Company Quick10K Filing
Quick10K
Centerpoint Energy
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$29.25 502 $14,670
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-05-15 Regulation FD, Exhibits
8-K 2019-05-15 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-05-09 Earnings, Regulation FD, Exhibits
8-K 2019-05-09 Earnings, Regulation FD, Exhibits
8-K 2019-04-25 Shareholder Vote
8-K 2019-04-16 Officers, Exhibits
8-K 2019-04-05 Regulation FD, Exhibits
8-K 2019-03-20 Regulation FD, Exhibits
8-K 2019-03-04 Officers
8-K 2019-02-01 Other Events
8-K 2019-02-01 M&A, Off-BS Arrangement, Regulation FD, Exhibits
8-K 2019-01-30 Other Events
8-K 2019-01-16 Other Events, Regulation FD, Exhibits
8-K 2018-11-27 Officers, Regulation FD, Exhibits
8-K 2018-11-08 Earnings, Regulation FD, Exhibits
8-K 2018-10-05 Leave Agreement, Other Events
8-K 2018-10-03 Other Events, Exhibits
8-K 2018-10-03 Enter Agreement, Exhibits
8-K 2018-10-02 Regulation FD, Exhibits
8-K 2018-09-25 Enter Agreement, Shareholder Rights, Amend Bylaw, Exhibits
8-K 2018-09-24 Other Events, Exhibits
8-K 2018-09-04 Regulation FD, Exhibits
8-K 2018-08-28 Other Events
8-K 2018-08-22 Shareholder Rights, Amend Bylaw, Exhibits
8-K 2018-08-15 Enter Agreement, Exhibits
8-K 2018-08-14 Other Events, Exhibits
8-K 2018-08-03 Earnings, Regulation FD, Exhibits
8-K 2018-06-26 Other Events
8-K 2018-06-15 Other Events
8-K 2018-06-12 Regulation FD, Exhibits
8-K 2018-05-25 Enter Agreement, Exhibits
8-K 2018-04-26 Shareholder Vote
8-K 2018-04-21 Enter Agreement, Regulation FD, Exhibits
8-K 2018-04-04 Other Events
8-K 2018-03-16 Regulation FD, Exhibits
8-K 2018-03-12 Regulation FD, Exhibits
8-K 2018-02-13 Regulation FD, Exhibits
8-K 2018-01-05 Regulation FD, Exhibits
8-K 2018-01-04 Earnings, Exhibits
OTEX Open Text 10,830
SF Stifel Financial 4,170
ALTR Altair Engineering 2,630
INST Instructure 1,550
CASA Casa Systems 574
CIX Compx 186
ARDS Aridis Pharmaceuticals 75
DYSL Dynasil of America 18
INQD Indoor Harvest 0
TTLO Torotel 0
CNP 2019-03-31
Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations of Centerpoint Energy, Inc. and Subsidiaries
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 6. Exhibits
EX-10.1 cnp_exhibit101x3312019.htm
EX-31.1.1 cnp_exhibit3111x3312019.htm
EX-31.1.2 cehe_exhibit3112x3312019.htm
EX-31.1.3 cercexhibit3113_3312019.htm
EX-31.2.1 cnp_exhibit3121x3312019.htm
EX-31.2.2 cehe_exhibit3122x3312019.htm
EX-31.2.3 cercexhibit3123_3312019.htm
EX-32.1.1 cnp_exhibit3211x3312019.htm
EX-32.1.2 cehe_exhibit3212x3312019.htm
EX-32.1.3 cercexhibit3213_3312019.htm
EX-32.2.1 cnp_exhibit3221x3312019.htm
EX-32.2.2 cehe_exhibit3222x3312019.htm
EX-32.2.3 cercexhibit3223_3312019.htm

Centerpoint Energy Earnings 2019-03-31

CNP 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 cnp_10qx3312019combined.htm 10-Q Document
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM 10-Q
(Mark One)
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2019
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
FOR THE TRANSITION PERIOD FROM __________________ TO __________________

 
Registrant, State or Other Jurisdiction of Incorporation or Organization
 
Commission file number
Address of Principal Executive Offices, Zip Code and Telephone Number
I.R.S. Employer Identification No.
 
 
 
1-31447
CenterPoint Energy, Inc.
74-0694415
 
(a Texas corporation)
 
 
1111 Louisiana
 
 
Houston, Texas 77002
 
 
(713-207-1111)
 
 
 
 
1-3187
CenterPoint Energy Houston Electric, LLC
22-3865106
 
(a Texas limited liability company)
 
 
1111 Louisiana
 
 
Houston, Texas 77002
 
 
(713-207-1111)
 
 
 
 
1-13265
CenterPoint Energy Resources Corp.
76-0511406
 
(a Delaware corporation)
 
 
1111 Louisiana
 
 
Houston, Texas 77002
 
 
(713-207-1111)
 


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 þ
No o
CenterPoint Energy Houston Electric, LLC
Yes þ
No o
CenterPoint Energy Resources Corp.
Yes þ
No o

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 þ
No o
CenterPoint Energy Houston Electric, LLC
Yes þ
No o
CenterPoint Energy Resources Corp.
Yes þ
No o




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.
þ

o
o
o
o
CenterPoint Energy Houston Electric, LLC
o
o
þ
o
o
CenterPoint Energy Resources Corp.
o
o
þ
o
o

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 o
No þ
CenterPoint Energy Houston Electric, LLC
Yes o
No þ
CenterPoint Energy Resources Corp.
Yes o
No þ
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
New York Stock Exchange
Chicago Stock Exchange
CenterPoint Energy, Inc.
Depositary shares, each representing a 1/20th interest in a share of 7.00% Series B Mandatory Convertible Preferred Stock, $0.01 par value
CNP/PB
New York Stock Exchange
CenterPoint Energy Houston Electric, LLC
9.15% First Mortgage Bonds due 2021
n/a
New York Stock Exchange
CenterPoint Energy Houston Electric, LLC
6.95% General Mortgage Bonds due 2033
n/a
New York Stock Exchange
CenterPoint Energy Resources Corp.
6.625% Senior Notes due 2037
n/a
New York Stock Exchange

Indicate the number of shares outstanding of each of the issuers’ classes of common stock as of April 25, 2019:
CenterPoint Energy, Inc.
 
502,173,861 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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
 
 
 
 
 
 
 
 
Item 3.
 
Item 4.
 
 
 
 
 
PART II.
 
OTHER INFORMATION
 
Item 1.
 
Item 1A.
 
Item 6.
 
 
 


i



GLOSSARY
ACE
 
Affordable Clean Energy
AFUDC
 
Allowance for funds used during construction
AMA
 
Asset Management Agreement
AMS
 
Advanced Metering System
APSC
 
Arkansas Public Service Commission
ARO
 
Asset retirement obligation
ARAM
 
Average rate assumption method
ARP
 
Alternative revenue program
ASC
 
Accounting Standards Codification
ASU
 
Accounting Standards Update
AT&T Common
 
AT&T Inc. common stock
Bcf
 
Billion cubic feet
Bond Companies
 
Bond Company II, Bond Company III, Bond Company IV and Restoration Bond Company, each a wholly-owned, bankruptcy remote entity formed solely for the purpose of purchasing and owning transition or system restoration property through the issuance of Securitization Bonds
Bond Company II
 
CenterPoint Energy Transition Bond Company II, LLC, a wholly-owned subsidiary of Houston Electric
Bond Company III
 
CenterPoint Energy Transition Bond Company III, LLC, a wholly-owned subsidiary of Houston Electric
Bond Company IV
 
CenterPoint Energy Transition Bond Company IV, LLC, a wholly-owned subsidiary of Houston Electric
Brazos Valley Connection
 
A portion of the Houston region transmission project between Houston Electric’s Zenith substation and the Gibbons Creek substation owned by the Texas Municipal Power Agency
CCR
 
Coal Combustion Residuals
CECA
 
Clean Energy Cost Adjustment
CECL
 
Current expected credit losses
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., a wholly-owned subsidiary of CERC Corp.
Charter Common
 
Charter Communications, Inc. common stock
CIP
 
Conservation Improvement Program
CME
 
Chicago Mercantile Exchange
CNP Midstream
 
CenterPoint Energy Midstream, Inc., a wholly-owned subsidiary of CenterPoint Energy
COLI
 
Corporate-owned life insurance
Common Stock
 
CenterPoint Energy, Inc. common stock, par value $0.01 per share
CPCN
 
Certificate of Public Convenience and Necessity
CPP
 
Clean Power Plan
CSIA
 
Compliance and System Improvement Adjustment
DCRF
 
Distribution Cost Recovery Factor
DRR
 
Distribution Replacement Rider
DSMA
 
Demand Side Management Adjustment
ECA
 
Environmental Cost Adjustment
EDIT
 
Excess deferred income taxes
EECR
 
Energy Efficiency Cost Recovery
EECRF
 
Energy Efficiency Cost Recovery Factor

ii


GLOSSARY
EEFC
 
Energy Efficiency Funding Component
EEFR
 
Energy Efficiency Funding Rider
ELG
 
Effluent Limitation Guidelines
Enable
 
Enable Midstream Partners, LP
Enable GP
 
Enable GP, LLC, Enable’s general partner
Enable Series A Preferred Units
 
Enable’s 10% Series A Fixed-to-Floating Non-Cumulative Redeemable Perpetual Preferred Units, representing limited partner interests in Enable
EPA
 
Environmental Protection Agency
ERCOT
 
Electric Reliability Council of Texas
ESG
 
Energy Systems Group, LLC, a wholly-owned subsidiary of Vectren
FERC
 
Federal Energy Regulatory Commission
Fitch
 
Fitch, Inc.
Form 10-Q
 
Quarterly Report on Form 10-Q
FRP
 
Formula Rate Plan
Gas Daily
 
Platts gas daily indices
GenOn
 
GenOn Energy, Inc.
GHG
 
Greenhouse gases
GMES
 
Government Mandated Expenditure Surcharge
GRIP
 
Gas Reliability Infrastructure Program
GWh
 
Gigawatt-hours
Houston Electric
 
CenterPoint Energy Houston Electric, LLC and its subsidiaries
IDEM
 
Indiana Department of Environmental Management
Indiana Electric
 
Operations of SIGECO’s electric transmission and distribution services, and includes its power generating and wholesale power operations
Indiana Gas
 
Indiana Gas Company, Inc., a wholly-owned subsidiary of Vectren
Indiana North
 
Gas operations of Indiana Gas
Indiana South
 
Gas operations of SIGECO
Indiana Utilities
 
The combination of Indiana Electric, Indiana North and Indiana South
Interim Condensed Financial Statements
 
Unaudited condensed consolidated interim financial statements and combined notes
Internal Spin
 
The series of internal transactions consummated on September 4, 2018 whereby CERC (i) contributed its equity investment in Enable consisting of Enable common units and its interests in Enable GP to CNP Midstream and (ii) transferred all of its interest in CNP Midstream to CenterPoint Energy
IRP
 
Integrated Resource Plan
IRS
 
Internal Revenue Service
IURC
 
Indiana Utility Regulatory Commission
kV
 
Kilovolt
LIBOR
 
London Interbank Offered Rate
LPSC
 
Louisiana Public Service Commission
MATS
 
Mercury and Air Toxics Standards
Merger
 
The merger of Merger Sub with and into Vectren on the terms and subject to the conditions set forth in the Merger Agreement, with Vectren continuing as the surviving corporation and as a wholly-owned subsidiary of CenterPoint Energy, Inc.
Merger Agreement
 
Agreement and Plan of Merger, dated as of April 21, 2018, among CenterPoint Energy, Vectren and Merger Sub
Merger Date
 
February 1, 2019
Merger Sub
 
Pacer Merger Sub, Inc., an Indiana corporation and wholly-owned subsidiary of CenterPoint Energy

iii


GLOSSARY
MGP
 
Manufactured gas plant
MISO
 
Midcontinent Independent System Operator
MLP
 
Master Limited Partnership
MMBtu
 
One million British thermal units
Moody’s
 
Moody’s Investors Service, Inc.
MPSC
 
Mississippi Public Service Commission
MPUC
 
Minnesota Public Utilities Commission
MRT
 
Enable Mississippi River Transmission, LLC
MW
 
Megawatts
NGD
 
Natural gas distribution business
NGLs
 
Natural gas liquids
NRG
 
NRG Energy, Inc.
NYMEX
 
New York Mercantile Exchange
NYSE
 
New York Stock Exchange
OCC
 
Oklahoma Corporation Commission
OGE
 
OGE Energy Corp.
PBRC
 
Performance Based Rate Change
PRPs
 
Potentially responsible parties
PUCO
 
Public Utilities Commission of Ohio
PUCT
 
Public Utility Commission of Texas
Railroad Commission
 
Railroad Commission of Texas
RCRA
 
Resource Conservation and Recovery Act of 1976
Registrants
 
CenterPoint Energy, Houston Electric and CERC, collectively
Reliant Energy
 
Reliant Energy, Incorporated
REP
 
Retail electric provider
Restoration Bond Company
 
CenterPoint Energy Restoration Bond Company, LLC, a wholly-owned subsidiary of Houston Electric
Revised Policy Statement
 
Revised Policy Statement on Treatment of Income Taxes
ROE
 
Return on equity
ROU
 
Right of use
RRA
 
Rate Regulation Adjustment
RRI
 
Reliant Resources, Inc.
RSP
 
Rate Stabilization Plan
SEC
 
Securities and Exchange Commission
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
SERP
 
Supplemental Executive Retirement Plan
SIGECO
 
Southern Indiana Gas and Electric Company, a wholly-owned subsidiary of Vectren
S&P
 
S&P Global Ratings
SRC
 
Sales Reconciliation Component
TBD
 
To be determined
TCEH Corp.
 
Formerly Texas Competitive Electric Holdings Company LLC, predecessor to Vistra Energy Corp. whose major subsidiaries include Luminant and TXU Energy

iv


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

v


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 Vectren.

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:

the performance of Enable, the amount of cash distributions CenterPoint Energy receives from Enable, Enable’s ability to redeem the Enable Series A Preferred Units in certain circumstances and the value of CenterPoint Energy’s interest in Enable, and factors that may have a material impact on such performance, cash distributions and value, including factors such as:

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

the timing and extent of changes in the supply of natural gas and associated commodity prices, particularly prices of natural gas and NGLs, the competitive effects of the available pipeline capacity in the regions served by Enable, and the effects of geographic and seasonal commodity price differentials, including the effects of these circumstances on re-contracting available capacity on Enable’s interstate pipelines;

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

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

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

changes in tax status; and

access to debt and equity capital;

the expected benefits of the Merger and integration, including the outcome of shareholder litigation filed against Vectren that could reduce anticipated benefits of the Merger, as well as the ability to successfully integrate the Vectren businesses and to realize anticipated benefits and commercial opportunities;

industrial, commercial and residential growth in our service territories and changes in market demand, including the demand for our non-utility products and services and effects of energy efficiency measures and demographic patterns;

the outcome of the pending Houston Electric rate case;

timely and appropriate rate actions that allow recovery of costs and a reasonable return on investment;

future economic conditions in regional and national markets and their effect on sales, prices and costs;

weather variations and other natural phenomena, including the impact of severe weather events on operations and capital;

state and federal legislative and regulatory actions or developments affecting various aspects of our businesses (including the businesses of Enable), including, among others, 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;

tax legislation, including the effects of the TCJA (which includes any potential changes to interest deductibility) and uncertainties involving state commissions’ and local municipalities’ regulatory requirements and determinations regarding the treatment of EDIT and our rates;


vi


CenterPoint Energy’s and CERC’s ability to mitigate weather impacts through normalization or rate mechanisms, and the effectiveness of such mechanisms;

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

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

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

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

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

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

the impact of unplanned facility outages or other closures;

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

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

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

our ability to control operation and maintenance costs;

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

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

commercial bank and financial market conditions, our access to capital, the cost of such capital, and the results of our financing and refinancing efforts, including availability of funds in the debt capital markets;

changes in rates of inflation;

inability of various counterparties to meet their obligations to us;

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

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

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

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

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

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


vii


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

the outcome of litigation;

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

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

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

the effective tax rates;

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

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

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.

viii


PART I. FINANCIAL INFORMATION

Item 1.     FINANCIAL STATEMENTS

CENTERPOINT ENERGY, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED INCOME
(Unaudited)

 
 
Three Months Ended
 
 
March 31,
 
 
2019
 
2018
 
 
(in millions, except per share amounts)
Revenues:
 
 
 
 
Utility revenues
 
$
2,161

 
$
1,894

Non-utility revenues
 
1,370

 
1,261

Total
 
3,531

 
3,155

Expenses:
 
 
 
 
Utility natural gas, fuel and purchased power
 
735

 
637

Non-utility cost of revenues, including natural gas
 
1,251

 
1,273

Operation and maintenance
 
861

 
569

Depreciation and amortization
 
313

 
314

Taxes other than income taxes
 
126

 
111

Total
 
3,286

 
2,904

Operating Income
 
245

 
251

Other Income (Expense):
 
 
 
 
Gain on marketable securities
 
83

 
1

Loss on indexed debt securities
 
(86
)
 
(18
)
Interest and other finance charges
 
(121
)
 
(78
)
Interest on Securitization Bonds
 
(12
)
 
(16
)
Equity in earnings of unconsolidated affiliate, net
 
62

 
69

Other income, net
 
20

 
3

Total
 
(54
)
 
(39
)
Income Before Income Taxes
 
191

 
212

Income tax expense
 
22

 
47

Net Income
 
169

 
165

Preferred stock dividend requirement
 
29

 

Income Available to Common Shareholders
 
$
140

 
$
165

 
 
 
 
 
Basic Earnings Per Common Share
 
$
0.28

 
$
0.38

Diluted Earnings Per Common Share
 
$
0.28

 
$
0.38

Weighted Average Common Shares Outstanding, Basic
 
502

 
431

Weighted Average Common Shares Outstanding, Diluted
 
504

 
434


See Combined Notes to Unaudited Condensed Consolidated Financial Statements

1


CENTERPOINT ENERGY, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME
(Unaudited)

 
 
Three Months Ended
 
 
March 31,
 
 
2019
 
2018
 
 
(in millions)
Net income
 
$
169

 
$
165

Other comprehensive income (loss):
 
 
 
 
Adjustment to pension and other postretirement plans (net of tax of $1 and $1)
 
1

 
1

Net deferred gain (loss) from cash flow hedges (net of tax of $-0- and $1)
 
(1
)
 
4

Reclassification of deferred loss from cash flow hedges realized in net income (net of tax of $-0- and $-0-)
 
1

 

Total
 
1

 
5

Comprehensive income
 
$
170

 
$
170


See Combined Notes to Unaudited Condensed Consolidated Financial Statements



2


CENTERPOINT ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

ASSETS

 
March 31,
2019
 
December 31,
2018
 
(in millions)
Current Assets:
 
 
 
Cash and cash equivalents ($242 and $335 related to VIEs, respectively)
$
255

 
$
4,231

Investment in marketable securities
623

 
540

Accounts receivable ($56 and $56 related to VIEs, respectively), less bad debt reserve of $29 and $18, respectively
1,415

 
1,190

Accrued unbilled revenues
451

 
378

Natural gas inventory
115

 
194

Materials and supplies
256

 
200

Non-trading derivative assets
63

 
100

Prepaid expenses and other current assets ($33 and $34 related to VIEs, respectively)
241

 
192

Total current assets
3,419

 
7,025

Property, Plant and Equipment:
 
 
 
Property, plant and equipment
29,011

 
20,267

Less: accumulated depreciation and amortization
9,499

 
6,223

Property, plant and equipment, net
19,512

 
14,044

Other Assets:
 
 
 
Goodwill
5,129

 
867

Regulatory assets ($977 and $1,059 related to VIEs, respectively)
2,229

 
1,967

Non-trading derivative assets
33

 
38

Investment in unconsolidated affiliates
2,471

 
2,482

Preferred units – unconsolidated affiliate
363

 
363

Intangible assets, net
460

 
65

Other
286

 
158

Total other assets
10,971

 
5,940

Total Assets
$
33,902

 
$
27,009


See Combined Notes to Unaudited Condensed Consolidated Financial Statements



3


CENTERPOINT ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS – (continued)
(Unaudited)

LIABILITIES AND SHAREHOLDERS’ EQUITY

 
March 31,
2019
 
December 31,
2018
 
(in millions, except share amounts)
Current Liabilities:
 
 
 
Current portion of VIE Securitization Bonds long-term debt
$
347

 
$
458

Indexed debt, net
23

 
24

Current portion of other long-term debt
32

 

Indexed debt securities derivative
687

 
601

Accounts payable
1,181

 
1,240

Taxes accrued
214

 
204

Interest accrued
127

 
121

Dividends accrued

 
187

Customer deposits
142

 
86

Non-trading derivative liabilities
48

 
126

Other
338

 
255

Total current liabilities
3,139

 
3,302

Other Liabilities:
 

 
 

Deferred income taxes, net
3,824

 
3,239

Non-trading derivative liabilities
18

 
5

Benefit obligations
888

 
796

Regulatory liabilities
3,449

 
2,525

Other
609

 
402

Total other liabilities
8,788

 
6,967

Long-term Debt:
 

 
 

VIE Securitization Bonds, net
914

 
977

Other long-term debt, net
12,845

 
7,705

Total long-term debt, net
13,759

 
8,682

Commitments and Contingencies (Note 14)


 


Shareholders’ Equity:
 

 
 

Cumulative preferred stock, $0.01 par value, 20,000,000 shares authorized


 


Series A Preferred Stock, $0.01 par value, $800 aggregate liquidation preference, 800,000 shares outstanding
790

 
790

Series B Preferred Stock, $0.01 par value, $978 aggregate liquidation preference, 977,500 shares outstanding
950

 
950

Common stock, $0.01 par value, 1,000,000,000 shares authorized, 502,168,182 shares and 501,197,784 shares outstanding, respectively
5

 
5

Additional paid-in capital
6,060

 
6,072

Retained earnings
518

 
349

Accumulated other comprehensive loss
(107
)
 
(108
)
Total shareholders’ equity
8,216

 
8,058

Total Liabilities and Shareholders’ Equity
$
33,902

 
$
27,009


See Combined Notes to Unaudited Condensed Consolidated Financial Statements

4


CENTERPOINT ENERGY, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(Unaudited)
 
Three Months Ended March 31,
 
2019
 
2018
 
(in millions)
Cash Flows from Operating Activities:
 
 
 
Net income
$
169

 
$
165

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
313

 
314

Amortization of deferred financing costs
7

 
6

Amortization of intangible assets in non-utility cost of revenues
9

 

Deferred income taxes
(14
)
 
(17
)
Unrealized gain on marketable securities
(83
)
 
(1
)
Loss on indexed debt securities
86

 
18

Write-down of natural gas inventory
1

 
1

Equity in earnings of unconsolidated affiliate, net of distributions
12

 
(9
)
Pension contributions
(2
)
 
(62
)
Changes in other assets and liabilities, excluding acquisitions:
 
 
 
Accounts receivable and unbilled revenues, net
138

 
39

Inventory
120

 
139

Accounts payable
(332
)
 
(209
)
Fuel cost recovery
58

 
64

Non-trading derivatives, net
(40
)
 
64

Margin deposits, net
19

 
(28
)
Interest and taxes accrued
(116
)
 
(32
)
Net regulatory assets and liabilities
(3
)
 
42

Other current assets
16

 
(15
)
Other current liabilities
(101
)
 
1

Other assets
58

 
(3
)
Other liabilities
(39
)
 
5

Other operating activities, net
(5
)
 
2

Net cash provided by operating activities
271

 
484

Cash Flows from Investing Activities:
 
 
 
Capital expenditures
(537
)
 
(362
)
Acquisitions, net of cash acquired
(5,987
)
 

Distributions from unconsolidated affiliate in excess of cumulative earnings

 
14

Proceeds from sale of marketable securities

 
16

Other investing activities, net
(15
)
 
1

Net cash used in investing activities
(6,539
)
 
(331
)
Cash Flows from Financing Activities:
 
 
 
Increase (decrease) in short-term borrowings, net

 
(39
)
Proceeds from (payments of) commercial paper, net
2,692

 
(837
)
Proceeds from long-term debt, net
721

 
997

Payments of long-term debt
(994
)
 
(165
)
Long-term revolving credit facility
135

 

Debt issuance costs
(8
)
 
(7
)
Payment of dividends on Common Stock
(144
)
 
(120
)
Payment of dividends on Preferred Stock
(43
)
 

Distribution to ZENS note holders

 
(16
)
Other financing activities, net
(14
)
 
(5
)
Net cash provided by (used in) financing activities
2,345

 
(192
)
Net Decrease in Cash, Cash Equivalents and Restricted Cash
(3,923
)
 
(39
)
Cash, Cash Equivalents and Restricted Cash at Beginning of Period
4,278

 
296

Cash, Cash Equivalents and Restricted Cash at End of Period
$
355

 
$
257


See Combined Notes to Unaudited Condensed Consolidated Financial Statements

5


CENTERPOINT ENERGY, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED CHANGES IN EQUITY
(Unaudited)
 
 
Three Months Ended March 31,
 
2019
 
2018
 
Shares
 
Amount
 
Shares
 
Amount
 
(in millions of dollars and shares, except per share amounts)
Cumulative Preferred Stock, $0.01 par value; authorized 20,000,000 shares
 
 
 
 
 
 
 
Balance, beginning of period
2

 
$
1,740

 

 
$

Balance, end of period
2

 
1,740

 

 

Common Stock, $0.01 par value; authorized 1,000,000,000 shares
 

 
 

 
 

 
 

Balance, beginning of period
501

 
5

 
431

 
4

Issuances related to benefit and investment plans
1

 

 

 

Balance, end of period
502

 
5

 
431

 
4

Additional Paid-in-Capital
 
 
 
 
 

 
 

Balance, beginning of period
 
 
6,072

 
 

 
4,209

Issuances related to benefit and investment plans
 
 
(12
)
 
 

 
(1
)
Balance, end of period
 
 
6,060

 
 

 
4,208

Retained Earnings
 
 
 

 
 

 
 

Balance, beginning of period
 
 
349

 
 

 
543

Net income
 
 
169

 
 

 
165

Balance, end of period
 
 
518

 
 

 
708

Accumulated Other Comprehensive Loss
 
 
 

 
 

 
 

Balance, beginning of period
 
 
(108
)
 
 

 
(68
)
Other comprehensive income
 
 
1

 
 

 
5

Balance, end of period
 
 
(107
)
 
 

 
(63
)
Total Shareholders’ Equity
 
 
$
8,216

 
 

 
$
4,857


 See Combined Notes to Unaudited Condensed Consolidated Financial Statements


6


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 March 31,
 
2019
 
2018
 
(in millions)
Revenues
$
686

 
$
755

Expenses:
 

 
 

Operation and maintenance
368

 
342

Depreciation and amortization
175

 
233

Taxes other than income taxes
62

 
61

Total
605

 
636

Operating Income
81

 
119

Other Income (Expense):
 

 
 

Interest and other finance charges
(40
)
 
(33
)
Interest on Securitization Bonds
(12
)
 
(16
)
Other income (expense), net
4

 
(3
)
Total
(48
)
 
(52
)
Income Before Income Taxes
33

 
67

Income tax expense
6

 
15

Net Income
$
27

 
$
52


See Combined Notes to Unaudited Condensed Consolidated Financial Statements


7


CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC AND SUBSIDIARIES
(AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OF CENTERPOINT ENERGY, INC.)
CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME
(Unaudited)
 
Three Months Ended March 31,
 
2019
 
2018
 
(in millions)
Net income
$
27

 
$
52

Other comprehensive income:
 
 
 
Net deferred gain (loss) from cash flow hedges (net of tax of $-0- and $1)
(1
)
 
4

Total
(1
)
 
4

Comprehensive income
$
26

 
$
56


See Combined Notes to Unaudited Condensed Consolidated Financial Statements


8


CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC AND SUBSIDIARIES
(AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OF CENTERPOINT ENERGY, INC.)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

ASSETS
 
March 31,
2019
 
December 31,
2018
 
(in millions)
Current Assets:
 
 
 
Cash and cash equivalents ($242 and $335 related to VIEs, respectively)
$
243

 
$
335

Accounts and notes receivable ($56 and $56 related to VIEs, respectively), less bad debt reserve of $1 and $1, respectively
286

 
283

Accounts and notes receivable–affiliated companies
991

 
20

Accrued unbilled revenues
86

 
110

Materials and supplies
134

 
135

Taxes receivable

 
5

Prepaid expenses and other current assets ($33 and $34 related to VIEs, respectively)
46

 
61

Total current assets
1,786

 
949

Property, Plant and Equipment:
 
 
 
Property, plant and equipment
12,287

 
12,148

Less: accumulated depreciation and amortization
3,743

 
3,746

Property, plant and equipment, net
8,544

 
8,402

Other Assets:
 

 
 

Regulatory assets ($977 and $1,059 related to VIEs, respectively)
1,056

 
1,124

Other
34

 
32

Total other assets
1,090

 
1,156

Total Assets
$
11,420

 
$
10,507


See Combined Notes to Unaudited Condensed Consolidated Financial Statements


















9


CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC AND SUBSIDIARIES
(AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OF CENTERPOINT ENERGY, INC.)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

LIABILITIES AND MEMBERS EQUITY
 
March 31,
2019
 
December 31,
2018
 
(in millions)
Current Liabilities:
 

 
 

Current portion of VIE Securitization Bonds long-term debt
$
347

 
$
458

Accounts payable
238

 
262

Accounts and notes payable–affiliated companies
37

 
78

Taxes accrued
65

 
115

Interest accrued
56

 
64

Non-trading derivative liabilities

 
24

Other
76

 
89

Total current liabilities
819

 
1,090

Other Liabilities:
 

 
 

Deferred income taxes, net
1,015

 
1,023

Benefit obligations
88

 
91

Regulatory liabilities
1,272

 
1,298

Other
68

 
65

Total other liabilities
2,443

 
2,477

Long-term Debt:
 

 
 

VIE Securitization Bonds, net
914

 
977

Other, net
3,970

 
3,281

Total long-term debt, net
4,884

 
4,258

Commitments and Contingencies (Note 14)

 

Member’s Equity:
 
 
 
Common stock

 

Additional paid-in capital
2,486

 
1,896

Retained earnings
803

 
800

Accumulated other comprehensive loss
(15
)
 
(14
)
Total member’s equity
3,274

 
2,682

Total Liabilities and Member’s Equity
$
11,420

 
$
10,507


See Combined Notes to Unaudited Condensed Consolidated Financial Statements


10


CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC AND SUBSIDIARIES
(AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OF CENTERPOINT ENERGY, INC.)
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(Unaudited)
 
Three Months Ended March 31,
 
2019
 
2018
 
(in millions)
Cash Flows from Operating Activities:
 
 
 
Net income
$
27

 
$
52

Adjustments to reconcile net income to net cash provided by operating activities:
 

 
 

Depreciation and amortization
175

 
233

Amortization of deferred financing costs
3

 
3

Deferred income taxes
(15
)
 
(20
)
Changes in other assets and liabilities:
 

 
 

Accounts and notes receivable, net
21

 
9

Accounts receivable/payable–affiliated companies
(32
)
 
(5
)
Inventory
1

 
4

Accounts payable
2

 
(16
)
Taxes receivable
5

 

Interest and taxes accrued
(58
)
 
(54
)
Non-trading derivatives, net
(25
)
 

Net regulatory assets and liabilities
(44
)
 
(26
)
Other current assets
13

 
2

Other current liabilities
(7
)
 
(2
)
Other assets
3

 
1

Other liabilities
(1
)
 
(2
)
Other operating activities, net
(2
)
 
1

Net cash provided by operating activities
66

 
180

Cash Flows from Investing Activities:
 

 
 

Capital expenditures
(258
)
 
(230
)
Increase in notes receivable–affiliated companies
(979
)
 
(133
)
Other investing activities, net

 
(1
)
Net cash used in investing activities
(1,237
)
 
(364
)
Cash Flows from Financing Activities:
 

 
 

Proceeds from long-term debt, net
696

 
398

Payments of long-term debt
(175
)
 
(165
)
Decrease in notes payable–affiliated companies
(1
)
 
(60
)
Dividend to parent
(24
)
 
(32
)
Contribution from parent
590

 

Debt issuance costs
(7
)
 
(3
)
Other financing activities, net
(1
)
 
1

Net cash provided by financing activities
1,078

 
139

Net Decrease in Cash, Cash Equivalents and Restricted Cash
(93
)
 
(45
)
Cash, Cash Equivalents and Restricted Cash at Beginning of Period
370

 
274

Cash, Cash Equivalents and Restricted Cash at End of Period
$
277

 
$
229


See Combined Notes to Unaudited Condensed Consolidated Financial Statements


11


CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC AND SUBSIDIARIES
(AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OF CENTERPOINT ENERGY, INC.)
CONDENSED STATEMENTS OF CONSOLIDATED CHANGES IN EQUITY
(Unaudited)

 
Three Months Ended March 31,
 
2019
 
2018
 
Shares
 
Amount
 
Shares
 
Amount
 
(in millions, except share amounts)
Common Stock
 

 
 

 
 

 
 

Balance, beginning of period
1,000

 
$

 
1,000

 
$

Balance, end of period
1,000

 

 
1,000

 

Additional Paid-in-Capital
 
 
 

 
 

 
 

Balance, beginning of period
 
 
1,896

 
 

 
1,696

Contribution from Parent
 
 
590

 
 
 

Other
 
 

 
 
 
1

Balance, end of period
 
 
2,486

 
 

 
1,697

Retained Earnings
 
 
 

 
 

 
 

Balance, beginning of period
 
 
800

 
 

 
673

Net income
 
 
27

 
 

 
52

Dividend to parent
 
 
(24
)
 
 
 
(32
)
Balance, end of period
 
 
803

 
 

 
693

Accumulated Other Comprehensive Income (Loss)
 
 
 
 
 
 
 
Balance, beginning of period
 
 
(14
)
 
 
 

Other comprehensive income (loss)
 
 
(1
)
 
 
 
4

Balance, end of period
 
 
(15
)
 
 
 
4

Total Member’s Equity
 
 
$
3,274

 
 

 
$
2,394


See Combined Notes to Unaudited Condensed Consolidated Financial Statements


12



CENTERPOINT ENERGY RESOURCES CORP. AND SUBSIDIARIES
(AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OF CENTERPOINT ENERGY, INC.)
CONDENSED STATEMENTS OF CONSOLIDATED INCOME
(Unaudited)

 
 
Three Months Ended
 
 
March 31,
 
 
2019
 
2018
 
 
(in millions)
Revenues:
 
 
 
 
Utility revenues
 
$
1,185

 
$
1,143

Non-utility revenues
 
1,183

 
1,257

Total
 
2,368

 
2,400

Expenses:
 
 

 
 

Utility natural gas
 
625

 
637

Non-utility cost of revenues, including natural gas
 
1,171

 
1,273

Operation and maintenance
 
250

 
238

Depreciation and amortization
 
77

 
73

Taxes other than income taxes
 
49

 
48

Total
 
2,172

 
2,269

Operating Income
 
196

 
131

Other Income (Expense):
 
 

 
 

Interest and other finance charges
 
(29
)
 
(29
)
Other expense, net
 
(3
)
 
(4
)
Total
 
(32
)
 
(33
)
Income From Continuing Operations Before Income Taxes
 
164

 
98

Income tax expense
 
26

 
20

Income From Continuing Operations
 
138

 
78

Income from discontinued operations (net of tax of $-0- and $17, respectively)
 

 
52

Net Income
 
$
138

 
$
130


See Combined Notes to Unaudited Condensed Consolidated Financial Statements



13


CENTERPOINT ENERGY RESOURCES CORP. AND SUBSIDIARIES
(AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OF CENTERPOINT ENERGY, INC.)
CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME
(Unaudited)

 
 
Three Months Ended
 
 
March 31,
 
 
2019
 
2018
 
 
(in millions)
Net income
 
$
138

 
$
130

Comprehensive income
 
$
138

 
$
130


See Combined Notes to Unaudited Condensed Consolidated Financial Statements


14


CENTERPOINT ENERGY RESOURCES CORP. AND SUBSIDIARIES
(AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OF CENTERPOINT ENERGY, INC.)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
ASSETS
 
March 31,
2019
 
December 31,
2018
 
(in millions)
Current Assets:
 
 
 
Cash and cash equivalents
$
1

 
$
14

Accounts receivable, less bad debt reserve of $22 and $17, respectively
856

 
894

Accrued unbilled revenues
191

 
268

Accounts and notes receivable–affiliated companies
232

 
120

Materials and supplies
67

 
65

Natural gas inventory
72

 
194

Non-trading derivative assets
63

 
100

Prepaid expenses and other current assets
65

 
115

Total current assets
1,547

 
1,770

Property, Plant and Equipment:
 
 
 
Property, plant and equipment
7,533

 
7,431

Less: accumulated depreciation and amortization
2,260

 
2,205

Property, plant and equipment, net
5,273

 
5,226

Other Assets:
 

 
 

Goodwill
867

 
867

Regulatory assets
180

 
181

Non-trading derivative assets
33

 
38

Other
165

 
132

Total other assets
1,245

 
1,218

Total Assets
$
8,065

 
$
8,214


See Combined Notes to Unaudited Condensed Consolidated Financial Statements


















15



CENTERPOINT ENERGY RESOURCES CORP. AND SUBSIDIARIES
(AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OF CENTERPOINT ENERGY, INC.)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
LIABILITIES AND STOCKHOLDER’S EQUITY

 
March 31,
2019
 
December 31,
2018
 
(in millions)
Current Liabilities:
 

 
 

Accounts payable
$
570

 
$
856

Accounts and notes payable–affiliated companies
38

 
50

Taxes accrued
81

 
82

Interest accrued
31

 
38

Customer deposits
76

 
75

Non-trading derivative liabilities
47

 
102

Other
136

 
137

Total current liabilities
979

 
1,340

Other Liabilities:
 

 
 

Deferred income taxes, net
443

 
406

Non-trading derivative liabilities
9

 
5

Benefit obligations
94

 
93

Regulatory liabilities
1,233

 
1,227

Other
362

 
329

Total other liabilities
2,141

 
2,060

Long-Term Debt
2,384

 
2,371

Commitments and Contingencies (Note 14)


 


Stockholder’s Equity:
 
 
 
Common stock

 

Additional paid-in capital
2,015

 
2,015

Retained earnings
541

 
423

Accumulated other comprehensive income
5

 
5

Total stockholder’s equity
2,561

 
2,443

Total Liabilities and Stockholder’s Equity
$
8,065

 
$
8,214



See Combined Notes to Unaudited Condensed Consolidated Financial Statements


16


CENTERPOINT ENERGY RESOURCES CORP. AND SUBSIDIARIES
(AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OF CENTERPOINT ENERGY, INC.)
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(Unaudited)
 
Three Months Ended March 31,
 
2019
 
2018
 
(in millions)
Cash Flows from Operating Activities:
 
 
 
Net income
$
138

 
$
130

Less: Income from discontinued operations, net of tax

 
52

Income from continuing operations
138

 
78

Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
 

 
 

Depreciation and amortization
77

 
73

Amortization of deferred financing costs
3

 
2

Deferred income taxes
21

 
14

Write-down of natural gas inventory
1

 
1

Changes in other assets and liabilities, excluding acquisitions:
 

 
 

Accounts receivable and unbilled revenues, net
102

 
29

Accounts receivable/payable–affiliated companies
(18
)
 
(4
)
Inventory
119

 
135

Accounts payable
(255
)
 
(173
)
Fuel cost recovery
58

 
64

Interest and taxes accrued
(8
)
 
(10
)
Non-trading derivatives, net
(26
)
 
60

Margin deposits, net
19

 
(28
)
Net regulatory assets and liabilities
19

 
55

Other current assets
7

 
3

Other current liabilities
(8
)
 
19

Other assets
(12
)
 
3

Other liabilities
10

 
4

Other operating activities, net
1

 
1

Net cash provided by operating activities from continuing operations
248

 
326

Net cash provided by operating activities from discontinued operations

 
60

Net cash provided by operating activities
248

 
386

Cash Flows from Investing Activities:
 

 
 

Capital expenditures
(146
)
 
(114
)
Increase in notes receivable–affiliated companies
(106
)
 

Other investing activities, net
2

 
3

Net cash used in investing activities from continuing operations
(250
)
 
(111
)
Net cash provided by investing activities from discontinued operations

 
14

Net cash used in investing activities
(250
)
 
(97
)
Cash Flows from Financing Activities:
 

 
 

Increase (decrease) in short-term borrowings, net

 
(39
)
Proceeds from (payments of) commercial paper, net
11

 
(172
)
Proceeds from long-term debt

 
599

Dividends to parent
(20
)
 
(86
)
Debt issuance costs

 
(4
)
Decrease in notes payable–affiliated companies

 
(570
)
Other financing activities, net
(2
)
 
(2
)
Net cash used in financing activities from continuing operations
(11
)
 
(274
)
Net cash provided by financing activities from discontinued operations

 

Net cash used in financing activities
(11
)
 
(274
)
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash
(13
)
 
15

Cash, Cash Equivalents and Restricted Cash at Beginning of Period
25

 
12

Cash, Cash Equivalents and Restricted Cash at End of Period
$
12

 
$
27


See Combined Notes to Unaudited Condensed Consolidated Financial Statements

17


CENTERPOINT ENERGY RESOURCES CORP. AND SUBSIDIARIES
(AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OF CENTERPOINT ENERGY, INC.)
CONDENSED STATEMENTS OF CONSOLIDATED CHANGES IN EQUITY
(Unaudited)

 
Three Months Ended March 31,
 
2019
 
2018
 
Shares
 
Amount
 
Shares
 
Amount
 
(in millions, except share amounts)
Common Stock
 
 
 
 
 
 
 
Balance, beginning of period
1,000

 
$

 
1,000

 
$

Balance, end of period
1,000

 

 
1,000

 

Additional Paid-in-Capital
 
 
 

 
 

 
 

Balance, beginning of period
 
 
2,015

 
 

 
2,528

Other
 
 

 
 
 
(1
)
Balance, end of period
 
 
2,015

 
 

 
2,527

Retained Earnings
 
 
 

 
 

 
 

Balance, beginning of period
 
 
423

 
 

 
574

Net income
 
 
138

 
 

 
130

Dividend to parent
 
 
(20
)
 
 

 
(86
)
Balance, end of period
 
 
541

 
 

 
618