From time to time the Registrants make statements concerning their expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not historical facts. These statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied by these statements. You can generally identify forward-looking statements by the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “objective,” “plan,” “potential,” “predict,” “projection,” “should,” “target,” “will” or other similar words.

The Registrants have based their forward-looking statements on management’s beliefs and assumptions based on information reasonably available to management at the time the statements are made. The Registrants caution you that assumptions, beliefs, expectations, intentions and projections about future events may and often do vary materially from actual results. Therefore, the Registrants cannot assure you that actual results will not differ materially from those expressed or implied by the Registrants’ forward-looking statements. In this Form 10-Q, unless context requires otherwise, the terms “our,” “we” and “us” are used as abbreviated references to CenterPoint Energy, Inc. together with its consolidated subsidiaries, including Houston Electric, CERC and Vectren.

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

Except as discussed in the ~~last~~penultimate paragraph in Note 12 to the Registrants’ Interim Condensed Financial Statements, no registrant has an obligation in respect of any other Registrant’s debt securities, and holders of such debt securities should not consider the financial resources or results of operations of any Registrant other than the obligor in making a decision with respect to such securities.

Included in this combined Form 10-Q are the Interim Condensed Financial Statements of CenterPoint Energy, Houston Electric and CERC, which are referred to collectively as the Registrants. The Interim Condensed Financial Statements are unaudited, omit certain financial statement disclosures and should be read with the Registrants’ financial statements included in the Registrants’ combined 2020 Form 10-K. The Combined Notes to Interim Condensed Financial Statements apply to all Registrants and specific references to Houston Electric and CERC herein also pertain to CenterPoint Energy, unless otherwise indicated.

On April 29, 2021, CenterPoint Energy, through its subsidiary CERC Corp., entered into an Asset Purchase Agreement to sell its Arkansas and Oklahoma Natural Gas businesses. On August 31, 2021, CenterPoint Energy, through its subsidiary CERC Corp., completed the sale of MES to Last Mile Energy. See Note 3 for further information.

As of ~~March 31,~~September 30, 2021, CenterPoint Energy’s reportable segments were Electric and Natural ~~Gas and Midstream Investments.~~Gas. Houston Electric and CERC each consist of a single reportable segment. For a description of CenterPoint Energy’s reportable segments, see Note 16.

As of ~~March 31,~~September 30, 2021, CNP Midstream owned approximately 53.7% of the common units representing limited partner interests in Enable, which owns, operates and develops natural gas and crude oil infrastructure assets; CNP Midstream also

As of ~~March 31,~~September 30, 2021, CenterPoint Energy and Houston Electric had VIEs consisting of the Bond Companies, which are consolidated. The consolidated VIEs are wholly-owned, bankruptcy-remote, special purpose entities that were formed solely for the purpose of securitizing transition and system restoration-related property. Creditors of CenterPoint Energy and Houston Electric have no recourse to any assets or revenues of the Bond Companies. The bonds issued by these VIEs are payable only from and secured by transition and system restoration property, and the bondholders have no recourse to the general credit of CenterPoint Energy or Houston Electric.

The Interim Condensed Financial Statements reflect all normal recurring adjustments that are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the respective periods. Amounts reported in the Condensed Statements of Consolidated Income are not necessarily indicative of amounts expected for a full-year period due to the effects of, among other things, (a) seasonal fluctuations in demand for energy, ~~and energy services,~~ (b) changes in energy commodity prices, (c) timing of maintenance and other expenditures and (d) acquisitions and dispositions of businesses, assets and other interests. Certain prior year amounts have been reclassified to conform to the current year reportable segment presentation described in the 2020 Form ~~10-K.~~

Management believes that recently adopted and recently issued accounting standards that are not yet effective will not have a material impact on the Registrants’ financial position, results of operations or cash flows upon adoption.

In April 2021, certain assets and liabilities representing the Arkansas and Oklahoma Natural Gas businesses met the held for sale criteria. The sale will be considered an asset sale for tax purposes, requiring net deferred tax liabilities to be excluded

Although the Arkansas and Oklahoma Natural Gas businesses met the held for sale criteria, their expected disposals do not represent a strategic shift to CenterPoint Energy and CERC, as both will retain significant operations in, and will continue to invest in, their natural gas businesses. Therefore, the assets and liabilities associated with the transaction are not reflected as discontinued operations on CenterPoint Energy’s and CERC’s Condensed Statements of Consolidated Income, as applicable, and the December 31, 2020 Condensed Consolidated Balance Sheets were not required to be recast for assets held for sale. Since the depreciation on the Arkansas and Oklahoma Natural Gas assets will continue to be reflected in revenues through customer rates until the expected closing of the transaction and will be reflected in the carryover basis of the rate-regulated assets once sold, CenterPoint Energy and CERC will continue to record depreciation on those assets through the expected closing of the transaction.

In September 2021, CenterPoint Energy’s equity investment in Enable met the held for sale criteria. CenterPoint Energy’s plan to exit its Midstream Investment reportable segment in 2022 represents a strategic shift to CenterPoint Energy. Therefore, the assets and liabilities associated with the equity investment in Enable are reflected as discontinued operations on CenterPoint Energy’s Condensed Statements of Consolidated Income, and the December 31, 2020 Condensed Consolidated Balance Sheet was required to be recast for assets held for sale. For further information about CenterPoint Energy’s equity investment in Enable, see Note 9.

The Registrants record assets and liabilities held for sale at the lower of their carrying value or their estimated fair value less cost to sell. Neither CenterPoint Energy nor CERC recognized any gains or losses on assets held for sale during the three and nine months ended September 30, 2021. See Note 10 for further information about the allocation of goodwill to the businesses to be disposed.

The assets and liabilities of the Arkansas and Oklahoma Natural Gas businesses and equity method investment in Enable classified as held for sale in CenterPoint Energy’s and CERC’s Condensed Consolidated Balance Sheets, as applicable, included the following:

The pre-tax income for the Arkansas and Oklahoma Natural Gas businesses, excluding interest and corporate allocations, included in CenterPoint Energy’s and CERC’s Condensed Statements of Consolidated Income is as follows:

A summary of discontinued operations presented in CenterPoint Energy’s Condensed Statements of Consolidated Income is as follows:

A summary of discontinued operations presented in CERC’s Condensed Statements of Consolidated Income is as follows:

CenterPoint Energy and CERC have elected not to separately disclose discontinued operations on their respective Condensed Statements of Consolidated Cash Flows. ~~Unregulated long-lived assets are not depreciated or amortized once they are classified as held for sale.~~ The following table summarizes CenterPoint Energy’s and CERC’s cash flows from discontinued operations and certain supplemental cash flow disclosures, ~~related to the Infrastructure Services and Energy Services Disposal Groups,~~ as applicable:

Transactions between CES and CenterPoint Energy’s and CERC’s Natural Gas businesses that were previously eliminated in consolidation have been reflected in continuing operations until June 1, 2020, which was the date of closing of the sale of the Energy Services Disposal Group. Revenues and expenses included in continuing operations were as follows:

In the normal course of business prior to June 1, 2020, the Energy Services Disposal Group through CES traded natural gas under supply contracts and entered into natural gas related transactions under transportation, storage and other contracts. In connection with the Energy Services Disposal Group’s business activities prior to the closing of the sale of the Energy Services Disposal Group on June 1, 2020, CERC Corp. issued guarantees to certain of CES’s counterparties to guarantee the payment of CES’s obligations. For further information, see Note 14.

CenterPoint Energy’s and CERC’s Natural Gas businesses had AMAs associated with their utility distribution service in Arkansas, Louisiana and Oklahoma with the

Fees incurred by CenterPoint Energy’s and CERC’s Natural Gas reportable segment for pipeline construction and repair services are as follows:

In the Securities Purchase Agreement, CenterPoint Energy agreed to a mechanism to reimburse PowerTeam Services subsequent to closing of the sale for certain amounts of specifically identified change orders that may be ultimately rejected by one of VISCO’s customers as part of on-going audits. CenterPoint Energy’s maximum contractual exposure under the Securities Purchase Agreement, in addition to the amount reflected in the working capital adjustment, for these change orders is $21 million. CenterPoint Energy does not expect the ultimate outcome of this matter to have a material adverse effect on its financial condition, results of operations or cash flows. CenterPoint Energy anticipates this matter will be resolved in 2021.

The MES disposal does not represent a strategic shift to CenterPoint Energy and CERC, as both will retain significant operations in, and will continue to invest in, their natural gas businesses. Therefore, the assets and liabilities associated with MES are not reflected as discontinued operations on CenterPoint Energy’s and CERC’s Condensed Statements of Consolidated Income, as applicable, and the December 31, 2020 Condensed Consolidated Balance Sheets were not required to be recast for assets held for sale. CenterPoint Energy and CERC recognized a pre-tax gain on the sale of $8 million and $11 million, respectively, during the three and nine months ended September 30, 2021. See Note 10 for further information about the allocation of goodwill to the MES disposal.

In accordance with ASC 606, Revenue from Contracts with Customers, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Registrants expect to be entitled to receive in exchange for these goods or services. The revenues and related balances in the following tables exclude operating revenues and balances from the Energy Services Disposal Group and the Infrastructure Services Disposal Group, which are reflected as discontinued operations prior to the date of closing of each transaction. See Note 3 for further information. Certain prior year amounts have been reclassified to conform to the current year reportable segment presentation described in the Registrants’ combined 2020 Form 10-K.

ARPs are contracts between the utility and its regulators, not between the utility and a customer. The Registrants recognize ARP revenue as other revenues when the regulator-specified conditions for recognition have been met. Upon recovery of ARP revenue through incorporation in rates charged for utility service to customers, ARP revenue is reversed and recorded as revenue from contracts with customers. The recognition of ARP revenues and the reversal of ARP revenues upon recovery through rates charged for utility service may not occur in the same period.

The following tables disaggregate revenues by reportable segment and major source:

The Registrants’ net periodic cost (benefit), before considering amounts subject to overhead allocations for capital expenditure projects or for amounts subject to deferral for regulatory purposes, includes the following components relating to pension and postretirement benefits:

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On March 11, 2021, the ARPA was signed into law which includes pension plan funding relief for the sponsoring employers. As a result, the ~~expected~~required minimum contribution to pension plans for 2021 ~~as disclosed is likely to be~~has been significantly reduced. However, ~~at this time,~~ CenterPoint Energy iselects to maintain the same level of funding previously planned for 2021, and therefore, the expected minimum contribution amount does not ~~able to quantify the reduction amount until further IRS guidance related to the pension~~reflect this funding relief ~~under the ARPA becomes available.~~available for 2021.

The table below reflects the contributions made to the pension and postretirement benefit plans during 2021:

On the approval and recommendation of the Compensation Committee and approval of the Board (acting solely through its independent directors), CenterPoint Energy entered into a separation agreement between CenterPoint Energy and Mr. Carroll, dated July 21, 2021. Under the terms of the separation agreement, Mr. Carroll exited the positions of Executive Chairman on July 21, 2021 and Board member on September 30, 2021. Under the terms of the separation agreement, Mr. Carroll received a lump sum cash payment of $28 million and his separation was treated as an “enhanced retirement” for purposes of his outstanding 2019, 2020 and 2021 equity award agreements.

On the approval and recommendation of the Compensation Committee and approval of the Board (acting solely through its independent directors), CenterPoint Energy has entered into a retention incentive agreement with David J. Lesar, President and Chief Executive Officer of CenterPoint Energy, dated July 20, 2021. For information about the classification of this award, see Note 19.

The Registrants are at times allowed by a regulator to defer an equity return as part of the recoverable carrying costs of a regulatory asset. A deferred equity return is capitalized for rate-making purposes, but it is not included in the Registrant’s regulatory assets on its Condensed Consolidated Balance Sheets. The allowed equity return is recognized in the Condensed Statements of Consolidated Income as it is recovered in rates. The recoverable allowed equity return not yet recognized by the Registrants is as follows:

The table below reflects the amount of allowed equity return recognized by each Registrant in its Condensed Statements of Consolidated Income:

In February 2021, certain of ~~our~~the Registrants’ jurisdictions experienced an extreme and unprecedented winter weather event that resulted in prolonged freezing temperatures, which impacted ~~our~~their businesses. In Texas, the February 2021 Winter Storm Event caused an electricity generation shortage that was severely disruptive to Houston Electric’s service territory and the wholesale generation market. While demand for electricity reached extraordinary levels due to the extreme cold, the supply of electricity significantly decreased in part because of the inability of certain power generation facilities to supply electric power to the grid. Houston Electric does not own or operate any electric generation ~~facilities. It~~facilities other than leasing facilities that provide temporary emergency electric energy to aid in restoring power to distribution customers during certain widespread power outages as allowed by a new law enacted after the February 2021 Winter Storm Event. Houston Electric transmits and distributes to customers of REPs electric power that the REPs obtain from power generation facilities owned by third parties. ERCOT serves as the independent system operator and regional reliability coordinator for member electric power systems in most of Texas. To comply with ERCOT’s orders, Houston Electric implemented controlled outages across its service territory, resulting in a substantial number of businesses and residents being without power, many for extended periods of time, in compliance with ERCOT’s directives as an emergency procedure to avoid prolonged large-scale state-wide blackouts and long-term damage to the electric system in Texas. In anticipation of this weather event, Houston Electric implemented its emergency operations plan’s processes and procedures necessary to respond to such events, including establishing an incident command center and calling for mutual assistance from other utilities where needed, among other measures. Throughout the February 2021 Winter Storm Event, Houston Electric remained in contact with its regulators and stakeholders, including federal, state and local officials, as well as the PUCT and ERCOT.

The February 2021 Winter Storm Event also impacted wholesale prices of CenterPoint ~~Energy~~Energy’s and CERC’s natural gas purchases and their ability to ~~service~~serve customers in their Natural Gas service territories, including due to the reduction in available natural gas capacity and impacts to CenterPoint Energy’s and CERC’s natural gas supply portfolio activities, and the effects of weather on their systems and their ability to transport natural gas, among other things. The overall natural gas market, including the markets from which CenterPoint Energy and CERC sourced a significant portion of their natural gas for their operations, experienced significant impacts caused by the February 2021 Winter Storm Event, resulting in extraordinary increases in the price of natural gas purchased by CenterPoint Energy and CERC.

On February 13, 2021, the Railroad Commission authorized each Texas natural gas distribution utility to record in a regulatory asset the extraordinary expenses associated with the February 2021 Winter Storm Event, including, but not limited to, natural gas cost and other costs related to the procurement and transportation of natural gas supply, subject to recovery in future regulatory proceedings. The Texas governor signed legislation in June 2021 that authorizes the Railroad Commission to use securitization financing and the issuance of customer rate relief bonds for recovery of extraordinary natural gas costs incurred by natural gas utilities as a result of the February 2021 Winter Storm Event. In addition, CenterPoint Energy’s and CERC’s Natural Gas utilities in jurisdictions outside of Texas deferred under-recovered natural gas cost as regulatory assets under existing recovery mechanisms and ~~have either sought or intend to seek~~are seeking recovery of the increased cost of natural ~~gas, which will be subject to customary~~gas. As of September 30, 2021, CenterPoint Energy and CERC have recorded current regulatory ~~prudency reviews that may impact~~assets of $1,423 million and $1,316 million included in Prepaid expenses and other current assets, respectively, and non-current regulatory assets of $654 million and $654 million, respectively, associated with the ~~amounts recovered.~~ February 2021 Winter Storm Event.

Amounts for the under recovery of natural gas costs are reflected in regulatory assets included in Prepaid expenses and other current assets and Regulatory assets on CenterPoint Energy’s and CERC’s Condensed Consolidated Balance Sheets. Recovery of natural gas costs within the regulatory assets are probable and are ~~probable~~subject to customary regulatory prudence reviews in all jurisdictions that may impact the amounts ultimately recovered. CenterPoint Energy and CERC, as applicable, have begun recovery of ~~recovery; however, the timing of recovery for each jurisdiction for the estimated incremental~~natural gas ~~cost attributable to the February 2021 Winter Storm Event within each regulatory asset is uncertain. As of March 31, 2021,~~costs in Arkansas, Indiana, Louisiana, Mississippi and Minnesota. CenterPoint Energy and CERC have ~~recorded current regulatory assets~~filed for securitization of ~~$462~~natural gas costs in Oklahoma and Texas, and expect to receive commission approval and issuance of financing orders from both in 2022, and issuance of the securitization bonds from Texas in 2022 and Oklahoma in 2023. The Minnesota Attorney General’s Office and Department of Commerce have proposed significant disallowances for all natural gas utilities, resulting in a potential disallowance of up to approximately $290 million for CenterPoint Energy and ~~$347 million, respectively, and non-current regulatory assets of $1.7 billion and $1.7 billion, respectively, associated~~CERC. The natural gas costs in Minnesota were incurred in accordance with the ~~February 2021 Winter Storm Event. Due~~plan on file with the MPUC and CenterPoint Energy believes the costs were prudently incurred and are eligible for recovery through an existing mechanism. Additionally, due to the uncertainty of timing and method of recovery in some jurisdictions, CenterPoint Energy and CERC may not earn a return on ~~all~~ amounts deferred in the ~~non-current~~ regulatory ~~asset~~assets associated with the February 2021 Winter Storm Event.

On February 21, 2021, in response to the 2021 February Winter Storm Event, the PUCT issued an order prohibiting REPs from sending a request to TDUs to disconnect such REPs’ customers for non-payment, effective February 21, 2021. As a result of this order, ~~in the event a request for disconnect is received from a REP,~~ Houston Electric ~~will~~did not execute any ~~such disconnect request~~requests for disconnection from any REPs until the PUCT ~~issues~~issued orders for disconnects to resume. In June 2021, the PUCT issued an updated order relating to disconnections and REPs resumed the distribution of disconnection notices thereafter. As of ~~March 31,~~September 30, 2021, as authorized by the PUCT, CenterPoint Energy and

See Notes 12 and 14(d) for further information regarding debt financing transactions and litigation related to the February 2021 Winter Storm Event, respectively.

Governors, public utility commissions and other authorities in the states in which the Registrants operate issued a number of different orders related to the COVID-19 pandemic, including orders addressing customer non-payment and disconnection. Although the disconnect moratoriums have expired in ~~certain of~~ the Registrants’ service territories, CenterPoint Energy continues to support those customers who may need payment assistance, arrangements or extensions.

The COVID-19 ERP allows program expenses to be recovered in rates. CenterPoint Energy’s and Houston Electric’s COVID-19 ERP regulatory assets were $-0- as of ~~March 31,~~September 30, 2021 and $6 million as of December 31, 2020.

Commissions in all of Indiana Electric’s and CenterPoint Energy’s and CERC’s Natural Gas 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. CenterPoint Energy and CERC have recorded estimated incremental uncollectible receivables to the associated regulatory asset of ~~$29~~$28 million and ~~$27~~$26 million, respectively, as of ~~March 31,~~September 30, 2021 and $22 million and $19 million, respectively, as of December 31, 2020.

In some of the states in which the Registrants operate, public utility commissions have authorized utilities to employ deferred accounting authority for certain COVID-19 related costs which ensure the safety and health of customers, employees, and contractors, that would not have been incurred in the normal course of business. CERC’s Natural Gas service territories in Minnesota and Arkansas will include any offsetting savings in the deferral. Other jurisdictions where the Registrants operate may require them to offset the deferral with savings as well. The Arkansas FRP, filed on April 5, 2021, included a request for (1) the regulatory asset as of September 30, 2020 in working capital for the 2021 historical year using a thirteen-month average of the asset balance; (2) the regulatory asset as of September 30, 2020 in working capital for the 2021 projected year using a thirteen-month average of the asset balance; and (3) the amortization of the balance over the 2021 projected year twelve-month period beginning October 1, 2021. The APSC ordered that the regulatory asset be reviewed in a future proceeding. The Mississippi RRA, filed on April 30, 2021, included the unamortized balance of the regulatory asset as of December 31, 2020 in rate base per Docket No. 2018-AD-141 Order Authorizing Utility Response and Accounting for COVID-19.

The Registrants are exposed to various market risks. These risks arise from transactions entered into in the normal course of business. The Registrants utilize derivative instruments such as swaps and options to mitigate the impact of changes in commodity prices, weather and interest rates on operating results and cash flows.

The table below summarizes the Registrants’ outstanding interest rate hedging activity:

The following tables present information about derivative instruments and hedging activities. The first table provides a balance sheet overview of Derivative Liabilities, while the last table provides a breakdown of the related income statement impacts.

Assets and liabilities that are recorded at fair value in the Registrants’ Condensed Consolidated Balance Sheets are categorized based upon the level of judgment associated with the inputs used to measure their value. Hierarchical levels, as defined below and directly related to the amount of subjectivity associated with the inputs to fair valuations of these assets and liabilities, are as follows:

The Registrants determine the appropriate level for each financial asset and liability on a quarterly basis.

The following tables present information about the Registrants’ assets and liabilities measured at fair value on a recurring basis as of ~~March 31,~~September 30, 2021 and December 31, 2020 and indicate the fair value hierarchy of the valuation techniques utilized by the Registrants to determine such fair value.

As a result of classifying the Arkansas and Oklahoma Natural Gas businesses as held for sale, including the allocation of goodwill, CenterPoint Energy and CERC used a market approach consisting of the contractual sales price adjusted for estimated working capital and other contractual purchase price adjustments to determine fair value of the businesses classified as held for sale, which are Level 2 inputs. Neither CenterPoint Energy nor CERC recognized any gains or losses upon classification of held for sale during the three and nine months ended September 30, 2021. See Note 3 for further information.

The fair values of cash and cash equivalents, investments in debt and equity securities measured at fair value and short-term borrowings are estimated to be approximately equivalent to carrying amounts and have been excluded from the table below. The carrying amounts of non-trading derivative assets and liabilities and CenterPoint Energy’s ZENS indexed debt securities derivative are stated at fair value and are excluded from the table below. The fair value of each debt instrument is determined by multiplying the principal amount of each debt instrument by a combination of historical trading prices and comparable issue data. These liabilities, which are not measured at fair value in the Registrants’ Condensed Consolidated Balance Sheets, but for which the fair value is disclosed, would be classified as Level 2 in the fair value hierarchy.

CenterPoint Energy has the ability to significantly influence the operating and financial policies of Enable, a publicly traded MLP, and, accordingly, accounts for its investment in Enable’s common units using the equity method of accounting. Enable is considered to be a VIE because the power to direct the activities that most significantly impact Enable’s economic performance does not reside with the holders of equity investment at risk. However, CenterPoint Energy is not considered the primary beneficiary of Enable since it does not have the power to direct the activities of Enable that are considered most significant to the economic performance of Enable. As of ~~March 31,~~September 30, 2021, CenterPoint Energy’s maximum exposure to loss related to Enable is limited to its investment in unconsolidated ~~affiliate,~~affiliates, its investment in Enable Series A Preferred Units and outstanding current accounts receivable from Enable.

On February 16, 2021, Enable entered into the Enable Merger Agreement. At the closing of the transactions contemplated by the Enable Merger Agreement, if and when it occurs, Energy Transfer will acquire all of Enable’s outstanding equity interests, resulting in the exchange of Enable common units owned by CenterPoint Energy at the transaction exchange ratio of 0.8595x Energy Transfer common units for each Enable common unit. CenterPoint Energy will also receive $5 million in cash in exchange for its interest in Enable GP and Energy Transfer Series G Preferred Units with an aggregate liquidation preference of approximately $385 million in exchange for all of its Enable Series A Preferred Units. Pursuant to previously disclosed support agreements, CenterPoint Energy and OGE, who collectively own approximately 79.2% of Enable’s common units, delivered written consents approving the Enable Merger Agreement and, on a non-binding, advisory basis, the compensation that will or may become payable to Enable’s named executive officers in connection with the transactions contemplated by the Enable Merger Agreement. The transactions contemplated under the Enable Merger Agreement are expected to be completed in ~~the second half of~~ 2021, subject to customary closing conditions, including Hart-Scott-Rodino antitrust clearance. Upon the consummation of the transaction, the ~~partnership~~ agreements relating to Enable between CenterPoint Energy, OGE and ~~OGE~~Enable and certain of their affiliates will terminate, and CenterPoint Energy will pay $30 million ~~in cash~~ to OGE (or other mutually agreed upon consideration). ~~Because~~

On September 21, 2021, CNP Midstream entered into a Forward Sale Agreement with an investment banking financial institution to deliver, subject to and immediately following the closing of the Enable Merger, 50 million common units of Energy Transfer expected to be received by CNP Midstream as consideration in the pending Enable Merger in exchange for the proceeds of the forward sale transaction. The Forward Sale Agreement provides for an initial forward sale price equal to a percentage of the closing price on September 21, 2021 of Energy Transfer common units, which is subject to certain adjustments pursuant to the terms of the Forward Sale Agreement. The Forward Sale Agreement is subject to early termination under certain circumstances, including in connection with termination of the Enable Merger. CenterPoint Energy ~~will retain an investment~~has guaranteed CNP Midstream’s obligations under the Forward Sale Agreement. Additionally, CenterPoint Energy plans for a complete exit from its Midstream Investment reportable segment in ~~the midstream industry at the completion of this transaction, the transaction does not represent~~2022.

CenterPoint Energy’s planned exit from its Midstream Investment reportable segment represents a strategic shift that will have a major effect on CenterPoint Energy’s operations or financial results, and as such, its equity investment in Enable is ~~not~~ classified and presented as discontinued operations. Equity method investments that ~~do not~~ qualify for discontinued operations are ~~not~~also presented as assets held for sale. Therefore, the assets and liabilities associated with the equity investment in Enable are reflected as discontinued operations on CenterPoint Energy’s Condensed Statements of Consolidated Income and the December 31, 2020 Condensed Consolidated Balance Sheet was required to be recast for assets held for sale. The Enable Series A Preferred Units are not reflected in the Midstream Investments reportable segment as equity investments without a readily determinable fair value are not included in the scope of discontinued operations.

The carrying value of CenterPoint Energy’s equity method investment in Enable is reflected as held for sale on CenterPoint Energy’s Condensed Consolidated Balance Sheets and equity in earnings (losses) from Enable are reflected as discontinued operations on CenterPoint Energy’s Condensed Statements of Consolidated Income. For further information, see Note 3.

Generally, sales to any person or entity (including a series of sales to the same person or entity) of more than 5% of the aggregate of the common units CenterPoint Energy owns in Enable or sales to any person or entity (including a series of sales to the same person or entity) by OGE of more than 5% of the aggregate of the common units it owns in Enable are subject to mutual rights of first offer and first refusal set forth in Enable’s Agreement of Limited Partnership.

CenterPoint Energy and OGE held the following interests in Enable GP as of both ~~March 31,~~September 30, 2021 and December 31, 2020:

The transactions with Enable in the following tables exclude transactions with the Energy Services Disposal Group.

Summarized unaudited consolidated income information for Enable is as follows:

Summarized unaudited consolidated balance sheet information for Enable is as follows:

When 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. As a result, goodwill attributable to the Natural Gas businesses to be disposed is classified as held for sale as of September 30, 2021, and goodwill attributable to MES was reflected in the gain on sale during the three and nine months ended September 30, 2021. Neither CenterPoint Energy nor CERC recognized any goodwill impairments within any reportable segment during the three or nine months ended September 30, 2021.

CenterPoint Energy and CERC perform goodwill impairment tests at least annually and evaluate goodwill when events or changes in circumstances indicate that its carrying value may not be recoverable. The impairment evaluation for goodwill is performed by comparing the fair value of each reporting unit with the carrying amount of the reporting unit, including goodwill. The reporting units approximate the reportable segments, with the exception of ESG, which is a separate reporting unit but included in the Corporate and Other reconciling category at CenterPoint Energy. The estimated fair value of the reporting unit

The tables below present information on CenterPoint Energy’s intangible assets, excluding goodwill, recorded in Other non-current assets on CenterPoint Energy’s Condensed Consolidated Balance Sheets and the related amortization expense included in Depreciation and amortization on CenterPoint Energy’s Condensed Statements of Consolidated Income, unless otherwise indicated.

CenterPoint Energy estimates that amortization expense of intangible assets with finite lives for the next five years will be as follows:

A subsidiary of CenterPoint Energy holds shares of certain securities detailed in the table below, which are securities with a readily determinable fair value and are expected to be held to facilitate CenterPoint Energy’s ability to meet its obligation under the ZENS. Unrealized gains and losses resulting from changes in the market value of the ZENS-Related Securities are recorded in CenterPoint Energy’s Condensed Statements of Consolidated Income.

In September 1999, CenterPoint Energy issued ZENS having an original principal amount of $1.0 billion of which $828 million remained outstanding as of ~~March 31,~~September 30, 2021. Each ZENS is exchangeable at the holder’s option at any time for an amount of cash equal to 95% of the market value of the reference shares attributable to such note. The number and identity of the reference shares attributable to each ZENS are adjusted for certain corporate events.

CenterPoint Energy’s reference shares for each ZENS consisted of the following:

CenterPoint Energy pays interest on the ZENS at an annual rate of 2% plus the amount of any quarterly cash dividends paid in respect of the reference shares attributable to the ZENS. The principal amount of the ZENS is subject to increases or decreases to the extent that the annual yield from interest and cash dividends on the reference shares attributable to the ZENS is less than or more than 2.309%. The adjusted principal amount is defined in the ZENS instrument as “contingent principal.” As of ~~March 31,~~September 30, 2021, the ZENS, having an original principal amount of $828 million and a contingent principal amount of ~~$52~~$42 million, were outstanding and were exchangeable, at the option of the holders, for cash equal to 95% of the market value of the reference shares attributable to the ZENS.

On May 17, 2021, AT&T announced that it had entered into a definitive agreement with Discovery, Inc. to combine their media assets into a new publicly traded company to be called Warner Bros. Discovery. Pursuant to the definitive agreement, AT&T shareholders are expected to receive stock representing 71% of the new company. Upon the closing of the transaction, reference shares attributable to ZENS would consist of AT&T Common, Charter Common and common stock of Warner Bros. Discovery. AT&T announced that the transaction is expected to close in the middle of 2022.

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The Registrants, including the subsidiaries of CenterPoint Energy discussed above, were in compliance with all financial debt covenants as of ~~March 31,~~September 30, 2021.

The table below reflects the utilization of the Registrants’ respective revolving credit facilities:

The Registrants reported the following effective tax rates:

On March 11, 2021, the ARPA was enacted in response to continued economic and health impacts of the COVID-19 pandemic. The ARPA expands the definition of “covered employee” under section 162(m) beginning in 2027, and extends the employee retention tax credit through December 31, 2021, among other provisions. CenterPoint Energy does not currently anticipate any material impacts from this legislation. On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic. The CARES Act provides relief to corporate taxpayers by permitting a five-year carryback of 2018-2020 NOLs, deferring the payment of the employer share of payroll taxes for the remaining months of 2020 until 2021 and 2022, increasing the 30% limitation on interest expense deductibility to 50% of adjusted taxable income for 2019 and 2020, and accelerating refunds for minimum tax credit carryforwards, among other provisions. Based on the CARES Act NOL carryback provision, during the three and nine months ended ~~March 31,~~September 30, 2020, CenterPoint Energy recorded a ~~$19~~$18 million and $37 million benefit, respectively, resulting from carryback claims to be filed to refund taxes paid.

CenterPoint Energy reported a net uncertain tax liability, inclusive of interest and penalties, of ~~$10~~$4 million as of ~~March 31,~~September 30, 2021. Interest and penalties of $1 million were recorded on the uncertain tax liability for the nine months ended September 30, 2021. In the three ~~month period ending March 31, 2021.~~months ended September 30, 2021, CenterPoint Energy released a $6 million net uncertain tax liability, including interest and penalties, upon the IRS’ acceptance of an accounting method change filed in 2020. The Registrants believe that it is reasonably possible that a decrease of up to $6$3 million in unrecognized tax benefits may occur in the next 12 months as a result of a lapse of statutes on older exposures, a tax settlement, and/or ~~the acceptance~~a resolution of ~~an application for an accounting method change.~~open audits. For CenterPoint Energy, tax years through 2018 have been audited and settled with the IRS. For the 2019 through 2021 tax years CenterPoint Energy is a participant in the IRS’s Compliance Assurance Process. ~~Vectren’s~~On September 30, 2021, Vectren was notified by the IRS that its pre-Merger ~~2017~~2014 through 2019 tax ~~years are still open~~returns were selected for ~~examination.~~audit.

Commitments include minimum purchase obligations related to CenterPoint Energy’s and CERC’s Natural Gas reportable segment and CenterPoint Energy’s Electric reportable segment. A purchase obligation is defined as an agreement to purchase goods or services that is enforceable and legally binding on the registrant and that specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Contracts with minimum payment provisions have various quantity requirements and durations and are not classified as non-trading derivative assets and liabilities in CenterPoint Energy’s and CERC’s Condensed Consolidated Balance Sheets as of ~~March 31,~~September 30, 2021 and December 31, 2020. These contracts meet an exception as “normal purchases contracts” or do not meet the definition of a derivative. Natural gas and coal supply commitments also include transportation contracts that do not meet the definition of a derivative.

On February 9, 2021, Indiana Electric entered into a BTA with a subsidiary of Capital Dynamics. Pursuant to the BTA, Capital Dynamics, with its partner Tenaska, will build a 300 MW solar array in Posey County, Indiana through a special purpose entity, Posey Solar. Upon completion of construction, currently projected to be at the end of 2023, and subject to IURC

As of ~~March 31,~~September 30, 2021, undiscounted minimum purchase obligations are approximately:

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

Specific to ESG’s role as a general contractor in the performance contracting industry, as of ~~March 31,~~September 30, 2021, there were 5150 open surety bonds supporting future performance with an aggregate face amount of approximately ~~$527~~$558 million. ESG’s exposure is less than the face amount of the surety bonds and is limited to the level of uncompleted work under the contracts. As of ~~March 31,~~September 30, 2021, approximately ~~47%~~35% of the work was yet to be completed on projects with open surety bonds. Further, various subcontractors issue surety bonds to ESG. In addition to these performance obligations, ESG also warrants the functionality of certain installed infrastructure generally for one year and the associated energy savings over a specified number of years. As of ~~March 31,~~September 30, 2021, there were 3235 warranties totaling ~~$554~~$549 million and an additional $1.2 billion in energy savings commitments not guaranteed by Vectren. Since ESG’s inception in 1994, CenterPoint Energy believes ESG has had a history of generally meeting its performance obligations and energy savings guarantees and its installed products ~~operating~~have operated effectively.

CenterPoint Energy issues parent company level guarantees to certain vendors, customers and other commercial counterparties of ESG. These guarantees do not represent incremental consolidated obligations, but rather, represent guarantees of subsidiary obligations to allow those subsidiaries to conduct business without posting other forms of assurance. As of ~~March 31,~~September 30, 2021, CenterPoint Energy, primarily through Vectren, has issued parent company level guarantees supporting ESG’s obligations. For those obligations where potential exposure can be estimated, management estimates the maximum exposure under these guarantees to be approximately ~~$517~~$513 million as of ~~March 31,~~September 30, 2021. This exposure primarily relates to energy savings guarantees on federal energy savings performance contracts. Other parent company level guarantees, certain of which do not contain a cap on potential liability, have been issued in support of federal operations and maintenance projects for which a maximum exposure cannot be estimated based on the nature of the projects. While there can be no assurance that performance under any of these parent company guarantees will not be required in the future, CenterPoint Energy considers the likelihood of a material amount being incurred as remote.

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 closed on June 1, 2020. In the normal course of business prior to June 1, 2020, the Energy Services Disposal Group through CES, traded natural gas under supply contracts and entered into natural gas related transactions under transportation, storage and other contracts. In connection with the Energy Services Disposal Group’s business activities prior to the closing of the sale of the Energy Services Disposal Group on June 1, 2020, CERC Corp. issued guarantees to certain of CES’s counterparties to guarantee the payment of CES’s obligations. When CES remained wholly owned by CERC Corp., these guarantees did not represent incremental consolidated obligations, but rather, these guarantees represented guarantees of CES’s obligations to allow it to conduct business without posting other forms of assurance.

A CERC Corp. guarantee primarily had a one- or two-year term, although CERC Corp. would generally not be released from obligations incurred by CES prior to the termination of such guarantee unless the beneficiary of the guarantee affirmatively released CERC Corp. from its obligations under the guarantee. Throughout CERC Corp.’s ownership of CES and subsequent to the sale of the Energy Services Disposal Group through ~~March 31,~~September 30, 2021, CERC Corp. did not pay any amounts under guarantees of CES’s obligations.

Under the terms of the Equity Purchase Agreement, Symmetry Energy Solutions Acquisition must generally use reasonable best efforts to replace existing CERC Corp. guarantees with credit support provided by a party other than CERC Corp. as of and after the closing of the transaction. Additionally, to the extent that CERC Corp. retains any exposure relating to certain guarantees of CES’s obligations 90 days after closing of the transaction, Symmetry Energy Solutions Acquisition will pay a 3% annualized fee on such exposure, increasing by 1% on an annualized basis every three months. As of ~~March 31,~~September 30, 2021, management estimates approximately ~~$51~~$29 million of exposure remained outstanding under CERC Corp. guarantees issued prior to the closing of the transaction on June 1, 2020. ~~On May 3, 2021, the estimated remaining exposure under these obligations decreased to $41 million.~~ CES has provided replacement credit support to counterparties to whom CERC Corp. had issued guarantees prior to closing representing the full amount of CERC’s remaining exposure under the guarantees. CERC believes that counterparties to whom replacement credit support has been provided would seek payment if needed under such replacement credit support instead of a CERC Corp. guarantee. ~~NaN~~No additional guarantees were provided by CERC Corp. to CES subsequent to the closing of the transaction on June 1, 2020.

If CERC Corp. is required to pay a counterparty under a guarantee in respect of obligations of CES, Symmetry Energy Solutions Acquisition is required to promptly reimburse CERC Corp. for all amounts paid. If Symmetry Energy Solutions Acquisition fails to reimburse CERC Corp., CERC Corp. has the contractual right to seek payment from Shell Energy North America (US), L.P. in an amount up to $40 million in the aggregate. While there can be no assurance that payment under any of these guarantees will not be required in the future, CenterPoint Energy and CERC consider the likelihood of a material amount being incurred as remote.

CenterPoint Energy and CERC recorded 0no amounts on their respective Condensed Consolidated Balance Sheets as of ~~March 31,~~September 30, 2021 and December 31, 2020 related to the performance of these guarantees.

Like other Texas TDUs, Houston Electric ~~may~~has become involved in certain of the above-referenced investigations, litigation or other regulatory and legal proceedings regarding their efforts to restore power and their compliance with NERC, ERCOT and PUCT rules and directives. CenterPoint Energy and Houston Electric are responding to inquiries from the Texas Attorney General and the Galveston County District Attorney’s Office, and CenterPoint Energy and CERC are responding to inquiries from the Arkansas, Minnesota and Oklahoma Attorneys General. CenterPoint Energy, Houston Electric and CERC are subject to, and may be further subject to, litigation and claims. Such claims include, or in the future could include, wrongful death, personal injury and property damage claims, lawsuits for impacts on businesses and other organizations and entities and shareholder claims, among other claims or litigation matters. ~~As of April 29, 2021,~~ CenterPoint Energy and Houston Electric, along with numerous other entities, have been named as defendants in such litigation, all of which is now pending in state court as part of a ~~defendant in approximately 60 lawsuits related to the February 2021 Winter Storm Event.~~multi-district litigation proceeding. CenterPoint Energy and Houston Electric intend to vigorously defend themselves against the claims raised. CenterPoint Energy, Houston Electric and CERC are unable to predict the consequences of any such matters or to estimate a range of potential losses.

Total costs that may be incurred in connection with addressing these sites cannot be determined at this time. The estimated accrued costs are limited to CenterPoint Energy’s and CERC’s share of the remediation efforts and are therefore net of exposures of other PRPs. The estimated range of possible remediation costs for the sites for which CenterPoint Energy and CERC believe they may have responsibility was based on remediation continuing for the minimum time frame given in the table below.

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

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

Indiana Electric has 3 ash ponds, 2 at the F.B. Culley facility (Culley East and Culley West) and 1 at the A.B. Brown facility. Under the existing CCR Rule, Indiana Electric is required to perform integrity assessments, including ground water monitoring, at its F.B. Culley and A.B. Brown generating stations. The ground water studies are necessary to determine

Indiana Electric continues to refine site specific estimates of closure costs for its ~~ten-acre~~10-acre Culley East pond. In July 2018, Indiana Electric filed a Complaint for Damages and Declaratory Relief against its insurers seeking reimbursement of defense, investigation and pond closure costs incurred to comply with the CCR Rule, and has since reached confidential settlement agreements with its insurers. The proceeds of these settlements will offset costs that have been and will be incurred to close the ponds.

As of ~~March 31,~~September 30, 2021, CenterPoint Energy has recorded an approximate ~~$88~~$89 million ARO, which represents the discounted value of future cash flow estimates to close the ponds at A.B. Brown and F.B. Culley. This estimate is subject to change due to the contractual arrangements; continued assessments of the ash, closure methods, and the timing of closure; implications of Indiana Electric’s generation transition plan; changing environmental regulations; and proceeds received from the settlements in the aforementioned insurance proceeding. In addition to these ~~removal costs,~~AROs, Indiana Electric also anticipates equipment purchases of between $60 million and $80 million to complete the A.B. Brown closure project.

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

The Series C Preferred Stock issued in May 2020 ~~are~~were considered participating securities since these shares ~~participate~~participated in dividends on Common Stock on a pari passu, pro rata, as-converted basis. As a result, beginning June 30, 2020, earnings per share on Common Stock iswas computed using the two-class method required for participating ~~securities.~~securities during the periods the Series C Preferred Stock was outstanding. As of May 7, 2021, all of the outstanding Series C Preferred Stock were converted into shares of Common Stock and earnings per share on Common Stock and, as such, the two-class method was no longer applicable beginning June 30, 2021.

The two-class method uses an earnings allocation formula that treats participating securities as having rights to earnings that otherwise would have been available only to common shareholders. Under the two-class method, income (loss) available to common shareholders from continuing operations is derived by subtracting the following from income (loss) from continuing operations:

Undistributed earnings are calculated by subtracting dividends declared on Common Stock, the preferred share dividend requirement and deemed dividends for the amortization of the beneficial conversion feature from net income. Net losses are not allocated to the Series C Preferred Stock as it does not have a contractual obligation to share in the losses of CenterPoint Energy.

The Series C Preferred Stock ~~includes~~included conversion features at a price that iswas below the fair value of the Common Stock on the commitment date. This beneficial conversion feature, which was approximately $32 million ~~represents~~at issuance, represented the difference between the fair value per share of the Common Stock as of the commitment date and the conversion price, multiplied by the number of common shares issuable upon conversion. The beneficial conversion feature iswas recognized as a discount to Series C Preferred Stock and was amortized as a deemed dividend over the period from the issue date to the first allowable conversion date, which was November 6, 2020.

Basic earnings per common share is computed by dividing income available to common shareholders from continuing operations by the basic weighted average number of common shares outstanding during the period. Participating securities are excluded from basic weighted average number of common shares outstanding. Diluted earnings per common share is computed by dividing income available to common shareholders from continuing operations by the weighted average number of common shares outstanding, including all potentially dilutive common shares, if the effect of such common shares is dilutive.

Diluted earnings per share reflects the dilutive effect of potential common shares from share-based awards and convertible preferred shares. The dilutive effect of ~~the restricted stock,~~ Series B Preferred Stock and Series C Preferred Stock is computed using the if-converted method, as applicable, which assumes conversion of the restricted stock, Series B Preferred Stock and Series C Preferred Stock at the beginning of the period, giving income recognition for the add-back of the preferred share dividends, amortization of beneficial conversion feature, and undistributed earnings allocated to preferred shareholders. The dilutive effect of restricted stock is computed using the treasury stock method, as applicable, which includes the incremental shares that would be hypothetically vested in excess of the number of shares assumed to be hypothetically repurchased with the assumed proceeds.

The following table reconciles numerators and denominators of CenterPoint Energy’s basic and diluted earnings per common share.

The Registrants’ determination of reportable segments considers the strategic operating units under which its CODM manages sales, allocates resources and assesses performance of various products and services to wholesale or retail customers in differing regulatory environments. Each Registrant’s CODM views net income as the measure of profit or loss for the reportable segments. Certain prior year amounts have been reclassified to conform to the current year reportable segment

CenterPoint Energy’s Midstream Investments reportable segment presented in the Registrants’ combined 2020 Form 10-K consisted of the equity investment in Enable (excluding the Enable Series A Preferred Units). In September 2021, CenterPoint Energy’s equity investment in Enable met the held for sale criteria and is reflected as discontinued operations, and as a result this reportable segment is not reflected in the financial data for reportable segments. See Notes 3 and 9 for further information regarding CenterPoint Energy’s equity investment in Enable as held for sale and discontinued operations and the pending Enable Merger.

As of ~~March 31,~~September 30, 2021, reportable segments by Registrant were as follows:

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

Financial data for reportable segments is as follows, including Corporate and Other and Discontinued Operations for reconciliation purposes:

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

CERC consists of a single reportable segment; therefore, a tabular reportable segment presentation has not been included.

CenterPoint Energy and CERC elected not to separately disclose discontinued operations on their respective Condensed Statements of Consolidated Cash Flows. The table below provides supplemental disclosure of cash flow information and ~~has~~does not ~~been recast to~~ exclude the Infrastructure Services and Energy Services Disposal Groups prior to the closing of the respective transactions.

The table below provides a reconciliation of cash, cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheets to the amount reported in the Condensed Statements of Consolidated Cash Flows.

The table below summarizes CenterPoint Energy money pool activity:

CenterPoint Energy provides some corporate services to Houston Electric and CERC. The costs of services have been charged directly to Houston Electric and CERC using methods that management believes are reasonable. These methods include usage rates, dedicated asset assignment and proportionate corporate formulas based on operating expenses, assets, gross margin, employees and a composite of assets, gross margin and employees. Houston Electric provides certain services to CERC. These services are billed at actual cost, either directly or as an allocation and include fleet services, shop services, geographic services, surveying and right-of-way services, radio communications, data circuit management and field operations. Additionally, CERC provides certain services to Houston Electric. These services are billed at actual cost, either directly or as an allocation and include line locating and other miscellaneous services. These charges are not necessarily indicative of what would have been incurred had Houston Electric and CERC not been affiliates.

Amounts charged for these services were as follows and are included primarily in operation and maintenance expenses:

The table below presents transactions among Houston Electric, CERC and their parent, CenterPoint Energy.

On the approval and recommendation of the Compensation Committee and approval of the Board (acting solely through its independent directors), CenterPoint Energy entered into a retention incentive agreement with David J. Lesar, President and Chief Executive Officer of CenterPoint Energy, dated July 20, 2021. Under the terms of the retention incentive agreement, Mr. Lesar will receive equity-based awards under CenterPoint Energy’s LTIP covering a total of 1 million shares of Common Stock

Changes in accumulated comprehensive income (loss) are as follows:

~~Series C Preferred Stock~~

CenterPoint Energy has a corporate response planning team comprised of employees across the organization, including members of senior management, that assesses risks to its business, including for health, safety and environmental matters and personnel issues, and has addressed various impacts of the February 2021 Winter Storm Event. The corporate response planning team coordinated additional support for operations and other personnel that responded directly to the February 2021 Winter Storm Event.

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 2020 Form ~~10-K.~~10-K and in Item 1A of Part II of this combined Form 10-Q.

Income (loss) available to common shareholders for the three and nine months ended ~~March 31,~~September 30, 2021 and 2020 was as follows:

Income available to common shareholders increased ~~$1,562~~$126 million primarily due to the following ~~items~~items:

These increases were partially offset by:

These increases were partially offset by lower usage in part due to less favorable weather.

Income available to common shareholders increased $1,850 million primarily due to the following items:

These increases were also partially offset by the impact of the board-implemented governance changes announced in July 2021

Excluding those items, income available to common shareholders increased $121 million primarily due to the following key factors:

CenterPoint Energy’s CODM views net income as the measure of profit or loss for the reportable segments. Segment results include inter-segment interest income and expense, which may result in inter-segment profit and loss. Certain prior year amounts have been reclassified to conform to the current year presentation described in the Registrants’ combined 2020 Form 10-K.

The following discussion of results of operations by reportable segment concentrates on CenterPoint Energy’s Utility Operations, conducted through two reportable segments, Electric and Natural Gas. ~~A discussion of~~ CenterPoint Energy’s formerly reported Midstream Investments reportable segment results isare now included in discontinued operations. For additional information regarding the ~~discussion of CenterPoint Energy’s consolidated results above.~~Midstream Investments reportable segment, see Notes 3, 9 and 16 to the Interim Condensed Financial Statements.

For information regarding factors that may affect the future results of operations of the Electric reportable segment, please read “Risk Factors — Risk Factors Associated with Our Consolidated Financial Condition,” “— Risk Factors Affecting Electric Generation, Transmission and Distribution Businesses,” “— Risk Factors Affecting Our Businesses” and “— General Risk Factors Affecting Our Businesses and/or CenterPoint Energy’s Interests in Enable Midstream Partners, LP” in Item 1A of Part I of the Registrants’ combined 2020 Form ~~10-K.~~10-K and in Item 1A of Part II of this combined Form 10-Q.

For information regarding factors that may affect the future results of operations of CenterPoint Energy’s Natural Gas reportable segment, please read “Risk Factors — Risk Factors Associated with Our Consolidated Financial Condition,” “— Risk Factors Affecting Natural Gas' Business,” “— Risk Factors Affecting Our Businesses” and “— General Risk Factors Affecting Our Businesses and/or CenterPoint Energy’s Interests in Enable Midstream Partners, LP” in Item 1A of Part I of the Registrants’ combined 2020 Form ~~10-K.~~10-K and in Item 1A of Part II of this combined Form 10-Q.

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

The following table provides variance explanations ~~for the three months ended March 31, 2021 compared to three months ended March 31, 2020~~ by major income statement caption for the Natural Gas reportable segment:

Houston Electric’s CODM views net income as the measure of profit or loss for its reportable segment. Houston Electric consists of a single reportable segment. 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,” “— Risk Factors Affecting Our Businesses” and “— General Risk Factors Affecting Our Businesses and/or CenterPoint Energy’s Interests in Enable Midstream Partners, LP” in Item 1A of Part I of the Registrants’ combined 2020 Form ~~10-K.~~10-K and in Item 1A of Part II of this combined Form 10-Q.

The following table provides variance explanations ~~for the three months ended March 31, 2021 compared to three months ended March 31, 2020~~ by major income statement caption for Houston Electric:

CERC’s CODM views net income as the measure of profit or loss for its reportable segment. CERC’s results of operations are affected by seasonal fluctuations in the demand for natural 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, debt service costs and income tax 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’ Business,” “— Risk Factors Affecting Our Businesses” and “— General Risk Factors Affecting Our Businesses and/or CenterPoint Energy’s Interests in Enable Midstream Partners, LP” in Item 1A of Part I of the Registrants’ combined 2020 Form ~~10-K.~~10-K and in Item 1A of Part II of this combined Form 10-Q.

The following table provides variance explanations ~~for the three months ended March 31, 2021 compared to three months ended March 31, 2020~~ by major income statement caption for CERC:

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 Affecting Future Earnings” in Item 7 of Part II and “Risk Factors” in Item 1A of Part I of the Registrants’ combined 2020 Form 10-K, in Item 1A of Part II of this combined Form 10-Q and “Cautionary Statement Regarding Forward-Looking Information” in this combined Form 10-Q.

The following table summarizes the net cash provided by (used in) operating, investing and financing activities during the ~~three~~nine months ended ~~March 31,~~September 30, 2021 and 2020:

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, cash payment to OGE associated with the Enable Merger Agreement further discussed in Note 9 to the Interim Condensed Financial Statements, and cash payment expected to be made at the closing of the sale of the Arkansas and Oklahoma Natural Gas businesses that will be passed through to the Arkansas customers as further discussed in Note 3 of the Interim Condensed Financial Statements, the Registrants’ principal anticipated cash requirements for the remaining ~~nine~~three months of 2021 include the following:

As a result of the February 2021 Winter Storm Event, from February 12, 2021 to February 22, 2021, management estimates CenterPoint Energy spent approximately an incremental ~~$2.2~~$2.1 billion more on natural gas supplies (inclusive of an incremental ~~$2.1~~$2.0 billion more spent by CERC on natural gas supplies). These amounts are ~~preliminary~~ estimates as of ~~April 29,~~September 30, 2021 and remain subject to final settlement. While CenterPoint Energy and CERC will seek to recover the increased costs from its customers (although timing of recovery is uncertain), in the interim, CERC has issued additional external debt financing and used internally generated cash from operations to pay for such natural gas working capital. For further details, see Note 12 to the Interim Condensed Financial Statements. The proceeds from the debt financing, along with existing sources of liquidity, ~~provide~~

Although CenterPoint Energy’s and CERC’s ~~excess~~extraordinary costs from the increase in natural gas prices are subject to available natural gas recovery mechanisms in their jurisdictions (although timing of recovery is uncertain), until such amounts are

The Registrants expect that anticipated cash needs for the remaining ~~nine~~three months of 2021 will be met with borrowings under their credit facilities, proceeds from the issuance of long-term debt, term loans or common stock, anticipated cash flows from operations, with respect to CenterPoint Energy and CERC, proceeds from commercial paper, with respect to CenterPoint Energy, distributions from Enable until the closing of the Enable Merger which is expected in ~~the second half of~~ 2021, including any proceeds therefrom, distributions from Energy Transfer or proceeds from dispositions of Energy Transfer common units or Energy Transfer Series G Preferred Units after the expected closing of the Enable Merger, and, with respect to CERC, proceeds from any potential asset sales, including the announced sale of our Natural Gas businesses in Arkansas and Oklahoma, which is expected to close by the end of 2021, subject to the satisfaction of customary closing ~~conditions.~~conditions, including final orders from the APSC and OCC approving the transaction. 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. For further information about the Enable Merger and the announced sale of our Arkansas and Oklahoma Natural Gas businesses, see Notes 93 and ~~20,~~9, respectively, to the Interim Condensed Financial Statements.

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 and guarantees as discussed in Note 14(b) to the Interim Condensed Financial Statements, we have no off-balance sheet arrangements.

For information about COVID-19 regulatory matters, see Note 6 to the Interim Condensed Financial Statements.

~~The Texas Legislature conducted in late February and March initial hearings on the February 2021 Winter Storm Event. Immediately after~~For information about the February 2021 Winter Storm Event, five unaffiliated directors of the ERCOT Board resigned. Three ERCOT market segment directors have also resigned and their replacements were appointed. Presently, the Texas legislature is considering legislation that would require unaffiliated directors of ERCOT to be Texas residents. On March 3, 2021, the ERCOT Board terminated the employment agreement with the ERCOT President and CEO with 60 days’ notice. On April 27, 2021, the ERCOT Board announced a new interim President and CEO. Following the February 2021 Winter Storm Event, all three PUCT commissioners have also either resigned or announced their resignation. To date, Governor Abbott has announced two new PUCT commissioners and both have been confirmed by the Texas Senate. Under consideration at the Texas Legislature is legislation requiring the number of appointed PUCT commissioners to be increased from three to five. For the two additional PUCT commissioner appointees, one will be appointed by the Texas Lieutenant Governor and one will be appointed by the Texas Speaker of the House.

On June 17, 2021 Indiana Electric filed a CPCN with the IURC seeking approval to construct two natural gas combustion turbines to replace portions of its existing coal-fired generation fleet. Indiana Electric has also requested depreciation expense and post in-service carrying costs to be deferred in a ~~decision~~regulatory asset until the date Indiana South’s base rates include a return on and recovery of depreciation expense on the ~~CPCN~~facility. A hearing is ~~expected~~currently scheduled for January 26 through 31, 2022. The estimated $323 million turbine facility would be constructed at the current site of the A.B. Brown power plant in Posey County, Indiana and would provide a combined output of 460 MW. Construction of the turbines will begin following receipt of approval by the ~~fourth quarter~~IURC, which is anticipated in the second half of ~~2021.~~2022. The turbines are targeted to be operational in 2024. Subject to IURC approval, recovery of the proposed natural gas combustion turbines and regulatory asset will be requested in the next Indiana Electric rate case expected in 2023.

The State of Indiana has enacted legislation, Senate Bill 386, that would enable CenterPoint Energy to request approval from the IURC to securitize the remaining book value and removal costs associated with generating facilities to be retired in the

~~On December 17, 2020, Houston Electric~~In July 2021, Indiana North and SIGECO filed petitions with the IURC for the approval of a new financial services agreement and the confirmation of Indiana North’s financing authority. VEDO filed a ~~certificate of convenience and necessity~~similar application with the ~~PUCT~~PUCO in September 2021. CenterPoint Energy is evaluating the transfer of Indiana North and VEDO from VUHI to CERC in order to better align its organizational structure with management and financial reporting. As a part of the restructuring, VUHI may approach certain of its debt holders with an offer to exchange existing VUHI debt for CERC debt. The applications request confirmation of approval to ~~build a 345 kV transmission line in Wharton County, Texas connecting~~reissue existing debt of Indiana North and VEDO to CERC, to continue to amortize existing issuance expenses and discounts, and to treat any potential exchange fees as discounts to be amortized over the Hillje substation on Houston Electric’s transmission system to the planned 610 MW Space City Solar Generation facility being developed by third-party developer EDF Renewables. Depending on the route ultimately approved by the PUCT, the estimated capital costlife of the ~~transmission line project ranges from approximately $23 million~~debt. If CenterPoint Energy moves forward with the restructuring, including any VUHI debt exchanges, it is expected to $71 million. The actual capital costs of the project will depend on actual land acquisition costs, construction costs, and other factors in addition to route selection. In January 2021, Houston Electric executed a Standard Generation Interconnection Agreement for the Space City Solar Generation facility with EDF Renewables, which also provided security for the transmission line projectbe completed in the ~~form~~first half of ~~a $23 million letter~~2022.

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. Each of the Registrant’s credit facilities provide for a mechanism to replace LIBOR with possible alternative benchmarks upon certain benchmark replacement events. The borrowers are currently in compliance with the various business and financial covenants in the four revolving credit facilities.

For detailed information about the Registrants’ debt transactions in 2021, see Note 12 to the Interim Condensed Financial Statements.

On May 29, 2020, the Registrants filed a joint shelf registration statement with the SEC 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 will expire on May 29, 2023. For information related to the Registrants’ debt issuances in 2021, see Note 12 to the Interim Condensed Financial Statements.

As of ~~April 29,~~October 21, 2021, the Registrants had no temporary investments.

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 interest on borrowings under the credit facilities is based on each respective borrower’s credit ratings. As of ~~April 29,~~October 21, 2021, Moody’s, S&P and Fitch had assigned the following credit ratings to the borrowers:

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 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, 2021, the impact on the borrowing costs under the four revolving credit facilities would have been insignificant. 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 reportable segments.

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 ~~$162~~$223 million as of ~~March 31,~~September 30, 2021. The amount of collateral will depend on seasonal variations in transportation levels.

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

Under each of CenterPoint Energy’s (including 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.

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. As announced in December 2020, CenterPoint Energy’s business strategy incorporated the Business Review and Evaluation Committee’s recommendations to increase its planned capital expenditures in its electric and natural gas businesses to support rate base growth and sell certain of its Natural Gas businesses located in Arkansas and Oklahoma as a means to efficiently finance a portion of such increased capital expenditures, among other recommendations. On April 29, 2021, CenterPoint Energy, through its subsidiary CERC Corp., entered into an Asset Purchase Agreement to sell its Arkansas and Oklahoma Natural Gas businesses for $2.15 billion in cash, including recovery of approximately $425 million of storm-related incremental natural gas costs incurred in the February 2021 Winter Storm Event, subject to certain adjustments set forth in the Asset Purchase Agreement. For further information, ~~regarding the announced sale of our Arkansas and Oklahoma Natural Gas businesses,~~ see Note 203 to the Interim Condensed Financial Statements.

Additionally, CenterPoint Energy’s process of evaluating and optimizing the various businesses, assets and ownership interests currently held by it ~~considered,~~included consideration of, among other things, various plans, proposals and other strategic alternatives with respect to Enable and CenterPoint Energy’s investment in Enable, which may result in the disposition of a portion or all of its ownership interest in Enable. In February 2021, CenterPoint Energy announced its support of the Enable Merger, which is expected to close in ~~the second half of~~ 2021, subject to customary closing conditions, including Hart-Scott-Rodino antitrust clearance. CenterPoint Energy may not realize any or all of the anticipated strategic, financial, operational or other benefits from the Enable Merger, if completed, or from any disposition or reduction of its anticipated resulting investment in Energy Transfer. On September 21, 2021, CNP Midstream entered into a Forward Sale Agreement with an investment banking financial institution to deliver, subject to and immediately following the closing of the Enable Merger, 50 million common units of Energy Transfer expected to be received by CNP Midstream as consideration in the pending Enable Merger in exchange for the proceeds of the forward sale transaction. Additionally, CenterPoint Energy plans for a complete exit from its Midstream Investment reportable segment in 2022. There can be no assurances that any disposal of Energy Transfer common units or Energy Transfer Series G Preferred Units will be completed. Any disposal of such securities may involve significant costs and expenses, including in connection with any public offering or private placement, a significant underwriting or other discount. For information regarding the Enable Merger and the Forward Sale Agreement, see Note 9 to the Interim Condensed Financial Statements.

On August 31, 2021, CenterPoint Energy, through its subsidiary CERC Corp., completed the sale of MES to Last Mile Energy. For further information, see Note 3 to the Interim Condensed Financial Statements.

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 and the transactions contemplated by the Enable Merger Agreement, see Notes 93 and 209 to the Interim Condensed Financial Statements.

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.

CenterPoint Energy and CERC have historically entered into partial weather hedges for certain Natural Gas 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. The Registrants do not currently enter into weather hedges. For more information about weather hedges, see Note 7(a) to the Interim Condensed Financial Statements.

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, the February 2021 Winter Storm Event, 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 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.

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

~~Houston Electric has contractually agreed that it will not issue additional first mortgage bonds, subject to certain exceptions. Additionally, certain~~Certain provisions in note purchase agreements relating to debt issued by VUHI have the effect of restricting the amount of additional first mortgage bonds issued by SIGECO.

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.

During the three and nine months ended September 30, 2021, as described further in Note 3 to the Interim Condensed Financial Statements, certain assets and liabilities representing a business met the held for sale criteria. As a result, goodwill attributable to the natural gas reporting unit of $398 million and $144 million at CenterPoint Energy and CERC, respectively, was deemed attributable to assets held for sale as of September 30, 2021. Neither CenterPoint Energy nor CERC recognized any gains or losses upon classification of held for sale during the three and nine months ended September 30, 2021. No change to the goodwill attributable to the natural gas reporting unit as of September 30, 2021 was identified.

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, present value techniques based on estimates of cash flows, or multiples of earnings or revenue performance measures. The fair value could be different if different estimates and assumptions in these valuation techniques were applied.

Fair value measurements require significant judgment and often 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 rates reflecting risk inherent in the future market prices. Changes in these assumptions could have a significant impact on the resulting fair value.

CenterPoint Energy and CERC used a market approach consisting of the contractual sales price adjusted for estimated working capital and other contractual purchase price adjustments to determine fair value of the businesses classified as held for sale. The fair value of the retained businesses within the natural gas reporting unit was estimated based on a weighted combination of income approach and market approaches, consistent with the methodology used in the 2020 and 2021 annual goodwill impairment tests. A third-party valuation specialist was utilized to determine the key assumptions used in the estimate of fair value of the retained natural gas reporting unit as of September 30, 2021. The fair value of the retained natural gas reporting unit at CenterPoint Energy and CERC significantly exceeded the carrying value of the retained businesses within that reporting unit as of September 30, 2021.

No goodwill impairment resulted from assets held for sale as of September 30, 2021, and the annual goodwill impairment test was performed in the third quarter of 2021. An interim goodwill impairment test could be triggered outside of the annual test by the following: actual earnings results that are materially lower than expected, significant adverse changes in the operating environment, an increase in the discount rate, changes in other key assumptions which require judgment and are forward looking in nature, if CenterPoint Energy’s market capitalization falls below book value for an extended period of time, or events affecting a reporting unit such as a contemplated disposal of all or part of a reporting unit. Interim goodwill

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

As of ~~March 31,~~September 30, 2021, 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 ~~$3.4~~$4.0 billion and $2.4 billion as of ~~March 31,~~September 30, 2021 and December 31, 2020, respectively. If the floating interest rates were to increase by 10% from ~~March 31,~~September 30, 2021 rates, CenterPoint Energy’s combined interest expense would increase by approximately ~~$1.7~~$2 million annually.

As of ~~March 31,~~September 30, 2021 and December 31, 2020, CenterPoint Energy had outstanding fixed-rate debt (excluding indexed debt securities) aggregating ~~$12.5~~$12.6 billion and $11.1 billion, respectively, in principal amount and having a fair value of ~~$13.5~~$14.0 billion and $12.9 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 ~~$376~~$359 million if interest rates were to decline by 10% from levels at ~~March 31,~~September 30, 2021. 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.

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 ~~$13~~$11 million as of ~~March 31,~~September 30, 2021 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$1 million if interest rates were to decline by 10% from levels at ~~March 31,~~September 30, 2021. Changes in the fair value of the derivative component, a ~~$927~~$993 million recorded liability at ~~March 31,~~September 30, 2021, 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, 2021 levels, the fair value of the derivative component liability would decrease by approximately $1 million, which would be recorded as an unrealized gain in CenterPoint Energy’s Condensed Statements of Consolidated Income.

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 Interim Condensed 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, 2021 aggregate market value of these shares would result in a net loss of less than $1 million, which would be recorded as a loss in CenterPoint Energy’s Condensed Statements of Consolidated Income.

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 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

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.

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, 2021 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, 2021 that has materially affected, or is reasonably likely to materially affect, the Registrants’ internal controls over financial reporting.

~~There~~See below the new risk factors affecting the Registrants’ businesses, in addition to those discussed in “Risk Factors” in Item 1A of Part I of the combined 2020 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 2020 Form 10-K.

In September 2021, CenterPoint Energy announced its new net zero emission goals for Scope 1 and 2 emissions by 2035 and a 20-30% reduction in Scope 3 emissions by 2035. CenterPoint Energy’s analysis and plan for execution requires it to make a number of assumptions. These goals and underlying assumptions involve risks and uncertainties and are not guarantees. Should one or more of CenterPoint Energy’s underlying assumptions prove incorrect, its actual results and ability to achieve net zero emissions by 2035 could differ materially from its expectations. Certain of the assumptions that could impact CenterPoint Energy’s ability to meet its net zero emissions goals include, but are not limited to: emission levels, service territory size and capacity needs remaining in line with expectations (inclusive of changes related to the sale of CenterPoint Energy’s Natural Gas businesses in Arkansas and Oklahoma); regulatory approval of Indiana Electric’s generation transition plan; impacts of future environmental regulations or legislation; impact of future carbon pricing regulations or legislation, including a future carbon tax; price, availability and regulation of carbon offsets; price of fuel, such as natural gas; cost of energy generation technologies, such as wind and solar, natural gas and storage solutions; adoption of alternative energy by the public, including

Cyberattacks are becoming more sophisticated, and U.S. government warnings have indicated that infrastructure assets, including pipelines and electric infrastructure, may be specifically targeted by certain groups. In the second quarter of 2021, the TSA announced two new security directives in response to a ransomware attack on the Colonial Pipeline that occurred earlier this year. These directives require critical pipeline owners to comply with mandatory reporting measures, designate a cybersecurity coordinator, provide vulnerability assessments, and ensure compliance with certain cybersecurity requirements. We may be required to expend significant additional resources to respond to cyberattacks, to continue to modify or enhance our protective measures, or to assess, investigate and remediate any critical infrastructure security vulnerabilities. Any failure to remain in compliance with these government regulations or failure in our cybersecurity protective measures may result in enforcement actions which may have a material adverse effect on our business and operations.

While we have implemented and maintain a cybersecurity program designed to protect our information technology, operational technology, and data systems from such attacks, our cybersecurity program does not prevent all breaches or cyberattack incidents. We have experienced an increase in the number of attempts by external parties to access our networks or our company data without authorization. We have experienced, and expect to continue to experience, cyber intrusions and attacks to our information systems. To our knowledge, none of these intrusions or attacks have resulted in a material cybersecurity or data breach. The risk of a disruption or breach of our operational systems, or the compromise of the data processed in connection with our operations, through cybersecurity breach or ransomware attack has increased as attempted attacks have advanced in sophistication and number around the world.

We depend on the secure operation of our physical assets to transport the energy we deliver and our information technology to process, transmit and store electronic information, including information and operational technology we use to safely operate our energy transportation systems. Security breaches could expose our business to a risk of loss, misuse or interruption of critical physical assets or information and functions that affect our operations, as well as potential data privacy breaches and loss of protected personal information. Such losses could result in operational impacts, damage to our assets, public or personnel safety incidents, damage to the environment, reputational harm, competitive disadvantage, regulatory enforcement actions, litigation and a potential material adverse effect on our operations, financial position, results of operations and/or cash flows. There is no certainty that costs incurred related to securing against threats will be recovered through rates.

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 combined 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.

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.


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.	~~580,495,853~~628,865,734	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




	CenterPoint Energy Houston Electric, LLC Financial Statements (unaudited)	7




	CenterPoint Energy Resources Corp. Financial Statements (unaudited)	13





	Combined Notes to Interim Condensed Financial Statements (unaudited)	19
	(1) Background and Basis of Presentation	19
	(2) New Accounting Pronouncements	20
	(3) Held for Sale and Divestitures	20
	(4) Revenue Recognition and Allowance for Credit Losses	2225
	(5) Employee Benefit Plans	2528
	(6) Regulatory ~~Accounting~~Matters	2630
	(7) Derivative Instruments	2832
	(8) Fair Value Measurements	3034
	(9) Unconsolidated Affiliates	3136
	(10) Goodwill and Other Intangibles	3439
	(11) Indexed Debt Securities (ZENS) and Securities Related to ZENS	3541
	(12) Short-term Borrowings and Long-term Debt	3641
	(13) Income Taxes	3844
	(14) Commitments and Contingencies	3945
	(15) Earnings Per Share	4451
	(16) Reportable Segments	4552
	(17) Supplemental Disclosure of Cash Flow Information	4755
	(18) Related Party Transactions	4855
	(19) Equity	4957
	(20) Subsequent Events	5059
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5160
	Recent Events	5160
	Consolidated Results of Operations	5261
	Results of Operations by Reportable Segment	5362
	Certain Factors Affecting Future Earnings	6070
	Liquidity and Capital Resources	6171
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	7288
Item 4.	Controls and Procedures	7389

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	7389
Item 1A.	Risk Factors	7389

Item 6.	Exhibits	7490
	Signatures	7994


GLOSSARY
ACE						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						Alternative revenue program
ARPA						American Rescue Plan Act of 2021
ASC						Accounting Standards Codification
Asset Purchase Agreement						Asset Purchase Agreement, dated as of April 29, 2021, by and between CERC Corp. and Southern Col Midco, LLC, a Delaware limited liability company and an affiliate of Summit Utilities, Inc.
ASU						Accounting Standards Update
AT&T						AT&T Inc.
AT&T Common						AT&T ~~Inc.~~ common stock

Bcf						Billion cubic feet
Board						Board of Directors of CenterPoint Energy, Inc.
Bond Companies						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 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
BTA						Build Transfer Agreement
Business Review and Evaluation Committee						Business Review and Evaluation Committee of the Board of Directors of CenterPoint Energy, Inc.
Capital Dynamics						Capital Dynamics, Inc.
CARES Act						Coronavirus Aid, Relief, and Economic Security Act
CCN						Certificate of Convenience and Necessity
CCR						Coal Combustion Residuals


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

CNG						Compressed Natural Gas
CNP Midstream						CenterPoint Energy Midstream, Inc., a wholly-owned subsidiary of CenterPoint Energy

CODM						Chief Operating Decision Maker, who is each Registrant’s Chief Operating Executive
Common Stock						CenterPoint Energy, Inc. common stock, par value $0.01 per share
Compensation Committee						Compensation Committee of the Board
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
CPCN						Certificate of Public Convenience and Necessity
CPP						Clean Power Plan
CSIA						Compliance and System Improvement Adjustment


GLOSSARY
DCRF						Distribution Cost Recovery Factor
DRR						Distribution Replacement Rider
DSMA						Demand Side Management Adjustment


ECA						Environmental Cost Adjustment


~~GLOSSARY~~
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~~

Elk GP Merger Sub						Elk GP Merger Sub LLC, a Delaware limited liability company and a direct wholly-owned subsidiary of Energy Transfer
Elk Merger Sub						Elk Merger Sub LLC, a Delaware limited liability company and a direct wholly-owned subsidiary of Energy Transfer
Enable						Enable Midstream Partners, LP
Enable GP						Enable GP, LLC, Enable’s general partner
Enable Merger						The proposed merger of Elk Merger Sub with and into Enable and the merger of Elk GP Merger Sub with and into Enable GP, in each case on the terms and subject to the conditions set forth in the Enable Merger Agreement, with Enable and Enable GP surviving as wholly-owned subsidiaries of Energy Transfer
Enable Merger Agreement						Agreement and Plan of Merger by and among Energy Transfer, Elk Merger Sub LLC, Elk GP Merger Sub, Enable, Enable GP and, solely for the purposes of Section 2.1(a)(i) therein, Energy Transfer GP, and solely for the purposes of Section 1.1(b)(i) therein, CenterPoint Energy
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						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 CEIP
Energy Services Disposal Group						Substantially all of the businesses within CenterPoint Energy’s and CERC’s Energy Services reporting unit that were sold under the Equity Purchase Agreement
Energy Transfer						Energy Transfer LP, a Delaware limited partnership
Energy Transfer GP						LE GP, LLC, a Delaware limited liability company and sole general partner of Energy Transfer
Energy Transfer Series G Preferred Units						Energy Transfer Series G Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Units
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, LLC (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
February 2021 Winter Storm Event						The extreme and unprecedented winter weather event in February 2021 (Winter Storm Uri) ~~resulting~~that resulted in electricity generation supply shortages, including in Texas, and natural gas supply shortages and increased wholesale prices of natural gas in the United States, primarily due to prolonged freezing temperatures
FERC						Federal Energy Regulatory Commission
Fitch						Fitch Ratings, Inc.
Form 10-Q						Quarterly Report on Form 10-Q
Forward Sale Agreement						Contingent forward sale agreement for 50 million Energy Transfer common units, dated September 21, 2021, by and between CNP Midstream and an investment banking financial institution
FRP						Formula Rate Plan

GHG						Greenhouse gases


GLOSSARY
GRIP						Gas Reliability Infrastructure Program
~~GSR~~						~~Gas Supply Rate~~
GWh						Gigawatt-hours
Houston Electric						CenterPoint Energy Houston Electric, LLC and its subsidiaries
IDEM						Indiana Department of Environmental Management


~~GLOSSARY~~
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						Provided underground pipeline construction and repair services through 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
IURC						Indiana Utility Regulatory Commission
kV						Kilovolt

Last Mile Energy						Last Mile Energy Solutions, LLC, a Texas limited liability company
LIBOR						London Interbank Offered Rate
LNG						Liquefied Natural Gas
LPSC						Louisiana Public Service Commission
LTIP						Long-term Incentive Plan

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. (now known as Mobile Energy Solutions, Inc.), previously a wholly-owned subsidiary of CERC Corp.
MGP						Manufactured gas plant

MLP						Master Limited Partnership

Moody’s						Moody’s Investors Service, Inc.
MPSC						Mississippi Public Service Commission
MPUC						Minnesota Public Utilities Commission

MW						~~Megawatts~~Megawatt
NERC						North American Electric Reliability Corporation

NGLs						Natural gas liquids
NOLs						Net operating losses
NRG						NRG Energy, Inc.


OCC						Oklahoma Corporation Commission
OGE						OGE Energy Corp.
PBRC						Performance Based Rate Change
Posey Solar						Posey Solar, LLC, a special purpose entity


GLOSSARY
PowerTeam Services						PowerTeam Services, LLC, a Delaware limited liability company, now known as Artera Services, LLC


PPA						Power Purchase Agreement
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


~~GLOSSARY~~
Registrants						CenterPoint Energy, Houston Electric and CERC, collectively

REP						Retail electric provider
Restoration Bond Company						CenterPoint Energy Restoration Bond Company, LLC, a wholly-owned subsidiary of Houston Electric

ROE						Return on equity
ROU						Right of use
RRA						Rate Regulation Adjustment
RSP						Rate Stabilization Plan
Scope 1 emissions						Direct source of emissions from a company’s operations
Scope 2 emissions						Indirect source of emissions from a company’s energy usage
Scope 3 emissions						Indirect source of emissions from a company’s end-users
SEC						Securities and Exchange Commission
Securities Purchase Agreement						Securities Purchase Agreement, dated as of February 3, 2020, by and among Vectren Utility Services, Inc., PowerTeam Services and, solely for purposes of Section 10.17 of the Securities Purchase Agreement, Vectren
Securitization Bonds						Transition and system restoration bonds
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

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
SOFR						Secured Overnight Financing Rate
S&P						S&P Global Ratings
SRC						Sales Reconciliation Component
Stock Purchase Agreement						Stock Purchase Agreement, dated as of June 24, 2021, by and between CERC Corp. and Last Mile Energy
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

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


Tenaska						Tenaska Wind Holdings, LLC


GLOSSARY
Texas RE						Texas Reliability Entity
TOB						Tariffed On Bill
~~Utility Holding~~TSA						~~Utility Holding, LLC, a wholly-owned subsidiary~~The Department of ~~CenterPoint Energy~~Homeland Security’s Transportation Security Administration

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


~~GLOSSARY~~
ZENS						2.0% Zero-Premium Exchangeable Subordinated Notes due 2029
ZENS-Related Securities						As of both ~~March 31,~~September 30, 2021 and December 31, 2020, consisted of AT&T Common and Charter Common
2020 Form 10-K						Annual Report on Form 10-K for the fiscal year ended December 31, 2020 as filed with the SEC on February 25, 2021


		Three Months Ended				Three Months Ended						Nine Months Ended
		March 31,				September 30,						September 30,
				2021			2020			2021		2020		2021		2020
			(in millions, except per share amounts)							(in millions, except per share amounts)
Revenues:	Revenues:								Revenues:
Utility revenues	Utility revenues			$	2,484		$	2,073	Utility revenues	$	1,661	$	1,538	$	5,797	$	5,087
Non-utility revenues	Non-utility revenues			63			94		Non-utility revenues	88		84		241		277
Total	Total			2,547			2,167		Total	1,749		1,622		6,038		5,364
Expenses:	Expenses:								Expenses:
Utility natural gas, fuel and purchased power	Utility natural gas, fuel and purchased power			935			609		Utility natural gas, fuel and purchased power	223		170		1,416		981
Non-utility cost of revenues, including natural gas	Non-utility cost of revenues, including natural gas			40			64		Non-utility cost of revenues, including natural gas	61		63		159		196
Operation and maintenance	Operation and maintenance			669			674		Operation and maintenance	709		659		2,055		1,976
Depreciation and amortization	Depreciation and amortization			307			282		Depreciation and amortization	353		306		987		885
Taxes other than income taxes	Taxes other than income taxes			143			136		Taxes other than income taxes	125		122		394		387
Goodwill impairment	Goodwill impairment			0			185		Goodwill impairment	—		—		—		185
Total	Total			2,094			1,950		Total	1,471		1,320		5,011		4,610
Operating Income	Operating Income			453			217		Operating Income	278		302		1,027		754
Other Income (Expense):	Other Income (Expense):								Other Income (Expense):
Loss on marketable securities				(23)			(144)
Gain on indexed debt securities				26			135
Gain (loss) on marketable securities									Gain (loss) on marketable securities	(12)		83		40		14
Gain (loss) on indexed debt securities									Gain (loss) on indexed debt securities	11		(84)		(40)		(25)
Gain on sale									Gain on sale	8		—		8		—
Interest expense and other finance charges	Interest expense and other finance charges			(113)			(139)		Interest expense and other finance charges	(114)		(121)		(346)		(388)
Interest expense on Securitization Bonds	Interest expense on Securitization Bonds			(6)			(8)		Interest expense on Securitization Bonds	(5)		(7)		(16)		(22)
Equity in earnings (loss) of unconsolidated affiliates, net				108			(1,475)

Other income (expense), net				(8)			14

Other income, net									Other income, net	17		11		20		47
Total	Total			(16)			(1,617)		Total	(95)		(118)		(334)		(374)
Income (Loss) from Continuing Operations Before Income Taxes				437			(1,400)
Income from Continuing Operations Before Income Taxes									Income from Continuing Operations Before Income Taxes	183		184		693		380
Income tax expense (benefit)	Income tax expense (benefit)			74			(347)		Income tax expense (benefit)	33		(15)		63		33
Income (Loss) from Continuing Operations				363			(1,053)
Loss from Discontinued Operations (net of tax benefit of $-0- and $17, respectively)				0			(146)
Income from Continuing Operations									Income from Continuing Operations	150		199		630		347
Income (Loss) from Discontinued Operations (net of tax expense (benefit) of $15, $5, $56 and $(340), respectively)									Income (Loss) from Discontinued Operations (net of tax expense (benefit) of $15, $5, $56 and $(340), respectively)	68		(78)		202		(1,320)
Net Income (Loss)	Net Income (Loss)			363			(1,199)		Net Income (Loss)	218		121		832		(973)
Income allocated to preferred shareholders	Income allocated to preferred shareholders			29			29		Income allocated to preferred shareholders	23		52		82		127
Income (Loss) Available to Common Shareholders	Income (Loss) Available to Common Shareholders			$	334		$	(1,228)	Income (Loss) Available to Common Shareholders	$	195	$	69	$	750	$	(1,100)

Basic earnings (loss) per common share - continuing operations				$	0.56		$	(2.15)
Basic earnings per common share - continuing operations									Basic earnings per common share - continuing operations	$	0.21	$	0.27	$	0.94	$	0.42
Basic earnings (loss) per common share - discontinued operations	Basic earnings (loss) per common share - discontinued operations			0			(0.29)		Basic earnings (loss) per common share - discontinued operations	0.11		(0.14)		0.35		(2.52)
Basic Earnings (Loss) Per Common Share	Basic Earnings (Loss) Per Common Share			0.56			(2.44)		Basic Earnings (Loss) Per Common Share	0.32		0.13		1.29		(2.10)
Diluted earnings (loss) per common share - continuing operations				$	0.56		$	(2.15)
Diluted earnings per common share - continuing operations									Diluted earnings per common share - continuing operations	$	0.21	$	0.27	$	0.91	$	0.42
Diluted earnings (loss) per common share - discontinued operations	Diluted earnings (loss) per common share - discontinued operations			0			(0.29)		Diluted earnings (loss) per common share - discontinued operations	0.11		(0.14)		0.34		(2.52)
Diluted Earnings (Loss) Per Common Share	Diluted Earnings (Loss) Per Common Share			$	0.56		$	(2.44)	Diluted Earnings (Loss) Per Common Share	$	0.32	$	0.13	$	1.25	$	(2.10)

Weighted Average Common Shares Outstanding, Basic	Weighted Average Common Shares Outstanding, Basic			552			502		Weighted Average Common Shares Outstanding, Basic	605		545		581		525
Weighted Average Common Shares Outstanding, Diluted	Weighted Average Common Shares Outstanding, Diluted			631			502		Weighted Average Common Shares Outstanding, Diluted	609		548		601		525


		March 31, 2021		December 31, 2020			September 30, 2021		December 31, 2020
		(in millions)					(in millions)
Current Assets:	Current Assets:					Current Assets:
Cash and cash equivalents ($142 and $139 related to VIEs, respectively)		$	146	$	147
Cash and cash equivalents ($105 and $139 related to VIEs, respectively)						Cash and cash equivalents ($105 and $139 related to VIEs, respectively)	$	133	$	147
Investment in marketable securities	Investment in marketable securities	848		871		Investment in marketable securities	911		871
Accounts receivable ($24 and $23 related to VIEs, respectively), less allowance for credit losses of $65 and $52, respectively		780		676
Accrued unbilled revenues, less allowance for credit losses of $4 and $5, respectively		343		505
Preferred units – unconsolidated affiliate						Preferred units – unconsolidated affiliate	363		—
Accounts receivable ($43 and $23 related to VIEs, respectively), less allowance for credit losses of $50 and $52, respectively						Accounts receivable ($43 and $23 related to VIEs, respectively), less allowance for credit losses of $50 and $52, respectively	650		676
Accrued unbilled revenues, less allowance for credit losses of $2 and $5, respectively						Accrued unbilled revenues, less allowance for credit losses of $2 and $5, respectively	293		505

Natural gas and coal inventory	Natural gas and coal inventory	67		203		Natural gas and coal inventory	217		203
Materials and supplies	Materials and supplies	310		297		Materials and supplies	376		297

Non-trading derivative assets						Non-trading derivative assets	23		—
Taxes receivable	Taxes receivable	79		82		Taxes receivable	14		82

Prepaid expenses and other current assets ($16 and $15 related to VIEs, respectively)		646		139
Current assets held for sale						Current assets held for sale	3,150		—
Prepaid expenses and other current assets ($18 and $15 related to VIEs, respectively)						Prepaid expenses and other current assets ($18 and $15 related to VIEs, respectively)	1,578		139
Total current assets	Total current assets	3,219		2,920		Total current assets	7,708		2,920
Property, Plant and Equipment:	Property, Plant and Equipment:					Property, Plant and Equipment:
Property, plant and equipment	Property, plant and equipment	32,991		32,514		Property, plant and equipment	32,692		32,514
Less: accumulated depreciation and amortization	Less: accumulated depreciation and amortization	10,252		10,152		Less: accumulated depreciation and amortization	10,078		10,152
Property, plant and equipment, net	Property, plant and equipment, net	22,739		22,362		Property, plant and equipment, net	22,614		22,362
Other Assets:	Other Assets:					Other Assets:
Goodwill	Goodwill	4,697		4,697		Goodwill	4,294		4,697
Regulatory assets ($597 and $633 related to VIEs, respectively)		3,795		2,094
Regulatory assets ($469 and $633 related to VIEs, respectively)						Regulatory assets ($469 and $633 related to VIEs, respectively)	2,307		2,094

Non-trading derivative assets						Non-trading derivative assets	9		—

Investment in unconsolidated affiliates		853		783
Preferred units – unconsolidated affiliate	Preferred units – unconsolidated affiliate	363		363		Preferred units – unconsolidated affiliate	—		363

Non-current assets held for sale						Non-current assets held for sale	—		782
Other non-current assets	Other non-current assets	240		252		Other non-current assets	228		253
Total other assets	Total other assets	9,948		8,189		Total other assets	6,838		8,189
Total Assets	Total Assets	$	35,906	$	33,471	Total Assets	$	37,160	$	33,471


		Three Months Ended March 31,					Nine Months Ended September 30,
		2021		2020			2021		2020
		(in millions)					(in millions)
Cash Flows from Operating Activities:	Cash Flows from Operating Activities:					Cash Flows from Operating Activities:
Net income (loss)	Net income (loss)	$	363	$	(1,199)	Net income (loss)	$	832	$	(973)

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:					Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	307		282		Depreciation and amortization	987		885

Amortization of deferred financing costs	Amortization of deferred financing costs	7		7		Amortization of deferred financing costs	27		23

Amortization of intangible assets in non-utility cost of revenues						Amortization of intangible assets in non-utility cost of revenues	1		1
Deferred income taxes	Deferred income taxes	66		(377)		Deferred income taxes	86		(429)

Goodwill impairment and loss from reclassification to held for sale	Goodwill impairment and loss from reclassification to held for sale	0		214		Goodwill impairment and loss from reclassification to held for sale	—		175
Goodwill impairment	Goodwill impairment	0		185		Goodwill impairment	—		185

Unrealized loss on marketable securities		23		144
Gain on indexed debt securities		(26)		(135)
Unrealized gain on marketable securities						Unrealized gain on marketable securities	(40)		(14)
Gain on sale						Gain on sale	(8)		—
Loss on indexed debt securities						Loss on indexed debt securities	40		25

Write-down of natural gas inventory	Write-down of natural gas inventory	0		3		Write-down of natural gas inventory	—		3
Equity in (earnings) losses of unconsolidated affiliates	Equity in (earnings) losses of unconsolidated affiliates	(108)		1,475		Equity in (earnings) losses of unconsolidated affiliates	(258)		1,499
Distributions from unconsolidated affiliates	Distributions from unconsolidated affiliates	39		70		Distributions from unconsolidated affiliates	116		109
Pension contributions	Pension contributions	(8)		(2)		Pension contributions	(59)		(84)
Changes in other assets and liabilities, excluding acquisitions:
Changes in other assets and liabilities:						Changes in other assets and liabilities:
Accounts receivable and unbilled revenues, net	Accounts receivable and unbilled revenues, net	29		236		Accounts receivable and unbilled revenues, net	231		326

Inventory	Inventory	99		110		Inventory	(104)		(50)
Taxes receivable	Taxes receivable	3		13		Taxes receivable	68		4
Accounts payable	Accounts payable	(55)		(192)		Accounts payable	(53)		(251)

Non-trading derivatives, net	Non-trading derivatives, net	(14)		(53)		Non-trading derivatives, net	(51)		(14)
Margin deposits, net	Margin deposits, net	0		21		Margin deposits, net	—		65
Interest and taxes accrued	Interest and taxes accrued	(62)		(95)		Interest and taxes accrued	(12)		(53)
Net regulatory assets and liabilities	Net regulatory assets and liabilities	(2,297)		(27)		Net regulatory assets and liabilities	(2,309)		(81)
Other current assets	Other current assets	0		(5)		Other current assets	11		6
Other current liabilities	Other current liabilities	(59)		(37)		Other current liabilities	(24)		30
Other non-current assets	Other non-current assets	0		19		Other non-current assets	2		5
Other non-current liabilities	Other non-current liabilities	17		1		Other non-current liabilities	(46)		46
Other, net		(5)		4
Other operating activities, net						Other operating activities, net	12		1

Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	(1,681)		662		Net cash provided by (used in) operating activities	(551)		1,439
Cash Flows from Investing Activities:	Cash Flows from Investing Activities:					Cash Flows from Investing Activities:
Capital expenditures	Capital expenditures	(594)		(664)		Capital expenditures	(2,148)		(1,889)

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

Proceeds from divestitures						Proceeds from divestitures	22		1,136

Other, net		(10)		3
Other investing activities, net						Other investing activities, net	22		24

Net cash used in investing activities	Net cash used in investing activities	(604)		(654)		Net cash used in investing activities	(2,104)		(683)
Cash Flows from Financing Activities:	Cash Flows from Financing Activities:					Cash Flows from Financing Activities:

Increase (decrease) in short-term borrowings, net						Increase (decrease) in short-term borrowings, net	(27)		37
Proceeds from (payments of) commercial paper, net	Proceeds from (payments of) commercial paper, net	38		(828)		Proceeds from (payments of) commercial paper, net	596		(1,057)
Proceeds from long-term debt	Proceeds from long-term debt	2,795		0		Proceeds from long-term debt	4,493		299
Payments of long-term debt	Payments of long-term debt	(388)		(63)		Payments of long-term debt	(1,990)		(1,060)
Borrowings from revolving credit facilities	Borrowings from revolving credit facilities	0		1,050		Borrowings from revolving credit facilities	—		1,050
Payments of revolving credit facilities						Payments of revolving credit facilities	—		(1,050)

Payment of debt issuance costs	Payment of debt issuance costs	(20)		0		Payment of debt issuance costs	(38)		(4)

Payment of dividends on Common Stock	Payment of dividends on Common Stock	(88)		(145)		Payment of dividends on Common Stock	(278)		(309)
Payment of dividends on Preferred Stock	Payment of dividends on Preferred Stock	(48)		(42)		Payment of dividends on Preferred Stock	(106)		(114)
Proceeds from issuance of Common Stock, net						Proceeds from issuance of Common Stock, net	—		672
Proceeds from issuance of Series C Preferred Stock, net						Proceeds from issuance of Series C Preferred Stock, net	—		723

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

Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	2,285		(32)		Net cash provided by (used in) financing activities	2,644		(819)
Net Decrease in Cash, Cash Equivalents and Restricted Cash	Net Decrease in Cash, Cash Equivalents and Restricted Cash	0		(24)		Net Decrease in Cash, Cash Equivalents and Restricted Cash	(11)		(63)
Cash, Cash Equivalents and Restricted Cash at Beginning of Period	Cash, Cash Equivalents and Restricted Cash at Beginning of Period	167		271		Cash, Cash Equivalents and Restricted Cash at Beginning of Period	167		271
Cash, Cash Equivalents and Restricted Cash at End of Period	Cash, Cash Equivalents and Restricted Cash at End of Period	$	167	$	247	Cash, Cash Equivalents and Restricted Cash at End of Period	$	156	$	208


		Three Months Ended March 31,				Three Months Ended September 30,									Nine Months Ended September 30,
			2021		2020				2021					2020			2021			2020
					Shares		Amount			Shares	Amount			Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
				(in millions of dollars and shares)										(in millions of dollars and shares)
Cumulative Preferred Stock, $0.01 par value; authorized 20,000,000 shares	Cumulative Preferred Stock, $0.01 par value; authorized 20,000,000 shares												Cumulative Preferred Stock, $0.01 par value; authorized 20,000,000 shares
Balance, beginning of period	Balance, beginning of period				3		$	2,363		2	$	1,740	Balance, beginning of period	3	$	1,739	3	$	2,441	3	$	2,363	2	$	1,740

Issuances of Series C Preferred Stock, net of issuance costs and beneficial conversion feature													Issuances of Series C Preferred Stock, net of issuance costs and beneficial conversion feature	—	—		—	15		—	—		1	716
Conversion of Series B Preferred Stock and Series C Preferred Stock													Conversion of Series B Preferred Stock and Series C Preferred Stock	(2)	(949)		—	—		(2)	(1,573)		—	—
Balance, end of period	Balance, end of period				3		2,363			2	1,740		Balance, end of period	1	790		3	2,456		1	790		3	2,456
Common Stock, $0.01 par value; authorized 1,000,000,000 shares	Common Stock, $0.01 par value; authorized 1,000,000,000 shares												Common Stock, $0.01 par value; authorized 1,000,000,000 shares
Balance, beginning of period	Balance, beginning of period				551		6			502	5		Balance, beginning of period	593	6		545	5		551	6		502	5

Issuances of Common Stock													Issuances of Common Stock	36	—		—	—		77	—		42	—
Issuances related to benefit and investment plans	Issuances related to benefit and investment plans				1		0			0	0		Issuances related to benefit and investment plans	—	—		—	—		1	—		1	—
Balance, end of period	Balance, end of period				552		6			502	5		Balance, end of period	629	6		545	5		629	6		545	5
Additional Paid-in-Capital	Additional Paid-in-Capital												Additional Paid-in-Capital
Balance, beginning of period	Balance, beginning of period						6,914				6,080		Balance, beginning of period		7,553			6,801			6,914			6,080

Issuances of Common Stock, net of issuance costs													Issuances of Common Stock, net of issuance costs		949			(1)			1,573			672
Issuances related to benefit and investment plans	Issuances related to benefit and investment plans						2				6		Issuances related to benefit and investment plans		15			5			30			21

Recognition of beneficial conversion feature													Recognition of beneficial conversion feature		—			—			—			32
Balance, end of period	Balance, end of period						6,916				6,086		Balance, end of period		8,517			6,805			8,517			6,805
Retained Earnings (Accumulated Deficit)	Retained Earnings (Accumulated Deficit)												Retained Earnings (Accumulated Deficit)
Balance, beginning of period	Balance, beginning of period						(845)				632		Balance, beginning of period		(343)			(771)			(845)			632
Net income (loss)	Net income (loss)						363				(1,199)		Net income (loss)		218			121			832			(973)
Common Stock dividends declared (see Note 19)	Common Stock dividends declared (see Note 19)						0				(145)		Common Stock dividends declared (see Note 19)		(202)			(82)			(297)			(309)
Preferred Stock dividends declared (see Note 19)	Preferred Stock dividends declared (see Note 19)						0				(42)		Preferred Stock dividends declared (see Note 19)		(41)			(48)			(58)			(114)

Amortization of beneficial conversion feature													Amortization of beneficial conversion feature		—			(16)			—			(25)
Adoption of ASU 2016-13	Adoption of ASU 2016-13						0				(7)		Adoption of ASU 2016-13		—			—			—			(7)
Balance, end of period	Balance, end of period						(482)				(761)		Balance, end of period		(368)			(796)			(368)			(796)
Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss												Accumulated Other Comprehensive Loss
Balance, beginning of period	Balance, beginning of period						(90)				(98)		Balance, beginning of period		(85)			(84)			(90)			(98)
Other comprehensive income (loss)							3				(2)
Other comprehensive income													Other comprehensive income		5			2			10			16
Balance, end of period	Balance, end of period						(87)				(100)		Balance, end of period		(80)			(82)			(80)			(82)
Total Shareholders’ Equity	Total Shareholders’ Equity						$	8,716			$	6,970	Total Shareholders’ Equity		$	8,865		$	8,388		$	8,865		$	8,388


	September 30, 2021
	CenterPoint Energy		CERC
	(in millions)
Receivables, net	$	15	$	15
Accrued unbilled revenues	12		12
Natural gas inventory	48		48
Materials and supplies	8		8
Property, plant and equipment, net	1,254		1,254
Goodwill	398		144
Investment in unconsolidated affiliate (1)	926		—
Regulatory assets	403		403
Other	86		86
Total current assets held for sale	$	3,150	$	1,970

Short term borrowings (2)	$	34	$	34
Accounts payable	21		21
Taxes accrued	7		7

Customer deposits	11		11
Regulatory liabilities	317		317
Other	122		122
Total current liabilities held for sale	$	512	$	512


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(in millions)
Income (Loss) from Continuing Operations Before Income Taxes	$	(14)	$	(12)	$	48	$	48


	Three Months Ended March 31, 2020
	CenterPoint Energy				CERC
	Infrastructure Services Disposal Group		Energy Services Disposal Group		Total		Energy Services Disposal Group
	(in millions)
Revenues	$	222	$	886	$	1,108	$	886
Expenses:
Non-utility cost of revenues	44		808		852		808
Operation and maintenance	163		20		183		20

Taxes other than income taxes	1		1		2		1
Total expenses	208		829		1,037		829


Income (loss) from Discontinued Operations before income taxes	14		57		71		57
Loss on classification to held for sale, net (1)	(96)		(138)		(234)		(132)
Income tax benefit	(5)		(12)		(17)		(11)
Net loss from Discontinued Operations	$	(77)	$	(69)	$	(146)	$	(64)


	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020
	Energy Services Disposal Group
	(in millions)
Revenues	$	—	$	1,167
Expenses:
Non-utility cost of revenues	—		1,108
Operation and maintenance	—		34

Taxes other than income taxes	—		3
Total	—		1,145


Income from discontinued operations before income taxes	—		22
Gain (loss) on classification to held for sale, net (1)	3		(90)
Income tax expense (benefit)	1		(2)
Net income (loss) from discontinued operations	$	2	$	(66)


	Nine Months Ended September 30, 2021
	CenterPoint Energy
	Equity Method Investment in Enable
	(in millions)


Equity in earnings of unconsolidated affiliate - operating	$	(258)
Distributions from unconsolidated affiliate - operating	116


						Three Months Ended September 30, 2021
												Electric		Natural Gas		Corporate and Other		Total
						(in millions)
Revenue from contracts											Revenue from contracts	$	1,056	$	611	$	73	$	1,740

Other (1)											Other (1)	—		8		1		9

Total revenues											Total revenues	$	1,056	$	619	$	74	$	1,749

		Three Months Ended March 31, 2021										Nine Months Ended September 30, 2021
		Electric		Natural Gas			Corporate and Other		Total			Electric		Natural Gas		Corporate and Other		Total
		(in millions)										(in millions)
Revenue from contracts	Revenue from contracts	$	833	$	1,655		$	53	$	2,541	Revenue from contracts	$	2,822	$	2,984	$	190	$	5,996
Other (1)	Other (1)	(3)		8			1		6		Other (1)	1		38		3		42

Total revenues	Total revenues	$	830	$	1,663		$	54	$	2,547	Total revenues	$	2,823	$	3,022	$	193	$	6,038


		Accounts Receivable		Other Accrued Unbilled Revenues		Contract Assets		Contract Liabilities			Accounts Receivable		Other Accrued Unbilled Revenues		Contract Assets		Contract Liabilities
		(in millions)									(in millions)
Opening balance as of December 31, 2020	Opening balance as of December 31, 2020	$	604	$	505	$	27	$	18	Opening balance as of December 31, 2020	$	604	$	505	$	27	$	18
Closing balance as of March 31, 2021		675		343		23		23
Closing balance as of September 30, 2021										Closing balance as of September 30, 2021	568		293		24		22
Increase (decrease)	Increase (decrease)	$	71	$	(162)	$	(4)	$	5	Increase (decrease)	$	(36)	$	(212)	$	(3)	$	4


		Rolling 12 Months		Thereafter		Total		Rolling 12 Months		Thereafter		Total
		(in millions)								(in millions)
Revenue expected to be recognized on contracts in place as of March 31, 2021:
Revenue expected to be recognized on contracts in place as of September 30, 2021:									Revenue expected to be recognized on contracts in place as of September 30, 2021:

Corporate and Other	Corporate and Other	$	259	$	554	$	813		Corporate and Other	$	245	$	564	$	809
		$	259	$	554	$	813			$	245	$	564	$	809


	March 31, 2021						December 31, 2020
	CenterPoint Energy (1)		Houston Electric (2)		CERC (3)		CenterPoint Energy (1)		Houston Electric (2)		CERC (3)
	(in millions)
Allowed equity return not recognized	$	224	$	130	$	13	$	229	$	137	$	13


		Derivative Liabilities Fair Value
	Balance Sheet Location	March 31, 2021		December 31, 2020




Derivatives not designated as hedging instruments:		(in millions)
Natural gas derivatives (1)	Current Liabilities: Non-trading derivative liabilities	$	2	$	3
Natural gas derivatives (1)	Other Liabilities: Non-trading derivative liabilities	5		7
Interest rate derivatives	Other Liabilities: Non-trading derivative liabilities	9		20
Indexed debt securities derivative (2)	Current Liabilities	927		953

Total		$	943	$	983


			Three Months Ended March 31,						Three Months Ended September 30,			Nine Months Ended September 30,
		Income Statement Location		2021		2020			Income Statement Location	2021		2020		2021		2020
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:			(in millions)				Derivatives not designated as hedging instruments:		(in millions)
Indexed debt securities derivative (1)	Indexed debt securities derivative (1)	Gain (loss) on indexed debt securities		$	26	$	135	Indexed debt securities derivative (1)	Gain (loss) on indexed debt securities	$	11	$	(84)	$	(40)	$	(25)

Total				$	26	$	135


	Three Months Ended March 31,
		2021		2020 (1)
		(in millions)
Enable		$	108	$	(1,475)

Total		$	108	$	(1,475)


		March 31, 2021					September 30, 2021
		Limited Partner Interest (1)		Common Units	Enable Series A Preferred Units (2)		Limited Partner Interest (1)		Common Units	Enable Series A Preferred Units (2)
CenterPoint Energy (3)	CenterPoint Energy (3)	53.7	%	233,856,623	14,520,000	CenterPoint Energy (3)	53.7	%	233,856,623	14,520,000
OGE	OGE	25.5	%	110,982,805	0	OGE	25.5	%	110,982,805	—
Public unitholders	Public unitholders	20.8	%	91,007,338	0	Public unitholders	20.8	%	91,038,118	—

Total units outstanding	Total units outstanding	100.0	%	435,846,766	14,520,000	Total units outstanding	100.0	%	435,877,546	14,520,000


	March 31, 2021
	Management Rights (1)		Incentive Distribution Rights (2)
CenterPoint Energy (3)	50	%	40	%
OGE	50	%	60	%