	1	$	(4)
Incremental capital projects placed in service	4		17
Total	$	5	$	13
Interest expense and other finance charges
Debt to fund incremental capital projects	$	5	$	8
Total	$	5	$	8
Interest income
Money pool investments with CenterPoint Energy	$	(1)	$	(1)
Total	$	(1)	$	(1)
Other income (expense), net
Reduction to non-service benefit cost	$	2	$	3
Total	$	2	$	3
Income tax savings (expense)
Incremental taxable income	8		(11)
Total increase (decrease)	8		(11)

Total increase (decrease)	#REF!		#REF!
Income tax expense:
Taxable income
Total decrease

Income Tax Expense. For a discussion of ~~$134 million for the three months ended March 31, 2020 compared to $119 million for the three months ended March 31, 2019.~~

~~Net income increased $15 million primarily as a result of the following key factors:~~

effective tax rate ~~increases of $28 million in Minnesota, Arkansas and Texas, exclusive of the TCJA impact discussed below;~~

a $17 million reduction in operation and maintenance expense, inclusive of a $10 million decrease in Merger-related severance costs in 2019, primarily due to lower labor benefits and support services costs;

~~higher revenue of $5 million related to the impact of the TCJA in Arkansas, which was offset by lower TCJA revenue impacts in Texas and Mississippi; and~~

~~a $2 million increase in revenues associated with customer growth from the addition of almost 37,000 new customers.~~

~~These increases were partially offset primarily by the following:~~

~~an $18 million increase in state and federal income taxes and interest expense, primarily due to increased taxable income;~~

~~$8 million of lower revenue attributed to milder weather and lower customer usage as compared to the three months ended March 31, 2019;~~

~~a $5 million increase in property and other non-income related taxes, primarily due to increases in local tax rates and property valuations;~~

~~a $2 million increase in interest expense, primarily due to increased debt financing to fund an increase in capital projects in 2020; and~~

~~a $1 million increase in depreciation and amortization from an increase of incremental capital projects placed in service in 2020.~~

Decreased operation and maintenance expenses related to energy efficiency programs of $5 million and taxes other than income taxes of $4 million were offset by corresponding decreases in the related revenues.

~~Midstream Investments (CenterPoint Energy)~~

For information regarding factors that may affect the future results of operations of the Midstream Investments reportable segment, please read “Risk Factors — Risk Factors Affecting CenterPoint Energy’s Interests in Enable Midstream Partners, LP” and “— Other Risk Factors Affecting Our Businesses or CenterPoint Energy’s Interests in Enable Midstream Partners, LP” in Item 1A of Part I of the Registrants’ combined 2019 Form 10-K and in Item 1A of Part II of this Form 10-Q.

~~The following table provides the net income (loss) of the Midstream Investments reportable segment:~~

Three Months Ended March 31,
2020 2019
(in millions)
Non-utility Revenues $ —
$ —
Taxes other than income taxes (1 ) —
Total Expenses (1 ) —
Operating Income 1
—
Other Income (Expense):
Interest expense and other finance charges $ (14 ) $ (12 )
Equity in earnings (loss) from Enable, net (1,475 ) 62
Interest income —
$ 2
Income (Loss) from Continuing Operations Before Income Taxes (1,488 ) 52
Income tax expense (benefit) (361 ) 28
Net Income (Loss) $ (1,127 ) $ 24

CenterPoint Energy’s Midstream Investment reportable segment reported a net loss of $1,127 million for the three months ended March 31, 2020, compared to net income of $24 million for the three months ended March 31, 2019.

~~Net income decreased $1,151 million primarily as a result of the following key factors:~~

~~a $1,541 million impairment charge recorded on CenterPoint Energy’s equity investment in Enable (see~~per period, see Note 913 to the Interim Condensed Financial ~~Statements for further information); and~~Statements.

~~a $6 million decrease in Equity in Earnings from Enable.~~

~~These decreases were partially offset by the following:~~

~~a $389 million increase in income tax benefit primarily resulting from the impairment charge discussed above and a lower effective tax rate in 2020; and~~

~~a $10 million decrease in the loss on dilution.~~

~~Corporate and Other (CenterPoint Energy)~~

~~The following table shows the net income (loss) of CenterPoint Energy’s Corporate and Other:~~

Three Months Ended March 31,
2020 2019 (1)
(in millions)
Non-utility Revenues $ 82
$ 42
Expenses:
Non-utility cost of revenues, including natural gas 58
37
Operation and maintenance 5
24
Depreciation and amortization 17
14
Taxes other than income taxes 2
2
Total 82
77
Operating Loss —
(35 )
Other Income (Expense)
Gain (loss) on marketable securities (144 ) 83
Gain (loss) on indexed debt securities 135
(86 )
Interest expense and other finance charges (96 ) (84 )
Interest income 48
46
Other income, net 11
10
Loss from Continuing Operations Before Income Taxes (46 ) (66 )
Income tax benefit (50 ) (44 )
Net Income (Loss) $ 4
$ (22 )


~~(1)~~	~~Includes only February 1, 2019 through March 31, 2019 results of the ESG business acquired in the Merger.~~

~~Three months ended March 31, 2020 compared to three months ended March 31, 2019~~

CenterPoint Energy’s Corporate and Other reported net income of $4 million for the three months ended March 31, 2020 compared to a net loss of $22 million for the three months ended March 31, 2019.

~~Net income increased $26 million primarily due to the following key factors:~~

~~a $221 million increase in gains on the underlying value of indexed debt securities related to the ZENS;~~

~~a $19 million decrease in operation and maintenance expenses primarily due to the following:~~


◦	lower corporate allocations retained in continuing operations related to the Infrastructure Services Disposal Group of $11 million primarily from Merger-related severance and incentive compensation costs incurred in 2019 that did not recur in 2020;


◦	~~decreased benefits and services costs of $4 million;~~


◦	~~decreased software maintenance costs of $2 million; and~~


◦	~~reduced Merger-related integration costs of $2 million incurred in 2019 that did not recur in 2020;~~

a $19 million increase in margin primarily related to higher margin of $9 million at ESG from two large federal projects in 2020 and the reduction of Merger-related amortization of intangibles for construction backlog of $6 million in non-utility cost of revenues, including natural gas; and

~~a $6 million increase in income tax benefit.~~

~~These increases in net income were partially offset by the following:~~

~~a $227 million increase in losses on marketable securities;~~

a $12 million increase in interest expense from the inclusion of expense for three months in 2020 versus two months included in 2019 due to additional debt acquired in the Merger on February 1, 2019; and

a $3 million increase in depreciation and amortization from the inclusion of expense for three months in 2020 versus two months included in 2019 for businesses acquired in the Merger on February 1, 2019.

~~Corporate and Other (CERC)~~

~~The following table shows the net income (loss) of CERC’s Corporate and Other:~~

Three Months Ended March 31,
2020 2019
(in millions)
Non-utility Revenues $ 3
$ 1
Expenses
Operation and maintenance 5
6
Total 5
6
Operating Loss (2 ) (5 )
Other Income (Expense):
Interest expense and other finance charges (31 ) (31 )
Interest income 21
20
Other income (expense), net —
(1 )
Loss from Continuing Operations Before Income Taxes (12 ) (17 )
Income tax benefit (9 ) (8 )
Net Loss $ (3 ) $ (9 )

CERTAIN FACTORS AFFECTING FUTURE EARNINGS

For information on other developments, factors and trends that may have an impact on the Registrants’ future earnings, please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Certain Factors

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Affecting Future Earnings” in Item 7 of Part II and “Risk Factors” in Item 1A of Part I of the Registrants’ combined 2019 Form 10-K, in Item 1A of Part II of this Form 10-Q and “Cautionary Statement Regarding Forward-Looking Information” in this Form 10-Q.

LIQUIDITY AND CAPITAL RESOURCES

Historical Cash Flows

The following table summarizes the net cash provided by (used in) operating, investing and financing activities:


	Nine Months Ended September 30,
	2020						2019
	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
	(in millions)
Cash provided by (used in):
Operating activities	$	1,439	$	552	$	646	$	1,086	$	595	$	513
Investing activities	(683)		(283)		(339)		(7,775)		(1,504)		(515)
Financing activities	(819)		(316)		(307)		2,708		786		(21)

Three Months Ended March 31,
2020 2019
CenterPoint Energy Houston Electric CERC CenterPoint Energy Houston Electric CERC
(in millions)
Cash provided by (used in):
Operating activities $ 662
$ 103
$ 381
$ 271
$ 66
$ 248
Investing activities (654 ) 192
(177 ) (6,539 ) (1,237 ) (250 )
Financing activities (32 ) (315 ) (205 ) 2,345
1,078
(11 )

Operating Activities. The following items contributed to increased (decreased) net cash provided by operating activities for the ~~three~~nine months ended ~~March 31,~~September 30, 2020 compared to the same period of 2019:


	CenterPoint Energy		Houston Electric		CERC
	(in millions)
Changes in net income after adjusting for non-cash items	$	(1,804)	$	(131)	$	(2)
Changes in working capital	569		84		126
Change in equity in earnings of unconsolidated affiliates	1,712		—		—
Change in distributions from unconsolidated affiliates (1)	(117)		—		—

Lower pension contribution	10		—		—
Other	(17)		4		9
	$	353	$	(43)	$	133

CenterPoint Energy
Houston
Electric
CERC
(in millions)
Changes in net income after adjusting for non-cash items $ (1,363 ) $ (26 ) $ 62
Changes in working capital 212
58
67
Change in equity in earnings of unconsolidated affiliates 1,537
—
—
Change in distributions from unconsolidated affiliates (1)
(4 ) —
—
Other 9
5
4
$ 391
$ 37
$ 133

(1)This change is partially offset by the change in distributions from Enable in excess of cumulative earnings in investing activities noted in the table below.


~~(1)~~	~~This change is partially offset by the change in distributions from Enable in excess of cumulative earnings in investing activities noted in the table below.~~

Investing Activities. The following items contributed to (increased) decreased net cash used in investing activities for the ~~three~~nine months ended ~~March 31,~~September 30, 2020 compared to the same period of 2019:


	CenterPoint Energy		Houston Electric		CERC
	(in millions)

Mergers and acquisitions, net of cash acquired	$	5,991	$	—	$	—
Capital expenditures	(67)		(6)		(78)
Net change in notes receivable from affiliated companies	—		1,228		(36)
Change in distributions from Enable in excess of cumulative earnings	46		—		—

Proceeds from divestitures	1,136		—		286

Other	(14)		(1)		4
	$	7,092	$	1,221	$	176

CenterPoint Energy
Houston
Electric
CERC
(in millions)
Mergers and acquisitions, net of cash acquired $ 5,987
$ —
$ —
Higher capital expenditures (127 ) (28 ) (30 )
Net change in notes receivable from affiliated companies —
1,460
106
Change in distributions from Enable in excess of cumulative earnings 7
—
—
Other 18
(3 ) (3 )
$ 5,885
$ 1,429
$ 73

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Financing Activities. The following items contributed to (increased) decreased net cash used in financing activities for the ~~three~~nine months ended ~~March 31,~~September 30, 2020 compared to the same period of 2019:


	CenterPoint Energy		Houston Electric		CERC
	(in millions)
Net changes in commercial paper outstanding	$	(2,641)	$	—	$	(70)
Increased proceeds from issuances of preferred stock	723		—		—
Increased proceeds from issuances of common stock	672		—		—
Net changes in long-term debt outstanding, excluding commercial paper	(2,452)		(167)		—

Net changes in debt issuance costs	15		5		—
Net changes in short-term borrowings	37		5		31

Decreased payment of Common Stock dividends	124		—		—
Increased payment of preferred stock dividends	(13)		—		—
Net change in notes payable from affiliated companies	—		1		—
Contribution from parent	—		(590)		—
Dividend to parent	—		(357)		39
Capital contribution to parent associated with the sale of CES	—		—		(286)

Other	8		1		—
	$	(3,527)	$	(1,102)	$	(286)

CenterPoint Energy
Houston
Electric
CERC
(in millions)
Net changes in commercial paper outstanding $ (3,520 ) $ —
$ (183 )
Net changes in long-term debt outstanding, excluding commercial paper 210
(584 ) —
Net changes in long-term revolving credit facilities 915
—
—
Net changes in debt issuance costs 8
7
—
Increased payment of Common Stock dividends (1 ) —
—
Decreased payment of preferred stock dividends 1
—
—
Net change in notes payable from affiliated companies —
134
—
Contribution from parent —
(590 ) —
Dividend to parent —
(361 ) (12 )
Other 10
1
1
$ (2,377 ) $ (1,393 ) $ (194 )

Future Sources and Uses of Cash

The liquidity and capital requirements of the Registrants are affected primarily by results of operations, capital expenditures, debt service requirements, tax payments, working capital needs and various regulatory actions. Capital expenditures are expected to be used for investment in infrastructure. These capital expenditures are anticipated to maintain reliability and safety, increase resiliency and expand our systems through value-added projects. In addition to dividend payments on CenterPoint Energy’s Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Common Stock, and in addition to interest payments on debt, the Registrants’ principal anticipated cash requirements for the remaining ~~nine~~three months of 2020 include the following:


	CenterPoint Energy		Houston Electric		CERC
	(in millions)
Estimated capital expenditures	$	515	$	225	$	53
Scheduled principal payments on Securitization Bonds	71		71		—
Redemption of CERC Corp.’s 4.50% Senior Notes due 2021	593		—		593
ERCOT loan	5		5		—

CenterPoint Energy Houston Electric CERC
(in millions)
Estimated capital expenditures $ 1,682
$ 626
$ 401
Scheduled principal payments on Securitization Bonds 168
168
—
Maturing Vectren term loans 600
—
—

The Registrants expect that anticipated cash needs for the remaining ~~nine~~three months of 2020 will be met with borrowings under their credit facilities, bank loans, proceeds from the ~~private placement of Series C Preferred Stock and Common Stock, proceeds from the~~ issuance of long-term debt, ~~proceeds from the completed sale of the Infrastructure Services Disposal Group, proceeds from the anticipated sale of the Energy Services Disposal Group,~~ anticipated cash flows from operations, with respect to CenterPoint Energy and CERC, proceeds from commercial paper and, with respect to CenterPoint Energy, distributions from Enable. Discretionary financing or refinancing may result in the issuance of equity securities of CenterPoint Energy or debt securities of the Registrants in the capital markets or the arrangement of additional credit facilities or term bank loans. Issuances of equity or debt in the capital markets, funds raised in the commercial paper markets and additional credit facilities may not, however, be available on acceptable terms.

On April 1, 2020, Enable announced a reduction in its quarterly distributions per common unit from $0.3305 distributed for the fourth quarter 2019 to $0.16525, representing a 50% reduction. This reduction has resulted in, and is expected to result in, ~~one or more~~additional quarterly distributions to CenterPoint Energy that fall below CenterPoint Energy’s previously disclosed expected minimum quarterly distribution from Enable of $0.2875 per common unit. This reduction in Enable’s quarterly distributions per common unit is expected to reduce Enable common unit distributions to CenterPoint Energy by approximately $155 million per ~~year.~~year assuming no further reductions. To the extent current economic conditions persist or further deteriorate with respect to declines in the price of, and global demand for, natural gas, NGLs and crude oil, quarterly distributions on Enable’s common units may be subject to further reductions.

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Additionally, on April 1, 2020, CenterPoint Energy provided a business update related to certain measures it expects to take in response to the current business environment to strengthen its financial position and to adjust for the reduction in cash flow related to the reduction in Enable quarterly common unit distributions discussed above. These measures have included, or are expected to include, reducing CenterPoint Energy’s (i) quarterly common stock dividend per share from $0.2900 to $0.1500; (ii) anticipated 2020 capital spending by approximately $300 million, with CenterPoint Energy continuing to target five-year total capital investment of approximately $13 billion as previously disclosed; and (iii) anticipated operation and maintenance expenses for 2020 by a target

of approximately $40 million, excluding certain merger costs, utility costs to achieve savings, severance and amounts with revenue offsets.

The net proceeds of CenterPoint Energy’s sale of the Infrastructure Services Disposal Group were used to repay a portion of outstanding CenterPoint Energy debt, including $200 million of maturing Vectren term loans. The net proceeds of CenterPoint Energy’s sale of the Energy Services Disposal Group were used to repay a portion of outstanding CenterPoint Energy debt.

To the extent that access to the capital and other financial markets is adversely affected by the effects of COVID-19, the Registrants may need to consider alternative sources of funding for some of ~~its~~their operations and for working capital ~~which~~but expect any impacts on their liquidity to be temporary. Any alternative sources of funding may increase the cost of capital and result in higher interest expense. ~~At this time, the Registrants expect impacts on their liquidity due to COVID-19 to be temporary.~~ Although CenterPoint Energy customarily satisfies its near-term financing needs with proceeds from commercial paper, CenterPoint Energy ~~has~~ utilized its revolving credit facilities in March and April 2020 as a source of funding because market disruptions caused by COVID-19 temporarily limited its access to the commercial paper markets. ~~These~~CenterPoint Energy repaid all outstanding revolving credit facility loans in April 2020 and has resumed normal utilization of commercial paper as such markets have since rebounded as of September 30, 2020. Since CenterPoint Energy’s repayment of its outstanding revolving credit facility loans, CenterPoint Energy has not utilized its revolving credit facilities as a source of liquidity. However, to the extent the capital and other financial markets are again disrupted, CenterPoint Energy may again rely on its revolving credit facilities. Furthermore, the uncertain economic conditions may also result in the inability of the Registrants’ customers and other counterparties to make payments to the Registrants, on a timely basis or at ~~all, which could adversely affect~~all. Although the ~~business,~~Registrants have experienced an increase in days outstanding on receivables and uncollectible accounts during the three and nine months ended September 30, 2020, the Registrants do not expect the increase in days outstanding on receivables and uncollectible accounts to materially impact their liquidity at this time. In the event economic conditions further deteriorate and result in a greater number of customers and counterparties failing to make payments to the Registrants, their businesses, cash flows, liquidity, financial condition and results of operations ~~of the Registrants.~~would be adversely impacted. Under such circumstances, the Registrants would intend to rely on borrowings from the short-term capital markets ~~as well as continued use of~~or under their revolving credit facilities, if needed, to mitigate such effects until cash flows revert to their pre-COVID-19 levels. The net proceeds of CenterPoint Energy’s sale of the Infrastructure Services Disposal Group were used to repay a portion of outstanding CenterPoint Energy debt, including $200 million of maturing Vectren term loans.

Off-Balance Sheet Arrangements

Other than Houston Electric’s general mortgage bonds issued as collateral for tax-exempt long-term debt of CenterPoint Energy as discussed in Note 12, guarantees as discussed in Note 14(b) and (c) to the Interim Condensed Financial Statements, we have no off-balance sheet arrangements.

Regulatory Matters

COVID-19 Regulatory Matters

Governors, public utility commissions and other authorities in the states in which we operate have issued a number of different orders related to the COVID-19 ~~pandemic.~~pandemic, including orders addressing customer non-payment and disconnection. While ~~many~~certain jurisdictions are subject to mandatory stay-at-home and similar orders, essential businesses and activities are exempted from these orders, including utility operations and maintenance. Accordingly, CenterPoint Energy’s crews ~~will~~ continue to provide essential service by responding to calls, completing work orders and undertaking other critical work. To protect our customers and employees, we are implementing COVID-19 safety precautions. ~~Additionally, regulatory authorities~~Although the disconnect moratoriums have ~~issued orders addressing customer non-payment and disconnection. For example,~~either expired or will expire during the fourth quarter of 2020 in ~~Indiana,~~certain of the IURC issued an order that, among other things, permits utilities to voluntarily suspend or waive late fees and reconnections fees and reconnect customers who have been disconnected due to non-payment, provided that such actions are taken on a non-discriminatory basis and apply to all customers. Commissions in other states have issued similar orders. In our NGDRegistrants’ service territories, ~~and for Indiana Electric, we have temporarily suspended disconnections for non-payment and will continue~~CenterPoint Energy continues to support those customers who may need payment assistance, arrangements or extensions. We will continue to monitor developments in this area and adjust our response as guidelines and circumstances may require. Additionally, while we have not experienced delays to date due to COVID-19 with respect to our regulatory proceedings, we could experience significant delays in scheduling proceedings or hearings and in obtaining orders from regulatory agencies.

On March 26, 2020, the PUCT issued two orders related to COVID-19 issues that affect Houston Electric. First, the PUCT issued an order related to Accrual of Regulatory Assets granting authority for utilities to record as a regulatory asset costs resulting from the effects of COVID-19. In the order, the PUCT noted that it will consider whether a utility’s request for recovery of the regulatory asset is reasonable and necessary in a future proceeding. Second, the PUCT issued an order related to

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COVID-19 ERP, as modified, which, in light of the disaster declarations issued by the Governor of Texas, authorized a customer assistance program for certain residential customers of electric service in areas of Texas open to customer choice, which includes Houston Electric’s service territory. The order includes several requirements for transmission and distribution utilities (including Houston Electric):

▪Transmission and distribution utilities must file a tariff rider to collect funds to reimburse costs related to unpaid bills from eligible residential customers unemployed due to the impacts of COVID-19. The rider is based on $0.33 per MW hour ($0.00033 per KW hour) to be applied to all customer classes. Houston Electric filed its updated tariff implementing the rider on March 31, 2020, which was approved by the PUCT on April 2, 2020.

▪Transmission and distribution utilities entered into no-interest loan agreements with ERCOT to provide for an initial fund balance for reimbursement. On April 13, 2020, in connection with the PUCT’s COVID-19 ERP, Houston Electric entered into a no-interest loan agreement with ERCOT ~~for~~pursuant to which ERCOT loaned Houston Electric approximately $5 million.

▪The fund administered by each transmission and distribution utility for the COVID-19 ERP can also receive donations and grants from governmental entities, corporations, and other entities. Any funds received from other sources shall be administered and treated in the same manner by the transmission and distribution utilities as the funds in the program from the rider.

▪Transmission and distribution utilities may petition the PUCT for changes to the COVID-19 ERP, including the level of the rider in the event that the funds collected are not sufficient to cover reimbursements.

▪REPs will identify eligible customers to the relevant transmission and distribution utilities, and the transmission and distribution utilities will cease charging REPs for associated delivery charges, except securitization related charges. REPs will cease submitting disconnection for non-payment orders to transmission and distribution utilities for eligible customers.

▪The funds collected through the rider will be used to reimburse the following entities and costs: REPs’ energy charges related to eligible residential customers with an unpaid, past due electric bill subject to a disconnection for non-payment notice (reimbursement amounts are based on an average energy cost of $0.04 per KW hour); transmission and distribution utilities’ delivery charges related to eligible residential customers with an unpaid, past due electric bill subject to a disconnection for non-payment notice; the third-party administrator to cover its reasonable costs of administering the COVID-19 ERP eligibility process; and ERCOT for the loan to the transmission and distribution utilities.

•

▪REPs will submit one spreadsheet with reimbursement claims to transmission and distribution utilities beginning on April 30, 2020 and all subsequent requests that may be made on the 15th of each month, and transmission and distribution utilities will process reimbursement payments within 14 days.

▪^th ~~of each month, and transmission and distribution utilities will process reimbursement payments within 14 days.~~

Transmission and distribution utilities will prepare reports and file them at the PUCT every 30 days showing aggregate amounts of reimbursements to the transmission and distribution utilities and REPs.

The PUCT issued an order on August 27, 2020 to conclude the COVID-19 ERP. The PUCT determined that enrollment in the COVID-19 ERP ~~will~~would end on ~~July 17,~~August 31, 2020 ~~unless otherwise extended by~~and benefits under the ~~PUCT.~~program ended on September 30, 2020. Final claims for reimbursement must be submitted to transmission and distribution utilities ~~not later than 90 days after~~by November 30, 2020. Final program reports must be submitted to the ~~end of the COVID-19 ERP.~~PUCT by January 15, 2021. The transmission and distribution utilities riders will remain in place and reimbursements will continue after the end of the COVID-19 ERP has ended to complete any remaining COVID-19 ERP cost recovery and disburse all reimbursement amounts or remaining balances.

Commissions in all of Indiana Electric’s and CenterPoint Energy’s and CERC’s NGD service territories have either (1) issued orders to record a regulatory asset for incremental bad debt expenses related to COVID-19, including costs associated with the suspension of disconnections and payment plans or (2) provided authority to recover bad debt expense through an existing tracking mechanism.

In some of the ~~other~~ states in which wethe Registrants operate, public utility commissions have authorized utilities to employ deferred accounting authority for certain COVID-19 related costs which ensure the safety and ~~savings. For example, the MPSC is allowing CenterPoint Energy and CERC to defer the following:~~

~~all necessary and reasonable incremental costs or expenses to plan, prepare, stage, or react to protect and keep safe its~~health of customers, employees, and ~~customers,~~contractors, that would not have been incurred in the normal course of business. CERC’s NGD service territories in Minnesota and ~~to reliably~~Arkansas will include any offsetting savings in the deferral. Other jurisdictions where the Registrants operate ~~its utility system beginning with the date of the Governor of Mississippi’s declared state of emergency; and~~

any costs, including any incremental bad debt expenses and all associated credit and collection costs, related to connections, reconnections, or disconnections for all customers classes. This deferral authorization includes, but is not limited to, customer-paid fees.

~~Further, the MPSC is also allowing CenterPoint Energy and CERC~~may require them to offset ~~these deferrals~~the deferral with any financial relief received from other sources at the federal or state level. Orders have also been received from the Railroad Commission, the LPSC and the APSC authorizing CenterPoint Energy and CERC to defer some or all COVID-19 related costs for future recovery.savings as well.

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Houston Electric Base Rate Case (CenterPoint Energy and Houston Electric)

On April 5, 2019, and subsequently adjusted in errata filings in May and June 2019, Houston Electric filed its base rate application with the PUCT and the cities in its service area to change its rates, seeking approval for revenue increases of approximately $194 million, among other requests. On January 23, 2020, Houston Electric filed a Stipulation and Settlement Agreement with the PUCT that provides for the following, among other things:

•an overall revenue requirement increase of approximately $13 million;

•an ROE of 9.4%;

•a capital structure of 57.5% debt/42.5% equity;

•a refund of unprotected EDIT of $105 million plus carrying costs over approximately 30-36 months; and

•recovery of all retail transmission related costs through the TCRF.

Also, Houston Electric is not required to make a one-time refund of capital recovery from its TCOS and DCRF mechanisms. Future TCOS filings will take into account both ADFIT and EDIT until the final order from Houston Electric’s next base rate proceeding. No rate base items are required to be written off; however, approximately $12 million in rate case expenses were written off in 2019. A base rate application must be filed for Houston Electric no later than four years from the date of the PUCT’s final order in the proceeding. Additionally, Houston Electric will not file a DCRF in 2020, nor will a subsequent separate proceeding with the PUCT be instituted regarding EDIT on Houston Electric’s securitized assets. Furthermore, under the terms of the Stipulation and Settlement Agreement, Houston Electric agreed to adopt certain ring-fencing measures to increase its financial separateness from CenterPoint Energy but left the determination of whether to impose a dividend restriction up to the PUCT. The PUCT approved the Stipulation and Settlement Agreement at its February 14, 2020 open meeting and issued a final order on March 9, 2020. The PUCT declined to impose a dividend restriction in the final order. The rates were implemented on April 23, 2020.

CenterPoint Energy and Houston Electric record pre-tax expense for (i) probable disallowances of capital investments and (ii) customer refund obligations and costs deferred in regulatory assets when recovery of such amounts is no longer considered probable.

Bailey to Jones Creek Project (CenterPoint Energy and Houston Electric)

In April 2017, Houston Electric submitted a proposal to ERCOT requesting its endorsement of the Freeport Area Master Plan, which included the Bailey to Jones Creek Project. On November 21, 2019, the PUCT issued its final approval of Houston Electric’s certificate of convenience and necessity application, based on an unopposed settlement agreement under which Houston Electric would construct the project at an estimated cost of approximately $483 million. In April 2020, a federal court vacated the Army Corps of Engineers Nationwide Permit 12, which Houston Electric intended to use for the project. Houston Electric is monitoring those proceedings and has filed its individual permit application with the Army Corps in accordance with the federal court decision. Significant delays in the processing of that application could lead to delays in completing construction. The actual capital costs of the project will depend on land acquisition costs, construction costs, minor changes to the routing of the line to mitigate environmental and other land use impacts, structure design to address soil and coastal wind conditions, ~~the permitting issues described above,~~ and other factors. In April 2020, a federal court vacated the Army Corps of Engineers Nationwide Permit 12, which Houston Electric intended to use for the project. As a result, Houston Electric filed its individual permit application with the Army Corps of Engineers in accordance with the federal court decision. However, subsequent to filing the individual permit application, the federal court stayed the effectiveness of its order as it applied to the construction of transmission lines such as the Bailey to Jones Creek Project. In July 2020, the stay was extended by the U.S. Supreme Court to apply to a broader range of infrastructure projects and is expected to last through the full appellate process. As a result, the Army Corps of Engineers is proceeding with project review under the general Nationwide Permit 12 permit. Houston Electric has commenced pre-construction activities on the project, and anticipates beginning construction in early 2021 and completing construction and energizing the line before the ~~peak electric season~~end of 2021.

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Indiana South Base Rate Case (CenterPoint Energy)

On October 30, 2020, Indiana South filed its base rate case with the IURC seeking approval for a revenue increase of approximately $30 million. This rate case filing is required under Indiana TDSIC statutory requirements before the completion of Indiana South’s capital expenditure program, approved in ~~April 2022.~~2014 for investments starting in 2014 through 2020. The revenue increase is based upon a requested ROE of 10.15% and an overall after-tax rate of return of 6.18% on total rate base of approximately $469 million. Indiana South has utilized a projected test year, reflecting its 2021 budget as the basis for the revenue increase requested, and proposes to implement rates in two phases. The first phase of rate implementation will occur as of the date of an order in this proceeding, expected in September 2021, and the second phase of rate implementation will occur at the completion of the test year, as of December 31, 2021. Under Indiana statutory requirements, the IURC has 300 days from the date of the filing of Indiana South’s case-in-chief to issue an order.

Indiana Electric Generation Project (CenterPoint Energy)

Indiana Electric must either (i) make substantial investments in its existing generation resources ~~in the near term~~ to comply with environmental ~~regulations.~~regulations or (ii) replace its existing generation with new resources. Indiana requires each electric utility to perform and submit an IRP every three years (unless extended) to the IURC that uses economic modeling to consider the costs and risks associated with available resource options to provide reliable electric service for the next 20-year period. On February 20, 2018, Indiana Electric filed a petition seeking authorization from the IURC to construct a new 700-850 MW natural gas combined cycle generating facility to replace the baseload capacity of its existing generation fleet at an approximate cost of $900 million, which ~~includes~~included the cost of a new natural gas pipeline to serve the plant.

As a part of this same proceeding, Indiana Electric also sought recovery under Indiana Senate Bill 251 of costs to be incurred for environmental investments to be made at its F.B. Culley generating plant to comply with ELG and CCR rules. The F.B. Culley investments, estimated to be approximately $95 million, began in 2019 and will allow the F.B. Culley Unit 3 generating facility to comply with environmental requirements and continue to provide generating capacity to Indiana Electric’s customers. Under Indiana Senate Bill 251, Indiana Electric sought authority to recover 80% of the approved costs, including a return, using a tracking mechanism, with the remaining 20% of the costs deferred for recovery in Indiana Electric’s next base rate proceeding.

On April 24, 2019, the IURC issued an order approving the environmental investments proposed for the F.B. Culley generating facility, along with recovery of prior pollution control investments made in 2014. The order denied the proposed gas combined cycle generating facility. Indiana Electric ~~is conducting~~has conducted a new IRP, ~~expected~~which was submitted to ~~be completed~~the IURC in ~~mid-2020,~~June 2020, to identify an appropriate ~~investment of capital in its~~ generation ~~fleet~~resource portfolio to satisfy the needs of its customers and comply with environmental regulations. The proposed preferred portfolio indicates the replacement of 730 MW of coal with a significant buildout of renewables supported by dispatchable natural gas generation.

Indiana Electric A.B. Brown Ash Pond Remediation (CenterPoint Energy)

On August 14, 2019, Indiana Electric filed a petition with the IURC, seeking approval, as a federally mandated project, for the recovery of costs associated with the clean closure of the A.B. Brown ash pond pursuant to Indiana Senate Bill 251. This project, expected to last approximately 14 years, would result in the full excavation and recycling of the ponded ash through agreements with a beneficial reuse entity, totaling approximately $160 million. Under Indiana Senate Bill 251, Indiana Electric seeks authority to recover via a tracking mechanism 80% of the approved costs, with a return on eligible capital investments needed to allow for the extraction of the ponded ash, with the remaining 20% of the costs deferred for recovery in Indiana Electric’s next base rate proceeding. On December 19, 2019 and subsequently on January 10, 2020, Indiana Electric filed a settlement agreement with the intervening parties whereby the costs would be recovered as requested, with an additional commitment by Indiana Electric to offset the federally mandated costs by at least $25 million, representing a combination of total cash proceeds received from the

ash reuser and total insurance proceeds to be received from Indiana Electric’s insurers under confidential settlement agreements of litigation filed against the insurers. ~~The~~On May 13, 2020, the IURC approved the settlement agreement ~~with the intervening parties is pending before~~in full. On October 28, 2020, the IURC ~~with an order expected in the first half of 2020. If~~ approved Indiana ~~Electric would expect~~Electric’s ECA proceeding, which included the initiation of recovery of the ~~approved costs to commence in 2021.~~federally mandated project costs.

Rate Change Applications

The Registrants are routinely involved in rate change applications before state regulatory authorities. Those applications include general rate cases, where the entire cost of service of the utility is assessed and reset. In addition, Houston Electric is periodically involved in proceedings to adjust its capital tracking mechanisms (TCOS and DCRF) and annually files to adjust its EECRF. CERC is periodically involved in proceedings to adjust its capital tracking mechanisms in Texas (GRIP), its cost of service adjustments in Arkansas, Louisiana, Mississippi and Oklahoma (FRP, RSP, RRA and PBRC, respectively), its

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decoupling mechanism in Minnesota, and its energy efficiency cost trackers in Arkansas, Minnesota, Mississippi and Oklahoma (EECR, CIP, EECR and EECR, respectively). CenterPoint Energy is periodically involved in proceedings to adjust its capital tracking mechanisms in Indiana (CSIA for gas and TDSIC for electric) and Ohio (DRR), its decoupling mechanism in Indiana (SRC for gas), and its energy efficiency cost trackers in Indiana (EEFC for gas and DSMA for electric) and Ohio (EEFR).

The table below reflects significant applications pending or completed since the Registrants’ combined 2019 Form 10-K was filed with the SEC.

Mechanism

Annual Increase (Decrease) (1)

(in millions)

Filing

Date

Effective Date

Approval Date

Additional Information

CenterPoint Energy and Houston Electric (PUCT)

EECRF

$11

June
2020

March
2021

October 2020

The requested amount is comprised primarily of the following: 2021 Program and Evaluation, Measurement and Verification costs of $39 million, 2019 over recovery of ($1) million and 2019 earned bonus of $12 million. A settlement was approved in October 2020 consisting of 2021 Program and Evaluation, Measurement and Verification costs of $39 million, 2019 over recovery of ($1) million, 2019 earned bonus of $11 million and a black box reduction to revenue requirement of ($1) million.

Rate Case

$13

April

2019

April

2020

March 2020

See discussion above under Houston Electric Base Rate Case.

TCOS~~(1)~~

March 2020

~~TBD~~May
2020

~~Requested an increase~~Based on net change in invested capital of $204 ~~million to rate base.~~million.

TCOS

July
2020

September 2020

Based on net change in invested capital of $140 million.

CenterPoint Energy and CERC - Beaumont/East Texas (Railroad Commission)

Rate Case ~~(1)~~

November

2019

~~TBD~~November 2020

~~TBD~~June
2020

Unanimous settlement agreement ~~filed with~~approved by the Railroad Commission in ~~March~~June 2020 ~~that recommends~~provides for a $4 million annual increase in current revenues, a refund for an Unprotected EDIT Rider amortized over three years of which ~~$2.2~~$2 million is refunded in the first year and establishes a 9.65% ROE and a 56.95% equity ratio for future GRIP filings for the Beaumont/East Texas jurisdiction. ~~The settlement calls for new~~New rates towill be effective with October 2020 usage and ~~would~~will be reflected ~~starting with~~on customers’ bills in November ~~2020 bills.~~2020.

CenterPoint Energy and CERC - South Texas, Houston and Texas Coast (Railroad Commission)

GRIP ~~(1)~~

March

2020

~~TBD~~June
2020

Based on net change in invested capital of ~~$144~~$143 million.

CenterPoint Energy and CERC - Arkansas (APSC)

FRP ~~(1)~~

~~(8)~~(12)

April

2020

~~TBD~~October 2020

~~TBD~~September 2020

Based on ROE of 9.5% with 50 basis point (+/-) earnings band. Revenue reduction of ~~$8.1~~$12 million based on prior test year true-up earned return on equity of ~~11.75%~~11.79% combined with projected test year return on equity of ~~8.40%~~9.43%.

CenterPoint Energy and CERC - Louisiana (LPSC)

RSP (1)

September 2020

December 2020

TBD

Based on ROE of 9.95% with 50 basis point (+/-) earnings band. The North Louisiana increase, net of TCJA effects considered outside the earnings band, is $3 million based on a test year ended June 2020 and adjusted earned ROE of 5.97%. South Louisiana adjusted ROE of 10.42% for the test year ended June 2020 is inside the band; a decrease of $1 million results from TCJA effects considered outside the earnings band.

CenterPoint Energy and CERC - Minnesota (MPUC)

Decoupling (1)

N/A

September 2020

TBD

Represents under-recovery of approximately $2 million recorded for and during the period July 1, 2019 through June 30, 2020, including approximately $1 million related to the period July 1, 2018 through June 30, 2019.

CIP Financial Incentive~~(1)~~

May

2020

~~TBD~~October 2020

~~TBD~~August 2020

CIP Financial Incentive based on 2019 activity.

Rate Case (1)

October 2019

TBD

Reflects a proposed 10.15% ROE on a 51.39% equity ratio. Interim rates reflecting an annual increase of $53 million were implemented on January 1, 2020. In September 2020, a settlement that addressed all issues except the Inclusive Financing/Tariffed On Bill Financing (TOB) proposal by the City of Minneapolis was signed by a majority of all parties and was filed with the Office of Administrative Hearings. A stipulation between the City of Minneapolis and CenterPoint Energy addressing the TOB proposal was filed on September 2, 2020. The settlement reflects a $38.5 million increase and is still subject to approval by the MPUC.

CenterPoint Energy and CERC - Oklahoma (OCC)

PBRC~~(1)~~

(2)

March

2020

~~TBD~~July
2020

Based on ROE of 10% with 50 basis point (+/-) earnings band. Revenue credit of approximately $2 million based on 2019 test year adjusted earned ROE of 15.37%. The OCC approved a unanimous settlement agreement that provides for a revenue credit to customers of $2 million, paid out monthly for the next twelve months.

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Mechanism

Annual Increase (Decrease) (1)

(in millions)

Filing

Date

Effective Date

Approval Date

Additional Information

CenterPoint Energy and CERC - Mississippi (MPSC)

RRA~~(1)~~

May

2020

~~TBD~~September 2020

Based on ROE of 9.292% with 100 basis point (+/-) earnings band. Revenue increase of $2 million based on 2019 test year adjusted earned ROE of ~~7.45%~~7.90%.

CenterPoint Energy - Indiana South - Gas (IURC)

CSIA~~(1)~~

April
2020

July

2020

~~TBD~~July
2020

Requested an increase of $13 million to rate base, which reflects a $1 million annual increase in current revenues. 80% of revenue requirement is included in requested rate increase and 20% is deferred until the next rate case. The mechanism also includes refunds associated with the TCJA, resulting in no change to the previous credit provided, and a change in the total (over)/under-recovery variance of $1 million annually.

CSIA (1)

October 2020

January 2021

TBD

Requested an increase of $13 million to rate base, which reflects a $2 million annual increase in current revenues. 80% of revenue requirement is included in requested rate increase and 20% is deferred until the next rate case. The mechanism also includes refunds associated with the TCJA, resulting in no change to the previous credit provided, and a change in the total (over)/under-recovery variance of $(1) million annually.

Rate Case (1)

October 2020

September 2021

TBD

Requested an increase of approximately $30 million to operating revenues based on an ROE of 10.15% and an overall rate of return of 6.18% on rate base of $469 million. Projected test year of 2021, with phase one rates in place in September 2021 and phase two rates in place at completion of projected test year.

CenterPoint Energy - Indiana North - Gas (IURC)

CSIA~~(1)~~

April
2020

July

2020

~~TBD~~July
2020

Requested an increase of $35 million to rate base, which reflects a $4 million annual increase in current revenues. 80% of revenue requirement is included in requested rate increase and 20% is deferred until the next rate case. The mechanism also includes refunds associated with the TCJA, resulting in no change to the previous credit provided, and a change in the total (over)/under-recovery variance of $14 million annually.

CSIA (1)

October 2020

January 2021

TBD

Requested an increase of $32 million to rate base, which reflects a $2 million annual increase in current revenues. 80% of revenue requirement is included in requested rate increase and 20% is deferred until the next rate case. The mechanism also includes refunds associated with the TCJA, resulting in an increase of $(1) million to the previous credit provided, and a change in the total (over)/under-recovery variance of $(6) million annually.

CenterPoint Energy - Ohio (PUCO)

TSCR~~(1)~~

N/A

January

2019

~~TBD~~July
2020

Application to flow back to customers certain benefits from the TCJA. Initial impact reflects credits for 2018 of $(10) million and 2019 of $(9) million, and 2020 of ~~$(6)~~$(7) million, with mechanism ~~to begin subsequent to new~~that began upon approval ~~by PUCO. The order is expected in~~from the PUCO effective July 1, 2020.

~~DRR~~

~~May~~

~~2020~~TSCR (1)

N/A

September 2020

January 2021

TBD

Application to flow back to customers certain benefits from the TCJA. Impact reflects credits for 2021 of $(7) million and includes a reconciliation through August 31, 2020 of $(14) million.

~~September~~

~~2020~~DRR (1)

~~TBD~~10

May
2020

September
2020

TBD

Requested an increase of $67 million to rate base for investments made in 2019, which reflects a $10 million annual increase in current revenues. A change in (over)/under-recovery variance of $2 million annually is also included in rates.

CenterPoint Energy - Indiana Electric (IURC)

TDSIC~~(1)~~

February

2020

May

2020

~~TBD~~May
2020

Requested an increase of $34 million to rate base, which reflects a $4 million annual increase in current revenues. 80% of revenue requirement is included in requested rate increase and 20% is deferred until next rate case. The mechanism also includes a change in (over)/under-recovery variance of $2 million annually.

ECA

May
2020

August 2020

October 2020

Requested an increase of $49 million to rate base, which reflects a $10 million annual increase in current revenues. 80% of the revenue requirement is included in requested rate increase and 20% is deferred until next rate case. The mechanism also included a change in (over)/under-recovery variance of $4 million annually.

TDSIC (1)

August 2020

November 2020

TBD

Requested an increase of $36 million to rate base, which reflects a $3 million annual increase in current revenues. 80% of the revenue requirement is included in requested rate increase and 20% is deferred until next rate case. The mechanism also includes a change in (over)/under-recovery variance of $(1) million.


~~(1)~~	~~Represents proposed increases (decreases) when effective date and/or approval date is not yet determined. Approved rates could differ materially from proposed rates.~~

(1)Represents proposed increases (decreases) when effective date and/or approval date is not yet determined. Approved rates could differ materially from proposed rates.

Tax Reform

TCJA-related 2018 tax expense refunds are currently included in the Registrants’ existing rates and are therefore reducing the Registrants’ current annual revenue. The TCJA-related 2018 tax expense refunds for Houston Electric were completed in September 2019. However, in Houston Electric’s rate case filed in April 2019, and subsequently adjusted in errata filings in

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May and June 2019, pursuant to the Stipulation and Settlement Agreement, Houston Electric will return unprotected EDIT net regulatory liability balance to customers, through a separate rider and its wholesale transmission tariff over approximately three ~~years. The balance of unprotected EDIT was $105 million as of December 31, 2018. In addition, Houston Electric’s~~years and the TCJA-related protected EDIT balance asover ARAM. As of ~~December 31, 2018 is $563~~September 30, 2020, the balances of the net unprotected EDIT regulatory liability and protected EDIT regulatory liability were $65 million and ~~must be returned to customers over ARAM.~~$698 million, respectively.

CenterPoint Energy’s electric and natural gas utilities in Indiana and Ohio ~~which were acquired during the Merger,~~ currently recover corporate income tax expense in approved rates charged to customers. The IURC and the PUCO both issued orders which initiated proceedings to investigate the impact of the TCJA on utility companies and customers within Indiana and Ohio, respectively. In addition, the IURC and PUCO have ordered each utility to establish regulatory liabilities to record all estimated impacts of tax reform starting January 1, 2018 until the date when rates are adjusted to capture these impacts. In Indiana, in response to Vectren’s pre-Merger filing for proposed changes to its rates and charges to consider the impact of the lower federal income tax rates, the IURC approved an initial reduction to current rates and charges, effective June 1, 2018, to capture the immediate impact of the lower corporate federal income tax rate. The refund of EDIT and regulatory liabilities commenced in November 2018 for Indiana electric customers and in January 2019 for Indiana natural gas customers. In Ohio, the initial rate reduction to current rates and charges became effective upon conclusion of its pending base rate case on August 28, 2019. In January 2019, an application was filed with the PUCO in compliance with its October 2018 order requiring utilities to file for a request to adjust rates to reflect the impact of the TCJA, requesting authority to implement a rider to flow back to customers the tax benefits realized under the TCJA, including the refund of EDIT and regulatory liabilities. ~~CenterPoint Energy expects this proceeding~~On July 1, 2020, the PUCO approved the initial rate reduction to credit customers for the impact of the TCJA. This credit mechanism results in an amortization of the unprotected balance of EDIT over a period of six years, starting in 2018, with the protected balance amortized in accordance with ARAM. The credit mechanism will be ~~approved in 2020.~~adjusted via an annual filing made each October to reflect projected refunds for each calendar year.

ELG (CenterPoint Energy)

Under the Clean Water Act, the EPA sets technology-based guidelines for water discharges from new and existing electric generation facilities. In September 2015, the EPA finalized revisions to the existing steam electric ELG setting stringent technology-based water discharge limits for the electric power industry. The EPA focused this rulemaking on wastewater generated primarily by pollution control equipment necessitated by the comprehensive air regulations, specifically setting strict water discharge limits for arsenic, mercury and selenium for scrubber waste waters. The ELG will be implemented when existing water discharge permits for the plants are renewed. In the case of Indiana Electric’s water discharge permits, in 2017 the IDEM issued final renewals for the F.B. Culley and A.B. Brown power plants. IDEM agreed that units identified for retirement by December 2023 would not be required to install new treatment technology to meet ELG, and approved a 2020 compliance date for dry bottom ash and a 2023 compliance date for flue gas desulfurization wastewater treatment standards for the remaining coal-fired unit at F.B. Culley.

On April 13, 2017, as part of the U.S. President’s Administration’s regulatory reform initiative, which is focused on the number and nature of regulations, the EPA granted petitions to reconsider the ELG rule, and indicated it would stay the current implementation deadlines in the rule during the pendency of the reconsideration. On September 13, 2017, the EPA finalized a rule postponing certain interim compliance dates by two years, but did not postpone the final compliance deadline of December 31, 2023. In April 2018, the EPA published an effluent guidelines program plan that anticipated a December 2019 rule revising the effluent limitations and pre-treatment standards for existing sources in the 2015 rule. On April 12, 2019, the U.S. Court of Appeals for the Fifth Circuit vacated and remanded portions of the ELG rule that selected impoundment as the best available technology for legacy wastewater and leachate. ~~It is not clear what~~On October 13, 2020, the EPA finalized revisions to the ELG rule, which established a two-year extension of the ~~EPA will implement, or what effect those revisions may have.~~compliance deadline for the prohibition of wet sluicing of bottom ash. However, the ELG rule did not establish alternative deadlines for the prohibition of wet sluicing of fly ash, and the most recent revision to the CCR rule confirmed that ash ponds must commence closure no later than October 2023. As ~~Indiana Electric does not currently have short-term ELG implementation deadlines in its recently renewed wastewater discharge permits, it~~a result, CenterPoint Energy does not anticipate ~~immediate impacts from the EPA’s two-year extension of preliminary implementation deadlines due~~any changes to the longer compliance time frames granted by IDEM and will continue to work with IDEM to evaluate further implementation plans. On November 4, 2019, the EPA released a pre-publication copy of proposed revisions to the CCR and ELG rules. CenterPoint Energy will evaluate the proposals to determine potential impacts toits current compliance plans ~~for its A.B. Brown and F.B. Culley generating stations.~~based upon this most recent ELG update.

CPP and ACE Rule (CenterPoint Energy)

On August 3, 2015, the EPA released its CPP Rule, which required a 32% reduction in carbon emissions from 2005 levels. The final rule was published in the Federal Register on October 23, 2015, and that action was immediately followed by litigation ultimately resulting in the U.S. Supreme Court staying implementation of the rule. On August 31, 2018, the EPA published its proposed CPP replacement rule, the ACE Rule, which was finalized on July 8, 2019 and requires states to implement a program of energy efficiency improvement targets for individual coal-fired electric generating units. States have three years to develop state plans to implement the ACE rule, and CenterPoint Energy does not expect a state ACE rule to be finalized and approved by the EPA until 2024. CenterPoint Energy is currently unable to predict the effect of a state plan to implement the ACE rule but does not anticipate that such a plan would have a material effect.

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Impact of Legislative Actions & Other Initiatives (CenterPoint Energy)

At this time, compliance costs and other effects associated with reductions in GHG emissions or obtaining renewable energy sources remain uncertain. While the requirements of a state ACE rule remain uncertain, Indiana Electric will continue to monitor regulatory activity regarding GHG emission standards that may affect its electric generating units.

MRT Rate Case (CenterPoint Energy)

In June 2018, MRT filed a general Natural Gas Act rate case, and in October 2019, MRT filed a second rate case. MRT began collecting the rates proposed in the 2018 rate case, subject to refund, on January 1, 2019. On November 5, 2019, as supplemented on December 13, 2019, MRT filed uncontested proposed settlements for the 2018 and 2019 rate cases. The FERC approved both settlements on March 26, 2020, and that order became final on April 25, 2020.

Other Matters

Credit Facilities

The Registrants may draw on their respective revolving credit facilities from time to time to provide funds used for general corporate and limited liability company purposes, including to backstop CenterPoint Energy’s and CERC’s commercial paper programs. The facilities may also be utilized to obtain letters of credit. For further details related to the Registrants’ revolving credit facilities, please see Note 12 to the Interim Condensed Financial Statements.

Based on the consolidated debt to capitalization covenant in the Registrants’ revolving credit facilities, the Registrants would have been permitted to utilize the full capacity of such revolving credit facilities, which aggregated approximately ~~$5.1~~$4.9 billion as of ~~March 31,~~September 30, 2020. As of ~~May 1,~~October 23, 2020, the Registrants had the following revolving credit facilities and utilization of such facilities:


			Amount Utilized as of October 23, 2020
Registrant	Size of Facility		Loans		Letters of Credit		Commercial Paper		Weighted Average Interest Rate	Termination Date
	(in millions)
CenterPoint Energy	$	3,300	$	—	$	8	$	601	0.17%	March 3, 2022
CenterPoint Energy (1)	400		—		—		174		0.16%	July 14, 2022


Houston Electric	300		—		—		—		—%	March 3, 2022
CERC	900		—		—		423		0.16%	March 3, 2022
Total	$	4,900	$	—	$	8	$	1,198

Amount Utilized as of May 1, 2020
Registrant Size of Facility Loans Letters of Credit Commercial Paper Weighted Average Interest Rate Termination Date
(in millions)
CenterPoint Energy $ 3,300
$ —
$ 8
$ 1,675
1.68% March 3, 2022
CenterPoint Energy (1)
400
—
—
147
0.68% July 14, 2022
CenterPoint Energy (2)
200
—
—
—
—% July 14, 2022
Houston Electric 300
—
—
—
—% March 3, 2022
CERC 900
—
1
125
0.63% March 3, 2022
Total $ 5,100
$ —
$ 9
$ 1,947

(1)The credit facility was issued by VUHI and is guaranteed by SIGECO, Indiana Gas and VEDO.


~~(1)~~	~~The credit facility was issued by VUHI and is guaranteed by SIGECO, Indiana Gas and VEDO.~~

On September 30, 2020, VCC terminated its $200 million credit agreement dated as of July 14, 2017 after determining that it was no longer necessary for financing purposes. VCC did not incur any penalties in connection with the early termination.


~~(2)~~	~~The credit facility was issued by VCC and is guaranteed by Vectren.~~

Borrowings under each of the revolving credit facilities are subject to customary terms and conditions. However, there is no requirement that the borrower makes representations prior to borrowing as to the absence of material adverse changes or litigation that could be expected to have a material adverse effect. Borrowings under each of the revolving credit facilities are subject to acceleration upon the occurrence of events of default that we consider customary. The revolving credit facilities also provide for customary fees, including commitment fees, administrative agent fees, fees in respect of letters of credit and other fees. In each of the revolving credit facilities, the spread to LIBOR and the commitment fees fluctuate based on the borrower’s credit rating. The borrowers are currently in compliance with the various business and financial covenants in the ~~five~~four revolving credit facilities.

Long-term Debt

For detailed information about the Registrants’ debt transactions in 2020, see Notes 12 and 20 to the Interim Condensed Financial Statements.

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Securities Registered with the SEC

On ~~January 31, 2017,~~May 29, 2020, the Registrants filed a joint shelf registration statement with the SEC ~~as amended on September 24, 2018,~~ registering indeterminate principal amounts of Houston Electric’s general mortgage bonds, CERC Corp.’s senior debt securities and CenterPoint Energy’s senior debt securities and junior subordinated debt securities and an indeterminate number of shares of Common Stock, shares of preferred stock, depositary shares, as well as stock purchase contracts and equity units. The joint shelf registration statement ~~expired~~will expire on ~~January 31, 2020.~~May 29, 2023. For information related to debt and equity security issuances in 2020, see Notes 12 and 19 to the Interim Condensed Financial Statements.

Temporary Investments

As of ~~May 1,~~October 23, 2020, the Registrants had no temporary investments.

Money Pool

The Registrants participate in a money pool through which they and certain of their subsidiaries can borrow or invest on a short-term basis. Funding needs are aggregated and external borrowing or investing is based on the net cash position. The net funding requirements of the CenterPoint Energy money pool are expected to be met with borrowings under CenterPoint Energy’s revolving credit facility or the sale of CenterPoint Energy’s commercial paper. The net funding requirements of the CERC money pool are expected to be met with borrowings under CERC’s revolving credit facility or the sale of CERC’s commercial paper. The money pool may not provide sufficient funds to meet the Registrants’ cash needs.

The table below summarizes CenterPoint Energy money pool activity by Registrant as of ~~May 1,~~October 23, 2020:


	Weighted Average Interest Rate	Houston Electric		CERC
		(in millions)
Money pool investments (borrowings)	0.18%	$	41	$	—

Weighted Average Interest Rate Houston Electric CERC
(in millions)
Money pool investments (borrowings) 1.70% $ (193 ) $ —

Impact on Liquidity of a Downgrade in Credit Ratings

The interest on borrowings under the credit facilities is based on each respective borrower’s credit ratings. As of ~~May 1,~~October 23, 2020, Moody’s, S&P and Fitch had assigned the following credit ratings to the borrowers:

Moody’s

S&P

Fitch

Registrant

Borrower/Instrument

Rating

Outlook (1)

Rating

Outlook (2)

Rating

Outlook (3)

CenterPoint Energy

CenterPoint Energy Senior Unsecured Debt

Baa2

Negative

BBB

Negative

BBB

Negative

CenterPoint Energy

Vectren Corp. Issuer Rating

n/a

BBB+

Negative

n/a

CenterPoint Energy

VUHI Senior Unsecured Debt

Stable

BBB+

Negative

n/a

CenterPoint Energy

Indiana Gas Senior Unsecured Debt

n/a

BBB+

Negative

n/a

CenterPoint Energy

SIGECO Senior Secured Debt

Stable

Negative

n/a

Houston Electric

Houston Electric Senior Secured Debt

Stable

Negative

CERC

CERC Corp. Senior Unsecured Debt

~~Baa1~~A3

~~Positive~~Stable

BBB+

Negative

BBB+

Stable

(1)A Moody’s rating outlook is an opinion regarding the likely direction of an issuer’s rating over the medium term.


~~(1)~~	~~A Moody’s rating outlook is an opinion regarding the likely direction of an issuer’s rating over the medium term.~~

(2)An S&P outlook assesses the potential direction of a long-term credit rating over the intermediate to longer term.


~~(2)~~	~~An S&P outlook assesses the potential direction of a long-term credit rating over the intermediate to longer term.~~

(3)A Fitch rating outlook indicates the direction a rating is likely to move over a one- to two-year period.


~~(3)~~	~~A Fitch rating outlook indicates the direction a rating is likely to move over a one- to two-year period.~~

The Registrants cannot assure that the ratings set forth above will remain in effect for any given period of time or that one or more of these ratings will not be lowered or withdrawn entirely by a rating agency. The Registrants note that these credit ratings are included for informational purposes and are not recommendations to buy, sell or hold the Registrants’ securities and may be revised or withdrawn at any time by the rating agency. Each rating should be evaluated independently of any other rating. Any future reduction or withdrawal of one or more of the Registrants’ credit ratings could have a material adverse

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impact on the Registrants’ ability to obtain short- and long-term financing, the cost of such financings and the execution of the Registrants’ commercial strategies.

A decline in credit ratings could increase borrowing costs under the Registrants’ revolving credit facilities. If the Registrants’ credit ratings had been downgraded one notch by S&P and Moody’s from the ratings that existed as of ~~March 31,~~September 30, 2020, the impact on the borrowing costs under the ~~five~~four revolving credit facilities would have been immaterial. A decline in credit ratings would also increase the interest rate on long-term debt to be issued in the capital markets and could negatively impact the Registrants’ ability to complete capital market transactions and to access the commercial paper market. Additionally, a decline in credit ratings could increase cash collateral requirements and reduce earnings of CenterPoint Energy’s and CERC’s Natural Gas Distribution reportable segments.

The Energy Services Disposal Group provides natural gas sales and services primarily to commercial and industrial customers and electric and natural gas utilities throughout the United States. To economically hedge its exposure to natural gas prices, the Energy Services Disposal Group uses derivatives with provisions standard for the industry, including those pertaining to credit thresholds. Typically, the credit threshold negotiated with each counterparty defines the amount of unsecured credit that such counterparty will extend to the Energy Services Disposal Group. To the extent that the credit exposure that a counterparty has to the Energy Services Disposal Group at a particular time does not exceed that credit threshold, the Energy Services Disposal Group is not obligated to provide collateral. Mark-to-market exposure in excess of the credit threshold is routinely collateralized by the Energy Services Disposal Group. Similarly, mark-to-market exposure offsetting and exceeding the credit threshold may cause the counterparty to provide collateral to the Energy Services Disposal Group. As of March 31, 2020, the amount posted by the Energy Services Disposal Group as collateral aggregated approximately $72 million. Should the credit ratings of CERC Corp. (as the credit support provider for the Energy Services Disposal Group) fall below certain levels, the Energy Services Disposal Group

would be required to provide additional collateral up to the amount of its previously unsecured credit limit. CenterPoint Energy and CERC estimate that as of March 31, 2020, unsecured credit limits extended to the Energy Services Disposal Group by counterparties aggregated $452 million, and none of such amount was utilized.

Pipeline tariffs and contracts typically provide that if the credit ratings of a shipper or the shipper’s guarantor drop below a threshold level, which is generally investment grade ratings from both Moody’s and S&P, cash or other collateral may be demanded from the shipper in an amount equal to the sum of three months’ charges for pipeline services plus the unrecouped cost of any lateral built for such shipper. If the credit ratings of CERC Corp. decline below the applicable threshold levels, CERC might need to provide cash or other collateral of as much as ~~$193~~$207 million as of ~~March 31,~~September 30, 2020. The amount of collateral will depend on seasonal variations in transportation levels.

ZENS and Securities Related to ZENS (CenterPoint Energy)

If CenterPoint Energy’s creditworthiness were to drop such that ZENS holders thought its liquidity was adversely affected or the market for the ZENS were to become illiquid, some ZENS holders might decide to exchange their ZENS for cash. Funds for the payment of cash upon exchange could be obtained from the sale of the shares of ZENS-Related Securities that CenterPoint Energy owns or from other sources. CenterPoint Energy owns shares of ZENS-Related Securities equal to approximately 100% of the reference shares used to calculate its obligation to the holders of the ZENS. ZENS exchanges result in a cash outflow because tax deferrals related to the ZENS and shares of ZENS-Related Securities would typically cease when ZENS are exchanged or otherwise retired and shares of ZENS-Related Securities are sold. The ultimate tax liability related to the ZENS continues to increase by the amount of the tax benefit realized each year, and there could be a significant cash outflow when the taxes are paid as a result of the retirement or exchange of the ZENS. If all ZENS had been exchanged for cash on ~~March 31,~~September 30, 2020, deferred taxes of approximately ~~$470~~$465 million would have been payable in 2020. If all the ZENS-Related Securities had been sold on ~~March 31,~~September 30, 2020, capital gains taxes of approximately ~~$119~~$152 million would have been payable in 2020 based on 2020 tax rates in effect. For additional information about ZENS, see Note 11 to the Interim Condensed Financial Statements.

Cross Defaults

Under each of CenterPoint Energy’s (other than VUHI’s), Houston Electric’s and CERC’s respective revolving credit facilities, as well as under CenterPoint Energy’s term loan agreement, a payment default on, or a non-payment default that permits acceleration of, any indebtedness for borrowed money and certain other specified types of obligations (including guarantees) exceeding $125 million by the borrower or any of their respective significant subsidiaries will cause a default under such borrower’s respective credit facility or term loan agreement. A default by CenterPoint Energy would not trigger a default under its subsidiaries’ debt instruments or revolving credit facilities.

Under ~~each of~~ VUHI’s ~~and VCC’s respective~~ revolving credit ~~facilities and term loan agreements,~~facility, a payment default on, or a non-payment default that permits acceleration of, any indebtedness for borrowed money and certain other specified types of obligations (including guarantees) exceeding $50 million by the borrower, any of their respective subsidiaries or any of the respective guarantors of a credit facility ~~or term loan agreement~~ will cause a default under such borrower’s ~~respective~~ credit ~~facility or term loan agreement.~~facility.

Possible Acquisitions, Divestitures and Joint Ventures

From time to time, the Registrants consider the acquisition or the disposition of assets or businesses or possible joint ventures, strategic initiatives or other joint ownership arrangements with respect to assets or businesses. Any determination to take action in this regard will be based on market conditions and opportunities existing at the time, and accordingly, the timing, size or success of any efforts and the associated potential capital commitments are unpredictable. The Registrants may seek to fund all or part of any such efforts with proceeds from debt and/or equity issuances. Debt or equity financing may not, however, be available to the Registrants at that time due to a variety of events, including, among others, maintenance of our credit ratings, industry conditions, general economic conditions, market conditions and market perceptions.

CenterPoint Energy previously disclosed that it may reduce its ownership in Enable over time through sales in the public equity markets, or otherwise, of the Enable common units it holds, subject to market conditions. CenterPoint Energy has no

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intention to reduce its ownership of Enable common units and currently plans to hold such Enable common units and to utilize any cash distributions received on such Enable common units to finance a portion of CenterPoint Energy’s capital expenditure program. CenterPoint Energy may consider or alter its plans or proposals in respect of any such plans in the future. For further information, see “—Recent Events—Business Review and Evaluation Committee” above.

On February 3, 2020, CenterPoint Energy, through its subsidiary VUSI, entered into the Securities Purchase Agreement to sell the Infrastructure Services Disposal Group. The transaction closed on April 9, 2020.

~~See Note 3 to the Interim Condensed Financial Statements for further information.~~

Enable Midstream Partners (CenterPoint Energy)

CenterPoint Energy receives quarterly cash distributions from Enable on its common units and Enable Series A Preferred Units. A reduction in the cash distributions CenterPoint Energy receives from Enable could significantly impact CenterPoint Energy’s liquidity. For additional information about cash distributions from Enable, see Notes 9 and 20 to the Interim Condensed Financial Statements.

Hedging of Interest Expense for Future Debt Issuances

From time to time, the Registrants may enter into interest rate agreements to hedge, in part, volatility in the U.S. treasury rates by reducing variability in cash flows related to interest payments. For further information, see Note 7(a) to the Interim Condensed Financial Statements.

Weather Hedge (CenterPoint Energy and CERC)

CenterPoint Energy and CERC have historically entered into partial weather hedges for certain NGD jurisdictions and electric operations’ Texas service territory to mitigate the impact of fluctuations from normal weather. CenterPoint Energy and CERC remain exposed to some weather risk as a result of the partial hedges. For more information about weather hedges, see Note 7(a) to the Interim Condensed Financial Statements.

Collection of Receivables from REPs (CenterPoint Energy and Houston Electric)

Houston Electric’s receivables from the distribution of electricity are collected from REPs that supply the electricity Houston Electric distributes to their customers. Before conducting business, a REP must register with the PUCT and must meet certain financial qualifications. Nevertheless, adverse economic conditions, structural problems in the market served by ERCOT or financial difficulties of one or more REPs could impair the ability of these REPs to pay for Houston Electric’s services or could cause them to delay such payments. Houston Electric depends on these REPs to remit payments on a timely basis, and any delay or default in payment by REPs could adversely affect Houston Electric’s cash flows. In the event of a ~~REP’s~~REP default, Houston Electric’s tariff provides a number of remedies, including the option for Houston Electric to request that the PUCT suspend or revoke the certification of the REP. Applicable regulatory provisions require that customers be shifted to another REP or a provider of last resort if a REP cannot make timely payments. However, Houston Electric remains at risk for payments related to services provided prior to the shift to the replacement REP or the provider of last resort. If a REP were unable to meet its obligations, it could consider, among various options, restructuring under the bankruptcy laws, in which event such REP might seek to avoid honoring its obligations and claims might be made against Houston Electric involving payments it had received from such REP. If a REP were to file for bankruptcy, Houston Electric may not be successful in recovering accrued receivables owed by such REP that are unpaid as of the date the REP filed for bankruptcy. However, PUCT regulations authorize utilities, such as Houston Electric, to defer bad debts resulting from defaults by REPs for recovery in future rate cases, subject to a review of reasonableness and necessity.

Other Factors that Could Affect Cash Requirements

In addition to the above factors, the Registrants’ liquidity and capital resources could also be negatively affected by:

•reductions in the cash distributions we receive from Enable;

•cash collateral requirements that could exist in connection with certain contracts, including weather hedging arrangements, and natural gas purchases, natural gas price and natural gas storage activities of CenterPoint Energy’s and CERC’s Natural Gas Distribution reportable segment;

•acceleration of payment dates on certain gas supply contracts, under certain circumstances, as a result of increased natural gas prices and concentration of natural gas suppliers (CenterPoint Energy and CERC);

•increased costs related to the acquisition of natural gas (CenterPoint Energy and CERC);

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•increases in interest expense in connection with debt refinancings and borrowings under credit facilities or term ~~loans;~~ loans or the use of alternative sources of financings due to the effects of COVID-19 on capital and other financial markets;

•various legislative or regulatory actions;

•incremental collateral, if any, that may be required due to regulation of derivatives (CenterPoint ~~Energy and CERC)~~Energy);

•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, including the negative impact on such ability related to COVID-19;

•slower customer payments and increased write-offs of receivables due to higher natural gas prices, changing economic conditions or COVID-19 (CenterPoint Energy and CERC);

•the satisfaction of any obligations pursuant to guarantees;

•the outcome of litigation;

•contributions to pension and postretirement benefit plans;

•restoration costs and revenue losses resulting from future natural disasters such as hurricanes and the timing of recovery of such restoration costs; and


•	•various other risks identified in “Risk Factors” in Item 1A of Part I of the Registrants’ combined 2019 Form 10-K and in Item 1A of Part II of this Form 10-Q. ~~Item 1A of Part I of the Registrants’ combined 2019 Form 10-K~~ ~~and in Item 1A of Part II of this Form 10-Q.~~

Certain Contractual Limits on Our Ability to Issue Securities and Borrow Money

Houston Electric has contractually agreed that it will not issue additional first mortgage bonds, subject to certain exceptions. For information about the total debt to capitalization financial covenants in the Registrants’ and certain of CenterPoint Energy’s subsidiaries’ revolving credit facilities, see Note 12 to the Interim Condensed Financial Statements.

CRITICAL ACCOUNTING POLICIES

Impairment of Long-Lived Assets, Including Identifiable Intangibles, Goodwill, Equity Method Investments, and Investments without a Readily Determinable Fair Value

The Registrants review the carrying value of long-lived assets, including identifiable intangibles, goodwill, equity method investments, and investments without a readily determinable fair value whenever events or changes in circumstances indicate that such carrying values may not be recoverable, and at least annually, goodwill is tested for impairment as required by accounting guidance for goodwill and other intangible assets. Unforeseen events, changes in market conditions, and probable regulatory disallowances, where applicable, could have a material effect on the value of long-lived assets, including intangibles, goodwill, equity method investments, and investments without a readily determinable fair value due to changes in observable or estimated market value, future cash flows, interest rate, and regulatory matters could result in an impairment charge.

In connection with its preparation of the financial statements for the three months ended March 31, 2020, CenterPoint Energy and CERC identified triggering events to perform interim goodwill impairment tests for each of their reporting units due to the macroeconomic conditions resulting from the COVID-19 pandemic and the related decline in CenterPoint Energy’s ~~common stock~~Common Stock price. CenterPoint Energy recognized goodwill impairment losses, discussed below, during the ~~three~~nine months ~~March 31,~~ended September 30, 2020, and CERC recorded no impairments to goodwill within continuing operations during the ~~three~~nine months ended ~~March 31,~~September 30, 2020. ~~The long-lived assets within~~CenterPoint Energy and CERC performed their annual goodwill impairment tests in the third quarter of 2020 and determined that no goodwill impairment charge was required for any reporting ~~units were determined to be recoverable~~unit as a result of ~~March 31, 2020.~~those tests.

Fair value is the amount at which an asset, liability or business could be bought or sold in a current transaction between willing parties and may be estimated using a number of techniques, including quoted market prices or valuations by third parties, present value techniques based on estimates of cash flows, or multiples of earnings or revenue performance measures. The fair value could be different using different estimates and assumptions in these valuation techniques.

Fair value measurements require significant judgment and unobservable inputs, including (i) projected timing and amount of future cash flows, which factor in planned growth initiatives, (ii) the regulatory environment, as applicable, and (iii) discount

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rates reflecting risk inherent in the current and future market prices. Determining the discount rates requires the estimation of the appropriate company specific risk premiums for those businesses based on evaluation of industry and entity-specific risks, which

includes expectations about future market or economic conditions and reflects the risk demonstrated by market participants through the value of CenterPoint Energy’s ~~common stock~~Common Stock price as of the impairment test date. Changes in these assumptions could have a significant impact on results of the impairment tests. CenterPoint Energy and CERC utilized a third-party valuation specialist to determine the key assumptions used in the estimate of fair value for each of their respective reporting units on the date of their ~~annual~~ goodwill impairment ~~test~~tests and for CenterPoint Energy the fair value of each of its reporting units ~~are~~is reconciled to its market capitalization based on the price of CenterPoint Energy’s ~~common stock.~~Common Stock.

Interim goodwill impairment test, excluding assets held for sale

CenterPoint Energy and CERC performed an interim goodwill impairment test as of March 31, 2020. The fair value of each reporting unit was derived using an income approach or a weighted combination of income and market approaches. Based on the results of the test, CenterPoint Energy recorded a goodwill impairment loss of $185 million at its Indiana Electric Integrated reporting ~~unit.~~unit in the nine months ended September 30, 2020. CERC recorded no goodwill impairment charge in its continuing operations for the ~~three~~nine months ended ~~March 31,~~September 30, 2020.

The fair values of each reporting unit exceeded the carrying value of the reporting unit, with the exception of CenterPoint Energy’s Indiana Electric Integrated reporting unit. As of March 31, 2020, subsequent to the impairment loss recorded by CenterPoint Energy in the three months ended March 31, 2020, Indiana Electric Integrated reporting unit’s fair value approximated its carrying value, and the reporting unit had total goodwill of $936 million. The reporting unit is comprised entirely of businesses acquired in the Merger on February 1, 2019, when the carrying value of the acquired assets and liabilities were adjusted to fair value and as a result presented the greatest risk for impairment. The primary driver for the decline in fair value as of the March 31, 2020 interim goodwill impairment test date is an increase in discounts rates, or the weighted average cost of capital of market participants, on the rate regulated reporting units due in part to the decline in current macroeconomic conditions from July 1, 2019, the previous annual testing date at that time, to March 31, 2020.

An interim goodwill impairment test could be triggered and goodwill impairments recorded in future periods by CenterPoint Energy or CERC’s reporting units due to any of the following: CenterPoint Energy’s market capitalization falling below book value, adverse macroeconomic environment, turnover in key personnel, events affecting a reporting unit such as a contemplated disposal of all or part of a reporting unit, actual earnings results that are materially lower than expected, significant adverse changes in the operating or regulatory environment, or changes in discount rates or other key assumptions that require judgment and are forward looking in nature. CenterPoint Energy and CERC performed their annual goodwill impairment tests in the third quarter of 2020 and determined that no goodwill impairment charge was required for any reporting unit as a result of those tests.

For further information, see Note 10 to the Interim Condensed Financial Statements.

Assets held for sale and discontinued operations ~~Infrastructure Services Disposal Group~~

Generally, a long-lived asset to be sold is classified as held for sale in the period in which management, with approval from the Board of Directors, as applicable, commits to a plan to sell, and a sale is expected to be completed within one year. The Registrants record assets and liabilities held for sale, or the disposal group, at the lower of their carrying value or their estimated fair value less cost to sell. If a disposal group reflects a component of a reporting unit and meets the definition of a business, the goodwill within that reporting unit is allocated to the disposal group based on the relative fair value of the components representing a business that will be retained and disposed. Goodwill is not allocated to a portion of a reporting unit that does not meet the definition of a business. A disposal group that meets the held for sale criteria and also represents a strategic shift to the Registrant is also reflected as discontinued operations on the Statements of Consolidated Income, and prior periods are recast to reflect the earnings or losses from such businesses as income from discontinued operations, net of tax.

On February 3, 2020, CenterPoint Energy, through its subsidiary VUSI, entered into the Securities Purchase Agreement to sell the Infrastructure Services Disposal Group. ~~The transaction closed on April 9, 2020.~~

In February 2020, certain assets and liabilities representing the Infrastructure Services Disposal Group met the held for sale criteria and represented all of the businesses within the reporting unit. In accordance with the Securities Purchase Agreement, VISCO was converted from a wholly-owned corporation to a limited liability company that iswas disregarded for federal income tax purposes immediately prior to the closing of the transaction resulting in the sale of membership ~~units at closing.~~units. The sale was considered an asset sale for tax purposes ~~requiring~~and closed on April 9, 2020. As of September 30, 2020, CenterPoint Energy had a receivable from PowerTeam Services for working capital and other adjustments set forth in the ~~net deferred tax liabilities of approximately $125 million as of March 31, 2020 to~~Securities Purchase Agreement, and a gain or loss on sale in future periods may be ~~excluded from the disposal group and were recognized as a deferred income tax benefit~~incurred by CenterPoint Energy ~~upon closing.~~

~~Upon classifying~~for differences between the ~~Infrastructure Services Disposal Group~~estimated receivable as ~~held for sale~~of September 30, 2020 and ~~in connection with~~ the ~~preparation~~actual amount of the ~~Registrants’ financial statements for the three months ended March 31, 2020, CenterPoint Energy recorded a goodwill impairment~~payment.

Table of ~~approximately $82 million, plus an additional loss of $14 million for transaction costs.~~Contents

Because the Infrastructure Services Disposal Group met the held for sale criteria and also represents a strategic shift to CenterPoint Energy, it is reflected as discontinued operations on CenterPoint Energy’s Statements of Consolidated Income, and as a result, prior periods have been recast to reflect the earnings or losses from such businesses as income from discontinued operations, net of tax.

~~Assets held for sale and discontinued operations, Energy Services Disposal Group~~

On February 24, 2020, CenterPoint Energy, through its subsidiary CERC Corp., entered into the Equity Purchase Agreement to sell the Energy Services Disposal Group. This transaction ~~does~~did not include CEIP and its ~~assets. The transaction is expected to close in the second quarter of 2020.~~

assets or MES. In February 2020, certain assets and liabilities representing the Energy Services Disposal Group met the criteria to be classified as held for sale and represented substantially all of the businesses within the reporting unit. In accordance with the Equity Purchase Agreement, CES ~~will be~~was converted from a wholly-owned corporation to a limited liability company that iswas disregarded for federal income tax purposes immediately prior to the closing of the transaction resulting in the sale of membership ~~units at closing.~~units. The sale ~~will be~~was considered an asset sale for tax purposes ~~requiring the net deferred tax assets of approximately $3 million as of March 31, 2020 to be included within the retained component of the reporting unit~~ and ~~will be recognized as a deferred tax expense by CenterPoint Energy upon closing.~~closed on June 1, 2020.

Upon classifying the Energy Services Disposal Group as held for sale and in connection with the preparation of the Registrants’ financial statements for the three months ended March 31, 2020, CenterPoint Energy recorded a goodwill impairment loss of approximately $62 million and a loss on assets held for sale of approximately $70 million, plus an additional loss of $6 million for transaction costs. CenterPoint Energy and CERC disclosed itin its 2019 Form 10-K that an anticipated loss on held for sale of $80 million was expected in 2020 for the ~~three months ended March 31, 2020.~~Energy Services Disposal Group. The primary driver for the increase in the actual loss on held for sale, including goodwill impairment, recorded by CenterPoint Energy and CERC in the ~~three~~nine months ended ~~March 31,~~September 30, 2020 compared to the amounts previously anticipated is a result of an increase in portions of the derivative assets, net of derivative liabilities, excluded from the working capital adjustment within the Equity Purchase Agreement during the ~~three~~nine months ended ~~March 31,~~September 30, 2020. ~~Additional impairments~~In October 2020, CenterPoint Energy collected the full and final settlement of the working capital adjustment under the Equity Purchase Agreement, and no gains or ~~loss~~losses on ~~held for sale may be recorded~~this transaction are expected in future ~~periods due to increases to the carrying value of derivative assets or decreases to derivative liabilities in those~~ periods.

Because the Energy Services Disposal Group met the held for sale criteria and also represents a strategic shift to CenterPoint Energy and CERC, it is reflected as discontinued operations on CenterPoint Energy’s and CERC’s Statements of Consolidated Income, and prior periods have been recast to reflect the earnings or losses from such businesses as income from discontinued operations, net of tax.

For further information, see Note 3 to the Interim Condensed Financial Statements.

Equity Method Investments

Equity method investments are evaluated for impairment when factors indicate that a decrease in value of an investment has occurred and the carrying amount of the investment may not be recoverable. An impairment loss, based on the excess of the carrying value over the best estimate of fair value of the investment, is recognized in earnings when an impairment is deemed to be other than temporary. Considerable judgment is used in determining if an impairment loss is other than temporary and the amount of any impairment. Based on the severity of the decline in Enable’s common unit price during the three months ended March 31, 2020 due to the macroeconomic conditions related in part to the COVID-19 pandemic, combined with Enable’s announcement on April 1, 2020 to reduce its quarterly distributions per common unit by 50%, and the market outlook indicating excess supply and continued depressed crude oil and natural gas prices impacting the midstream oil and gas industry, CenterPoint Energy determined, in connection with its preparation of its financial statements for the three months ended March 31, 2020, that an other than temporary decrease in the value of its investment in Enable had occurred. CenterPoint Energy wrote down the value of its investment in Enable to its estimated fair value of $848 million as of March 31, 2020 and recognized an impairment charge of $1,541 million during the ~~three~~nine months ended ~~March 31,~~September 30, 2020. Both the income approach and market approach were utilized to estimate the fair value of CenterPoint Energy’s equity investment in Enable, which includes common units, general partner interest, and incentive distribution rights held by CenterPoint Energy through CNP Midstream. The determination of fair value considered a number of relevant factors including Enable’s common unit price and forecasted distributions, recent comparable transactions and the limited float of Enable’s publicly traded common units. CenterPoint Energy did not identify a decrease in value as of September 30, 2020, and no impairments in its investment in Enable were recorded during the three months ended September 30, 2020.

Key assumptions in the market approach include recent market transactions of comparable companies and EBITDA to total enterprise multiples for comparable companies. Due to volatility of the quoted price of Enable’s units, a volume weighted average price was used under the market approach to best approximate fair value at the measurement date. Key assumptions in the income

approach include Enable’s forecasted cash distributions, projected cash flows of incentive distribution rights, forecasted growth rate of Enable’s cash distributions beyond 2020, and the discount rate used to determine the present value of the estimated future cash flows. A weighing of the different approaches was utilized to determine the estimated fair value of our investment in Enable. CenterPoint Energy based its assumptions on projected financial information that it believes is reasonable; however, actual results may differ materially from those projections. It is reasonably possible that the fair value of CenterPoint Energy’s investment in Enable will change in the near term due to the following: actual Enable cash distribution is materially lower than expected, significant adverse changes in Enable’s operating environment, decline in Enable’s common unit price, increase in the discount rate, and changes in other key assumptions which require judgment and/or are forward looking in nature. Further declines in the fair value of Enable could result in additional impairments.

For further information, see Note 9 to the Interim Condensed Financial Statements.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 2 to the Interim Condensed Financial Statements, incorporated herein by reference, for a discussion of new accounting pronouncements that affect the Registrants.

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OTHER SIGNIFICANT MATTERS

The significant uncertainties related to the COVID-19 pandemic and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries. While it is unknown how long these conditions will last and what the complete financial effect will be, the plan assets and benefit obligations of our pension and postretirement plans ~~are expected to~~may be negatively impacted when these plans are re-measured, generally, at year-end, resulting in a decline in the funded status. During the ~~three~~nine months ended ~~March 31,~~September 30, 2020, the fair value of pension plan assets ~~declined~~increased by approximately ~~$171~~$115 million or ~~10%~~5.7% from December 31, ~~2019.~~2019, excluding CenterPoint Energy’s contributions to, and benefit distributions from, the pension plans. A decline in the funded status of our pension plans as of December 31, 2020 could result in an increase in plan expenses and minimum required contributions for the subsequent years from the historical amounts. Currently, we do not expect the event to impact the disclosed 2020 plan expenses or minimum required contributions.


~~Item 3.~~	~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Houston Electric and CERC meet the conditions specified in General Instruction H(1)(a) and (b) to Form 10-Q and are therefore permitted to use the reduced disclosure format for wholly-owned subsidiaries of reporting companies. Accordingly, Houston Electric and CERC have omitted from this report the information called for by Item 3 (Quantitative and Qualitative Disclosures About Market Risk) of Part I of the Form 10-Q.

Interest Rate Risk (CenterPoint Energy)

As of ~~March 31,~~September 30, 2020, CenterPoint Energy had outstanding long-term debt, lease obligations and obligations under its ZENS that subject it to the risk of loss associated with movements in market interest rates.

CenterPoint Energy’s floating rate obligations aggregated ~~$4.2~~$2.1 billion and $3.9 billion as of ~~March 31,~~September 30, 2020 and December 31, 2019, respectively. If the floating interest rates were to increase by 10% from ~~March 31,~~September 30, 2020 rates, CenterPoint Energy’s combined interest expense would increase by approximately $9$1 million annually.

As of ~~March 31,~~September 30, 2020 and December 31, 2019, CenterPoint Energy had outstanding fixed-rate debt (excluding indexed debt securities) aggregating ~~$11.2~~$11.3 billion and $11.2 billion, respectively, in principal amount and having a fair value of ~~$12.0~~$13.0 billion and $12.2 billion, respectively. Because these instruments are fixed-rate, they do not expose CenterPoint Energy to the risk of loss in earnings due to changes in market interest rates. However, the fair value of these instruments would increase by approximately ~~$348~~$294 million if interest rates were to decline by 10% from levels at ~~March 31,~~September 30, 2020. In general, such an increase in fair value would impact earnings and cash flows only if CenterPoint Energy were to reacquire all or a portion of these instruments in the open market prior to their maturity.

The ZENS obligation is bifurcated into a debt component and a derivative component. The debt component of ~~$18~~$16 million as of ~~March 31,~~September 30, 2020 was a fixed-rate obligation and, therefore, did not expose CenterPoint Energy to the risk of loss in earnings due to changes in market interest rates. However, the fair value of the debt component would increase by approximately $2$2 million if interest rates were to decline by 10% from levels at ~~March 31,~~September 30, 2020. Changes in the fair value of the derivative component, a ~~$758~~$918 million recorded liability at ~~March 31,~~September 30, 2020, are recorded in CenterPoint Energy’s Condensed Statements of Consolidated Income and, therefore, it is exposed to changes in the fair value of the derivative component as a result of changes in the underlying risk-free interest rate. If the risk-free interest rate were to increase by 10% from ~~March 31,~~September 30, 2020 levels, the fair value of the

derivative component liability would decrease by less than $1$1 million,, which would be recorded as an unrealized gain in CenterPoint Energy’s Condensed Statements of Consolidated Income.

Equity Market Value Risk (CenterPoint Energy)

CenterPoint Energy is exposed to equity market value risk through its ownership of 10.2 million shares of AT&T Common and 0.9 million shares of Charter Common, which CenterPoint Energy holds to facilitate its ability to meet its obligations under the ZENS. See Note 11 to the condensed consolidated financial statements for a discussion of CenterPoint Energy’s ZENS obligation. Changes in the fair value of the ZENS-Related Securities held by CenterPoint Energy are expected to substantially offset changes in the fair value of the derivative component of the ZENS. A decrease of 10% from the ~~March 31,~~September 30, 2020 aggregate market value of these shares would result in a net ~~loss~~gain of ~~less than~~ $1$8 million,, which would be recorded as an unrealized ~~loss~~gain in CenterPoint Energy’s Condensed Statements of Consolidated Income.

Commodity Price Risk From Non-Trading Activities (CenterPoint Energy)

CenterPoint Energy’s regulated operations in Indiana have limited exposure to commodity price risk for transactions involving purchases and sales of natural gas, coal and purchased power for the benefit of retail customers due to current state

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regulations, which, subject to compliance with those regulations, allow for recovery of the cost of such purchases through natural gas and fuel cost adjustment mechanisms. CenterPoint Energy’s utility natural gas operations in Indiana have regulatory authority to lock in pricing for up to 50% of annual natural gas purchases using arrangements with an original term of up to 10 years. This authority has been utilized to secure fixed price natural gas using both physical purchases and financial derivatives. As of ~~March 31,~~September 30, 2020, the recorded fair value of non-trading energy derivative liabilities was ~~$23~~$7 million for CenterPoint Energy’s utility natural gas operations in Indiana, which is offset by a regulatory asset.

Although CenterPoint Energy’s regulated operations are exposed to limited commodity price risk, natural gas and coal prices have other effects on working capital requirements, interest costs, and some level of price-sensitivity in volumes sold or delivered. Constructive regulatory orders, such as those authorizing lost margin recovery, other innovative rate designs and recovery of unaccounted for natural gas and other natural gas-related expenses, also mitigate the effect natural gas costs may have on CenterPoint Energy’s financial condition. In 2008, the PUCO approved an exit of the merchant function in CenterPoint Energy’s Ohio natural gas service territory, allowing Ohio customers to purchase substantially all natural gas directly from retail marketers rather than from CenterPoint Energy.

CenterPoint Energy uses derivative instruments as economic hedges to offset the commodity price exposure inherent in the Energy Services Disposal Group. The commodity risk created by these instruments, including the offsetting impact on the market value of natural gas inventory, is described below. CenterPoint Energy measures this commodity risk using a sensitivity analysis. For purposes of this analysis, CenterPoint Energy estimates commodity price risk by applying a $0.50 change in the forward NYMEX price to its net open fixed price position (including forward fixed price physical contracts, natural gas inventory and fixed price financial contracts) at the end of each period. As of March 31, 2020, the recorded fair value of CenterPoint Energy’s non-trading energy derivatives was a net asset of $127 million (before collateral), all of which is related to the Energy Services Disposal Group and included in assets and liabilities held for sale. A $0.50 change in the forward NYMEX price would have had a combined impact of $19 million on CenterPoint Energy’s non-trading energy derivatives net asset, included in assets and liabilities held for sale, and the market value of natural gas inventory. For further information, See Note 3 to the Interim Condensed Financial Statements.

Item 4.CONTROLS AND PROCEDURES

Commodity price risk is not limited to changes in forward NYMEX prices. Variation of commodity pricing between the different indices used to mark to market portions of Energy Services Disposal Group’s natural gas inventory, included in assets held for sale, (Gas Daily) and the related fair value hedge (NYMEX) can result in volatility to CenterPoint Energy’s net income. Over time, any gains or losses on the sale of storage gas inventory would be offset by gains or losses on the fair value hedges.

On February 24, 2020, CenterPoint Energy, through its subsidiary CERC Corp., entered into the Equity Purchase Agreement to sell the Energy Services Disposal Group. The transaction is expected to close in the second quarter of 2020. For further information, see Note 3 to the Interim Condensed Financial Statements.


~~Item 4.~~	~~CONTROLS AND PROCEDURES~~

In accordance with Exchange Act Rules 13a-15 and 15d-15, the Registrants carried out separate evaluations, under the supervision and with the participation of each company’s management, including the principal executive officer and principal financial officer, of the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report. Based on those evaluations, the principal executive officer and principal financial officer, in each case, concluded that the disclosure controls and procedures were effective as of ~~March 31,~~September 30, 2020 to provide assurance that information required to be disclosed in the

reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and such information is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding disclosure.

There has been no change in the Registrants’ internal controls over financial reporting that occurred during the three months ended ~~March 31,~~September 30, 2020 that has materially affected, or is reasonably likely to materially affect, the Registrants’ internal controls over financial reporting.

PART II. OTHER INFORMATION


~~Item 1.~~	~~LEGAL PROCEEDINGS~~

Item 1.LEGAL PROCEEDINGS

For a description of certain legal and regulatory proceedings, please read Note 14(d) to the Interim Condensed Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Future Sources and Uses of Cash” and “— Regulatory Matters,” each of which is incorporated herein by reference. See also “Business — Regulation” and “— Environmental Matters” in Item 1 and “Legal Proceedings” in Item 3 of the Registrants’ combined 2019 Form 10-K.


~~Item 1A.~~	~~RISK FACTORS~~

Item 1A.RISK FACTORS

Please see below the new risk factors affecting the Registrants’ businesses and CenterPoint Energy’s investment in Enable, in addition to those discussed in “Risk Factors” in Item 1A of Part I of the combined 2019 Form 10-K, which could materially affect the Registrants’ financial condition or future results. Except for the updates below, there have been no material changes from the risk factors disclosed in the Registrants’ combined 2019 Form 10-K.

We face risks related to COVID-19 and other health epidemics and outbreaks, including economic, regulatory, legal, workforce and cyber security risks, which could adversely impact our financial condition, results of operations, cash flows and liquidity.

The ~~recent outbreak of~~ COVID-19 pandemic is a rapidly evolving situation that is adversely affecting current global economic activities and conditions. An extended slowdown of economic growth, decreased demand for commodities and/or material changes in governmental or regulatory policy in the United States has resulted in, and could continue to result in, lower growth, including customer growth, and reduced demand for and usage of electricity and natural gas in our service territories as customer facilities ~~continue~~close, remain closed or potentially close again. We have experienced reduced demand and usage among our electric and natural gas commercial and industrial customers, as well as a decrease in revenues from disconnections and reconnections due to ~~close~~the disconnect moratoriums across our service territories due to COVID-19, which have now either expired or ~~remain closed.~~will expire during the fourth quarter of 2020 in certain of the Registrants’ service territories. The ability of our customers, contractors and

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suppliers to meet their obligations to us, including payment obligations, ~~could~~has also bebeen negatively affected under the current economic conditions. Furthermore, while we have not experienced significant disruptions or challenges with respect to our supply chain from the COVID-19 pandemic, to the extent we experience such disruptions in our supply chain that limit our ability to obtain materials and equipment necessary for our businesses, whether through delayed order fulfillment, limited production or unavailability due to COVID-19, we may be unable to perform our operations timely or as anticipated, which could result in service or construction delays or increased costs.

In our NGD service territories and for Indiana Electric, we have informed customers that disconnections for non-payment and late fees are temporarily suspended, which could increase our bad debt expense. For Houston Electric, we are following PUCT orders regarding disconnection practices related to those customers impacted by COVID-19. These PUCT orders provide for suspended disconnections for certain residential customers as well as for their REPs and utilities to be compensated through a temporary rider charged by utilities, including Houston Electric, applicable to all customers. Additionally, the PUCT orders allow for certain utility costs related to COVID-19 to be placed in a regulatory asset for utilities to seek recovery in the future. As adverse economic conditions continue, REPs could encounter financial difficulties, including bankruptcies, which could impair their ability to pay for Houston Electric’s services or could cause them to delay such ~~payments.~~payments, adversely affecting Houston Electric’s cash flows and liquidity. In our NGD service territories and for Indiana Electric, we informed customers that disconnections for non-payment had been temporarily suspended and in certain service territories continue to be temporarily suspended. However, the disconnect moratoriums have now either expired or will expire during the fourth quarter of 2020 in certain of the Registrants’ service territories. As a result of the disconnect moratoriums across our NGD service territories and other payment deferrals or arrangements, days outstanding on receivables and uncollectible accounts have increased, resulting in an increase to allowance for doubtful accounts. To the extent these conditions in our service territories persist, our bad debt expense from uncollectible accounts could continue to increase, negatively impacting our financial condition, results of operations and cash flows. Our NGD service territories and Indiana Electric have either (1) received authority from their public utility commissions to defer bad debt expense associated with COVID-19 as a regulatory asset or (2) exercised existing authority to recover bad debt expense through an existing tracking mechanism. CenterPoint Energy and CERC have recorded estimated incremental uncollectible receivables to the associated regulatory asset of $16 million and $14 million, respectively, as of September 30, 2020. Additionally, our state and local regulatory agencies, in response to a federal mandate or otherwise, could impose restrictions on the rates we charge to provide our services, including the inability to implement approved rates, or delay actions with respect to our rate cases and filings. The COVID-19 ~~outbreak~~pandemic may affect our ability to timely satisfy regulatory requirements such as recordkeeping and/or timely reporting requirements. As the EPA and many state environmental agencies have issued enforcement discretion policies for such issues, it is unclear whether the effect of any possible noncompliance due to COVID-19 will be material.

Furthermore, in the event key officers or a substantial portion of our workforce were to be impacted by COVID-19 for an extended period of time, we may face challenges with respect to our services or operations and we may not be able to execute our capital plan as anticipated. There is considerable uncertainty regarding the extent to which COVID-19 will continue to spread and the extent and duration of governmental and other measures implemented to try to slow the spread of COVID-19, such as large-scale travel bans and restrictions, border closures, quarantines, shelter-in-place orders and business and government shutdowns. Restrictions of this nature have caused, and may continue to cause, us, our suppliers and other business counterparties to experience operational delays, shortages of employees, facility shutdowns or business closures. We have modified certain business and workforce practices (including those related to employee travel, employee work locations and ~~cancellation of physical~~ participation in ~~certain~~ meetings,

events and conferences) to conform to government restrictions and best practices encouraged by governmental and regulatory authorities. However, the quarantine of personnel or the inability to access our facilities or customer sites could adversely affect our operations. While certain of our personnel have been, and may continue to be, quarantined, our operations and corporate functions have not been adversely affected to date. As of the date of this Form 10-Q, we have increased the permitted occupancy of certain of our offices and facilities, with the rest of our office-based personnel continuing to work remotely under alternate work arrangements. Where we must maintain a presence in the field, we have adjusted our operational protocols to minimize exposure and risk to our field personnel, customers and the communities we serve, including, among other things, modifying our work schedules and reporting locations, delaying certain work types, such as maintenance and capital projects, and adjusting project scope and scale to adhere to safety protocols, while continuing to maintain the work activities necessary for safe and reliable service to our customers with increased safety precautions, but we cannot assure that such adjustments and precautions will be sufficient to minimize exposure to and risk from COVID-19. Also, we have a limited number of highly skilled employees for some of our operations. If a large proportion of our employees in those critical positions were to contract COVID-19 at the same time, we would rely upon our business continuity plans in an effort to continue operations at our facilities, but there is no certainty that such measures will be sufficient to mitigate the adverse impact to our operations that could result from shortages of highly skilled employees.

In addition, the significant uncertainties related to the COVID-19 pandemic and actions taken to slow its spread have had, and are expected to continue to have, an adverse impact on the economies and financial markets of many countries. The plan assets and benefit obligations of our pension and postretirement plans ~~are expected to~~may be impacted negatively when these plans are re-measured, generally, at year-end, resulting in a decline in the funded status. During the ~~three~~nine months ended ~~March 31,~~September 30, 2020, the fair value of pension plan assets ~~declined~~increased by approximately ~~$171~~$115 million or ~~10%~~5.7% from December 31, ~~2019.~~2019, excluding CenterPoint Energy’s contributions to, and benefit distributions from, the pension plans. A decline in the funded status of our

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pension plans as of December 31, 2020 could result in an increase in plan expenses and minimum required contributions for the subsequent years from the historical amounts.

Experts have observed an increase in the volume and the sophistication of cyberattacks since the beginning of the COVID-19 pandemic. Any technology system breaches and/or data privacy incidents could disrupt our operations or result in the loss or exposure of confidential or sensitive customer, employee or company information and adversely affect our business, financial condition and results of operations. As many of our employees and third-party service providers work remotely in accordance with government mandates or guidelines, we face heightened cyber security and privacy risks related to unauthorized system access, aggressive social engineering tactics and adversaries attacking the information technology systems, network infrastructure, technology and facilities used to conduct our ~~businesses.~~ business. The increase in the remote working arrangements of our employees as a result of the COVID-19 pandemic has required enhancements and modifications to our information technology infrastructure (e.g., virtual private network, or VPN, and remote collaboration systems), and any failures of these technologies, including third-party service providers, that facilitate working remotely could limit our ability to conduct our ordinary operations and expose us to increased risk or impact of a cyberattack.

Additionally, in the event that customers, contractors, employees or others were to allege that they contracted COVID-19 because of actions we took or failed to take, we could face claims, lawsuits and potential legal liability. In addition to the reasonableness of our actions and efforts to comply with applicable COVID-19 guidance, our exposure and ultimate liability would depend upon the applicability of workers’ compensation, the availability of insurance coverage and limitations on liability being considered or enacted at the state and federal level.

We will continue to monitor developments affecting our employees, customers and operations. At this time, however, we cannot predict the extent or duration of the COVID-19 pandemic or its effects on national, state and local economies, including the impact on our ability to access capital markets, our supply chain, our business strategies and plans and our workforce, nor can we estimate the potential adverse impact from COVID-19 on our financial condition, results of operations, cash flows and liquidity.

The demand for Enable’s services are impacted by the drilling and production decisions of others and by commodity price volatility, which could adversely affect its financial position, results of operations and its ability to make cash distributions to us. A sustained decline in energy and commodity prices may also contribute to unfavorable economic conditions in certain of our service territories, in particular Houston, Texas.

The COVID-19 pandemic has adversely affected Enable’s businesses by (i) reducing the demand for natural gas, NGLs and crude oil due to reduced global and national economic activity, leading to significantly lower prices for natural gas, NGLs and crude oil; (ii) impairing the supply chain of certain of its customers for which it provides gathering and processing services, both of which could lead to further reduction of the utilization of its systems; and (iii) reducing producer activity across its footprint which is expected to result in reduced utilization of its services. In addition, concerns about global economic growth, as well as uncertainty regarding the timing, pace and extent of an economic recovery in the United States and abroad, have had a significant adverse impact on global financial markets and commodity prices. The price of, and demand for, natural gas, NGLs and crude oil declined significantly in response to the ongoing spread and economic effects of COVID-19, including significant governmental measures being implemented to control the spread of COVID-19, including quarantines, travel restrictions and business ~~shutdowns and efforts made by oil-producing countries to reduce production of crude oil in response to declining global demand. For example, a~~shutdowns. A coalition of 23 nations led by Saudi Arabia and Russia agreed to reduce production of crude oil by 9.7 million barrels per day in May and June; however, NGL and crude oil prices have remained depressed. These events, combined with the continuing COVID-19 pandemic and uncertainty regarding the length of time it ~~will~~would take for the United States and the rest of the world to slow the spread of COVID-19 to the point where applicable authorities are comfortable easing current restrictions on various commercial and economic activities, contributed to a sharp drop in prices for crude oil in the first quarter of 2020 and negative crude oil prices in the second quarter of 2020. On March 31, 2020, Enable’s common unit price closed at $2.57 per common unit. In response to these industry conditions, on April 1, 2020, Enable announced a reduction in its quarterly distributions per common unit from $0.3305 distributed for the fourth quarter 2019 to $0.16525, representing a 50% reduction. This reduction has resulted, and is expected to result in ~~one or more~~additional, quarterly distributions to us that fall below our previously disclosed expected minimum quarterly distribution from Enable of $0.2875 per common unit. This reduction in Enable’s quarterly distributions per common unit ~~is expected to~~will reduce its common unit distributions to us by approximately $155 million per ~~year.~~year assuming no further reductions. To the extent such economic conditions persist or further deteriorate, quarterly distributions on Enable’s common units may be subject to further reductions. Enable currently cannot predict the duration or magnitude of the effects of COVID-19 on the supply and demand for, and the price of, natural gas, NGLs and crude oil or the exploration, development and production activity of the producers across its areas of operation. Sustained low commodity prices and reductions in exploration or production activities could continue to adversely affect the value of our interests in Enable and Enable’s financial position, results of operations and ability to make cash distributions to us.

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Additionally, the significant decline in energy and commodity prices described above, if sustained, could cause, the rate of economic, employment and/or population growth in certain of our service territories to decline. In particular, Houston, Texas has a higher percentage of employment tied to the energy sector relative to other regions of the country. A reduction in the rate of economic, employment and/or population growth could result in lower growth and reduced demand for and usage of electricity and natural gas in such service territories. As such, sustained low energy and commodity prices could have an adverse impact on our financial condition, results of operations, cash flows and liquidity.


~~Item 6.~~	~~EXHIBITS~~

Item 6.EXHIBITS

Exhibits filed herewith are designated by a cross (+); all exhibits not so designated are incorporated by reference to a prior filing as indicated. Agreements included as exhibits are included only to provide information to investors regarding their terms. Agreements listed below may contain representations, warranties and other provisions that were made, among other things, to provide the parties thereto with specified rights and obligations and to allocate risk among them, and no such agreement should be relied upon as constituting or providing any factual disclosures about the Registrants, any other persons, any state of affairs or other matters.

Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, the Registrants have not filed as exhibits to this Form 10-Q certain long-term debt instruments, including indentures, under which the total amount of securities authorized does not exceed 10% of the total assets of the Registrants and its subsidiaries on a consolidated basis. The Registrants hereby agree to furnish a copy of any such instrument to the SEC upon request.

Exhibit
Number

Description

Report or Registration
Statement

SEC File or
Registration
Number

Exhibit
Reference

CenterPoint Energy

Houston Electric

CERC

2.1*

Agreement and Plan of Merger, dated as of April 21, 2018, by and among Vectren Corporation, CenterPoint Energy, Inc. and Pacer Merger Sub, Inc.

CenterPoint Energy’s Form 8-K dated April 21, 2018

1-31447

2.1

2.2*

Securities Purchase Agreement, dated as of February 3, 2020, by and among Vectren Utility Services, Inc., PowerTeam Services, LLC and, solely for purposes of Section 10.17 of the Securities Purchase Agreement, Vectren Corporation

CenterPoint Energy’s Form 8-K dated February 3, 2020

1-31447

2.3*

Equity Purchase Agreement, dated as of February 24, 2020, by and between CERC Corp. and Athena Energy Services Buyer, LLC

CenterPoint Energy’s Form 8-K dated February 24, 2020

1-31447

3.1

Restated Articles of Incorporation of CenterPoint Energy

CenterPoint Energy’s Form 8-K dated July 24, 2008

1-31447

3.2

Restated Certificate of Formation of Houston Electric

Houston Electric’s Form 10-Q for the quarter ended June 30, 2011

1-3187

3.1

3.3

Certificate of Incorporation of RERC Corp.

CERC Form 10-K for the year ended December 31, 1997

1-13265

3(a)(1)

3.4

Certificate of Merger merging former NorAm Energy Corp. with and into HI Merger, Inc. dated August 6, 1997

CERC Form 10-K for the year ended December 31, 1997

1-13265

3(a)(2)

3.5

Certificate of Amendment changing the name to Reliant Energy Resources Corp.

CERC Form 10-K for the year ended December 31, 1998

1-13265

3(a)(3)

3.6

Certificate of Amendment changing the name to CenterPoint Energy Resources Corp.

CERC Form 10-Q for the quarter ended June 30, 2003

1-13265

3(a)(4)

3.7

Third Amended and Restated Bylaws of CenterPoint Energy

CenterPoint Energy’s Form 8-K dated February 21, 2017

1-31447

3.1

3.8

Amended and Restated Limited Liability Company Agreement of Houston Electric

Houston Electric’s Form 10-Q for the quarter ended June 30, 2011

1-3187

3.2

3.9

Bylaws of RERC Corp.

CERC Form 10-K for the year ended December 31, 1997

1-13265

3(b)

Table of Contents

Exhibit
Number
Description
Report or Registration
Statement

SEC File or
Registration
Number

Exhibit
Reference
CenterPoint Energy Houston Electric CERC
2.1*
Agreement and Plan of Merger, dated as of April 21, 2018, by and among Vectren Corporation, CenterPoint Energy, Inc. and Pacer Merger Sub, Inc.
CenterPoint Energy’s Form 8-K dated April 21, 2018 1-31447 2.1 x
2.2*
Securities Purchase Agreement, dated as of February 3, 2020, by and among Vectren Utility Services, Inc., PowerTeam Services, LLC and, solely for purposes of Section 10.17 of the Securities Purchase Agreement, Vectren Corporation
CenterPoint Energy’s Form 8-K dated February 3, 2020 1-31447 x
2.3*
Equity Purchase Agreement, dated as of February 24, 2020, by and between CERC Corp. and Athena Energy Services Buyer, LLC
CenterPoint Energy’s Form 8-K dated February 24, 2020 1-31447 x x
3.1
Restated Articles of Incorporation of CenterPoint Energy
CenterPoint Energy’s Form 8-K dated July 24, 2008 1-31447 3.2 x
3.2
Restated Certificate of Formation of Houston Electric
Houston Electric’s Form 10-Q for the quarter ended June 30, 2011 1-3187 3.1 x
3.3
Certificate of Incorporation of RERC Corp.

CERC Form 10-K for the year ended December 31, 1997 1-13265 3(a)(1) x
3.4
Certificate of Merger merging former NorAm Energy Corp. with and into HI Merger, Inc. dated August 6, 1997
CERC Form 10-K for the year ended December 31, 1997 1-13265 3(a)(2) x
3.5
Certificate of Amendment changing the name to Reliant Energy Resources Corp.
CERC Form 10-K for the year ended December 31, 1998 1-13265 3(a)(3) x
3.6
Certificate of Amendment changing the name to CenterPoint Energy Resources Corp.
CERC Form 10-Q for the quarter ended June 30, 2003 1-13265 3(a)(4) x
3.7
Third Amended and Restated Bylaws of CenterPoint Energy
CenterPoint Energy’s Form 8-K dated February 21, 2017 1-31447 3.1 x
3.8
Amended and Restated Limited Liability Company Agreement of Houston Electric
Houston Electric’s Form 10-Q for the quarter ended June 30, 2011 1-3187 3.2 x
3.9
Bylaws of RERC Corp.
CERC Form 10-K for the year ended December 31, 1997 1-13265 3(b) x
3.10
Statement of Resolutions Deleting Shares Designated Series A Preferred Stock of CenterPoint Energy
CenterPoint Energy’s Form 10-K for the year ended December 31, 2011 1-31447 3(c) x


Exhibit Number	Description	Report or Registration Statement	SEC File or Registration Number	Exhibit Reference	CenterPoint Energy	Houston Electric	CERC
3.10	Statement of Resolutions Deleting Shares Designated Series A Preferred Stock of CenterPoint Energy	CenterPoint Energy’s Form 10-K for the year ended December 31, 2011	1-31447	3(c)	x
3.11	Statement of Resolution Establishing Series of Shares Designated Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock of CenterPoint Energy	CenterPoint Energy’s Form 8-K dated August 22, 2018	1-31447	3.1	x
3.12	Statement of Resolution Establishing Series of Shares designated 7.00% Series B Mandatory Convertible Preferred Stock of CenterPoint Energy	CenterPoint Energy’s Form 8-K dated September 25, 2018	1-31447	3.1	x
3.13	Statement of Resolution Establishing Series of Shares designated Series C Mandatory Convertible Preferred Stock of CenterPoint Energy, Inc., filed with the Secretary of State of the State of Texas and effective May 7, 2020	CenterPoint Energy’s Form 8-K dated May 6, 2020	1-31447	3.1	x
4.1	Form of CenterPoint Energy Stock Certificate	CenterPoint Energy’s Registration Statement on Form S-4	3-69502	4.1	x
4.2	Form of Certificate representing the Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock of CenterPoint Energy	CenterPoint Energy’s Form 8-K dated August 22, 2018	1-31447	4.1	x
4.3	Form of Certificate representing the 7.00% Series B Mandatory Convertible Preferred Stock of CenterPoint Energy (included as Exhibit A to Exhibit 3.12)	CenterPoint Energy’s Form 8-K dated September 25, 2018	1-31447	4.1	x
4.4	Deposit Agreement, dated as of October 1, 2018, among CenterPoint Energy and Broadridge Corporate Issuer Solutions, Inc., as Depositary, and the holders from time to time of the Depositary Receipts described therein	CenterPoint Energy’s Form 8-K dated September 25, 2018	1-31447	4.2	x
4.5	Form of Depositary Receipt for the Depositary Shares (included as Exhibit A to Exhibit 4.4)	CenterPoint Energy’s Form 8-K dated September 25, 2018	1-31447	4.3	x
4.6	$1,600,000,000 Credit Agreement, dated as of March 3, 2016, among CenterPoint Energy, as Borrower, and the banks named therein	CenterPoint Energy’s Form 8-K dated March 3, 2016	1-31447	4.1	x
4.7	$300,000,000 Credit Agreement, dated as of March 3, 2016, among Houston Electric, as Borrower, and the banks named therein	CenterPoint Energy’s Form 8-K dated March 3, 2016	1-31447	4.2	x	x
4.8	$600,000,000 Credit Agreement, dated as of March 3, 2016, among CERC Corp., as Borrower, and the banks named therein	CenterPoint Energy’s Form 8-K dated March 3, 2016	1-31447	4.3	x		x
4.9	First Amendment to Amended and Restated Credit Agreement, dated as of June 16, 2017, by and among CenterPoint Energy, as Borrower, and the banks named therein	CenterPoint Energy’s Form 8-K dated June 16, 2017	1-31447	4.1	x
4.10	Second Amendment to Amended and Restated Credit Agreement, dated as of May 25, 2018, by and among CenterPoint Energy, as Borrower, and the banks named therein	CenterPoint Energy’s Form 8-K dated May 25, 2018	1-31447	4.1	x
4.11	First Amendment to Credit Agreement, dated as of June 16, 2017, among Houston Electric, as Borrower, and the banks named therein	CenterPoint Energy’s Form 8-K dated June 16, 2017	1-31447	4.2	x	x
4.12	First Amendment to Credit Agreement, dated as of June 16, 2017, among CERC Corp., as Borrower, and the banks named therein	CenterPoint Energy’s Form 8-K dated June 16, 2017	1-31447	4.3	x		x

Table of Contents

Exhibit
Number
Description
Report or Registration
Statement

SEC File or
Registration
Number

Exhibit
Reference
CenterPoint Energy Houston Electric CERC
3.11
Statement of Resolution Establishing Series of Shares Designated Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock of CenterPoint Energy
CenterPoint Energy’s Form 8-K dated August 22, 2018 1-31447 3.1 x
3.12
Statement of Resolution Establishing Series of Shares designated 7.00% Series B Mandatory Convertible Preferred Stock of CenterPoint Energy
CenterPoint Energy’s Form 8-K dated September 25, 2018 1-31447 3.1 x
4.1
Form of CenterPoint Energy Stock Certificate
CenterPoint Energy’s Registration Statement on Form S-4 3-69502 4.1 x
4.2
Form of Certificate representing the Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock of CenterPoint Energy
CenterPoint Energy’s Form 8-K dated August 22, 2018 1-31447 4.1 x
4.3
Form of Certificate representing the 7.00% Series B Mandatory Convertible Preferred Stock of CenterPoint Energy (included as Exhibit A to Exhibit 3.12)
CenterPoint Energy’s Form 8-K dated September 25, 2018 1-31447 4.1 x
4.4
Deposit Agreement, dated as of October 1, 2018, among CenterPoint Energy and Broadridge Corporate Issuer Solutions, Inc., as Depositary, and the holders from time to time of the Depositary Receipts described therein
CenterPoint Energy’s Form 8-K dated September 25, 2018 1-31447 4.2 x
4.5
Form of Depositary Receipt for the Depositary Shares (included as Exhibit A to Exhibit 4.4)
CenterPoint Energy’s Form 8-K dated September 25, 2018 1-31447 4.3 x
4.6
$1,600,000,000 Credit Agreement, dated as of March 3, 2016, among CenterPoint Energy, as Borrower, and the banks named therein
CenterPoint Energy’s Form 8-K dated March 3, 2016 1-31447 4.1 x
4.7
$300,000,000 Credit Agreement, dated as of March 3, 2016, among Houston Electric, as Borrower, and the banks named therein
CenterPoint Energy’s Form 8-K dated March 3, 2016 1-31447 4.2 x x
4.8
$600,000,000 Credit Agreement, dated as of March 3, 2016, among CERC Corp., as Borrower, and the banks named therein
CenterPoint Energy’s Form 8-K dated March 3, 2016 1-31447 4.3 x x
4.9
First Amendment to Amended and Restated Credit Agreement, dated as of June 16, 2017, by and among CenterPoint Energy, as Borrower, and the banks named therein
CenterPoint Energy’s Form 8-K dated June 16, 2017 1-31447 4.1 x
4.10
Second Amendment to Amended and Restated Credit Agreement, dated as of May 25, 2018, by and among CenterPoint Energy, as Borrower, and the banks named therein
CenterPoint Energy’s Form 8-K dated May 25, 2018 1-31447 4.1 x
4.11
First Amendment to Credit Agreement, dated as of June 16, 2017, among Houston Electric, as Borrower, and the banks named therein
CenterPoint Energy’s Form 8-K dated June 16, 2017 1-31447 4.2 x x
4.12
First Amendment to Credit Agreement, dated as of June 16, 2017, among CERC Corp., as Borrower, and the banks named therein
CenterPoint Energy’s Form 8-K dated June 16, 2017 1-31447 4.3 x x
4.13
$400,000,000 Credit Agreement, dated as of July 14, 2017, among VUHI, as Borrower, certain Subsidiaries of VUHI, as Guarantors, and the banks named therein
Vectren’s Form 8-K dated July 17, 2017 1-15467 10.1 x
4.14
$200,000,000 Credit Agreement, dated as of July 14, 2017, among VCC, as Borrower, Vectren Corporation, as Guarantor, and the banks named therein
Vectren’s Form 8-K dated July 17, 2017 1-15467 10.2 x


Exhibit Number	Description	Report or Registration Statement	SEC File or Registration Number	Exhibit Reference	CenterPoint Energy	Houston Electric	CERC
4.13	$400,000,000 Credit Agreement, dated as of July 14, 2017, among VUHI, as Borrower, certain Subsidiaries of VUHI, as Guarantors, and the banks named therein	Vectren’s Form 8-K dated July 17, 2017	1-15467	10.1	x
4.14	Term Loan Agreement dated as of September 14, 2018, among VCC, as Borrower, Vectren as Guarantor, and the banks named therein	Vectren’s Form 8-K dated September 18, 2018	1-15467	10.1	x
4.15	First Amendment to Term Loan Agreement, dated as of June 25, 2019, among VCC, as Borrower, Vectren as Guarantor and the banks named therein	CenterPoint Energy’s Form 10-Q for the quarter ended June 30, 2019	1-31447	4.17	x
4.16	$1,000,000,000 Term Loan Agreement, dated as of May 15, 2019, among CenterPoint Energy, as Borrower, Mizuho Bank, Ltd., as Administrative Agent and Lead Arranger, and the banks named therein	CenterPoint Energy’s Form 8-K dated May 15, 2019	1-31447	4.1	x
4.17	Preferred Stock Purchase Agreement, by and among CenterPoint Energy, Inc., Elliott International, L.P., and Elliott Associates, L.P., dated May 6, 2020	CenterPoint Energy’s Form 8-K dated May 6, 2020	1-31447	4.1	x
4.18	Preferred Stock Purchase Agreement, by and among CenterPoint Energy, Inc., BEP Special Situations 2 LLC and BEP Special Situations IV LLC, dated May 6, 2020	CenterPoint Energy’s Form 8-K dated May 6, 2020	1-31447	4.2	x
4.19	Common Stock Purchase Agreement, by and among CenterPoint Energy, Inc. and each investor identified on Schedule A thereto, dated May 6, 2020	CenterPoint Energy’s Form 8-K dated May 6, 2020	1-31447	4.3	x
4.20	Common Stock Purchase Agreement, by and among CenterPoint Energy, Inc. and each investor identified on Schedule A thereto, dated May 6, 2020	CenterPoint Energy’s Form 8-K dated May 6, 2020	1-31447	4.4	x
4.21	Common Stock Purchase Agreement, by and among CenterPoint Energy, Inc. and each investor identified on Schedule A thereto, dated May 6, 2020	CenterPoint Energy’s Form 8-K dated May 6, 2020	1-31447	4.5	x
4.22	Indenture, dated as of February 1, 1998, between Reliant Energy Resources Corp. and Chase Bank of Texas, National Association, as Trustee	CERC’s Form 8-K dated February 5, 1998	1-13265	4.1			x
+4.23	Supplemental Indenture No. 18 to Exhibit 4.22, dated as of October 1, 2020, providing for the issuance of CERC Corp.’s 1.75% Senior Notes due 2020						x
10.1	Offer Letter dated July 1, 2020 between CenterPoint Energy and David J. Lesar	Form 8-K of CenterPoint Energy, Inc. dated June 30, 2020	1-31447	10.1	x
10.2	Form of Performance Award Agreement for the Chief Executive Officer	Form 8-K of CenterPoint Energy, Inc. dated June 30, 2020	1-31447	10.2	x
10.3	Form of Restricted Stock Unit Award Agreement for the Chief Executive Officer	Form 8-K of CenterPoint Energy, Inc. dated June 30, 2020	1-31447	10.3	x

Table of Contents

Exhibit
Number
Description
Report or Registration
Statement

SEC File or
Registration
Number

Exhibit
Reference
CenterPoint Energy Houston Electric CERC
4.15
Term Loan Agreement dated as of July 30, 2018, among VUHI, as Borrower, the Subsidiaries of Borrower identified herein as Guarantors and the banks named therein
Vectren’s Form 8-K dated July 30, 2018 1-15467 10.1 x
4.16
Term Loan Agreement dated as of September 14, 2018, among VCC, as Borrower, Vectren as Guarantor, and the banks named therein
Vectren’s Form 8-K dated September 18, 2018 1-15467 10.1 x
4.17
First Amendment to Term Loan Agreement, dated as of June 25, 2019, among VCC, as Borrower, Vectren as Guarantor and the banks named therein
CenterPoint Energy’s Form 10-Q for the quarter ended June 30, 2019 1-31447 4.17 x
4.18
$1,000,000,000 Term Loan Agreement, dated as of May 15, 2019, among CenterPoint Energy, as Borrower, Mizuho Bank, Ltd., as Administrative Agent and Lead Arranger, and the banks named therein
CenterPoint Energy’s Form 8-K dated May 15, 2019 1-31447 4.1 x
10.1
Second Amendment to the CenterPoint Energy Savings Restoration Plan, effective as of January 1, 2020
CenterPoint Energy’s Form 8-K dated December 9, 2019 1-31447 10.1 x
10.2
First Amendment to the Amended and Restated CenterPoint Energy Stock Plan for Outside Directors
CenterPoint Energy’s Form 10-K for the year ended December 31, 2019 1-31447 10(n)(2) x
10.3
Separation and Release Agreement between CenterPoint Energy, Inc. and Scott M. Prochazka, dated March 6, 2020
CenterPoint Energy’s Form 8-K dated March 6, 2020 1-31447 10.1 x
10.4
Form of Award Agreement for Restricted Stock Unit Awards
CenterPoint Energy’s Form 8-K dated March 4, 2020 1-31447 10.1 x
10.5
Form of Award Agreement for Performance Share Units
CenterPoint Energy’s Form 8-K/A dated March 30, 2020 1-31447 10.1 x
10.6
Form of Award Agreement for Restricted Stock Unit Awards
CenterPoint Energy’s Form 8-K/A dated March 30, 2020 1-31447 10.2 x
+31.1.1
Rule 13a-14(a)/15d-14(a) Certification of John W. Somerhalder II
x
+31.1.2
Rule 13a-14(a)/15d-14(a) Certification of John W. Somerhalder II
x
+31.1.3
Rule 13a-14(a)/15d-14(a) Certification of John W. Somerhalder II
x
+31.2.1
Rule 13a-14(a)/15d-14(a) Certification of Kristie L. Colvin
x
+31.2.2
Rule 13a-14(a)/15d-14(a) Certification of Kristie L. Colvin
x
+31.2.3
Rule 13a-14(a)/15d-14(a) Certification of Kristie L. Colvin
x
+32.1.1
Section 1350 Certification of John W. Somerhalder II
x
+32.1.2
Section 1350 Certification of John W. Somerhalder II
x
+32.1.3
Section 1350 Certification of John W. Somerhalder II
x
+32.2.1
Section 1350 Certification of Kristie L. Colvin
x
+32.2.2
Section 1350 Certification of Kristie L. Colvin
x
+32.2.3
Section 1350 Certification of Kristie L. Colvin
x
+101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document x x x
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Exhibit
Number

Description

Report or Registration
Statement

SEC File or
Registration
Number

Exhibit
Reference

CenterPoint Energy

Houston Electric

CERC

10.4

Form of Restricted Stock Unit Award Agreement (Retention, Service-Based Vesting)

Form 8-K of CenterPoint Energy, Inc. dated June 30, 2020

1-31447

10.4

10.5

Offer Letter between CenterPoint Energy and Jason P. Wells

Form 8-K of CenterPoint Energy, Inc. dated September 15, 2020

1-31447

10.1

10.6

Governance Arrangement Agreement, by and among CenterPoint Energy, Inc., Elliott International, L.P., and Elliott Associates, dated May 6, 2020

Form 8-K of CenterPoint Energy, Inc. dated May 6, 2020

1-31447

10.1

+31.1.1

Rule 13a-14(a)/15d-14(a) Certification of David J. Lesar

+31.1.2

Rule 13a-14(a)/15d-14(a) Certification of K enn eth M. Mercado

+31.1.3

Rule 13a-14(a)/15d-14(a) Certification of S cott E. Doyle

+31.2.1

Rule 13a-14(a)/15d-14(a) Certification of J ason P. W ells

+31.2.2

Rule 13a-14(a)/15d-14(a) Certification of Jason P. Wells

+31.2.3

R ule 13a-14(a)/15d-14(a) Certification of Jason P. Wells

+32.1.1

Section 1350 Certification of David J. Lesar

+32.1.2

Section 1350 Certification of Kenneth M. Mercado

+32.1.3

Section 1350 Certification of Scott E. Doyle

+32.2.1

Section 1350 Certification of Jason P. Wells

+32.2.2

Section 1350 Certification of Jason P. Wells

+32.2.3

Section 1350 Certification of Jason P. Wells

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+101.LAB

Inline XBRL Taxonomy Extension Labels Linkbase Document

+101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

+104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

~~Exhibit~~

~~Number~~

~~Description~~

~~Report or Registration~~

~~Statement~~

~~SEC File or~~

~~Registration~~

~~Number~~

~~Exhibit~~

~~Reference~~

~~CenterPoint Energy~~

~~Houston Electric~~

~~CERC~~

~~+101.CAL~~

~~Inline XBRL Taxonomy Extension Calculation Linkbase Document~~

~~+101.DEF~~

~~Inline XBRL Taxonomy Extension Definition Linkbase Document~~

~~+101.LAB~~

~~Inline XBRL Taxonomy Extension Labels Linkbase Document~~

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~~Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)~~



*	Schedules to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedules will be furnished supplementally to the SEC upon request; provided, however, that the parties may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any document so furnished.

100

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		CENTERPOINT ENERGY, INC.
		CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
		CENTERPOINT ENERGY RESOURCES CORP.


By:		~~CENTERPOINT ENERGY, INC.~~
	~~CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC~~
	~~CENTERPOINT ENERGY RESOURCES CORP.~~


~~By:~~	/s/ Kristie L. Colvin
		Kristie L. Colvin
		~~Interim Executive~~Senior Vice President and Chief ~~Financial~~Accounting Officer
		~~and Chief Accounting Officer~~

Date: November 5, 2020

~~Date: May 7, 2020~~

101



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)



Securities registered pursuant to Section 12(b) of the Act:
Registrant	Title of each class	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.
CenterPoint Energy, Inc.	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
CenterPoint Energy Houston Electric, LLC	9.15% First Mortgage Bonds due 2021	n/a	The New York Stock Exchange
CenterPoint Energy Houston Electric, LLC	6.95% General Mortgage Bonds due 2033	n/a	The New York Stock Exchange
CenterPoint Energy Resources Corp.	6.625% Senior Notes due 2037	n/a	The New York Stock Exchange



CenterPoint Energy, Inc.	~~502,656,951~~544,821,120	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.



(Mark One)
☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



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


PART I.			FINANCIAL INFORMATION
Item 1.			Financial Statements	1
			CenterPoint Energy, Inc. Financial Statements (unaudited)	1


~~PART I.~~			~~FINANCIAL INFORMATION~~
~~Item 1.~~			~~Financial Statements~~	1
			~~CenterPoint Energy, Inc. Financial Statements~~ ~~(unaudited)~~	1
	CenterPoint Energy Houston Electric, LLC Financial Statements (unaudited)	7




			CenterPoint Energy Resources Corp. Financial Statements (unaudited)	13





			Combined Notes to Unaudited Condensed Consolidated Financial Statements (unaudited)	19
			(1) Background and Basis of Presentation	19
			(2) New Accounting Pronouncements	21
			(3) ~~Held for Sale and Discontinued Operations~~Divestitures	21
			(4) Revenue Recognition	2526
			(5) Employee Benefit Plans	2830
			(6) Regulatory Accounting	2932
			(7) Derivative Instruments	3133
			(8) Fair Value Measurements	3635
			(9) Unconsolidated Affiliates	4038
			(10) Goodwill and Other Intangibles	4341
			(11) Indexed Debt Securities (ZENS) and Securities Related to ZENS	4543
			(12) ~~Short-term Borrowings and~~ Long-term Debt	4543
			(13) Income Taxes	4745
			(14) Commitments and Contingencies	4846
			(15) Earnings Per Share	5251
			(16) Reportable Segments	53
			(17) Supplemental Disclosure of Cash Flow Information	5655
			(18) Related Party Transactions	56
			(19) Equity	57
			(20) Subsequent Events	5960
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations	6162
			Recent Events	6162
			Consolidated Results of Operations	6365
			Results of Operations by Reportable Segment	6766
			Certain Factors Affecting Future Earnings	7776
			Liquidity and Capital Resources	7877
Item 3.			Quantitative and Qualitative Disclosures about Market Risk	93
Item 4.			Controls and Procedures	94

PART II.			OTHER INFORMATION
Item 1.			Legal Proceedings	9594
Item 1A.			Risk Factors	9594

Item 6.			Exhibits	97
			Signatures	101


GLOSSARY
ACE			Affordable Clean Energy
ADFIT			Accumulated deferred federal income taxes


~~GLOSSARY~~
~~ACE~~AMA		~~Affordable Clean Energy~~
~~AMA~~	Asset Management Agreement
AMS			Advanced Metering System
APSC			Arkansas Public Service Commission
ARAM			Average rate assumption method
ARO			Asset retirement obligation
~~ARP~~
ARP			Alternative revenue program
ASC			Accounting Standards Codification
ASU			Accounting Standards Update
AT&T Common			AT&T Inc. common stock
~~Athena Energy Services~~		~~Athena Energy Services Buyer, LLC, a Delaware limited liability company and subsidiary of Energy Capital Partners, LLC~~
Bailey to Jones Creek Project		A transmission project in the greater Freeport, Texas area, which includes enhancements to two existing substations and the construction of a new 345 kV double-circuit line to be located in the counties of Brazoria, Matagorda and Wharton
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
CARES Act			Coronavirus Aid, Relief, and Economic Security Act
CCR			Coal Combustion Residuals
~~CECA~~			~~Clean Energy Cost Adjustment~~
CECL			Current expected credit losses
CEIP			CenterPoint Energy Intrastate Pipelines, LLC, a wholly-owned subsidiary of CERC Corp.
CenterPoint Energy			CenterPoint Energy, Inc., and its subsidiaries
CERC			CERC Corp., together with its subsidiaries
CERC Corp.			CenterPoint Energy Resources Corp.
CES			CenterPoint Energy Services, Inc. (now known as Symmetry Energy Solutions, LLC), previously a wholly-owned subsidiary of CERC Corp.
Charter Common			Charter Communications, Inc. common stock
CIP			Conservation Improvement Program
~~CME~~			~~Chicago Mercantile Exchange~~
CNG			Compressed Natural Gas
CNP Midstream			CenterPoint Energy Midstream, Inc., a wholly-owned subsidiary of CenterPoint Energy
~~CODM~~
CODM			Chief Operating Decision Maker, ~~the Registrants’~~who is each Registrant’s Chief Operating Executive ~~Officer~~
Common Stock			CenterPoint Energy, Inc. common stock, par value $0.01 per share
COVID-19			Novel coronavirus disease 2019 and related global outbreak that was subsequently declared a pandemic by the World Health Organization
COVID-19 ERP			COVID-19 Electricity Relief Program
~~CPP~~	~~Clean Power Plan~~



~~GLOSSARY~~CPP						Clean Power Plan
CSIA						Compliance and System Improvement Adjustment
DCRF						Distribution Cost Recovery Factor
DRR						Distribution Replacement Rider
DSMA						Demand Side Management Adjustment
~~EBITDA~~


GLOSSARY
EBITDA		Earnings before income taxes, depreciation and amortization
~~EDIT~~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
ELG		Effluent Limitation Guidelines
~~Enable~~
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
Energy Services		~~Offers~~Offered competitive variable and fixed-priced physical natural gas supplies primarily to commercial and industrial customers and electric and natural gas utilities through CES and ~~its subsidiary,~~ CEIP
Energy Services Disposal Group		Substantially all of the businesses within CenterPoint Energy’s and CERC’s Energy Services reporting unit that ~~will be~~were sold under the Equity Purchase Agreement
EPA		Environmental Protection Agency
Equity Purchase Agreement		Equity Purchase Agreement, dated as of February 24, 2020, by and between CERC Corp. and Symmetry Energy Solutions Acquisition (f/k/a Athena Energy Services Buyer, LLC)
ERCOT		Electric Reliability Council of Texas
ESG		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
~~Gas Daily~~		~~Platts gas daily indices~~
GHG		Greenhouse gases
~~GRIP~~
GRIP		Gas Reliability Infrastructure Program
GWh		Gigawatt-hours
Houston Electric		CenterPoint Energy Houston Electric, LLC and its subsidiaries
IDEM		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
Infrastructure Services		~~Provides~~Provided underground pipeline construction and repair services through ~~Vectren’s~~VISCO and its wholly-owned subsidiaries, Miller Pipeline, LLC and Minnesota Limited, LLC
Infrastructure Services Disposal Group		Businesses within the Infrastructure Services reporting unit that were sold under the Securities Purchase Agreement
Interim Condensed Financial Statements		Unaudited condensed consolidated interim financial statements and combined notes
~~IRP~~	~~Integrated Resource Plan~~
~~IRS~~	~~Internal Revenue Service~~



~~GLOSSARY~~IRP						Integrated Resource Plan
~~IURC~~IRS						Internal Revenue Service
IURC						Indiana Utility Regulatory Commission
kV						Kilovolt
KW						Kilowatts
LIBOR						London Interbank Offered Rate


GLOSSARY
LNG						Liquefied Natural Gas
~~Merger~~LPSC						Louisiana Public Service Commission

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 Sub						Pacer Merger Sub, Inc., an Indiana corporation and wholly-owned subsidiary of CenterPoint Energy
MES						CenterPoint Energy Mobile Energy Solutions, Inc., a wholly-owned subsidiary of CERC Corp.
MGP						Manufactured gas plant
~~MLP~~
MLP						Master Limited Partnership
~~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
NOLs						Net operating losses
NRG						NRG Energy, Inc.
~~NYMEX~~						~~New York Mercantile Exchange~~
~~OCC~~
OCC						Oklahoma Corporation Commission
OGE						OGE Energy Corp.
PBRC						Performance Based Rate Change

PowerTeam Services						PowerTeam Services, LLC, a Delaware limited liability company
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
~~ROE~~
ROE						Return on equity
ROU						Right of use
RRA						Rate Regulation Adjustment
RSP						Rate Stabilization Plan
SEC						Securities and Exchange Commission
Securities Purchase Agreement						Securities Purchase Agreement, dated as of February 3, 2020, by and among VUSI, PowerTeam Services, and, solely for purposes of Section 10.17 of the Securities Purchase Agreement, Vectren
Securitization Bonds						Transition and system restoration bonds



~~GLOSSARY~~
Series A Preferred Stock	CenterPoint Energy’s Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred 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


GLOSSARY
Series C Preferred Stock						CenterPoint Energy’s Series C Mandatory Convertible Preferred Stock, par value $0.01 per share, with a liquidation preference of $1,000 per share
SIGECO						Southern Indiana Gas and Electric Company, a wholly-owned subsidiary of Vectren
S&P						S&P Global Ratings
SRC						Sales Reconciliation Component
~~TBD~~Symmetry Energy Solutions Acquisition						Symmetry Energy Solutions Acquisition, LLC, a Delaware limited liability company (f/k/a Athena Energy Services Buyer, LLC) and subsidiary of Energy Capital Partners, LLC
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
TCRF						Transmission Cost Recovery Factor
TDSIC						Transmission, Distribution and Storage System Improvement Charge
TDU						Transmission and distribution utility
~~TSCR~~
TSCR						Tax Savings Credit Rider
Utility Holding						Utility Holding, LLC, a wholly-owned subsidiary of CenterPoint Energy
VCC						Vectren Capital Corp., a wholly-owned subsidiary of Vectren
Vectren						Vectren Corporation, a wholly-owned subsidiary of CenterPoint Energy as of February 1, 2019
VEDO						Vectren Energy Delivery of Ohio, Inc., a wholly-owned subsidiary of Vectren
VIE						Variable interest entity
VISCO						Vectren Infrastructure Services Corporation, formerly a wholly-owned subsidiary of Vectren
Vistra Energy Corp.						Texas-based energy company focused on the competitive energy and power generation markets, whose major subsidiaries include Luminant and TXU Energy
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 ~~March 31,~~September 30, 2020 and December 31, 2019, consisted of AT&T Common and Charter Common
2019 Form 10-K						Annual Report on Form 10-K for the fiscal year ended December 31, 2019 as filed with the SEC on February 27, 2020, as recast in the Registrants’ Current Report on Form 8-K dated May 18, 2020, and filed with the SEC on May 19, 2020


◦	competitive conditions in the midstream industry, and actions taken by Enable’s customers and competitors, including drilling, production and capital spending decisions of third parties and the extent and timing of the entry of additional competition in the markets served by Enable;


◦	economic effects of the recent actions of Saudi Arabia, Russia and other oil-producing countries, which have resulted in a substantial decrease in oil and natural gas prices, and the combined impact of these events and COVID-19 on commodity prices;


◦	~~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;~~


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


◦	~~the timing of payments from Enable’s customers under existing contracts, including minimum volume commitment payments;~~


•	~~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~~;


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
	(in millions, except per share amounts)
Revenues:
Utility revenues	$	1,538	$	1,548	$	5,087	$	5,284
Non-utility revenues	84		110		277		261
Total	1,622		1,658		5,364		5,545
Expenses:
Utility natural gas, fuel and purchased power	170		171		981		1,228
Non-utility cost of revenues, including natural gas	63		80		196		188
Operation and maintenance	659		621		1,976		2,042
Depreciation and amortization	306		316		885		938
Taxes other than income taxes	122		113		387		352
Goodwill impairment	0		0		185		0
Total	1,320		1,301		4,610		4,748
Operating Income	302		357		754		797
Other Income (Expense):
Gain on marketable securities	83		59		14		206
Loss on indexed debt securities	(84)		(62)		(25)		(216)
Interest expense and other finance charges	(121)		(134)		(388)		(389)
Interest expense on Securitization Bonds	(7)		(9)		(22)		(31)
Equity in earnings (loss) of unconsolidated affiliates, net	(67)		77		(1,499)		213
Interest income	1		3		2		16
Interest income from Securitization Bonds	0		1		1		4
Other income, net	10		5		44		20
Total	(185)		(60)		(1,873)		(177)
Income (Loss) from Continuing Operations Before Income Taxes	117		297		(1,119)		620
Income tax expense (benefit)	(10)		46		(328)		75
Income (Loss) from Continuing Operations	127		251		(791)		545
Income (Loss) from Discontinued Operations (net of tax expense of $-0-, $16, $21 and $38, respectively)	(6)		19		(182)		89
Net Income (Loss)	121		270		(973)		634
Income allocated to preferred shareholders	52		29		127		88
Income (Loss) Available to Common Shareholders	$	69	$	241	$	(1,100)	$	546

Basic earnings (loss) per common share - continuing operations	$	0.14	$	0.44	$	(1.75)	$	0.91
Basic earnings (loss) per common share - discontinued operations	(0.01)		0.04		(0.35)		0.18
Basic Earnings (Loss) Per Common Share	0.13		0.48		(2.10)		1.09
Diluted earnings (loss) per common share - continuing operations	$	0.14	$	0.44	$	(1.75)	$	0.91
Diluted earnings (loss) per common share - discontinued operations	(0.01)		0.03		(0.35)		0.17
Diluted Earnings (Loss) Per Common Share	$	0.13	$	0.47	$	(2.10)	$	1.08

Weighted Average Common Shares Outstanding, Basic	545		502		525		502
Weighted Average Common Shares Outstanding, Diluted	548		505		525		505



	Three Months Ended
	March 31,
	2020			2019

Revenues:
Utility revenues	$	2,073		$	2,171
Non-utility revenues	94			58
Total	2,167			2,229
Expenses:
Utility natural gas, fuel and purchased power	609			797
Non-utility cost of revenues, including natural gas	64			47
Operation and maintenance	674			748
Depreciation and amortization	282			300
Taxes other than income taxes	136			126
Goodwill Impairment	185			—
Total	1,950			2,018
Operating Income	217			211
Other Income (Expense):
Gain (loss) on marketable securities	(144		)	83
Gain (loss) on indexed debt securities	135			(86		)
Interest expense and other finance charges	(139		)	(121		)
Interest expense on Securitization Bonds	(8		)	(12		)
Equity in earnings (loss) of unconsolidated affiliates, net	(1,475		)	62
Interest income	—			12
Interest income from Securitization Bonds	1			2
Other income, net	13			6
Total	(1,617		)	(54		)
Income (Loss) from Continuing Operations Before Income Taxes	(1,400		)	157
Income tax expense (benefit)	(347		)	14
Income (Loss) from Continuing Operations	(1,053		)	143
Income (loss) from discontinued operations (net of tax expense (benefit) of ($17) and $8, respectively)	(146		)	26
Net Income (Loss)	(1,199		)	169
Preferred stock dividend requirement	29			29
Income (Loss) Available to Common Shareholders	$	(1,228	)	$	140

Basic earnings (loss) per common share - continuing operations	$	(2.15	)	$	0.23
Basic earnings (loss) per common share - discontinued operations	(0.29		)	0.05
Basic Earnings (Loss) Per Common Share	(2.44		)	0.28
Diluted earnings (loss) per common share - continuing operations	$	(2.15	)	$	0.23
Diluted earnings (loss) per common share - discontinued operations	(0.29		)	0.05
Diluted Earnings (Loss) Per Common Share	$	(2.44	)	$	0.28

Weighted Average Common Shares Outstanding, Basic	502			502
Weighted Average Common Shares Outstanding, Diluted	502			504


	September 30, 2020		December 31, 2019
	(in millions)
Current Assets:
Cash and cash equivalents ($172 and $216 related to VIEs, respectively)	$	185	$	241
Investment in marketable securities	836		822
Accounts receivable ($30 and $26 related to VIEs, respectively), less bad debt reserve of $47 and $21, respectively	731		702
Accrued unbilled revenues, less bad debt reserve of $2 and $-0-, respectively	284		469

Natural gas inventory	234		209
Materials and supplies	300		263

Taxes receivable	102		106
Current assets held for sale	0		1,002
Prepaid expenses and other current assets ($16 and $19 related to VIEs, respectively)	113		123
Total current assets	2,785		3,937
Property, Plant and Equipment:
Property, plant and equipment	31,823		30,324
Less: accumulated depreciation and amortization	10,088		9,700
Property, plant and equipment, net	21,735		20,624
Other Assets:
Goodwill	4,697		4,882
Regulatory assets ($669 and $788 related to VIEs, respectively)	2,150		2,117


Investment in unconsolidated affiliates	749		2,408
Preferred units – unconsolidated affiliate	363		363

Non-current assets held for sale	0		962
Other	226		236
Total other assets	8,185		10,968
Total Assets	$	32,705	$	35,529



	March 31, 2020		December 31, 2019
	(in millions)
Current Assets:
Cash and cash equivalents ($190 and $216 related to VIEs, respectively)	$	220	$	241
Investment in marketable securities	678		822
Accounts receivable ($22 and $26 related to VIEs, respectively), less bad debt reserve of $30 and $21, respectively	711		702
Accrued unbilled revenues, less bad debt reserve of $3 and $-0-, respectively	320		469
Natural gas inventory	97		209
Materials and supplies	278		263
Taxes receivable	93		106
Current assets held for sale	1,647		1,002
Prepaid expenses and other current assets ($19 and $19 related to VIEs, respectively)	120		123
Total current assets	4,164		3,937
Property, Plant and Equipment:
Property, plant and equipment	30,830		30,324
Less: accumulated depreciation and amortization	9,852		9,700
Property, plant and equipment, net	20,978		20,624
Other Assets:
Goodwill	4,697		4,882
Regulatory assets ($758 and $788 related to VIEs, respectively)	2,120		2,117
Investment in unconsolidated affiliates	850		2,408
Preferred units – unconsolidated affiliate	363		363
Non-current assets held for sale	—		962
Other	223		236
Total other assets	8,253		10,968
Total Assets	$	33,395	$	35,529


	September 30, 2020		December 31, 2019
	(in millions, except share amounts)
Current Liabilities:
Short-term borrowings	$	37	$	0
Current portion of VIE Securitization Bonds long-term debt	208		231
Indexed debt, net	16		19
Current portion of other long-term debt	1,114		618
Indexed debt securities derivative	918		893
Accounts payable	658		884

Taxes accrued	212		239
Interest accrued	117		158

Customer deposits	120		124
Non-trading derivative liabilities	1		7


Current liabilities held for sale	0		455
Other	429		350
Total current liabilities	3,830		3,978
Other Liabilities:
Deferred income taxes, net	3,575		3,928
Non-trading derivative liabilities	6		15
Benefit obligations	691		750
Regulatory liabilities	3,480		3,474
Non-current liabilities held for sale	0		43
Other	789		738
Total other liabilities	8,541		8,948
Long-term Debt:
VIE Securitization Bonds, net	610		746
Other long-term debt, net	11,336		13,498
Total long-term debt, net	11,946		14,244
Commitments and Contingencies (Note 14)
Shareholders’ Equity:
Cumulative preferred stock, $0.01 par value, 20,000,000 shares authorized
Series A Preferred Stock, $0.01 par value, $800 aggregate liquidation preference, 800,000 shares outstanding	790		790
Series B Preferred Stock, $0.01 par value, $978 aggregate liquidation preference, 977,500 shares outstanding	950		950
Series C Preferred Stock, $0.01 par value, $725 aggregate liquidation preference, 725,000 shares outstanding	716		0
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 544,819,895 shares and 502,242,061 shares outstanding, respectively	5		5
Additional paid-in capital	6,805		6,080
Retained earnings (accumulated deficit)	(796)		632
Accumulated other comprehensive loss	(82)		(98)
Total shareholders’ equity	8,388		8,359
Total Liabilities and Shareholders’ Equity	$	32,705	$	35,529


	Three Months Ended March 31,							Nine Months Ended September 30,
	2020			2019				2020		2019
	(in millions)							(in millions)
Cash Flows from Operating Activities:							Cash Flows from Operating Activities:
Net income (loss)	$	(1,199	)	$	169		Net income (loss)	$	(973)	$	634

Adjustments to reconcile net income (loss) to net cash provided by operating activities:							Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	282			300			Depreciation and amortization	885		938
Depreciation and amortization on assets held for sale	—			13			Depreciation and amortization on assets held for sale	0		49
Amortization of deferred financing costs	7			7			Amortization of deferred financing costs	23		22
Amortization of intangible assets in non-utility cost of revenues	1			9			Amortization of intangible assets in non-utility cost of revenues	1		19
Deferred income taxes	(377		)	(14		)	Deferred income taxes	(429)		8
Goodwill impairment and loss from reclassification to held for sale	214			—			Goodwill impairment and loss from reclassification to held for sale	175		0
Goodwill impairment	185			—			Goodwill impairment	185		0
Unrealized loss (gain) on marketable securities	144			(83		)	Unrealized loss (gain) on marketable securities	(14)		(206)
Loss (gain) on indexed debt securities	(135		)	86			Loss (gain) on indexed debt securities	25		216

Write-down of natural gas inventory	3			1			Write-down of natural gas inventory	3		5
Equity in (earnings) losses of unconsolidated affiliates	1,475			(62		)	Equity in (earnings) losses of unconsolidated affiliates	1,499		(213)
Distributions from unconsolidated affiliates	70			74			Distributions from unconsolidated affiliates	109		226
Pension contributions	(2		)	(2		)	Pension contributions	(84)		(94)
Changes in other assets and liabilities, excluding acquisitions:							Changes in other assets and liabilities, excluding acquisitions:
Accounts receivable and unbilled revenues, net	236			138			Accounts receivable and unbilled revenues, net	326		521

Inventory	110			120			Inventory	(50)		(85)
Taxes receivable	13			—			Taxes receivable	4		(69)
Accounts payable	(192		)	(332		)	Accounts payable	(251)		(646)
Fuel cost recovery	11			58			Fuel cost recovery	(5)		68
Non-trading derivatives, net	(53		)	(40		)	Non-trading derivatives, net	(14)		(66)
Margin deposits, net	21			19			Margin deposits, net	65		(33)
Interest and taxes accrued	(95		)	(116		)	Interest and taxes accrued	(53)		(89)
Net regulatory assets and liabilities	(38		)	(3		)	Net regulatory assets and liabilities	(76)		(101)
Other current assets	(5		)	16			Other current assets	6		31
Other current liabilities	(37		)	(101		)	Other current liabilities	30		(118)
Other assets	19			58			Other assets	5		81
Other liabilities	1			(39		)	Other liabilities	46		(22)
Other operating activities, net	3			(5		)	Other operating activities, net	1		10

Net cash provided by operating activities	662			271			Net cash provided by operating activities	1,439		1,086
Cash Flows from Investing Activities:							Cash Flows from Investing Activities:
Capital expenditures	(664		)	(537		)	Capital expenditures	(1,889)		(1,822)
Acquisitions, net of cash acquired	—			(5,987		)	Acquisitions, net of cash acquired	0		(5,991)

Distributions from unconsolidated affiliate in excess of cumulative earnings	7			—			Distributions from unconsolidated affiliate in excess of cumulative earnings	46		0

Proceeds from divestitures (Note 3)							Proceeds from divestitures (Note 3)	1,136		0

Other investing activities, net	3			(15		)	Other investing activities, net	24		38

Net cash used in investing activities	(654		)	(6,539		)	Net cash used in investing activities	(683)		(7,775)
Cash Flows from Financing Activities:							Cash Flows from Financing Activities:
Increase in short-term borrowings, net							Increase in short-term borrowings, net	37		0
Proceeds from (payments of) commercial paper, net	(828		)	2,692			Proceeds from (payments of) commercial paper, net	(1,057)		1,584
Proceeds from long-term debt, net	—			721			Proceeds from long-term debt, net	299		2,916
Payments of long-term debt	(63		)	(994		)	Payments of long-term debt	(1,060)		(1,225)
Long-term revolving credit facility, net	1,050			135
Debt issuance costs	—			(8		)

Payment of debt issuance costs							Payment of debt issuance costs	(4)		(19)

Payment of dividends on Common Stock	(145		)	(144		)	Payment of dividends on Common Stock	(309)		(433)
Payment of dividends on Preferred Stock	(42		)	(43		)	Payment of dividends on Preferred Stock	(114)		(101)
Proceeds from issuance of Common Stock, net							Proceeds from issuance of Common Stock, net	672		0
Proceeds from issuance of Series C Preferred Stock, net							Proceeds from issuance of Series C Preferred Stock, net	723		0

Other financing activities, net	(4		)	(14		)	Other financing activities, net	(6)		(14)

Net cash provided by (used in) financing activities	(32		)	2,345			Net cash provided by (used in) financing activities	(819)		2,708
Net Decrease in Cash, Cash Equivalents and Restricted Cash	(24		)	(3,923		)	Net Decrease in Cash, Cash Equivalents and Restricted Cash	(63)		(3,981)
Cash, Cash Equivalents and Restricted Cash at Beginning of Period	271			4,278			Cash, Cash Equivalents and Restricted Cash at Beginning of Period	271		4,278
Cash, Cash Equivalents and Restricted Cash at End of Period	$	247		$	355		Cash, Cash Equivalents and Restricted Cash at End of Period	$	208	$	297


	December 31, 2019
	CenterPoint Energy						CERC
	Infrastructure Services Disposal Group		Energy Services Disposal Group		Total		Energy Services Disposal Group
	(in millions)
Receivables, net	$	192	$	445	$	637	$	445
Accrued unbilled revenues	109		8		117		8
Natural gas inventory	0		67		67		67
Materials and supplies	6		0		6		0
Non-trading derivative assets	0		136		136		136
Other	4		35		39		35
Total current assets held for sale	311		691		1,002		691
Property, plant and equipment, net	295		26		321		26
Goodwill	220		62		282		62
Non-trading derivative assets	0		58		58		58
Other	234		67		301		67
Total non-current assets held for sale	749		213		962		213
Total assets held for sale	$	1,060	$	904	$	1,964	$	904

Accounts payable	$	45	$	299	$	344	$	299
Taxes accrued	2		0		2		0
Non-trading derivative liabilities	0		44		44		44
Other	40		25		65		25
Total current liabilities held for sale	87		368		455		368
Non-trading derivative liabilities	0		14		14		14
Benefit obligations	0		4		4		4
Other	16		9		25		9
Total non-current liabilities held for sale	16		27		43		27
Total liabilities held for sale	$	103	$	395	$	498	$	395



	March 31, 2020
	CenterPoint Energy								CERC
	Infrastructure Services Disposal Group		Energy Services Disposal Group			Total			Energy Services Disposal Group
	(in millions)
Receivables, net	$	216	$	355		$	571		$	355
Accrued unbilled revenues	57		2			59			2
Natural gas inventory	—		52			52			52
Materials and supplies	6		—			6			—
Non-trading derivative assets	—		213			213			213
Property, plant and equipment, net	313		29			342			29
Goodwill	138		—			138			—
Loss on assets held for sale	—		(70		)	(70		)	(70		)
Other	242		94			336			94
Total current assets held for sale	$	972	$	675		$	1,647		$	675

Accounts payable	$	46	$	206		$	252		$	206
Taxes accrued	2		—			2			—
Non-trading derivative liabilities	—		36			36			36
Benefit obligations	—		4			4			4
Other	60		29			89			29
Total current liabilities held for sale	$	108	$	275		$	383		$	275


~~(1)~~	~~Reflects February 1, 2019 to March 31, 2019 results only due to the Merger.~~


~~(2)~~	~~Loss from classification to held for sale is inclusive of goodwill impairment and, for CenterPoint Energy, its costs to sell.~~


~~(1)~~	~~Represents charges for the period February 1, 2019 through March 31, 2019 only due to the Merger.~~


	Three Months Ended September 30, 2020
	Houston Electric T&D		Indiana Electric Integrated		Natural Gas Distribution		Corporate and Other		Total
	(in millions)
Revenue from contracts	$	828	$	157	$	550	$	75	$	1,610

Other (1)	0		0		10		2		12

Total revenues	$	828	$	157	$	560	$	77	$	1,622

	Nine Months Ended September 30, 2020
	Houston Electric T&D		Indiana Electric Integrated		Natural Gas Distribution		Corporate and Other		Total
	(in millions)
Revenue from contracts	$	2,188	$	414	$	2,475	$	240	$	5,317

Other (1)	(2)		0		44		5		47

Total revenues	$	2,186	$	414	$	2,519	$	245	$	5,364



	Three Months Ended March 31, 2020
	Houston Electric T&D		Indiana Electric Integrated		Natural Gas Distribution		Corporate and Other		Total
	(in millions)
Revenue from contracts	$	638	$	129	$	1,293	$	81	$	2,141
Other (1)	—		—		25		1		26
Total revenues	$	638	$	129	$	1,318	$	82	$	2,167