CENTERPOINT ENERGY INC [CNP] Filings

10-Q 1 cnp-20240630.htm 10-Q cnp-20240630

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________

FORM 10-Q


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

For the quarterly period ended June 30, 2024


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

Commission file number 1-31447

CenterPoint Energy, Inc.

(Exact name of registrant as specified in its charter)


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)

(713) 207-1111

Registrant's telephone number, including area code

Commission file number 1-3187

CenterPoint Energy Houston Electric, LLC

(Exact name of registrant as specified in its charter)


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)

(713) 207-1111

Registrant's telephone number, including area code

Commission file number 1-13265

CenterPoint Energy Resources Corp.

(Exact name of registrant as specified in its charter)


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)

(713) 207-1111

Registrant's telephone number, including area 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
			NYSE Chicago
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

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

CenterPoint Energy, Inc.

Yes

CenterPoint Energy Houston Electric, LLC

Yes

CenterPoint Energy Resources Corp.

Yes

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

CenterPoint Energy, Inc.

Yes

CenterPoint Energy Houston Electric, LLC

Yes

CenterPoint Energy Resources Corp.

Yes

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

CenterPoint Energy, Inc.

☐

CenterPoint Energy Houston Electric, LLC

☐

CenterPoint Energy Resources Corp.

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

CenterPoint Energy, Inc.

Yes

☐

CenterPoint Energy Houston Electric, LLC

Yes

☐

CenterPoint Energy Resources Corp.

Yes

☐

Indicate the number of shares outstanding of each of the issuers’ classes of common stock as of July 22, 2024:


CenterPoint Energy, Inc.	641,966,980	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.

CenterPoint Energy Houston Electric, LLC and CenterPoint Energy Resources Corp. meet the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and are therefore filing this form with the reduced disclosure format specified in General Instruction H(2) of Form 10-Q.

TABLE OF CONTENTS


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)	12





	Combined Notes to Interim Condensed Financial Statements (Unaudited)	18
	(1) Background and Basis of Presentation	18
	(2) New Accounting Pronouncements	19
	(3) Held for Sale and Divestitures	19
	(4) Revenue Recognition and Allowance for Credit Losses	21
	(5) Employee Benefit Plans	24
	(6) Regulatory Matters	25
	(7) Derivative Instruments	28
	(8) Fair Value Measurements	31
	(9) Goodwill	33
	(10) Equity Securities and Indexed Debt Securities (ZENS)	34
	(11) Short-term Borrowings and Long-term Debt	34
	(12) Income Taxes	37
	(13) Commitments and Contingencies	38
	(14) Earnings Per Share	44
	(15) Reportable Segments	45
	(16) Supplemental Disclosure of Cash Flow and Balance Sheet Information	46
	(17) Related Party Transactions	47
	(18) Equity	48
	(19) Leases	49
	(20) Subsequent Events	52
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	53
	Recent Events	53
	Consolidated Results of Operations	55
	Results of Operations by Reportable Segment	57
	Certain Factors Affecting Future Earnings	64
	Liquidity and Capital Resources	65
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	82
Item 4.	Controls and Procedures	83

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	83
Item 1A.	Risk Factors	83
Item 5.	Other Information	84
Item 6.	Exhibits	84
	Signatures	87


GLOSSARY
ACE						Affordable Clean Energy


AFUDC						Allowance for funds used during construction

ALJ						Administrative Law Judge
AMA						Asset Management Agreement
Arevon						Arevon Energy, Inc., which was formed through the combination of Capital Dynamics, Inc.’s U.S. Clean Energy Infrastructure business unit and Arevon Asset Management



ARO						Asset retirement obligation

ARP						Alternative revenue program

ASC						Accounting Standards Codification


ASU						Accounting Standards Update
AT&T Common						AT&T Inc. common stock

ATM Forward Purchasers						Bank of America, N.A., Barclays Bank PLC, Citibank, N.A., Goldman Sachs & Co. LLC, JPMorgan Chase Bank, National Association, Mizuho Markets Americas LLC, MUFG Securities EMEA plc and Royal Bank of Canada
ATM Forward Sellers						BofA Securities, Inc. Barclays Capital Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Mizuho Securities USA LLC, MUFG Securities Americas Inc. and RBC Capital Markets, LLC
ATM Managers						BofA Securities, Inc., Barclays Capital Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Mizuho Securities USA LLC, MUFG Securities Americas Inc. and RBC Capital Markets, LLC
Bcf						Billion cubic feet

Bond Companies						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 IV						CenterPoint Energy Transition Bond Company IV, LLC, a wholly-owned subsidiary of Houston Electric
BTA						Build Transfer Agreement

CAMT						Corporate Alternative Minimum Tax


CCN						Certificate of Convenience and Necessity
CCR						Coal Combustion Residuals


CECA						Clean Energy Cost Adjustment
CEIP						CenterPoint Energy Intrastate Pipelines, LLC, a wholly-owned subsidiary of CERC Corp.
CenterPoint Energy						CenterPoint Energy, Inc., and its subsidiaries
CEOH						Vectren Energy Delivery of Ohio, LLC, doing business as CenterPoint Energy Ohio, which converted its corporate structure from Vectren Energy Delivery of Ohio, Inc. to an Ohio limited liability company on June 13, 2022, formerly a wholly-owned subsidiary of Vectren, acquired by CERC on June 30, 2022
CEP						Capital Expenditure Program
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




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

Convertible Notes						CenterPoint Energy’s 4.25% Convertible Senior Notes due 2026
Convertible Notes Indenture						Indenture dated as of August 4, 2023 by and between CenterPoint Energy and The Bank of New York Mellon Trust Company, National Association, as trustee
COVID-19						Novel coronavirus disease 2019, and any mutations or variants thereof, and related global outbreak that was subsequently declared a pandemic by the World Health Organization

CPCN						Certificate of Public Convenience and Necessity
CPP						Clean Power Plan

CSIA						Compliance and System Improvement Adjustment
DCRF						Distribution Cost Recovery Factor
DOC						U.S. Department of Commerce
DRR						Distribution Replacement Rider
DSMA						Demand Side Management Adjustment


GLOSSARY
ECA						Environmental Cost Adjustment
EDF Renewables						EDF Renewables Development, Inc.
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












Energy Systems Group						Energy Systems Group, LLC, previously a wholly-owned subsidiary of Vectren




EPA						Environmental Protection Agency

Equity Distribution Agreement						Equity Distribution Agreement, dated as of January 10, 2024, by and between CenterPoint Energy, the ATM Managers, the ATM Forward Purchasers and the ATM Forward Sellers
Equity Purchase Agreement						Equity Purchase Agreement, dated as of May 21, 2023, by and between Vectren Energy Services and ESG Holdings Group
ERCOT						Electric Reliability Council of Texas
ESG Holdings Group						ESG Holdings Group, LLC, a Delaware limited liability company, and an affiliate of Oaktree Capital Management
Exchange Act						The Securities Exchange Act of 1934, as amended
February 2021 Winter Storm Event						The extreme and unprecedented winter weather event in February 2021 (Winter Storm Uri) 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
FASB						Financial Accounting Standards Board
FERC						Federal Energy Regulatory Commission

Fitch						Fitch Ratings, Inc.
Form 10-Q						Quarterly Report on Form 10-Q
General Mortgage						General Mortgage Indenture, dated as of October 10, 2002, between Houston Electric and JPMorgan Chase Bank, as Trustee, as supplemented




GHG						Greenhouse gases

GRIP						Gas Reliability Infrastructure Program

GWh						Gigawatt-hours
Houston Electric						CenterPoint Energy Houston Electric, LLC and its subsidiaries
Hurricane Beryl						The powerful and destructive storm that made landfall in Texas on July 8, 2024 as a Category 1 hurricane event on the Saffir-Simpson Hurricane Wind Scale and caused widespread damage to Houston Electric’s electric system
IAS						International Accounting Standards

IDEM						Indiana Department of Environmental Management
Indiana Electric						Operations of SIGECO’s electric transmission and distribution services, and includes its power generating and wholesale power operations
Indiana Gas						Indiana Gas Company, Inc., formerly a wholly-owned subsidiary of Vectren, acquired by CERC on June 30, 2022
Indiana North						Gas operations of Indiana Gas
Indiana South						Gas operations of SIGECO
Indiana Utilities						The combination of Indiana Electric, Indiana North and Indiana South


Interim Condensed Financial Statements						Unaudited condensed consolidated interim financial statements and combined notes
IRA						Inflation Reduction Act of 2022

IRP						Integrated Resource Plan
IRS						Internal Revenue Service
IURC						Indiana Utility Regulatory Commission



kV						Kilovolt
LAMS Asset Purchase Agreement						Asset Purchase Agreement, dated as of February 19, 2024, by and among CERC Corp. and the LAMS Buyers
LAMS Buyers						Delta Utilities No. LA, LLC, a Delaware limited liability company, Delta Utilities S. LA, LLC, a Delaware limited liability company, Delta Utilities MS, LLC, a Delaware limited liability company, and Delta Shared Services Co., LLC, a Delaware limited liability company
LDC						Local distribution company



LPSC						Louisiana Public Service Commission

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GLOSSARY
M&DOT						Mortgage and Deed of Trust, dated November 1, 1944, between Houston Lighting and Power Company and Chase Bank of Texas, National Association (formerly, South Texas Commercial National Bank of Houston), as Trustee, as amended and supplemented
MDL						Multi-district litigation
May 2024 Storm Events						The sudden and destructive severe weather events in May 2024 that included Category 2 hurricane-like winds and tornadoes, that resulted in widespread damage to Houston Electric’s electric delivery system
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

MGP						Manufactured gas plant
MISO						Midcontinent Independent System Operator


MMBtu						One million British thermal units
Moody’s						Moody’s Investors Service, Inc.

MPSC						Mississippi Public Service Corporation
MPUC						Minnesota Public Utilities Commission

MW						Megawatt
NERC						North American Electric Reliability Corporation


NOLs						Net operating losses

NRG						NRG Energy, Inc.
NYSE						New York Stock Exchange
Oriden						Oriden LLC
Origis						Origis Energy USA Inc.




OUCC						Indiana Office of Utility Consumer Counselor

Posey Solar						Posey Solar, LLC, a special purpose entity



PPA						Power Purchase Agreement
PRPs						Potentially responsible parties
PTCs						Production Tax Credits
PUCO						Public Utilities Commission of Ohio
PUCT						Public Utility Commission of Texas
Railroad Commission						Railroad Commission of Texas
RCRA						Resource Conservation and Recovery Act of 1976
Registrants						CenterPoint Energy, Houston Electric and CERC, collectively

REP						Retail electric provider
Restoration Bond Company						CenterPoint Energy Restoration Bond Company, LLC, a wholly-owned subsidiary of Houston Electric
Restructuring						CERC Corp.’s common control acquisition of Indiana Gas and CEOH from VUH on June 30, 2022

ROE						Return on equity
ROU						Right of use
RRA						Rate Regulation Adjustment
RSP						Rate Stabilization Plan
S&P						S&P Global Ratings
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

Securitization Bonds						Transition and system restoration bonds issued by the Bond Companies and SIGECO Securitization Bonds issued by the SIGECO Securitization Subsidiary
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



SIGECO						Southern Indiana Gas and Electric Company, a wholly-owned subsidiary of Vectren


GLOSSARY
SIGECO Securitization Bonds						SIGECO Securitization Subsidiary’s Series 2023-A Senior Secured Securitization Bonds
SIGECO Securitization Subsidiary						SIGECO Securitization I, LLC, a direct, wholly-owned subsidiary of SIGECO
SOFR						Secured Overnight Financing Rate

SRC						Sales Reconciliation Component


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
TEEEF						Assets leased or costs incurred as “temporary emergency electric energy facilities” under the Public Utility Regulatory Act Section 39.918, also referred to as mobile generation







Topic 326						Accounting Standards Update 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

Utility Holding						Utility Holding, LLC, a wholly-owned subsidiary of CenterPoint Energy
Vectren						Vectren, LLC, which converted its corporate structure from Vectren Corporation to a limited liability company on June 30, 2022, a wholly-owned subsidiary of CenterPoint Energy as of February 1, 2019
Vectren Energy Services						Vectren Energy Services Corporation, an Indiana corporation and a wholly-owned subsidiary of CenterPoint Energy
VIE						Variable interest entity

Vistra Energy Corp.						Texas-based energy company focused on the competitive energy and power generation markets
VRP						Voluntary Remediation Program
VUH						Vectren Utility Holdings, LLC, which converted its corporate structure from Vectren Utility Holdings, Inc. to a limited liability company on June 30, 2022, a wholly-owned subsidiary of Vectren

WBD Common						Warner Bros. Discovery, Inc. Series A common stock
Winter Storm Elliott						From December 21 to 26, 2022, a historic extratropical cyclone created winter storm conditions, including blizzards, high winds, snowfall and record cold temperatures across the majority of the United States and parts of Canada
ZENS						2.0% Zero-Premium Exchangeable Subordinated Notes due 2029
ZENS-Related Securities						As of June 30, 2024 and December 31, 2023, consisted of AT&T Common, Charter Common and WBD Common
2023 Form 10-K						Annual Report on Form 10-K for the fiscal year ended December 31, 2023 as filed with the SEC on February 20, 2024

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

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 SIGECO.

The following are some of the factors that could cause actual results to differ from those expressed or implied by the Registrants’ forward-looking statements and apply to all Registrants unless otherwise indicated:

•CenterPoint Energy’s business strategies and strategic initiatives, restructurings, joint ventures and acquisitions or dispositions of assets or businesses, including the announced sale of our Louisiana and Mississippi natural gas LDC businesses, and the completed sale of Energy Systems Group, which we cannot assure will have the anticipated benefits to us;

•industrial, commercial and residential growth in our service territories and changes in market demand, including the effects of energy efficiency measures and demographic patterns;

•our ability to fund and invest planned capital and the timely recovery of our investments, including those related to Indiana Electric’s generation transition plan as part of its IRPs;

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

•timely and appropriate rate actions that allow and authorize requested and timely recovery of costs and a reasonable return on investment, including the timing and amount of recovery of Houston Electric’s TEEEF leases and restoration costs relating to the May 2024 Storm Events and Hurricane Beryl, and requested or favorable adjustments to rates and approval of other requested items as part of base rate proceedings;

•economic conditions in regional and national markets, including changes to inflation and interest rates, and instability of banking institutions, and their effect on sales, prices and costs;

•weather variations and other natural phenomena, including the impact of severe weather events on operations, capital, legislation and/or regulations, such as seen in connection with the February 2021 Winter Storm Event, the May 2024 Storm Events and Hurricane Beryl;

•volatility in the markets for natural gas as a result of, among other factors, armed conflicts, including the conflict in the Middle East and any broader related conflict, and the conflict in Ukraine, and the related sanctions on certain Russian entities;

•disruptions to the global supply chain, including volatility in commodity prices, and tariffs and other legislation impacting the supply chain, that could prevent CenterPoint Energy from securing the resources needed to, among other things, fully execute on its 10-year capital plan or achieve its net zero and carbon emissions reduction goals;

•non-payment for our services due to financial distress of our customers and the ability of our customers, including REPs, to satisfy their obligations to CenterPoint Energy, Houston Electric, and CERC, and the negative impact on such ability related to adverse economic conditions and severe weather events;

•public health threats and their effect on our operations, business and financial condition, our industries and the communities we serve, U.S. and world financial markets and supply chains, potential regulatory actions and changes in customer and stakeholder behavior relating thereto;

•state and federal legislative and regulatory actions or developments affecting various aspects of our businesses, including, among others, the transmission and distribution system resiliency plan filed by Houston Electric with the PUCT, any actions resulting from the May 2024 Storm Events and/or Hurricane Beryl, energy deregulation or re-regulation, pipeline integrity and safety and changes in regulation and legislation pertaining to trade, health care, finance and actions regarding the rates charged by our regulated businesses;

•our ability to execute Houston Electric’s initial hurricane preparedness and response action plan, as described to the PUCT on July 25, 2024, including enhancing the resiliency of Houston Electric’s electric system through various investments, improving customer communications, and strengthening emergency response;

•direct or indirect effects on our facilities, resources, operations and financial condition resulting from terrorism, cyberattacks or intrusions, data security breaches or other attempts to disrupt our businesses or the businesses of third parties, or other catastrophic events such as fires, ice, earthquakes, explosions, leaks, floods, droughts, hurricanes, tornadoes and other severe weather events, pandemic health events or other occurrences;

•risks relating to potential wildfires, including costs of potential regulatory penalties and damages in excess of insurance liability coverage;

•tax legislation, including the effects of the IRA (which includes but is not limited to any potential changes to tax rates, CAMT imposed, tax credits and/or interest deductibility), as well as any changes in tax laws under the current or future administrations, and uncertainties involving state commissions’ and local municipalities’ regulatory requirements and determinations regarding the treatment of EDIT and our rates;

•our ability to mitigate weather impacts through normalization or rate mechanisms, and the effectiveness of such mechanisms;

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

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

•local, state and federal legislative and regulatory actions or developments relating to the environment, including, among others, those related to global climate change, air emissions, carbon, waste water discharges and the handling and disposal of CCR that could impact operations, cost recovery of generation plant costs and related assets, and CenterPoint Energy’s net zero and carbon emissions reduction goals;

•the impact of unplanned facility outages or other closures;

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

•the availability and prices of raw materials and services and changes in labor for current and future construction projects and operations and maintenance costs, including our ability to control such costs;

•impacts from CenterPoint Energy’s pension and postretirement benefit plans, such as the investment performance and increases to net periodic costs as a result of plan settlements and changes in assumptions, including discount rates;

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

•commercial bank and financial market conditions, including disruptions in the banking industry, our access to capital, the cost of such capital, impacts on our vendors, customers and suppliers, and the results of our financing and refinancing efforts, including availability of funds in the debt capital markets;

•inability of various counterparties to meet their obligations to us;

•the extent and effectiveness of our risk management activities;

•timely and appropriate regulatory actions, which include actions allowing securitization, for any hurricanes or other severe weather events, such as the May 2024 Storm Events and Hurricane Beryl, or natural disasters or other recovery of costs, including stranded coal-fired generation asset costs;

•acquisition and merger or divestiture activities involving us or our industry, including the ability to successfully complete merger, acquisition and divestiture plans on the timelines we expect or at all, such as the proposed sale of our Louisiana and Mississippi natural gas LDC businesses;

•our ability to recruit, effectively transition, motivate and retain management and key employees and maintain good labor relations;

•changes in technology, particularly with respect to efficient battery storage or the emergence or growth of new, developing or alternative sources of generation, and their adoption by consumers;

•the impact of climate change and alternate energy sources on the demand for natural gas and electricity generated or transmitted by us;

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

•the recording of impairment charges;

•political and economic developments, including energy and environmental policies under the current administration;

•CenterPoint Energy’s ability to execute on its strategy, initiatives, targets and goals, including its net zero and carbon

emissions reduction goals and its operations and maintenance expenditure goals;

•the outcome of litigation, including litigation related to the February 2021 Winter Storm Event and Hurricane Beryl;

•obligations related to warranties, guarantees and other contractual and legal obligations;

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

•other factors discussed in “Risk Factors” in Item 1A of Part I of the Registrants’ combined 2023 Form 10-K, which are incorporated herein by reference, and in other reports that the Registrants file from time to time with the SEC.

You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and the Registrants undertake no obligation to update or revise any forward-looking statements. Investors should note that the Registrants announce material financial and other information in SEC filings, press releases and

vii

public conference calls. Based on guidance from the SEC, the Registrants may use the Investors section of CenterPoint Energy’s website (http://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.

viii

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

CENTERPOINT ENERGY, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions, except per share amounts)
Revenues:
Utility revenues	$	1,892	$	1,789	$	4,499	$	4,506
Non-utility revenues	13		86		26		148
Total	1,905		1,875		4,525		4,654
Expenses:
Utility natural gas, fuel and purchased power	233		280		1,020		1,358
Non-utility cost of revenues, including natural gas	—		57		1		97
Operation and maintenance	678		679		1,387		1,342
Depreciation and amortization	386		349		749		668
Taxes other than income taxes	141		130		285		268

Total	1,438		1,495		3,442		3,733
Operating Income	467		380		1,083		921
Other Income (Expense):
Gain (loss) on equity securities	19		(31)		(64)		7
Gain (loss) on indexed debt securities	(18)		34		67		(5)
Loss on sale	—		(12)		—		(12)
Interest expense and other finance charges	(212)		(165)		(410)		(313)
Interest expense on Securitization Bonds	(5)		(2)		(11)		(4)




Other income, net	10		13		24		26
Total	(206)		(163)		(394)		(301)
Income Before Income Taxes	261		217		689		620
Income tax expense	33		99		111		177


Net Income	228		118		578		443
Income allocated to preferred shareholders	—		12		—		24
Income Available to Common Shareholders	$	228	$	106	$	578	$	419



Basic Earnings Per Common Share	$	0.36	$	0.17	$	0.91	$	0.66


Diluted Earnings Per Common Share	$	0.36	$	0.17	$	0.91	$	0.66

Weighted Average Common Shares Outstanding, Basic	641		631		636		631
Weighted Average Common Shares Outstanding, Diluted	642		633		638		633

See Combined Notes to Interim Condensed Financial Statements

Table of Contents

CENTERPOINT ENERGY, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
Net income	$	228	$	118	$	578	$	443
Other comprehensive income (loss):
Adjustment to pension and other postretirement plans (net of tax of $-0-, $-0-, $-0-, and $-0-)	2		—		1		(1)
Net deferred gain from cash flow hedges (net of tax of $1, $-0-, $1, and $-0-)	1		—		4		—



Total	3		—		5		(1)
Comprehensive income	231		118		583		442
Income allocated to preferred shareholders	—		12		—		24
Comprehensive income available to common shareholders	$	231	$	106	$	583	$	418

See Combined Notes to Interim Condensed Financial Statements

Table of Contents

CENTERPOINT ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 30, 2024		December 31, 2023
	(in millions)
ASSETS
Current Assets:
Cash and cash equivalents ($66 and $90 related to VIEs, respectively)	$	66	$	90
Investment in equity securities	477		541

Accounts receivable ($28 and $21 related to VIEs, respectively), less allowance for credit losses of $30 and $27, respectively	633		710
Accrued unbilled revenues ($2 and $2 related to VIEs, respectively), less allowance for credit losses of $2 and $2, respectively	336		516

Natural gas and coal inventory	133		197
Materials and supplies	569		573

Taxes receivable	186		94
Current assets held for sale	1,325		—
Regulatory assets	243		161
Prepaid expenses and other current assets ($13 and $15 related to VIEs, respectively)	112		145
Total current assets	4,080		3,027
Property, Plant and Equipment, net:
Property, plant and equipment	40,589		40,396
Less: accumulated depreciation and amortization	10,372		10,543
Property, plant and equipment, net	30,217		29,853
Other Assets:
Goodwill	3,943		4,160
Regulatory assets ($322 and $402 related to VIEs, respectively)	2,525		2,513






Other non-current assets	211		162
Total other assets	6,679		6,835
Total Assets	$	40,976	$	39,715

See Combined Notes to Interim Condensed Financial Statements

Table of Contents

CENTERPOINT ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS – (continued)

(Unaudited)


	June 30, 2024		December 31, 2023
	(in millions, except par value and shares)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Short-term borrowings	$	2	$	4
Current portion of VIE Securitization Bonds long-term debt	94		178
Indexed debt, net	4		5
Current portion of other long-term debt	510		872
Indexed debt securities derivative	538		605
Accounts payable	1,057		917

Taxes accrued	211		291
Interest accrued	244		236
Dividends accrued	—		126
Customer deposits	95		111
Non-trading derivative liabilities	4		9


Current liabilities held for sale	218		—
Other current liabilities	433		510
Total current liabilities	3,410		3,864
Other Liabilities:
Deferred income taxes, net	4,324		4,079
Non-trading derivative liabilities	1		3
Benefit obligations	590		572
Regulatory liabilities	3,039		3,208

Other non-current liabilities	744		763
Total other liabilities	8,698		8,625
Long-term Debt, net:
VIE Securitization Bonds, net	314		320
Other long-term debt, net	18,200		17,239
Total long-term debt, net	18,514		17,559
Commitments and Contingencies (Note 13)

Shareholders’ Equity:

Common stock, $0.01 par value, 1,000,000,000 shares authorized, 641,953,090 shares and 631,225,829 shares outstanding, respectively	6		6
Additional paid-in capital	8,836		8,604
Retained earnings	1,542		1,092
Accumulated other comprehensive loss	(30)		(35)
Total shareholders’ equity	10,354		9,667
Total Liabilities and Shareholders’ Equity	$	40,976	$	39,715

See Combined Notes to Interim Condensed Financial Statements

Table of Contents

CENTERPOINT ENERGY, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS

(Unaudited)


	Six Months Ended June 30,
	2024		2023
	(in millions)
Cash Flows from Operating Activities:
Net income	$	578	$	443


Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	749		668

Deferred income taxes	200		22




Loss on divestitures	—		12
Loss (gain) on equity securities	64		(7)
Loss (gain) on indexed debt securities	(67)		5



Pension contributions	(3)		(4)
Changes in other assets and liabilities:
Accounts receivable and unbilled revenues, net	188		647

Inventory	52		142
Taxes receivable	(92)		2
Accounts payable	(83)		(403)

Net regulatory assets and liabilities	(366)		1,022

Other current assets and liabilities	(93)		(120)
Other non-current assets and liabilities	21		48
Other operating activities, net	(34)		5


Net cash provided by operating activities	1,114		2,482
Cash Flows from Investing Activities:
Capital expenditures	(1,657)		(2,259)







Proceeds from divestitures	—		145


Other investing activities, net	57		(40)


Net cash used in investing activities	(1,600)		(2,154)
Cash Flows from Financing Activities:
Decrease in short-term borrowings, net	(4)		(14)

Payments of commercial paper, net	(623)		(920)
Proceeds from long-term debt and term loans, net	1,596		3,675
Payments of long-term debt and term loans, including make-whole premiums	(463)		(2,613)




Payment of debt issuance costs	(12)		(28)


Payment of dividends on Common Stock	(254)		(240)
Payment of dividends on Preferred Stock	—		(24)
Proceeds from issuance of Common Stock, net	247		—




Other financing activities, net	(28)		(23)


Net cash provided by (used in) financing activities	459		(187)
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash	(27)		141
Cash, Cash Equivalents and Restricted Cash at Beginning of Period	109		91
Cash, Cash Equivalents and Restricted Cash at End of Period	$	82	$	232

See Combined Notes to Interim Condensed Financial Statements

Table of Contents

CENTERPOINT ENERGY, INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED CHANGES IN EQUITY

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
	(in millions of dollars and shares, except authorized shares and par value amounts)
Cumulative Preferred Stock, $0.01 par value; authorized 20,000,000 shares
Balance, beginning of period	—	$	—	1	$	790	—	$	—	1	$	790




Balance, end of period	—	—		1	790		—	—		1	790
Common Stock, $0.01 par value; authorized 1,000,000,000 shares
Balance, beginning of period	633	6		631	6		631	6		630	6
Issuances of Common Stock	9	—		—	—		9	—		—	—
Issuances related to benefit and investment plans	—	—		—	—		2	—		1	—

Balance, end of period	642	6		631	6		642	6		631	6
Additional Paid-in-Capital
Balance, beginning of period		8,583			8,558			8,604			8,568
Issuances of Common Stock, net of issuance costs		244			—			247			—
Issuances related to benefit and investment plans		9			12			(15)			2


Balance, end of period		8,836			8,570			8,836			8,570
Retained Earnings
Balance, beginning of period		1,442			1,034			1,092			709
Net income		228			118			578			443
Common Stock dividends declared (see Note 18)		(128)			(120)			(128)			(120)






Balance, end of period		1,542			1,032			1,542			1,032
Accumulated Other Comprehensive Loss
Balance, beginning of period		(33)			(32)			(35)			(31)
Other comprehensive income (loss)		3			—			5			(1)
Balance, end of period		(30)			(32)			(30)			(32)
Total Shareholders’ Equity		$	10,354		$	10,366		$	10,354		$	10,366

See Combined Notes to Interim Condensed Financial Statements

Table of Contents

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC AND SUBSIDIARIES

(AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OF CENTERPOINT ENERGY, INC.)

CONDENSED STATEMENTS OF CONSOLIDATED INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
Revenues	$	1,044	$	909	$	1,945	$	1,701
Expenses:
Operation and maintenance	456		401		893		781
Depreciation and amortization	210		186		409		345
Taxes other than income taxes	75		67		150		131
Total	741		654		1,452		1,257
Operating Income	303		255		493		444
Other Income (Expense):
Interest expense and other finance charges	(79)		(63)		(155)		(116)
Interest expense on Securitization Bonds	(1)		(2)		(2)		(4)



Other income, net	10		10		21		17
Total	(70)		(55)		(136)		(103)
Income Before Income Taxes	233		200		357		341
Income tax expense	46		42		71		75
Net Income	$	187	$	158	$	286	$	266

See Combined Notes to Interim Condensed Financial Statements

Table of Contents

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC AND SUBSIDIARIES

(AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OF CENTERPOINT ENERGY, INC.)

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 30, 2024		December 31, 2023
	(in millions)
ASSETS
Current Assets:
Cash and cash equivalents ($61 and $76 related to VIEs, respectively)	$	61	$	76
Accounts receivable ($26 and $19 related to VIEs, respectively), less allowance for credit losses of $1 and $1, respectively	370		295
Accounts and notes receivable–affiliated companies	298		251
Accrued unbilled revenues	172		142
Materials and supplies	415		409
Taxes receivable	—		38


Prepaid expenses and other current assets ($13 and $13 related to VIEs, respectively)	28		48
Total current assets	1,344		1,259
Property, Plant and Equipment, net:
Property, plant and equipment	20,448		19,515
Less: accumulated depreciation and amortization	4,573		4,469
Property, plant and equipment, net	15,875		15,046
Other Assets:
Regulatory assets ($-0- and $74 related to VIEs, respectively)	845		752

Other non-current assets	37		29
Total other assets	882		781
Total Assets	$	18,101	$	17,086

See Combined Notes to Interim Condensed Financial Statements

Table of Contents

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC AND SUBSIDIARIES

(AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OF CENTERPOINT ENERGY, INC.)

CONDENSED CONSOLIDATED BALANCE SHEETS – (continued)

(Unaudited)


	June 30, 2024		December 31, 2023
	(in millions)
LIABILITIES AND MEMBER’S EQUITY
Current Liabilities:

Current portion of VIE Securitization Bonds long-term debt	$	81	$	161

Accounts payable	644		351
Accounts payable–affiliated companies	113		104
Taxes accrued	103		155
Interest accrued	114		99

Other current liabilities	122		111
Total current liabilities	1,177		981
Other Liabilities:
Deferred income taxes, net	1,437		1,406
Benefit obligations	40		32
Regulatory liabilities	961		1,025

Other non-current liabilities	92		107
Total other liabilities	2,530		2,570



Long-Term Debt, net	7,924		7,426
Commitments and Contingencies (Note 13)
Member’s Equity:
Common stock	—		—
Additional paid-in capital	4,975		4,745
Retained earnings	1,495		1,364

Total member’s equity	6,470		6,109
Total Liabilities and Member’s Equity	$	18,101	$	17,086

See Combined Notes to Interim Condensed Financial Statements

Table of Contents

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC AND SUBSIDIARIES

(AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OF CENTERPOINT ENERGY, INC.)

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS

(Unaudited)


	Six Months Ended June 30,
	2024		2023
	(in millions)
Cash Flows from Operating Activities:
Net income	$	286	$	266
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	409		345
Deferred income taxes	18		53


Changes in other assets and liabilities:
Accounts receivable and unbilled revenues, net	(108)		(16)
Accounts receivable/payable–affiliated companies	11		(24)
Inventory	(6)		(8)
Accounts payable	39		(18)
Taxes receivable	38		—
Net regulatory assets and liabilities	(302)		(192)
Other current assets and liabilities	(20)		(21)
Other non-current assets and liabilities