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Item 8. Financial Statements and Supplementary Data

2025-02-20 compared with 2024-02-20 · 983 added, 1161 removed, 1973 unchanged (52% of the section changed)

Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of

Index to Financial Statements

CenterPoint Energy, Inc.

and Subsidiaries

Report of Independent Registered Public Accounting Firm

Statements of Consolidated Income

Statements of Consolidated Comprehensive Income

Consolidated Balance Sheets

Statements of Consolidated Cash Flows

Statements of Consolidated Changes in Equity

CenterPoint Energy Houston Electric, LLC and Subsidiaries

Report of Independent Registered Public Accounting Firm 10 1

Statements of Consolidated Income 10 3

Statements of Consolidated Comprehensive Income

Consolidated Balance Sheets 10 5

Statements of Consolidated Cash Flows 10 7

Statements of Consolidated Changes in Equity 10 8

CenterPoint Energy Resources Corp.

and Subsidiaries

Report of Independent Registered Public Accounting Firm 10 9

Statements of Consolidated Income 1 1 1

Statements of Consolidated Comprehensive Income 1 1 2

Consolidated Balance Sheets 1 1 3

Statements of Consolidated Cash Flows 1 1 5

Statements of Consolidated Changes in Equity 1 1 6

Combined Notes to Consolidated Financial Statements

(1) Background

(2) Summary of Significant Accounting Policies

(3) Property, Plant and Equipment

(4) Held for Sale and Divestitures

(5) Revenue Recognition

(6) Goodwill 12 9

(7) Regulatory Matters

(8) Stock-Based Incentive Compensation Plans and Employee Benefit Plans

(9) Fair Value Measurements

(10) Equity Securities and Indexed Debt Securities (ZENS)

(12) Short-term Borrowings and Long-term Debt

(13) Income Taxes

(14) Commitments and Contingencies

(15) Earnings Per Share (CenterPoint Energy)

(16) Reportable Segments

(17) Supplemental Disclosure of Cash Flow and Balance Sheet

(18) Related Party Transactions (Houston electric and CERC)

(20) Subsequent Events

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of CenterPoint Energy, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of CenterPoint Energy, Inc.

and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related statements of consolidated income, comprehensive income, changes in equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial statements").

and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

23 unchanged sentences

The Commissions’ regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital.

Decisions to be made by the Commissions in the future will impact the accounting for regulated operations, including decisions about the amount of allowable costs and return on invested capital included in rates and any refunds that may be required.

to be made by the Commissions in the future will impact the accounting for regulated operations, including decisions about the amount of allowable costs and return on invested capital included in rates and any refunds that may be required.

While the Company has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commissions will not approve:

37 unchanged sentences

Total ( 776 ) ( 673 ) ( 149 )

Income from Continuing Operations Before Income Taxes 1,087 1,417 778

Income Before Income Taxes

1,214 1,087 1,417

Income tax expense 195 170 360

Income from Continuing Operations 917 1,057 668

Income from Discontinued Operations (net of tax expense of $- 0 -, $- 0 -, and $ 201 , respectively)

Net Income 1,019 917 1,057

1 unchanged sentence

Income Available to Common Shareholders $ 1,019 $ 867 $ 1,008

Basic earnings per common share - continuing operations $ 1.37 $ 1.60 $ 0.97

Basic earnings per common share - discontinued operations — — 1.38

Basic Earnings Per Common Share $ 1.58 $ 1.37 $ 1.60

Diluted earnings per common share - continuing operations $ 1.37 $ 1.59 $ 0.94

Diluted earnings per common share - discontinued operations — — 1.34

Diluted Earnings Per Common Share $ 1.58 $ 1.37 $ 1.59

8 unchanged sentences

(in millions)

Net Income $ 917 $ 1,057 $ 1,486

$ 1,019 $ 917 $ 1,057

Other comprehensive income (loss):

Adjustment to pension and other postemployment plans (net of tax expense (benefit) of $ 4 , ($ 1 ) and $ 2 , respectively)

Net deferred gain from cash flow hedges (net of tax benefit of $- 0 -, $- 0 - and $- 0 -, respectively)

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

Other comprehensive income (loss) from unconsolidated affiliates (net of tax of $- 0 -, $- 0 -, and $- 0 -, respectively)

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

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

Total 18 ( 4 ) 33

6 unchanged sentences

CONSOLIDATED BALANCE SHEETS

2023 December 31,

December 31, 2024 December 31, 2023

(in millions)

6 unchanged sentences

Materials and supplies 541 573

Non-trading derivative assets — 10

Taxes receivable 121 94

Current assets held for sale

Regulatory assets 239 161

1 unchanged sentence

Total current assets 4,381 3,027

Property, Plant and Equipment:

Property, Plant and Equipment, Net:

Property, plant and equipment 42,667 40,396

40,396 37,728

accumulated depreciation and amortization 10,578 10,543

10,543 10,585

Property, plant and equipment, net

32,089 29,853

Other Assets:

1 unchanged sentence

Regulatory assets ($ 313 and $ 402 related to VIEs, respectively)

Non-trading derivative assets — 2

Other non-current assets 247 162

4 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS, cont.

2023 December 31,

(in millions, except par value

CONSOLIDATED BALANCE SHEETS - (continued)

December 31, 2024 December 31, 2023

(in millions, except par value and shares)

LIABILITIES AND SHAREHOLDERS’ EQUITY

10 unchanged sentences

Customer deposits 93 111

Non-trading derivative liabilities 9 —

Other 510 452

Current liabilities held for sale

Other current liabilities 525 519

Total current liabilities 4,045 3,864

1 unchanged sentence

Deferred income taxes, net 4,389 4,079

Non-trading derivative liabilities 3 —

Benefit obligations 550 572

Regulatory liabilities 2,999 3,208

Other 763 774

Other non-current liabilities 722 766

Total other liabilities 8,660 8,625

4 unchanged sentences

Commitments and Contingencies (Note 14)

Temporary Equity (Note 12) — 3

Shareholders’ Equity:

Cumulative preferred stock, $ 0.01 par value, 20,000,000 shares authorized, no shares and 800,000 shares outstanding, respectively, $- 0 - and $ 800 liquidation preference, respectively (Note 12)

Common stock, $ 0.01 par value, 1,000,000,000 shares authorized, 651,727,276 shares and 631,225,829 shares outstanding, respectively

4 unchanged sentences

Total Liabilities and Shareholders’ Equity $ 43,768 $ 39,715

$ 39,715 $ 38,546

See Combined Notes to Consolidated Financial Statements

6 unchanged sentences

Cash Flows from Operating Activities:

$ 917 $ 1,057 $ 1,486

Net income $ 1,019 $ 917 $ 1,057

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

2 unchanged sentences

Loss (gain) on divestitures — 13 ( 303 )

13 ( 303 ) ( 681 )

Loss (gain) on equity securities ( 20 ) ( 31 ) 227

Loss (gain) on indexed debt securities 14 27 ( 325 )

Equity in earnings of unconsolidated affiliates

Distributions from unconsolidated affiliates — — 155

Pension contributions ( 30 ) ( 32 ) ( 35 )

4 unchanged sentences

Accounts payable 210 ( 302 ) 203

Net regulatory assets and liabilities 1,043 234 ( 2,295 )

Current regulatory assets and liabilities

( 86 ) 1,152 67

Non-current regulatory assets and liabilities

( 644 ) ( 109 ) 167

Other current assets and liabilities 101 162 ( 5 )

4 unchanged sentences

Capital expenditures ( 4,513 ) ( 4,401 ) ( 4,419 )

Transaction costs related to Enable Merger (Note 4)

Cash received related to Enable Merger — — 5

Proceeds from sale of equity securities, net of transaction costs — — 702

Proceeds from divestitures (Note 4)

Proceeds from divestitures

Other investing activities, net 24 24 14

3 unchanged sentences

Payment of obligation for finance lease — — ( 485 )

Proceeds from (payments of) commercial paper, net ( 1,055 ) ( 74 ) 1,132

Proceeds from long-term debt and term loans

Payments of commercial paper, net

( 539 ) ( 1,055 ) ( 74 )

Payments of long-term debt and term loans, including make-whole premiums

Proceeds from long-term debt and term loans, net

3,955 6,044 2,089

Payments of long-term debt and term loans, including make-whole premiums ( 1,050 ) ( 3,190 ) ( 1,795 )

Payment of debt issuance costs ( 35 ) ( 55 ) ( 36 )

1 unchanged sentence

Payment of dividends on Preferred Stock — ( 50 ) ( 49 )

Proceeds from issuance of Common Stock, net 494 — —

Redemption of Series A Preferred Stock — ( 800 ) —

2 unchanged sentences

Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash ( 79 ) 18 ( 163 )

Cash, Cash Equivalents and Restricted Cash at Beginning of Year 91 254 167

Cash, Cash Equivalents and Restricted Cash at End of Year $ 109 $ 91 $ 254

Cash, Cash Equivalents and Restricted Cash at Beginning of Period

Cash, Cash Equivalents and Restricted Cash at End of Period

$ 30 $ 109 $ 91

See Combined Notes to Consolidated Financial Statements

8 unchanged sentences

Balance, beginning of year — $ — 1 $ 790 1 $ 790

Conversion of Series B Preferred Stock and Series C Preferred Stock — — — — ( 2 ) ( 1,573 )

Redemption of Series A Preferred Stock — — ( 1 ) ( 790 ) — —

( 1 ) ( 790 ) — — — —

Balance, end of year — — — — 1 790

2 unchanged sentences

Balance, beginning of year 631 6 630 6 629 6

Issuances related to benefit and investment plans 1 — 1 — 1 —

Issuances of Common Stock 19 — — — — —

Issuances related to benefit and investment plans 2 — 1 — 1 —

Balance, end of year 652 6 631 6 630 6

1 unchanged sentence

Balance, beginning of year 8,604 8,568 8,529

Issuances related to benefit and investment plans 36 39 41

Issuances of Common Stock, net of issuance costs 494 — —

Conversion of Series B Preferred Stock and Series C Preferred Stock — — 1,573

Issuances related to benefit and investment plans 7 36 39

Balance, end of year 9,105 8,604 8,568

Retained Earnings (Accumulated Deficit)

Retained Earnings

Balance, beginning of year 1,092 709 154

Net income (loss) 917 1,057 1,486

Net income 1,019 917 1,057

Common Stock dividends declared (see Note 11)

2 unchanged sentences

— ( 42 ) ( 49 )

Series B Preferred Stock dividends declared (see Note 12)

Balance, end of year 1,572 1,092 709

1 unchanged sentence

Balance, beginning of year ( 35 ) ( 31 ) ( 64 )

Other comprehensive income ( 4 ) 33 26

Other comprehensive income (loss) 18 ( 4 ) 33

Balance, end of year ( 17 ) ( 35 ) ( 31 )

2 unchanged sentences

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Member of

CenterPoint Energy Houston Electric, LLC

To the Member of CenterPoint Energy Houston Electric, LLC

Opinion on the Financial Statements

26 unchanged sentences

Regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of assets to be recovered in rates.

The PUCT’s regulation of rates is

premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital.

The PUCT’s regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital.

Decisions to be made by the PUCT in the future will impact the accounting for regulated operations, including decisions about the amount of allowable costs and return on invested capital included in rates and any refunds that may be required.

While the Company has indicated it expects to recover costs from customers through regulated rates, there is a risk that the PUCT will not approve:

While the Company has

indicated it expects to recover costs from customers through regulated rates, there is a risk that the PUCT will not approve:

(1) full recovery of the costs of providing utility service, or (2) full recovery of all amounts invested in the utility business and a reasonable return on that investment.

7 unchanged sentences

We evaluated relevant external information and compared it to certain recorded regulatory asset and liability balances for completeness.

• For certain regulatory matters, we inspected the Company’s filings with the Commissions and the filings with the PUCT by intervenors to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the PUCT’s treatment of similar costs under similar circumstances.

• For certain regulatory matters, we inspected the Company’s filings with the PUCT and the filings with the PUCT by intervenors to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the PUCT’s treatment of similar costs under similar circumstances.

/s/ DELOITTE & TOUCHE LLP

25 unchanged sentences

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

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME

Year Ended December 31,

2024 2023 2022

(in millions)

Net income $ 546 $ 593 $ 510

Other comprehensive income:

Adjustment to pension and other postretirement plans (net of tax of $- 0 -, $- 0 - and $- 0 -)

Total ( 1 ) — —

Comprehensive income $ 545 $ 593 $ 510

See Combined Notes to Consolidated Financial Statements

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC AND SUBSIDIARIES

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

CONSOLIDATED BALANCE SHEETS

23 unchanged sentences

CONSOLIDATED BALANCE SHEETS – (continued)

LIABILITIES AND MEMBER ’ S EQUITY

December 31, 2024 December 31, 2023

2 unchanged sentences

Current Liabilities:

Short-term borrowings

Current portion of VIE Securitization Bonds long-term debt — 161

Accounts payable 681 351

Accounts and notes payable—affiliated companies 104 755

Accounts payable—affiliated companies

Taxes accrued 189 155

9 unchanged sentences

Long-Term Debt, net

VIE Securitization Bonds, net — 161

Other long-term debt, net 7,426 6,036

Total long-term debt, net 7,426 6,197

Commitments and Contingencies (Note 14)

3 unchanged sentences

Retained earnings 1,571 1,364

Accumulated other comprehensive loss ( 1 ) —

Total member’s equity 7,159 6,109

13 unchanged sentences

Changes in other assets and liabilities:

Accounts and notes receivable, net 16 ( 63 ) ( 17 )

Accounts receivable and unbilled revenues, net

( 10 ) 16 ( 63 )

Accounts receivable/payable–affiliated companies 25 ( 1 ) 47

2 unchanged sentences

Taxes receivable 38 ( 38 ) —

Net regulatory assets and liabilities ( 130 ) ( 41 ) ( 237 )

Current regulatory assets and liabilities

Non-current regulatory assets and liabilities

( 608 ) ( 136 ) ( 21 )

Other current assets and liabilities 43 28 ( 20 )

5 unchanged sentences

Increase in notes receivable–affiliated companies

( 130 ) ( 238 ) —

Other investing activities, net 5 14 1

1 unchanged sentence

Cash Flows from Financing Activities:

Proceeds from long-term debt 1,398 1,589 1,096

Proceeds from long-term debt and term loan, net

1,397 1,398 1,589

Payments of long-term debt ( 161 ) ( 156 ) ( 720 )

Dividend to parent ( 367 ) ( 316 ) —

Increase (decrease) in notes payable–affiliated companies — ( 642 ) 130

( 642 ) 130 504

Payment of debt issuance costs ( 8 ) ( 13 ) ( 17 )

Contribution from parent 844 885 1,143

Dividend to parent

( 339 ) ( 367 ) ( 316 )

Payment of obligation for finance lease — — ( 485 )

1 unchanged sentence

Net cash provided by financing activities 1,732 1,103 1,324

1,103 1,324 926

Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash ( 75 ) 1 ( 145 )

Cash, Cash Equivalents and Restricted Cash at Beginning of the Year 88 233 154

Cash, Cash Equivalents and Restricted Cash at End of the Year $ 89 $ 88 $ 233

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

Cash, Cash Equivalents and Restricted Cash at End of the Period

$ 14 $ 89 $ 88

See Combined Notes to Consolidated Financial Statements

17 unchanged sentences

Balance, end of year 1,571 1,364 1,138

Accumulated Other Comprehensive Loss

Balance, beginning of year — — —

Other comprehensive loss

Balance, end of year ( 1 ) — —

Total Member’s Equity $ 7,159 $ 6,109 $ 4,998

1 unchanged sentence

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholder of

CenterPoint Energy Resources Corp.

To the Stockholder of CenterPoint Energy Resources Corp.

Opinion on the Financial Statements

26 unchanged sentences

Rates are determined and approved in regulatory proceedings based on an analysis of the Company’s costs to provide utility service and a return on, and recovery of, the Company’s investment in the utility business.

Regulatory decisions can have an impact on the recovery of costs, the rate

of return earned on investment, and the timing and amount of assets to be recovered in rates.

Regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of assets to be recovered in rates.

The Commissions’ regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital.

Decisions to be made by the Commissions in the future will impact the accounting for regulated operations, including decisions about the

amount of allowable costs and return on invested capital included in rates and any refunds that may be required.

While the Company has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commissions will not approve:

24 unchanged sentences

Utility natural gas 1,489 1,856 2,607

Non-utility cost of revenue, including natural gas 3 4 17

Non-utility cost of revenues, including natural gas 3 3 4

Operation and maintenance 848 904 886

7 unchanged sentences

Other income (expense), net 12 14 ( 64 )

14 ( 64 ) ( 4 )

Total ( 185 ) ( 164 ) 363

1 unchanged sentence

Income tax expense (benefit) 104 ( 26 ) 236

( 26 ) 236 76

Net Income $ 540 $ 512 $ 725

9 unchanged sentences

Other comprehensive income:

Adjustment to other postemployment plans (net of tax expense of $- 0 -, $ 4 and $ 1 , respectively)

Other comprehensive income — 6 —

Adjustment to pension and other postretirement plans (net of tax of $- 0 -, $- 0 - and $ 4 )

Comprehensive income $ 541 $ 512 $ 731

13 unchanged sentences

Natural gas inventory 137 156

Non-trading derivative assets — 7

Taxes receivable 46 101

Current assets held for sale

Regulatory assets 238 161

1 unchanged sentence

Total current assets 2,537 1,309

Property, Plant and Equipment:

Property, Plant and Equipment, Net:

Property, plant and equipment 15,552 15,672

4 unchanged sentences

Regulatory assets 903 850

Non-trading derivative assets — 2

Other non-current assets 118 51

5 unchanged sentences

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

CONSOLIDATED BALANCE SHEETS, cont.

CONSOLIDATED BALANCE SHEETS - (continued)

December 31, 2024 December 31, 2023

5 unchanged sentences

Accounts payable 405 392

Accounts and notes payable–affiliated companies 99 190

Accounts payable–affiliated companies

Taxes accrued 150 145

1 unchanged sentence

Customer deposits 81 95

Non-trading derivative liabilities 8 —

Current liabilities held for sale

Other current liabilities 255 282

2 unchanged sentences

Deferred income taxes, net 1,370 1,246

Non-trading derivative liabilities 3 —

Benefit obligations 63 74

11 unchanged sentences

Total Liabilities and Stockholder’s Equity

$ 16,425 $ 15,296

See Combined Notes to Consolidated Financial Statements

18 unchanged sentences

Accounts payable 43 ( 250 ) 190

Net regulatory assets and liabilities 1,152 244 ( 2,095 )

Current regulatory assets and liabilities

( 85 ) 1,098 112

Non-current regulatory assets and liabilities

( 31 ) 54 132

Other current assets and liabilities 24 85 13

1 unchanged sentence

Other operating activities, net ( 24 ) 21 2

Net cash provided by (used in) operating activities 2,312 856 ( 1,219 )

Net cash provided by operating activities

1,068 2,312 856

Cash Flows from Investing Activities:

Capital expenditures ( 1,439 ) ( 1,619 ) ( 1,661 )

Increase in notes receivable–affiliated companies ( 1 ) — —

Proceeds from divestitures (Note 4)

Decrease (increase) in notes receivable–affiliated companies

Proceeds from divestitures

Other investing activities, net 19 ( 23 ) ( 8 )

Net cash provided by (used in) investing activities

( 1,419 ) ( 1,643 ) 406

Cash Flows from Financing Activities:

Increase (decrease) in short-term borrowings, net

Proceeds from (payments of) commercial paper, net ( 321 ) ( 94 ) 552

Proceeds from long-term debt and term loans

( 4 ) ( 10 ) 452

Payments of long-term debt and term loans, including make-whole premiums

Payments of commercial paper, net

115 ( 321 ) ( 94 )

Payment of debt issuance costs ( 14 ) ( 14 ) ( 10 )

Dividends to parent ( 496 ) ( 844 ) ( 17 )

Proceeds from long-term debt and term loans, net

399 2,006 927

Payments of long-term debt and term loans

— ( 2,332 ) ( 475 )

Increase in notes payable-affiliated companies

— — ( 1,517 )

Payments of debt issuance costs

( 3 ) ( 14 ) ( 14 )

Contribution from parent 290 500 289

Increase (decrease) in notes payable–affiliated companies — ( 1,517 ) 490

Dividends to parent

( 442 ) ( 496 ) ( 844 )

Other financing activities, net ( 3 ) ( 1 ) ( 1 )

Net cash provided by (used in) financing activities

352 ( 668 ) ( 1,277 )

Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash 1 1 ( 15 )

Cash, Cash Equivalents and Restricted Cash at Beginning of Year — 15 6

Cash, Cash Equivalents and Restricted Cash at End of Year $ 1 $ — $ 15

Cash, Cash Equivalents and Restricted Cash at Beginning of Period

Cash, Cash Equivalents and Restricted Cash at End of Period

See Combined Notes to Consolidated Financial Statements

12 unchanged sentences

Contribution from parent 290 500 289

Contribution to parent for sale of Arkansas and Oklahoma Natural Gas businesses — ( 720 ) —

Dividend to parent for sale of Arkansas and Oklahoma Natural Gas businesses — — ( 720 )

Balance, end of year 4,519 4,229 3,729

16 unchanged sentences

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Background

(1) Background and Basis of Presentation

This combined Form 10-K is filed separately by three registrants:

1 unchanged sentence

Information contained herein relating to any individual registrant is filed by such registrant solely on its own behalf.

Each registrant makes no representation as to information relating exclusively to the other Registrants or the subsidiaries of CenterPoint Energy other than itself or its subsidiaries.

Except as discussed in Note 13 to the Registrants’ Consolidated Financial Statements, no registrant has an obligation in respect of any other Registrant’s debt securities, and holders of such debt securities should not consider the financial resources or results of operations of any Registrant other than the obligor in making a decision with respect to such securities.

Included in this combined Form 10-K are the Financial Statements of CenterPoint Energy, Houston Electric and CERC, which are referred to collectively as the Registrants.

Each registrant makes no representation as to information relating exclusively to the other registrants or the subsidiaries of CenterPoint Energy, Inc.

other than itself or its subsidiaries.

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

Basis of Presentation .

Included in this combined Form 10-K are the consolidated financial statements of the Registrants.

The Combined Notes to the Consolidated Financial Statements apply to all Registrants and specific references to Houston Electric and CERC herein also pertain to CenterPoint Energy, unless otherwise indicated.

CenterPoint Energy, Inc.

is a public utility holding company.

On June 30, 2023, CenterPoint Energy completed the sale of its indirect subsidiary, Energy Systems Group, to an unaffiliated third party.

For additional information, see Note 4.

Additionally, certain amounts from prior years have been reclassified to conform to the current presentation.

CenterPoint Energy is a public utility holding company.

CenterPoint Energy’s operating subsidiaries own and operate electric transmission, distribution and generation facilities and natural gas distribution systems.

As of December 31, 2024, CenterPoint Energy’s operating subsidiaries were as follows:

• Houston Electric owns and operates electric transmission and distribution facilities in the Texas Gulf Coast area that includes the city of Houston;

(i) directly owns and operates natural gas distribution systems in Louisiana, Minnesota, Mississippi and Texas, (ii) indirectly, through Indiana Gas and VEDO, owns and operates natural gas distribution systems in Indiana and Ohio, respectively, and (iii) owns and operates permanent pipeline connections through interconnects with various interstate and intrastate pipeline companies through CEIP;

(i) directly owns and operates natural gas distribution systems in Louisiana, Minnesota, Mississippi and Texas, (ii) indirectly, through Indiana Gas and CEOH, owns and operates natural gas distribution systems in Indiana and Ohio, respectively, and (iii) owns and operates permanent pipeline connections through interconnects with various interstate and intrastate pipeline companies through CEIP;

• SIGECO provides energy delivery services to electric and natural gas customers located in and near Evansville in southwestern Indiana and owns and operates electric generation assets to serve its electric customers and optimizes those assets in the wholesale power market.

For a description of CenterPoint Energy’s reportable segments, see Note 17.

As of December 31, 2024, CenterPoint Energy’s reportable segments were Electric, Natural Gas, and Corporate and Other.

Houston Electric and CERC each consist of a single reportable segment.

On February 19, 2024, CenterPoint Energy, through its subsidiary CERC Corp., entered into the LAMS Asset Purchase Agreement to sell its Louisiana and Mississippi natural gas local distribution company businesses.

For a description of CenterPoint Energy’s reportable segments, see Note 16.

On June 30, 2023, CenterPoint Energy completed the sale of its indirect subsidiary, Energy Systems Group, to an unaffiliated third party.

On February 19, 2024, CenterPoint Energy, through its subsidiary CERC Corp., entered into the LAMS Asset Purchase Agreement to sell its Louisiana and Mississippi natural gas LDC businesses.

The transaction is expected to close in the first quarter of 2025.

For further information, see Note 21 to the consolidated financial statements.

(2) Summary of Significant Accounting Policies

(a) Principles of Consolidation

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles.

For additional information, see Note 4.

Principles of Consolidation.

The accompanying consolidated financial statements are prepared in conformity with GAAP.

The accounts of the Registrants and their wholly-owned and majority-owned and controlled subsidiaries are included in the consolidated financial statements.

All intercompany transactions and balances are eliminated in consolidation, except as described below.

As of December 31, 2023, CenterPoint Energy, Houston Electric and SIGECO had VIEs including the Bond Companies and the SIGECO Securitization Subsidiary, which are consolidated.

The consolidated VIEs are wholly-owned, bankruptcy-

remote, special purpose entities that were formed solely for the purpose of securitizing transition property or facilitating the securitization financing of qualified costs in the second quarter of 2023 associated with the completed retirement of SIGECO’s A.B.

Brown coal generation facilities.

All intercompany transactions and balances are eliminated in consolidation;

however, intercompany profits have not been eliminated when such amounts are probable of recovery under the affiliates’ rate regulation process.

As of December 31, 2024, CenterPoint Energy, Houston Electric and SIGECO had VIEs including Bond Company IV and the SIGECO Securitization Subsidiary, which are consolidated.

The consolidated VIEs are wholly-owned, bankruptcy-remote, special purpose entities that were formed solely for the purpose of securitizing transition property or facilitating the securitization financing of qualified costs.

CenterPoint Energy, through SIGECO, has a controlling financial interest in the SIGECO Securitization Subsidiary and is the VIE’s primary beneficiary.

For further information, see Note 7.

Creditors of CenterPoint Energy, Houston Electric and SIGECO have no recourse to any assets or revenues of the Bond Companies or the SIGECO Securitization Subsidiary, as applicable.

Houston Electric has a controlling financial interest in Bond Company IV and is the VIE’s primary beneficiary.

Creditors of CenterPoint Energy, Houston Electric and SIGECO have no recourse to any assets or revenues of Bond Company IV or the SIGECO Securitization Subsidiary, as applicable.

The Securitization Bonds issued by these VIEs are payable only from and secured by transition or securitization property, as applicable, and the bondholders have no recourse to the general credit of CenterPoint Energy, Houston Electric or SIGECO.

(b) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

(2) Summary of Significant Accounting Policies

(a) Use of Estimates

The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

CenterPoint Energy uses the equity method for investments in entities when it exercises significant influence, does not have control and is not considered the primary beneficiary, if applicable.

Generally, equity investments in limited partnerships with interest greater than approximately 3-5% is accounted for under the equity method.

Under the equity method, CenterPoint Energy adjusts its investments each period for contributions made, distributions received, respective shares of comprehensive income and amortization of basis differences, as appropriate.

CenterPoint Energy evaluates its equity method investments for impairment when events or changes in circumstances indicate there is a loss in value of the investment that is other than a temporary decline.

CenterPoint Energy considers distributions received from equity method investments which do not exceed cumulative equity in earnings subsequent to the date of investment to be a return on investment and classifies these distributions as operating activities in its Statements of Consolidated Cash Flows.

CenterPoint Energy considers distributions received from equity method investments in excess of cumulative equity in earnings subsequent to the date of investment to be a return of investment and classifies these distributions as investing activities in its Statements of Consolidated Cash Flows.

Investments without a readily determinable fair value will be measured at cost, less impairment, plus or minus observable prices changes of an identical or similar investment of the same issuer.

The Registrants record revenue for electricity delivery and natural gas sales and services under the accrual method and these revenues are recognized upon delivery to customers.

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For further discussion, see Note 5.

(e) MISO Transactions

Indiana Electric is a member of the MISO.

MISO-related purchase and sale transactions are recorded using settlement information provided by the MISO.

These purchase and sale transactions are accounted for on at least a net hourly position, meaning net purchases within that interval are recorded on CenterPoint Energy’s Statements of Consolidated Income in Utility natural gas, fuel and purchased power, and net sales within that interval are recorded on CenterPoint Energy’s Statements of Consolidated Income in Utility revenues.

These purchase and sale transactions are accounted for on at least a net hourly position, in which net purchases within that interval are recorded as Utility natural gas, fuel and purchased power and net sales within that interval are recorded as Utility revenues on CenterPoint Energy’s Statements of Consolidated Income.

On occasion, prior period transactions are resettled outside the routine process due to a change in the MISO’s tariff or a material interpretation thereof.

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Revenues associated with resettlements are recognized when the amount is determinable and collectability is reasonably assured.

(f) Guarantees

CenterPoint Energy recognizes guarantee obligations at fair value.

CenterPoint Energy discloses parent company guarantees of a subsidiary’s obligation when that guarantee results in the exposure of a material obligation of the parent company even if the probability of fulfilling such obligation is considered remote.

See Note 15(c).

(g) Long-lived Assets, Goodwill and Intangibles

(d) Environmental Costs

The Registrants (i) expense or capitalize environmental expenditures, as appropriate, depending on their future economic benefit;

(ii) expense amounts that relate to an existing condition caused by past operations that do not have future economic benefit;

and (iii) record undiscounted liabilities related to these future costs when environmental assessments and/or remediation activities are probable and the costs can be reasonably estimated.

(e) Cash and Cash Equivalents and Restricted Cash

For purposes of reporting cash flows, the Registrants consider cash equivalents to be short-term, highly-liquid investments with maturities of three months or less from the date of purchase.

Cash and cash equivalents held by the Bond Companies and the SIGECO Securitization Subsidiary (VIEs) solely to support servicing the Securitization Bonds as of December 31, 2024 and 2023 are reflected on CenterPoint Energy’s and Houston Electric’s Consolidated Balance Sheets.

In connection with the issuance of Securitization Bonds, CenterPoint Energy and Houston Electric were required to establish restricted cash accounts to collateralize the bonds that were issued in these financing transactions.

These restricted cash accounts are not available for withdrawal until the maturity of the bonds and are not included in cash and cash equivalents.

For more information on restricted cash, see Note 17.

(f) Accounts Receivable and Allowance for Credit Losses

Accounts receivable are recorded at the invoiced amount and do not bear interest.

Management reviews historical write-offs, current available information and reasonable and supportable forecasts to estimate and establish allowance for credit losses.

Account balances are charged off against the allowance when management determines it is probable that the receivable will not be recovered.

See Note 7 for further information about regulatory deferrals of bad debt expense, including those related to COVID-19 and the February 2021 Winter Storm Event.

(g) Inventory

The Registrants’ inventory consists principally of materials and supplies, and for CERC, natural gas, and for CenterPoint Energy, coal inventory.

Materials and supplies are valued at the lower of average cost or market, are recorded to inventory when purchased and subsequently charged to expense or capitalized to plant when installed.

Inventory related to CenterPoint Energy’s regulated operations is valued at historical cost consistent with ratemaking treatment.

Coal inventory is valued at average cost.

Certain natural gas in storage at CenterPoint Energy’s and CERC’s utilities are recorded using the last in, first out (LIFO) method.

CenterPoint Energy’s and CERC’s balances in inventory that were valued using LIFO method were as follows:

Year Ended December 31,

2024 2023 (1) 2024 2023 (1)

CenterPoint Energy CERC

(in millions)

LIFO inventory $ 94 $ 106 $ 73 $ 86

(1) Based on the average cost of gas purchased during December 2024, CenterPoint Energy’s cost of replacing inventories carried at LIFO cost was $ 1 million less than the carrying value at December 31, 2024.

CERC’s cost of replacing inventories carried at LIFO cost was $ 4 million more than the carrying value at December 31, 2024.

(h) Long-lived Assets

The Registrants record property, plant and equipment at historical cost and expense repair and maintenance costs as incurred.

The Registrants periodically evaluate long-lived assets, including property, plant and equipment, and specifically identifiable intangibles subject to amortization, when events or changes in circumstances indicate that the carrying value of these assets may not be recoverable.

The Registrants periodically evaluate long-lived assets, including property, plant and equipment, when events or changes in circumstances indicate that the carrying value of these assets may not be recoverable.

For rate-regulated businesses, recoverability of long-lived assets is assessed by determining if a capital disallowance from a regulator is probable through monitoring the outcome of rate cases and other proceedings.

For businesses that are not rate-regulated, recoverability is assessed based on an estimate of undiscounted cash flows attributable to the assets compared to the carrying value of the assets.

No long-lived asset or intangible asset impairments were recorded in 2023, 2022 or 2021.

No long-lived asset impairments were recorded in 2024, 2023 or 2022.

The Registrants compute depreciation and amortization using the straight-line method based on economic lives or regulatory-mandated recovery periods.

Amortization expense includes amortization of certain regulatory assets.

CenterPoint Energy and CERC perform goodwill impairment tests at least annually and evaluate goodwill when events or changes in circumstances indicate that its carrying value may not be recoverable.

CenterPoint Energy and CERC recognize a goodwill impairment by the amount a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill within that reporting unit.

Goodwill is evaluated for impairment by performing a qualitative assessment or using a quantitative test.

If CenterPoint Energy or CERC chooses to perform a qualitative assessment and determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the quantitative test is then performed;

otherwise, no further testing is required.

The quantitative test, if required, is performed by comparing the fair value of each reporting unit with the carrying amount of the reporting unit, including goodwill.

The estimated fair value of the reporting unit is primarily determined based on an income approach or a weighted combination of income and market approaches.

When the carrying amount is in excess of the estimated fair value of the reporting unit, the excess amount is recorded as an impairment charge, not to exceed the carrying amount of goodwill.

CenterPoint Energy includes deferred tax assets and liabilities within its reporting unit’s carrying value for the purposes of annual and interim impairment tests, regardless of whether the estimated fair value reflects the disposition of such assets and liabilities.

For further information about the goodwill impairment tests, see Note 6.

(h) Assets Held for Sale and Discontinued Operations

Generally, a long-lived asset to be sold is classified as held for sale in the period in which management, with approval from the Board of Directors, as applicable, commits to a plan to sell, and a sale is expected to be completed within one year.

The Registrants record assets and liabilities held for sale, or the disposal group, at the lower of their carrying value or their estimated fair value less cost to sell.

If the disposal group reflects a component of a reporting unit and meets the definition of a business, the goodwill within that reporting unit is allocated to the disposal group based on the relative fair value of the components representing a business that will be retained and disposed.

Goodwill is not allocated to a portion of a reporting unit that does not meet the definition of a business.

A disposal group that meets the held for sale criteria and also represents a strategic shift to the Registrant is also reflected as discontinued operations on the Statements of Consolidated Income, and prior periods are recast to reflect the earnings or losses from such businesses as income from discontinued operations, net of tax.

(i) Regulatory Assets and Liabilities

(j) Regulatory Assets and Liabilities

The Registrants apply the guidance for accounting for regulated operations within the Electric reportable segment and the Natural Gas reportable segment.

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For further detail on the Registrants’ regulatory assets and liabilities, see Note 7.

(j) Depreciation and Amortization Expense

The Registrants compute depreciation and amortization using the straight-line method based on economic lives or regulatory-mandated recovery periods.

Amortization expense includes amortization of certain regulatory assets and other intangibles.

(k) Capitalization and Deferral of Interest, including AFUDC

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Although AFUDC increases both property, plant and equipment and earnings, it is realized in cash when the assets are included in rates.

The table below includes interest capitalized or deferred during the periods.

The table below includes interest capitalized or deferred for the periods presented:

Year Ended December 31,

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Capitalized interest and AFUDC debt (1) $ 33 $ 18 $ 8 $ 32 $ 18 $ 6 $ 26 $ 14 $ 7

$ 32 $ 18 $ 6 $ 26 $ 14 $ 7 $ 18 $ 13 $ 3

AFUDC equity (2) 66 33 17 62 32 14 37 24 5

62 32 14 37 24 5 28 20 5

Deferred debt interest (3) 65 24 36 65 16 43 51 12 36

65 16 43 51 12 36 26 1 22

(1) Included in Interest expense and other finance charges on the Registrants’ respective Statements of Consolidated Income.

(2) Included in Other Income (Expense) on the Registrants’ respective Statements of Consolidated Income.

(3) Represents the amount of deferred debt interest on certain regulatory assets that are authorized to earn a return, such as debt post in-service carrying costs on property, plant and equipment, gas costs, storm restoration costs, and TEEEF (including returns on both regulatory and lease assets).

(l) Income Taxes

(2) Included in Other income (expense), net on the Registrants’ respective Statements of Consolidated Income.

(3) Represents the amount on certain regulatory assets that are authorized to earn a return, such as debt post in-service carrying costs on property, plant and equipment, gas costs, storm restoration costs, and TEEEF (including returns on both regulatory and lease assets) and is included in Interest expense and other finance charges on the Registrants’ respective Statements of Consolidated Income.

An arrangement is determined to be a lease at inception based on whether the Registrant has the right to control the use of an identified asset.

ROU assets represent the Registrants’ right to use the underlying asset for the lease term and lease liabilities represent the Registrants’ obligation to make lease payments arising from the lease.

ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term, including payments at commencement that depend on an index or rate.

Most leases in which the Registrants are the lessee do not have a readily determinable implicit rate, so an incremental borrowing rate, based on the information available at the lease commencement date, is utilized to determine the present value of lease payments.

When a secured borrowing rate is not readily available, unsecured borrowing rates are adjusted for the effects of collateral to determine the incremental borrowing rate.

Each Registrant uses the implicit rate for agreements in which it is a lessor.

Lease income and expense for operating leases and ROU amortization for finance leases are recognized on a straight-line basis over the lease term.

The Registrants have lease agreements with lease and non-lease components and have elected the practical expedient to combine lease and non-lease components for certain classes of leases, such as office buildings and temporary generation.

For classes of leases in which lease and non-lease components are not combined, consideration is allocated between components based on the stand-alone prices.

Sublease income is not significant to the Registrants.

The Registrants’ lease agreements do not contain any material residual value guarantees, material restrictions or material covenants.

Except as described in Note 18, there are no lease transactions between related parties.

Agreements in which the Registrants are lessors do not include provisions for the lessee to purchase the assets.

Because risk is minimal, the Registrants do not take any significant actions to manage risk associated with the residual value of their leased assets.

The Registrants’ operating lease agreements are primarily equipment and real property leases, including land and office facility leases.

CenterPoint Energy and Houston Electric also have finance lease agreements for temporary generation.

The Registrants’ lease terms may include options to extend or terminate a lease when it is reasonably certain that those options will be exercised.

The Registrants have elected an accounting policy that exempts leases with terms of one year or less from the recognition requirements of ASC 842.

(m) Income Taxes

Houston Electric and CERC are included in CenterPoint Energy’s U.S.

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The Registrants recognize interest and penalties as a component of income tax expense (benefit), as applicable, in their respective Statements of Consolidated Income.

CenterPoint Energy reports the income tax provision associated with its interest in Enable in discontinued operations, net of tax in its Statements of Consolidated Income.

For further information, see Note 4.

To the extent certain EDIT of the Registrants’ rate-regulated subsidiaries may be recoverable or payable through future rates, regulatory assets and liabilities have been recorded, respectively.

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Production tax credits extended by the IRA may be used to reduce current federal income taxes payable.

(m) Accounts Receivable and Allowance for Credit Losses

Accounts receivable are recorded at the invoiced amount and do not bear interest.

Management reviews historical write-offs, current available information, and reasonable and supportable forecasts to estimate and establish allowance for credit losses.

Account balances are charged off against the allowance when management determines it is probable the receivable will not be recovered.

See Note 7 for further information about regulatory deferrals of bad debt expense, including those related to COVID-19 and the February 2021 Winter Storm Event.

(n) Inventory

The Registrants’ inventory consists principally of materials and supplies, and for CERC, natural gas, and for CenterPoint Energy, coal inventory.

Materials and supplies are valued at the lower of average cost or market.

Materials and supplies are recorded to inventory when purchased and subsequently charged to expense or capitalized to plant when installed.

Inventory related to CenterPoint Energy’s regulated operations is valued at historical cost consistent with ratemaking treatment.

Coal inventory is valued at average cost.

Certain natural gas in storage at CenterPoint Energy’s and CERC’s utilities are recorded using the LIFO method.

CenterPoint Energy’s and CERC’s balances in inventory that were valued using LIFO method were as follows:

Year Ended December 31,

CenterPoint Energy CERC

(in millions)

LIFO inventory $ 106 $ 101 $ 86 $ 82

(1) Based on the average cost of gas purchased during December 2023, CenterPoint Energy’s and CERC’s cost of replacing inventories carried at LIFO cost was more than the carrying value at December 31, 2023 by $ 8 million and $ 13 million, respectively.

(o) Derivative Instruments

The Registrants are exposed to various market risks.

These risks arise from transactions entered into in the normal course of business.

The Registrants, from time to time, utilize derivative instruments such as physical forward contracts, swaps and options to mitigate the impact of changes in commodity prices, weather and interest rates on operating results and cash flows.

Such derivatives are recognized in the Registrants’ Consolidated Balance Sheets at their fair value unless the Registrant elects the normal purchase and sales exemption for qualified physical transactions.

A derivative may be designated as a normal purchase or normal sale if the intent is to physically receive or deliver the product for use or sale in the normal course of business.

CenterPoint Energy elected to record changes in the fair value of amounts excluded from the assessment of effectiveness immediately in its Statements of Consolidated Income, and such amounts will be captured in a regulatory asset or regulatory liability if they are recoverable or refundable to customers.

(p) Investments in Equity Securities (CenterPoint Energy)

(n) Investments in Equity Securities (CenterPoint Energy)

CenterPoint Energy reports equity securities at estimated fair value in the Consolidated Balance Sheets, and any gains and losses, net of any transaction costs, are recorded as Gain (loss) on equity securities in the Statements of Consolidated Income.

(q) Environmental Costs

The Registrants expense or capitalize environmental expenditures, as appropriate, depending on their future economic benefit.

The Registrants expense amounts that relate to an existing condition caused by past operations that do not have future economic benefit.

The Registrants record undiscounted liabilities related to these future costs when environmental assessments and/or remediation activities are probable and the costs can be reasonably estimated.

(r) Cash and Cash Equivalents and Restricted Cash

For purposes of reporting cash flows, the Registrants consider cash equivalents to be short-term, highly-liquid investments with maturities of three months or less from the date of purchase.

Cash and cash equivalents held by the Bond Companies and the SIGECO Securitization Subsidiary (VIEs) solely to support servicing the Securitization Bonds as of December 31, 2023 and 2022 are reflected on CenterPoint Energy’s and Houston Electric’s Consolidated Balance Sheets.

These restricted cash accounts are not available for withdrawal until the maturity of the bonds and are not included in cash and cash equivalents.

For more information on restricted cash see Note 18.

(s) Preferred Stock and Dividends

(o) Assets Held for Sale

The Registrants record assets and liabilities held for sale, or the disposal group, at the lower of their carrying value or their estimated fair value less cost to sell.

If a disposal group reflects a component of a reporting unit and meets the definition of a business, the goodwill within that reporting unit is allocated to the disposal group based on the relative fair value of the components representing a business that will be retained and disposed.

Goodwill is not allocated to a portion of a reporting unit that does not meet the definition of a business.

As of December 31, 2024, certain assets and liabilities representing the Louisiana and Mississippi natural gas LDC businesses met the held for sale criteria.

The sale will be considered an asset sale for tax purposes, requiring net deferred tax liabilities to be excluded from held for sale balances.

For further discussion of the sale, see Note 4.

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

The fair value could be different if different estimates and assumptions in these valuation techniques were applied.

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

Changes in these assumptions could have a significant impact on the resulting fair value.

(p) Preferred Stock and Dividends

Preferred stock is evaluated to determine balance sheet classification, and all conversion and redemption features are evaluated for bifurcation treatment.

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Income available to common stockholders is computed by deducting from net income the dividends accumulated and earned during the period on cumulative preferred stock.

(t) New Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

This ASU updates segment disclosure requirements through enhanced disclosures around significant segment expenses.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

(q) Recent Accounting Pronouncements

On December 31, 2024, the Registrants adopted ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which updates segment disclosure requirements through enhanced disclosures around significant segment expenses.

The Registrants applied the provision retrospectively to all periods presented for each Registrants’ reportable segment as further described.

See Note 16 for further discussion of our segment reporting.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income (Topic 220):

Expense Disaggregation Disclosures (“ASU 2024-03”).

This ASU improves disclosure of a public business entity’s expense by requiring disaggregated disclosure of expenses in commonly presented expense captions.

ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and for interim periods beginning after December 15, 2027.

Early adoption is permitted.

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Natural gas distribution 32 16,399 4,326 12,073 16,492 4,337 12,155

Finance ROU asset mobile generation 7.5 662 136 526 662 41 621

Finance ROU asset (2) 7.5 662 232 430 662 136 526

Other property 22 3,112 1,056 2,056 2,710 993 1,717

Total $ 42,667 $ 10,578 $ 32,089 $ 40,396 $ 10,543 $ 29,853

December 31, 2024 December 31, 2023

Weighted Average Useful Lives Property, Plant and Equipment, Gross Accumulated Depreciation & Amortization Property, Plant and Equipment, Net Property, Plant and Equipment, Gross Accumulated Depreciation & Amortization Property, Plant and Equipment, Net

(in years) (in millions)

Houston Electric

Electric transmission and distribution 37 $ 18,645 $ 3,647 $ 14,998 $ 16,800 $ 3,641 $ 13,159

Finance ROU asset mobile generation 7.5 662 136 526 662 41 621

Finance ROU asset (2) 7.5 662 232 430 662 136 526

Other property 20 2,443 749 1,694 2,053 692 1,361

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Total $ 15,552 $ 4,146 $ 11,406 $ 15,672 $ 4,169 $ 11,503

(1) SIGECO and AGC own a 300 MW unit at the Warrick Power Plant (Warrick Unit 4) as tenants in common as of December 31, 2023.

SIGECO’s share of the cost of this unit as of December 31, 2023, is $ 198 million with accumulated depreciation totaling $ 171 million.

(1) SIGECO and AGC owned a 300 MW unit at the Warrick Power Plant (Warrick Unit 4) as tenants in common as of December 31, 2023.

SIGECO’s share of the cost of this unit as of December 31, 2023, was $ 198 million with accumulated depreciation totaling $ 171 million.

Under the operating agreement, AGC and SIGECO shared equally in the cost of operation and output of the unit.

SIGECO’s share of operating costs is included in Operation and maintenance expense in CenterPoint Energy’s Statements of Consolidated Income.

SIGECO exited joint operations of Warrick 4 on January 1, 2024.

SIGECO’s share of operating costs was included in Operation and maintenance expense in CenterPoint Energy’s Statements of Consolidated Income.

SIGECO exited joint operations of Warrick Unit 4 on January 1, 2024.

(2) Houston Electric recognized a finance ROU asset as of December 31, 2024 and December 31, 2023 related to temporary generation.

See Note 19 for further discussion.

(b) Depreciation and Amortization

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Amortization of securitized regulatory assets 90 74 — 163 155 — 191 191 —

163 155 — 191 191 — 213 213 —

Other amortization 172 143 30 146 109 34 84 45 28

146 109 34 84 45 28 79 38 17

$ 1,401 $ 748 $ 493 $ 1,288 $ 670 $ 448 $ 1,316 $ 642 $ 483

Total $ 1,439 $ 762 $ 522 $ 1,401 $ 748 $ 493 $ 1,288 $ 670 $ 448

The Registrants account for an ARO at fair value in the period during which the legal obligation is incurred if a reasonable estimate of fair value and its settlement date can be made.

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Brown and F.B.

Culley as well as certain sites in Indiana pursuant to the CCR Legacy Rule;

see Note 14(d) for further discussion.

CenterPoint Energy and Houston Electric also recorded AROs relating to treated wood poles for electric distribution, distribution transformers containing PCB (also known as Polychlorinated Biphenyl), and underground fuel storage tanks.

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December 31, 2024 December 31, 2023

CenterPoint Energy

Houston Electric CERC

CenterPoint Energy

Houston Electric CERC

CenterPoint Energy Houston Electric CERC CenterPoint Energy Houston Electric CERC

(in millions)

Beginning balance $ 590 $ 40 $ 380 $ 610 $ 36 $ 420

Additions 11 — — — — —

Accretion expense (1) 21 1 16 23 1 16

23 1 16 20 1 15

Revisions in estimates (2) ( 34 ) ( 2 ) ( 33 ) ( 43 ) 3 ( 56 )

( 43 ) 3 ( 56 ) ( 69 ) ( 7 ) ( 74 )

Ending balance $ 588 $ 39 $ 363 $ 590 $ 40 $ 380

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(2) In 2024 and 2023, CenterPoint Energy and CERC reflected a decrease in their respective ARO liability, which was primarily attributable to increases in the long-term interest rates used for discounting in the ARO calculation.

In 2023, Houston Electric reflected an increase in its ARO liability attributable to an increase in discount rates and disposal costs, while in 2022, Houston Electric reflected a decrease in its ARO liability, which was primarily attributable to increases in the long-term interest rates used for discounting in the ARO calculation.

(4) Divestitures (CenterPoint Energy and CERC)

In 2024, Houston Electric reflected a decrease in its ARO liability attributable to an increase in discount rates, while in 2023, Houston Electric reflected an increase in its ARO liability attributable to an increase in discount rates and disposal costs.

(4) Held for Sale and Divestitures (CenterPoint Energy and CERC)

Held for Sale.

On February 19, 2024, CERC Corp.

entered into the LAMS Asset Purchase Agreement, pursuant to which CERC Corp.

agreed to sell its Louisiana and Mississippi natural gas LDC businesses.

The purchase price for the Louisiana and Mississippi natural gas LDC businesses is $ 1.2 billion and subject to adjustment as set forth in the LAMS Asset Purchase Agreement, including adjustments based on net working capital, regulatory assets and liabilities and capital expenditures at closing.

The completion of the proposed transaction is subject to customary closing conditions, including (i) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) approval of the LPSC, (iii) approval of the MPSC, (iv) no Material Adverse Effect (as defined in the LAMS Asset Purchase Agreement) having occurred and (v) customary closing conditions regarding the accuracy of the representations and warranties and compliance by the parties with the respective obligations under the LAMS Asset Purchase Agreement.

The proposed transaction is not subject to a financing condition and is expected to close by the end of the first quarter of 2025, subject to satisfaction of the foregoing conditions.

The businesses include approximately 12,000 miles of main pipeline in Louisiana and Mississippi serving more than 300,000 customers.

The Louisiana and Mississippi natural gas LDC businesses are reflected in CenterPoint Energy’s Natural Gas reportable segment and CERC’s single reportable segment, as applicable.

The transaction was approved by final orders issued by the MPSC on December 3, 2024 and the LPSC on December 17, 2024.

In February 2024, certain assets and liabilities representing the Louisiana and Mississippi natural gas LDC businesses met the held for sale criteria.

The sale will be considered an asset sale for tax purposes, requiring net deferred tax liabilities to be excluded from held for sale balances.

The Registrants record assets and liabilities held for sale at the lower of their carrying value or their estimated fair value less cost to sell.

Neither CenterPoint Energy nor CERC recognized any gains or losses upon classification of held for sale during the year ended December 31, 2024.

See Note 6 for further disclosure regarding the amount of goodwill allocated to the businesses to be sold.

The assets and liabilities of the Louisiana and Mississippi natural gas LDC businesses classified as held for sale in CenterPoint Energy’s and CERC’s Condensed Consolidated Balance Sheets, as applicable, included the following:

December 31, 2024

CenterPoint Energy CERC

(in millions)

Accounts receivable, net

Accrued unbilled revenues 26 26

Materials and supplies

Natural gas inventory 5 5

Property, plant and equipment, net 1,052 1,052

Goodwill 217 122

Regulatory assets 15 15

Total current assets held for sale $ 1,361 $ 1,266

Short-term borrowings $ 3 $ 3

Accounts payable 44 44

Customer deposits 14 14

Regulatory liabilities 31 31

Total current liabilities held for sale $ 176 $ 176

Although the Louisiana and Mississippi natural gas LDC businesses meet the held for sale criteria, their proposed disposals do not represent a strategic shift for CenterPoint Energy and CERC as both will retain significant operations in, and will continue to invest in, their natural gas businesses.

Therefore, the assets and liabilities associated with these transactions are not reflected as discontinued operations on CenterPoint Energy’s and CERC’s Condensed Statements of Consolidated Income, as applicable, and the December 31, 2023 Condensed Consolidated Balance Sheets were not required to be recast for assets held for sale.

Since the depreciation on the Louisiana and Mississippi natural gas LDC businesses assets will continue to be reflected in revenues through customer rates until the expected closing of the transaction and will be reflected in the carryover basis of the rate-regulated assets once sold, CenterPoint Energy and CERC will continue to record depreciation on those assets through the expected closing of the transaction.

The pre-tax income for the Louisiana and Mississippi natural gas LDC businesses, excluding interest and corporate allocations, included in CenterPoint Energy’s and CERC’s Statements of Consolidated Income is as follows:

Year Ended December 31,

2024 2023 2022

(in millions)

Income Before Income Taxes

$ 67 $ 44 $ 42

Divestiture of Energy Systems Group .

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The transaction closed on June 30, 2023, and CenterPoint Energy received $ 154 million in cash.

Additionally, as of December 31, 2023, CenterPoint Energy had a payable of

approximately $ 2 million to ESG Holdings Group for working capital and other adjustments set forth in the Equity Purchase Agreement.

In May 2023, certain assets and liabilities of Energy Systems Group met the held for sale criteria.

The divestiture of Energy Systems Group reflects CenterPoint Energy’s continued strategic focus on its core utility businesses.

The historical annual revenues, net income and total assets of Energy Systems Group did not have a sufficient effect, quantitatively or qualitatively, on CenterPoint Energy’s financial results to be considered a strategic shift.

Therefore, the income and expenses associated with Energy Systems Group were not reflected as discontinued operations on CenterPoint Energy’s Statements of Consolidated Income.

For disposal groups that are classified as held for sale but that do not meet the criteria for discontinued operations reporting, the assets and liabilities of the disposal group are required to be separately presented on the face of the balance sheet only in the initial period in which it is classified as held for sale.

Therefore, CenterPoint Energy’s Consolidated Balance Sheets as of December 31, 2022 were not recast to reflect Energy Systems Group’s assets and liabilities as held for sale.

Depreciation and amortization of long-lived assets ceased at the end of the quarter in which the held for sale criteria is met.

Additionally, as a result of the completion of the sale of Energy Systems Group in June 2023, there were no assets or liabilities classified as held for sale as of December 31, 2023.

For a discussion of guarantees and product warranties related to Energy Systems Group, see Note 15(c).

CenterPoint Energy recognized a loss on sale of approximately $ 13 million, including $ 3 million of transaction costs, during the twelve months ended December 31, 2023, in connection with the closing of the sale of Energy Systems Group.

Additionally, CenterPoint Energy recognized a current tax expense of $ 32 million during the twelve months ended December 31, 2023, as a result of the cash taxes payable upon the closing of the sale.

In November 2024, CenterPoint Energy paid $ 2 million to ESG Holdings Group for working capital and other adjustments set forth in the Equity Purchase Agreement.

For a discussion of CenterPoint Energy’s pre-disposition guarantees related to Energy Systems Group, see Note 14(c).

CenterPoint Energy recognized a loss on sale of approximately $ 13 million, including $ 3 million of transaction costs, during the year ended December 31, 2023, in connection with the closing of the sale of Energy Systems Group.

Additionally, CenterPoint Energy recognized a current tax expense of $ 32 million during the year ended December 31, 2023, as a result of the cash taxes payable upon the closing of the sale.

The pre-tax income (loss) for Energy Systems Group, excluding interest and corporate allocations, included in CenterPoint Energy’s Statements of Consolidated Income is as follows:

1 unchanged sentence

(in millions)

Income (Loss) from Continuing Operations Before Income Taxes $ ( 4 ) $ 2 $ ( 3 )

Income (Loss) Before Income Taxes

(1) Reflects January 1, 2023 to June 30, 2023 results only due to of the sale of Energy Systems Group.

5 unchanged sentences

The deferred taxes associated with the businesses were recognized as a deferred income tax benefit by CenterPoint Energy and CERC upon closing of the sale in 2022.

Although the Arkansas and Oklahoma Natural Gas businesses met the held for sale criteria as of December 31, 2021, their disposals did not represent a strategic shift to CenterPoint Energy and CERC, as both retained significant operations in, and continued to invest in, their natural gas businesses.

Therefore, the income and expenses associated with the disposed businesses were not reflected as discontinued operations on CenterPoint Energy’s and CERC’s Statements of Consolidated Income, as applicable.

Since the depreciation on the Arkansas and Oklahoma Natural Gas assets continued to be reflected in revenues through customer rates until the closing of the transaction and will be reflected in the carryover basis of the rate-regulated assets, CenterPoint Energy and CERC continued to record depreciation on those assets through the closing of the transaction.

The Registrants record assets and liabilities held for sale at the lower of their carrying value or their estimated fair value less cost to sell.

CenterPoint Energy and CERC recognized gains of $ 303 million and $ 557 million, respectively, net of transaction costs of $ 59 million, in connection with the closing of the disposition of the Arkansas and Oklahoma Natural Gas businesses during the year ended December 31, 2022.

CenterPoint Energy and CERC collected a receivable of $ 15 million in May 2022 for full and final settlement of the working capital adjustment under the AROK Asset Purchase Agreement.

Neither CenterPoint Energy nor CERC recognized any gains or losses on the measurement of assets held for sale during the year ended December 31, 2021.

See Note 6 for further information about the allocation of goodwill to the businesses to be disposed.

As a result of the completion of the sale of the Arkansas and Oklahoma Natural Gas businesses, there were no assets or liabilities classified as held for sale as of December 31, 2022.

Year Ended December 31,

(in millions)

Income from Continuing Operations Before Income Taxes $ 9 $ 78

(1) Reflects January 1, 2022 to January 9, 2022 results only due to of the sale of the Arkansas and Oklahoma Natural Gas businesses.

The pre-tax income for the Arkansas and Oklahoma Natural Gas businesses, excluding interest and corporate allocations, included in CenterPoint Energy’s and CERC’s Statements of Consolidated Income was $9 million for the year ended December 31, 2022, which only reflects January 1, 2022 to January 9, 2022 results due to the sale of the Arkansas and Oklahoma Natural Gas businesses previously described.

Effective on the date of the closing of the disposition of the Arkansas and Oklahoma Natural Gas businesses, a subsidiary of CenterPoint Energy entered into the Transition Services Agreement, whereby that subsidiary agreed to provide certain transition services such as accounting, customer operations, procurement, and technology functions for a term of up to twelve months.

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Actual transition services costs incurred are recorded net of amounts charged to Southern Col Midco.

CenterPoint Energy had no accounts receivable and accounts receivable of $ 1 million as of December 31, 2023 and 2022, respectively, from Southern Col Midco for transition services.

Divestiture of MES (CenterPoint Energy and CERC).

CenterPoint Energy, through its subsidiary CERC Corp., completed the sale of MES on August 31, 2021 to Last Mile Energy.

Prior to the transaction, MES provided temporary delivery of LNG and CNG throughout the contiguous 48 states and MES was reflected in CenterPoint Energy’s Natural Gas reportable segment and CERC’s single reportable segment, as applicable.

The MES disposal did not represent a strategic shift to CenterPoint Energy and CERC, as both retained significant operations in, and continued to invest in, their natural gas businesses.

Therefore, the income and expenses associated with MES are not reflected as discontinued operations on CenterPoint Energy’s and CERC’s Statements of Consolidated Income, as applicable.

CenterPoint Energy and CERC recognized a pre-tax gain on the sale of $ 8 million and $ 11 million, respectively, during year ended December 31, 2021.

See Note 6 for further information about the allocation of goodwill to the MES disposal.

Discontinued Operations (CenterPoint Energy)

CenterPoint Energy’s discontinued operations reflect the disposal of its interests in Enable, which represented a strategic shift that had a major effect on CenterPoint Energy’s operations and financial results.

As such, the equity in earnings of unconsolidated affiliates, net of tax, associated with CenterPoint Energy’s equity investment in Enable was reflected as discontinued operations on CenterPoint Energy’s Statements of Consolidated Income.

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

Year Ended December 31, 2021

(in millions)

Equity in earnings of unconsolidated affiliate, net $ 1,019

Income from discontinued operations before income taxes 1,019

Income tax expense 201

Net income from discontinued operations $ 818

CenterPoint Energy elected not to separately disclose discontinued operations on its Statements of Consolidated Cash Flows.

Except as discussed in Note 2, l ong-lived assets are not depreciated or amortized once they are classified as held for sale.

The following table summarizes CenterPoint Energy’s cash flows from discontinued operations and certain supplemental cash flow disclosures as applicable:

Year Ended December 31, 2021

Cash flows from operating activities:

(in millions)

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

Gain on Enable Merger $ ( 681 )

Equity in earnings of unconsolidated affiliate

Distributions from unconsolidated affiliate 155

Cash flows from investing activities:

Transaction costs related to the Enable Merger ( 49 )

Cash received related to Enable Merger 5

Disposal of Investment in Enable (CenterPoint Energy).

On December 2, 2021, Enable completed the previously announced Enable Merger pursuant to the Enable Merger Agreement entered into on February 16, 2021.

At the closing of the Enable Merger on December 2, 2021, Energy Transfer acquired 100 % of Enable’s outstanding common and preferred units, and, as a result, Enable Common Units owned by CenterPoint Energy were exchanged for Energy Transfer Common Units and Enable Series A Preferred Units owned by CenterPoint Energy were exchanged for Energy Transfer Series G Preferred Units.

During the year ended December 31, 2022, CenterPoint Energy sold all of its remaining Energy Transfer Common Units and Energy Transfer Series G Preferred Units.

See Note 11 for further information regarding Energy Transfer equity securities.

Distributions Received from Enable (CenterPoint Energy):

Year Ended December 31, 2021

Per Unit Cash Distribution

(in millions)

Enable Common Units $ 0.6610 $ 155

Enable Series A Preferred Units

Transactions with Enable (CenterPoint Energy and CERC):

The transactions with Enable through December 2, 2021 in the following tables exclude transactions with the Energy Services Disposal Group.

Year Ended December 31, 2021

(in millions)

Natural gas expenses, including transportation and storage costs (1)

(1) Included in Utility natural gas, fuel and purchased power on CenterPoint Energy’s Statements of Consolidated Income and in Utility natural gas on CERC’s Statements of Consolidated Income.

Summarized Financial Information for Enable (CenterPoint Energy)

Summarized consolidated income (loss) information for Enable is as follows:

Year Ended December 31, 2021 (1)

(in millions)

Operating revenues $ 3,466

Cost of sales, excluding depreciation and amortization 1,959

Depreciation and amortization 382

Operating income 634

Net income attributable to Enable Common Units 461

Reconciliation of Equity in Earnings (Losses), net before income taxes:

CenterPoint Energy’s interest $ 248

Basis difference amortization (2)

Loss on dilution, net of proportional basis difference recognition ( 1 )

Gain on Enable Merger 680

CenterPoint Energy’s equity in earnings (losses), net before income taxes (3)

(1) Reflects January 1, 2021 to December 2, 2021 results only due to the closing of the Enable Merger.

(2) Equity in earnings of unconsolidated affiliate includes CenterPoint Energy’s share of Enable earnings adjusted for the amortization of the basis difference of CenterPoint Energy’s original investment in Enable and its underlying equity in net assets of Enable.

The basis difference was being amortized through the year 2048 and ceased upon closing of the Enable Merger.

(3) Reported as discontinued operations on CenterPoint Energy’s Statements of Consolidated Income.

CenterPoint Energy had no accounts receivable as of December 31, 2023 from Southern Col Midco for transition services.

(5) Revenue Recognition

In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services.

In accordance with ASC 606, Revenue from Contracts with Customers, revenue is recognized when a customer obtains control of promised goods or services.

The amount of revenue recognized reflects the consideration to which the Registrants expect to be entitled to receive in exchange for these goods or services.

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Revenue from contracts with customers $ 4,558 $ 3,990 $ 4 $ 8,552

$ 4,275 $ 4,210 $ 127 $ 8,612

— ( 3 ) — ( 3 )

Eliminations — ( 2 ) — ( 2 )

Total revenues $ 4,590 $ 4,046 $ 7 $ 8,643

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Revenue from contracts with customers $ 4,275 $ 4,210 $ 127 $ 8,612

$ 4,095 $ 4,969 $ 263 $ 9,327

13 ( 23 ) 4 ( 6 )

Eliminations — ( 3 ) — ( 3 )

Total revenues $ 4,290 $ 4,276 $ 130 $ 8,696

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(1) Primarily consists of income from ARPs and leases.

Total lease income was $ 8 million, $ 7 million and $ 7 million for each of the years ended December 31, 2023, 2022 and 2021, respectively.

Houston Electric

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Revenue from contracts with customers $ 3,930 $ 3,684 $ 3,417

$ 3,684 $ 3,417 $ 3,117

( 7 ) ( 5 ) 17

Other (1) 9 ( 7 ) ( 5 )

Total revenues $ 3,939 $ 3,677 $ 3,412

$ 3,677 $ 3,412 $ 3,134

(1) Primarily consists of income from ARPs and leases.

Lease income was not significant for the years ended December 31, 2023, 2022, and 2021.

Year Ended December 31,

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Revenue from contracts with customers $ 3,868 $ 4,083 $ 4,816

$ 4,083 $ 4,816 $ 4,148

Total revenues $ 3,925 $ 4,149 $ 4,800

(1) Primarily consists of income from ARPs and leases.

Lease income was $ 4 million, $ 3 million and $ 3 million, respectively, for the years ended December 31, 2023, 2022 and 2021.

Revenues from Contracts with Customers

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Contract Balances.

When the timing of delivery of service is different from the timing of the payments made by customers and when the right to consideration is conditioned on something other than the passage of time, the Registrants recognize either a contract asset (performance precedes billing) or a contract liability (customer payment precedes performance).

When the timing of delivery of service is different from the timing of the payments made by customers and when the right to consideration is conditioned on something other than the passage of time, the Registrants recognize a contract liability when customer payment precedes performance.

Those customers that prepay are represented by contract liabilities until the performance obligations are satisfied.

The Registrants’ contract assets are included in Accrued unbilled revenues and contract liabilities are included in Accounts payable and Other current liabilities in their Consolidated Balance Sheets.

CenterPoint Energy’s contract assets and contract liabilities primarily related to Energy Systems Group contracts where revenue was recognized using the input method prior to the sale of Energy Systems Group that was completed on June 30, 2023.

The opening and closing balances of accounts receivable, other accrued unbilled revenue, contract assets and contract liabilities from contracts with customers are as follows:

The Registrants’ contract liabilities are included in Accounts payable and Other current liabilities in their Consolidated Balance Sheets.

The opening and closing balances of accounts receivable, accrued unbilled revenues and contract liabilities from contracts with customers are as follows:

CenterPoint Energy

Accounts Receivable Other Accrued Unbilled Revenues Contract

Contract Liabilities (1)

Accounts Receivable Accrued Unbilled Revenues Contract Liabilities

(in millions)

Opening balance as of December 31, 2023 $ 652 $ 516 $ 2

$ 858 $ 764 $ 4 $ 45

Closing balance as of December 31, 2024

Increase (decrease) $ ( 206 ) $ ( 248 ) $ ( 4 ) $ ( 43 )

(1) Decrease primarily related to the completed sale of Energy Systems Group on June 30, 2023.

The amount of revenue recognized in the year ended December 31, 2024 that was included in the opening contract liability was $ 2 million.

The difference between the opening and closing balances of the contract liabilities primarily results from the timing difference between CenterPoint Energy’s performance and the customer’s payment.

Houston Electric

Accounts Receivable Other Accrued Unbilled Revenues Contract Liabilities

Accounts Receivable Accrued Unbilled Revenues Contract Liabilities

(in millions)

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Closing balance as of December 31, 2024 284 137 2

Increase (decrease)

$ 9 $ ( 5 ) $ —

The amount of revenue recognized in the year ended December 31, 2024 that was included in the opening contract liability was $ 2 million.

Accounts Receivable Other Accrued

The difference between the opening and closing balances of the contract liabilities primarily results from the timing difference between Houston Electric’s performance and the customer’s payment.

Accounts Receivable Accrued

Unbilled Revenues

2 unchanged sentences

Closing balance as of December 31, 2024 326 338

$ ( 148 ) $ ( 244 )

Increase (decrease)

CERC does not have any opening or closing contract asset or contract liability balances.

Remaining Performance Obligations (CenterPoint Energy).

Following the completed sale of Energy Systems Group on June 30, 2023, CenterPoint Energy had no remaining performance obligations.

Practical Expedients and Exemption.

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Allowance for Credit Losses and Bad Debt Expense

CenterPoint Energy and CERC segregate financial assets that fall under the scope of Topic 326, primarily trade receivables due in one year or less, into portfolio segments based on shared risk characteristics, such as geographical location and regulatory environment, for evaluation of expected credit losses.

CenterPoint Energy and CERC segregate financial assets that fall under the scope of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, primarily trade receivables due in one year or less, into portfolio segments based on shared risk characteristics, such as geographical location and regulatory environment, for evaluation of expected credit losses.

Historical and current information, such as average write-offs, are applied to each portfolio segment to estimate the allowance for losses on uncollectible receivables.

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For a discussion of regulatory deferrals, see Note 7.

The table below summarizes the Registrants’ bad debt expense amounts for 2023, 2022 and 2021, net of regulatory deferrals, including those related to COVID-19:

The table below summarizes the Registrants’ bad debt expense amounts for 2024, 2023 and 2022, net of regulatory deferrals:

Year Ended December 31,

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Bad debt expense $ 21 $ 1 $ 16 $ 18 $ — $ 16 $ 20 $ — $ 17

Bad debt expense deferred as regulatory asset — — — — — — 16 8 8

(6) Goodwill and Other Intangibles (CenterPoint Energy and CERC)

Goodwill (CenterPoint Energy)

CenterPoint Energy’s goodwill by reportable segment is as follows:

December 31, 2022 Disposals December 31, 2023

(6) Goodwill (CenterPoint Energy and CERC)

CenterPoint Energy’s goodwill by reportable segment is as follows for the periods presented:

Electric (1) Natural Gas Corporate and Other Total

(in millions)

$ 936 $ — $ 936

2,920 — 2,920

Corporate and Other 438 134 (2) 304

Total $ 4,294 $ 134 $ 4,160

(1) Amount presented is net of the accumulated goodwill impairment charge of $ 185 million recorded in 2020.

Balance at December 31, 2022 $ 936 $ 2,920 $ 438 $ 4,294

Disposal (2) — — 134 134

Balance at December 31, 2023 936 2,920 304 4,160

Held for Sale (3) — 217 — 217

Balance at December 31, 2024 $ 936 $ 2,703 $ 304 $ 3,943

(1) Balances are presented net of the accumulated goodwill impairment charge of $ 185 million recorded in 2020.

(2) Represents goodwill attributable to the sale of Energy Systems Group.

For further information, see Note 4.

CERC’s goodwill as of both December 31, 2023 and December 31, 2022 was $ 1,583 million.

When the net assets or equity interest transferred in a common-control transaction constitute a business, goodwill is included with the net assets transferred at the parent company’s historical basis.

CenterPoint Energy applied a relative fair value methodology to determine the amount of goodwill to allocate to CERC from its natural gas reporting unit as part of the Restructuring.

When a disposal group reflects a component of a reporting unit and meets the definition of a business, the goodwill within that reporting unit is allocated to the disposal group based on the relative fair value of the components representing a business that will be retained and disposed.

As described further in Note 4, certain assets and liabilities of Energy Systems Group, including goodwill of $ 134 million at CenterPoint Energy, were disposed of upon consummation of the sale of Energy Systems

Group in the second quarter of 2023.

The disposal of goodwill attributable to Energy Systems Group was reflected in the loss on sale of $ 13 million during the year ended December 31, 2023.

CenterPoint Energy and CERC perform goodwill impairment tests at least annually and evaluate goodwill when events or changes in circumstances indicate that its carrying value may not be recoverable.

The impairment evaluation for goodwill is performed by comparing the fair value of each reporting unit with the carrying amount of the reporting unit, including goodwill.

The reporting units approximate the reportable segments, with the exception of Energy Systems Group, which is a separate reporting unit but included in Corporate and Other at CenterPoint Energy.

The estimated fair value of the reporting unit is primarily determined based on an income approach or a weighted combination of income and market approaches.

If the carrying amount is in excess of the estimated fair value of the reporting unit, then the excess amount is recorded as an impairment charge, not to exceed the carrying amount of goodwill.

See Note 2(g) for further discussion.

CenterPoint Energy and CERC performed the annual goodwill impairment tests in the third quarter of each of 2023 and 2022 and determined that no goodwill impairment charge was required for any reporting unit as a result of those tests.

Other Intangibles (CenterPoint Energy)

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

The intangible assets and associated amortization expense were primarily related to Energy Systems Group prior to the completion of the sale in June 2023 as indicated below.

As a result, there are no intangible assets to report as of December 31, 2023.

See Note 4 for further information.

(3) Represents goodwill attributable to the Louisiana and Mississippi natural gas LDC businesses classified as held for sale as of December 31, 2024.

CenterPoint Energy did not recognize any goodwill impairments within the Natural Gas reportable segment for the year ended December 31, 2024.

For further information, see Note 4.

There were no events impacting CERC’s goodwill for the year ended December 31, 2023.

CERC’s goodwill is as follows for the periods presented:

December 31, 2023 Held for Sale (1)

December 31, 2024

Gross Carrying Amount Accumulated Amortization Net Balance

(in millions)

Customer relationships (1)

$ 1,583 $ 122 $ 1,461

Trade names (1)

Operation and maintenance agreements (1) (2)

Other 2 ( 1 ) 1

Total $ 63 $ ( 25 ) $ 38

(1) Related to Energy Systems Group prior to the completion of the sale in June 2023.

Amortization ceased at June 30, 2023, the end of the quarter in which the held for sale criteria was met.

See Note 4 for further information.

(2) Amortization expense related to the operation and maintenance agreements is included in Non-utility cost of revenues, including natural gas on CenterPoint Energy’s Statements of Consolidated Income.

Amortization ceased at June 30, 2023, the end of the quarter in which the held for sale criteria was met.

See Note 4 for further information.

Year Ended December 31,

2023 2022 2021

(in millions)

Amortization expense of intangible assets recorded in Depreciation and amortization

Amortization expense of intangible assets recorded in Non-utility cost of revenues, including natural gas

(1) Represents goodwill attributable to CERC to be disposed of as part of the potential sale of the Louisiana and Mississippi natural gas LDC businesses was classified as held for sale as of December 31, 2024.

CERC did not recognize any goodwill impairments during the year ended December 31, 2024.

For further information, see Note 4.

CenterPoint Energy and CERC performed their annual goodwill impairment tests in the third quarter of each of 2024 and 2023 and determined that no goodwill impairment charge was required for any reporting unit as a result of those tests.

(7) Regulatory Matters

6 unchanged sentences

Benefit obligations (1) $ 373 $ — $ 4

$ 379 $ — $ 5

Asset retirement obligations & other 304 80 188

3 unchanged sentences

Cost recovery riders 145 — 83

Hurricane and February 2021 Winter Storm Event restoration costs 149 123 26

Hurricanes and February 2021 Winter Storm Event Restoration Costs

May 2024 Storm Events 86 86 —

Hurricane Beryl 458 458 —

Hurricane Francine

Other regulatory assets 177 87 74

Gas recovery costs 27 — 27

Decoupling 12 — 12

COVID-19 incremental costs 12 8 4

TEEEF costs 48 48 —

Temporary generation costs

Unrecognized equity return (2) ( 115 ) ( 77 ) ( 30 )

( 63 ) ( 39 ) ( 16 )

Total amounts deferred for future recovery 998 789 139

6 unchanged sentences

Regulatory assets related to TCJA 47 47 —

Hurricane Harvey restoration costs 17 17 —

Hurricanes and February 2021 Winter Storm Event Restoration Costs

Other regulatory assets 34 — 34

Benefit obligations 4 4 —

Emergency Generation Costs

Temporary generation costs

Unrecognized equity return (3)

6 unchanged sentences

Total Non-Current Regulatory Assets

$ 3,108 $ 1,284 $ 903

Regulatory Liabilities:

6 unchanged sentences

Total Non-Current Regulatory Liabilities

$ 2,999 $ 861 $ 1,887

December 31, 2023

4 unchanged sentences

Benefit obligations (1) $ 379 $ — $ 5

$ 392 $ — $ 5

Asset retirement obligations & other 290 75 186

2 unchanged sentences

Amounts deferred for future recovery related to:

Extraordinary gas costs 1,073 — 1,073

Cost recovery riders 113 — 73

Hurricane and February 2021 Winter Storm Event restoration costs 129 113 16

Hurricanes and February 2021 Winter Storm Event restoration costs

Other regulatory assets 147 59 72

2 unchanged sentences

COVID-19 incremental costs

TEEEF costs 182 182 —

Temporary generation costs

Unrecognized equity return (2) ( 63 ) ( 39 ) ( 16 )

9 unchanged sentences

Benefit obligations 11 11 —

Temporary generation costs

Unrecognized equity return (4)

21 unchanged sentences

(a) CenterPoint Energy’s allowed equity return on post in-service carrying cost generally associated with investments in Indiana;

(b) Houston Electric’s allowed equity return on its true-up balance of stranded costs, other changes and related interest resulting from the formerly integrated electric utilities prior to Texas deregulation to be recovered in rates through 2024 and certain storm restoration balances;

(b) Houston Electric’s allowed equity return on certain storm restoration balances and (c) CERC’s allowed equity return on post in-service carrying cost associated with certain distribution facilities replacements expenditures in Texas.

(4) Represents the following:

(a) CenterPoint Energy’s allowed equity return on post in-service carrying cost generally associated with investments in Indiana;

(b) Houston Electric’s allowed equity return on its true-up balance of stranded costs, other changes and related interest resulting from the formerly integrated electric utilities prior to Texas

deregulation to be recovered in rates through 2024 and certain storm restoration balances;

and (c) CERC’s allowed equity return on post in-service carrying cost associated with certain distribution facilities replacements expenditures in Texas.

2 unchanged sentences

Regulatory assets not earning a return with perpetual or undeterminable lives have been excluded from the weighted average recovery period calculation.

(5) Current regulatory assets for both CenterPoint Energy and CERC include extraordinary gas costs of $ 86 million and $ 1,175 million as of December 31, 2023 and 2022, respectively.

(6) Current regulatory liabilities are included in Other current liabilities in each of the Registrants’ respective Consolidated Balance Sheets.

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

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

Year Ended December 31,

3 unchanged sentences

Allowed equity return recognized $ 23 $ 20 $ 2 $ 41 $ 38 $ 2 $ 45 $ 42 $ 2

Indiana Electric Securitization of Generation Retirements (CenterPoint Energy)

On January 4, 2023, the IURC issued an order in accordance with Indiana Senate Enrolled Act 386 authorizing the issuance of up to $ 350 million in securitization bonds to securitize qualified costs associated with the retirements of Indiana Electric’s A.B.

Brown coal-fired generation facilities.

Accordingly, CenterPoint Energy determined that the retirement of property, plant and equipment became probable upon the issuance of the order.

No loss on abandonment was recognized in connection with issuance of the order as there was no disallowance of all or part of the cost of the abandoned property, plant and equipment.

In the first quarter of 2023, upon receipt of the order, CenterPoint Energy reclassified property, plant and equipment to be recovered through securitization to a regulatory asset and such amounts continued to earn a full return until recovered through securitization.

The SIGECO Securitization Subsidiary issued $ 341 million aggregate principal amount of the SIGECO Securitization Bonds on June 29, 2023.

See Note 13 for further details of the issuance of the SIGECO Securitization Bonds.

The SIGECO Securitization Subsidiary used a portion of the net proceeds from the issuance of the SIGECO Securitization Bonds to purchase the securitization property from SIGECO.

No gain or loss was recognized.

The SIGECO Securitization Bonds are secured by the securitization property, which includes the right to recover, through non-bypassable securitization charges payable by SIGECO’s retail electric customers, the qualified costs of SIGECO authorized by the IURC order.

SIGECO has no payment obligations with respect to the SIGECO Securitization Bonds except to remit collections of securitization charges as set forth in a servicing agreement between SIGECO and the SIGECO Securitization Subsidiary.

The non-bypassable securitization charges are subject to a true-up mechanism.

February 2021 Winter Storm Event

2 unchanged sentences

The overall natural gas market, including the markets from which CenterPoint Energy and CERC sourced a significant portion of their natural gas for their operations, experienced significant impacts caused by the February 2021 Winter Storm Event, resulting in extraordinary increases in the cost of natural gas purchased by CenterPoint Energy and CERC of approximately $ 2 billion.

CenterPoint Energy and CERC have completed recovery of natural gas costs in Mississippi, Indiana and Texas discussed further below, and continue to recover the natural gas cost in Louisiana and Minnesota.

CenterPoint Energy and CERC have completed recovery of natural gas costs in Mississippi, Indiana, Louisiana and Texas, and continue to recover the natural gas cost in Minnesota.

As of December 31, 2024, CenterPoint Energy and CERC had each recorded current regulatory assets of $ 67 million and non-current regulatory assets of $ 67 million associated with the February 2021 Winter Storm Event.

As of December 31, 2023, CenterPoint Energy and CERC have each recorded current regulatory assets of $ 86 million and non-current regulatory assets of $ 130 million associated with the February 2021 Winter Storm Event.

December 31, 2022, CenterPoint Energy and CERC have each recorded current regulatory assets of $ 1,175 million and non-current regulatory assets of $ 202 million associated with the February 2021 Winter Storm Event.

In Minnesota, the MPUC issued its written order on October 19, 2022 disallowing CERC’s recovery of approximately $ 36 million of the $ 409 million incurred, and CERC’s regulatory asset balance was reduced to reflect the disallowance.

CERC filed a petition for reconsideration on November 8, 2022 and a written order denying the petition for reconsideration was issued on January 6, 2023.

On August 24, 2023, the LPSC Staff issued an audit report which recommends some prospective process changes to the gas supply bid process and did not recommend any disallowance of February 2021 Winter Storm Event gas costs incurred in Louisiana.

Recovery of such costs remains subject to LPSC approval.

On December 19, 2023, the LPSC issued an order which accepted and approved the audit report.

As of both December 31, 2023 and 2022, as authorized by the PUCT, CenterPoint Energy and Houston Electric recorded a regulatory asset of $ 8 million for bad debt expenses resulting from REPs’ default on their obligation to pay delivery charges to Houston Electric net of collateral.

Additionally, as of December 31, 2023 and 2022, both CenterPoint Energy and Houston Electric recorded a regulatory asset of $ 17 million and $ 16 million, respectively, and will request reimbursement of costs associated with the February 2021 Winter Storm Event in Houston Electric’s next rate case.

As of December 31, 2024 and 2023, as authorized by the PUCT, both CenterPoint Energy and Houston Electric had each recorded a regulatory asset of $ 8 million for bad debt expenses resulting from REPs’ default on their obligation to pay delivery charges to Houston Electric net of collateral.

Additionally, both CenterPoint Energy and Houston Electric had each recorded a regulatory asset of $ 19 million and $ 17 million as of December 31, 2024 and 2023, respectively, and requested reimbursement of costs associated with the February 2021 Winter Storm Event in Houston Electric’s rate case, which was filed in March 2024.

On January 29, 2025 Houston Electric announced that a settlement agreement was reached with certain parties to the rate case filed on March 6, 2024, including the City of Houston and other regional municipalities.

Subject to PUCT review and approval, the settlement is expected to result in approximately $ 50 million less annual revenue and an average decrease of approximately $ 1 a month for residential customers based on average usage of 1,000 kWh per month.

See Note 14(d) for further information regarding litigation related to the February 2021 Winter Storm Event.

3 unchanged sentences

Incremental carrying costs incurred after August 2022 until the date the proceeds were received are recorded in a separate regulatory asset;

the current Texas Gas rate proceeding includes a request for recovery of this regulatory asset.

the most recent CERC rate proceeding in Texas included a request for recovery of this regulatory asset and was included in the settlement agreement approved by the Railroad Commission in June 2024.

As CenterPoint Energy and CERC have no future financial obligations for the repayment of the state’s customer rate relief bonds, the customer rate relief bonds are not recorded on CenterPoint Energy’s or CERC’s balance sheets.

The $ 1.1 billion in cash proceeds from the state’s customer rate relief bonds is considered to be a government grant.

The state’s customer rate relief bonds are backed in part by customer rate relief property, including customer rate relief charges, which are non-bypassable uniform monthly volumetric charges to be paid by all existing and future customers as a component of each regulated utility’s gas cost, separate from their base rate.

The state’s customer rate relief bonds are backed in part by customer rate relief property, including customer rate relief charges, which are non-bypassable uniform monthly volumetric charges to be paid by all existing and future sales customers as a component of each regulated utility’s gas cost, separate from their base rate.

CERC only acts as a collection agent, whose duties include management, servicing and administration of a portion of the customer rate relief property which is associated with the customer rate relief charge imposed on customers of CERC under the guidance and direction from the Railroad Commission.

2 unchanged sentences

While the customer rate relief charges will be included by CERC in their monthly billings, the billing amount is established by the Railroad Commission.

CERC will remit all customer rate relief charges to the financing entity set up by the Railroad Commission.

CERC will remit all customer rate relief charges collected to the financing entity set up by the Railroad Commission.

Therefore, the collection and servicing of customer rate relief charges have no impact on the respective Statements of Consolidated Income of CenterPoint Energy or CERC.

generally accepted accounting principles have no specific accounting guidance for government grants or assistance, the cash proceeds from the state’s customer rate relief bonds were accounted for as a government grant by analogy to the grant model under IAS 20—Accounting for Government Grants and Disclosures of Government Assistance.

GAAP has no specific accounting guidance for government grants or assistance, the cash proceeds from the state’s customer rate relief bonds were accounted for as a government grant by analogy to the grant model under IAS 20—Accounting for Government Grants and Disclosures of Government Assistance.

CenterPoint Energy and CERC reflect the proceeds from the grant as a deduction to natural gas costs and recognized the $ 1.1 billion of cash proceeds from the state’s customer rate relief bonds within Utility natural gas expense on their respective Statements of Consolidated Income in the year ended December 31, 2023, net of the recognition of natural gas cost related to relieving CenterPoint Energy and CERC’s regulatory assets related to the February 2021 Winter Storm Event in the same period.

Indiana Electric Securitization of Generation Retirements (CenterPoint Energy)

Brown coal-fired generation facilities.

Accordingly, CenterPoint Energy determined that the retirement of property, plant and equipment became probable upon the issuance of the order.

No loss on abandonment was recognized in connection with issuance of the order as there was no disallowance of all or part of the cost of the abandoned property, plant and equipment.

The SIGECO Securitization Subsidiary issued $ 341 million aggregate principal amount of the SIGECO Securitization Bonds on June 29, 2023.

The SIGECO Securitization Subsidiary used a portion of the net proceeds from the issuance of the SIGECO Securitization Bonds to purchase the securitization property from SIGECO.

No gain or loss was recognized.

The SIGECO Securitization Subsidiary, and not SIGECO, is the owner of the securitization property, and the assets of the SIGECO Securitization Subsidiary are not available to pay the creditors of SIGECO or its affiliates, other than the SIGECO Securitization Subsidiary.

The non-bypassable securitization charges are subject to a true-up mechanism.

Houston Electric TEEEF

Pursuant to legislation passed in 2021, Houston Electric entered into two leases for TEEEF (mobile generation) which are detailed in Note 20.

Houston Electric initially sought recovery of the lease costs and the applicable return as of December 31, 2021 under these lease agreements of approximately $ 200 million in its DCRF application field with the PUCT on April 5, 2022, and subsequently amended on July 1, 2022, to show mobile generation in a separate Rider TEEEF.

A final order was issued on April 5, 2023 approving a reduced revenue requirement of $ 39 million that results in full recovery of costs requested

but lengthens the amortization period for the short-term lease to be collected over 82.5 months.

Pursuant to legislation passed in 2021, Houston Electric entered into two leases for TEEEF (temporary generation) which are detailed in Note 19.

2022, and subsequently amended on July 1, 2022, to show temporary generation in a separate Rider TEEEF.

A final order was issued on April 5, 2023 approving a revenue requirement of $ 39 million that results in full recovery of costs requested but lengthens the amortization period for the short-term lease to be collected over 82.5 months.

On May 25, 2023, the PUCT issued its order on rehearing which clarified some of the findings but did not change the approval of TEEEF cost recovery.

Additional motions for rehearing were filed and the PUCT issued an order on August 3, 2023 denying the motions for rehearing.

The deadline for a party to file a judicial appeal of the PUCT’s decision was September 5, 2023, and no appeal was filed.

As such, the PUCT’s decision on the first TEEEF filing is now final and non-appealable.

On April 5, 2023, Houston Electric made its second TEEEF filing requesting recovery of TEEEF related costs incurred through December 31, 2022.

Houston Electric is requesting a new annual revenue requirement of approximately $ 188 million u sing 78 months to amortize the related deferred costs for proposed rates beginning September 2023, a net increase in TEEEF revenues of approximately $ 149 million .

On June 7, 2023, intervenors jointly requested a hearing, and on June 14, 2023, the PUCT staff indicated that it does not oppose a hearing in this docket.

On June 21, 2023 Houston Electric made a filing that a hearing is not necessary given the PUCT’s decision in the TEEEF docket filed in 2022 and indicated that if the PUCT does refer this case to the State Office of Administrative Hearings, any preliminary order issued by the PUCT should be limited.

On July 18, 2023 the PUCT referred the case to the State Office of Administrative Hearings and, on July 20, 2023, the PUCT issued a preliminary order identifying the issues to be addressed.

The PUCT’s decision on the first TEEEF filing is now final and non-appealable.

On April 5, 2023, Houston Electric made its second TEEEF filing requesting recovery of TEEEF related costs incurred through December 31, 2022, which requested a new annual revenue requirement of approximately $ 188 million u sing 78 months to amortize the related deferred costs for proposed rates beginning September 2023, a net increase in TEEEF revenues of approximately $ 149 million .

On August 28, 2023, the State Office of Administrative Hearings issued an Order setting interim rates to collect an annual revenue requirement at the filed amount.

Interim rates became effective on September 1, 2023 and are subject to surcharge or refund if they differ from the final rates approved by the PUCT.

On October 12, 2023, a joint motion to abate was filed because the parties reached an agreement in principle on all issues.

The agreement in principle reduces the annual revenue requirement by approximately $ 35 million based on recovering the balance as of December 31, 2022 over a 102 month amortization period (instead of the 78 month period in the initial filing) and also allows for revised interim rates (to incorporate the agreement in principle and the initial interim rates that have been in place since September 1, 2023).

The updated interim rates were implemented December 15, 2023.

The agreement in principle is subject to PUCT approval which was granted in its order issued on February 1, 2024.

Interim rates became effective on September 1, 2023, subject to surcharge or refund if they differ from the final rates approved by the PUCT.

An agreement in principle was reached which reduced the annual revenue requirement by approximately $ 35 million based on recovering the balance as of December 31, 2022 over a 102-month amortization period (instead of the 78-month period in the initial filing) and also allowed for revised interim rates (to incorporate the agreement in principle and the initial interim rates that have been in place since September 1, 2023).

The updated interim rates were implemented on December 15, 2023 and approved by the PUCT pursuant to its order issued on February 1, 2024 when the PUCT approved the agreement in principle.

The PUCT’s decision on the second TEEEF filing is final and non-appealable.

On September 11, 2024, the TCA filed a complaint with the PUCT requesting that the PUCT modify its rulings with respect to its prior decisions related to the TEEEF filings made in 2022 and 2023.

Specifically, TCA requested that the PUCT end cost recovery and return on investment on all the large 32 MW and 5 MW TEEEF units approved in docket 53442.

On October 2, 2024, Houston Electric filed a response to the TCA complaint and requested that the complaint be dismissed due to the principles of res judicata and collateral estoppel.

On October 8, 2024, TCA supplemented its complaint and on October 9, 2024, PUCT staff filed a statement of position stating that Houston Electric’s response provided a strong argument for dismissal of the complaint, but also stating that it would be prudent to have a thorough legal argument from TCA.

On October 10, 2024, PUCT issued Order No.

2 finding the TCA complaint insufficient and requiring supplemental information or amendment from TCA by October 24, 2024;

TCA filed supplemental information on October 24, 2024.

On November 14, 2024, PUCT issued Order No.

4 denying the motion to reconsider and extending a deadline.

On December 16, 2024, PUCT issued Order No.

5 granting waiver of the requirement for informal disposition and soliciting commission staff recommendation by January 16, 2025.

On January 16, 2025, PUCT staff filed a supplemental recommendation recommending that the TCA has not met its requirement to first present its complaint to the City of Houston prior to presenting it to the PUCT.

On January 17, 2025 the case was abated until February 28, 2025 to enable the TCA to present its complaint to the City of Houston.

On December 19, 2024, Houston Electric announced a proposal to release Houston Electric’s 15 large 27 MW to 32 MW TEEEF units to the San Antonio area prior to the summer of 2025.

The proposal is intended to help ERCOT address a potential energy shortfall and Load Shed risk and to provide additional electric generation capacity to support growing energy demand in the greater San Antonio region.

Under the proposal, Houston Electric would not receive revenue or profit from ERCOT and would also not charge Houston-area customers for these TEEEF units for the period when they are in San Antonio serving ERCOT, which is currently expected to be for a period of up to two years.

Houston Electric would anticipate receiving revenues from one or more future transactions after the period the units are utilized to temporarily serve an energy need in the San Antonio area, and would therefore plan to continue to not charge customers for these units for any future periods.

The proposal has not been finalized and is subject to the negotiation of definitive documentation among the relevant parties, as well as being subject to the approval of ERCOT and other stakeholders.

It is not certain that mutually agreeable definitive documentation will be entered into at all or that all approvals will be obtained.

Houston Electric defers costs associated with the short-term and long-term leases that are probable of recovery and would otherwise be charged to expense in a regulatory asset, including allowed debt returns, and determined that such regulatory assets remain probable of recovery as of December 31, 2024.

Right of use finance lease assets, such as assets acquired under the long-term leases, are evaluated for impairment under the long-lived asset impairment model by assessing if a capital disallowance from a regulator is probable through monitoring the outcome of rate cases and other proceedings.

Houston Electric continues to monitor the on-going proceedings and did not record any impairments on its right of use assets in the years ended December 31, 2023 or 2022.

Houston Electric did not record any impairments on its right of use assets or regulatory asset in the years ended December 31, 2024 and 2023.

See Note 19 for further information.

May 2024 Storm Events

Houston Electric’s service territory experienced sudden and destructive severe weather events in May 2024 that included hurricane-like winds and tornadoes.

The May 2024 Storm Events caused significant damage to Houston Electric’s electric

delivery system.

As of December 31, 2024, Houston Electric had recorded $ 345 million in Property, plant and equipment and $ 73 million in Regulatory assets, excluding carrying costs, for such restoration costs.

Based on currently available information, as of December 31, 2024, Houston Electric estimates that total costs to restore the electric delivery facilities damaged as a result of the May 2024 Storm Events will be approximately $ 458 million, excluding carrying costs.

These preliminary estimates are subject to revision as certain restoration costs are expected to be incurred through the end of 2025.

As is common with electric utilities serving coastal regions, the poles, towers, wires, street lights and pole-mounted equipment that comprise Houston Electric’s transmission and distribution system are not covered by property insurance.

Houston Electric is deferring certain storm restoration costs as management believes it is probable that such costs will be recovered through the regulatory process.

On November 8, 2024, Houston Electric filed an Application for Determination of System Restoration Costs with the PUCT.

The application seeks a determination as to the reasonableness and necessity of approximately $ 502 million of costs (including estimated case processing expenses and carrying costs) incurred or expected to be incurred to restore service following the May 2024 Storm Events.

On January 10, 2025, intervenors filed testimony recommending various disallowances ranging from $ 4.1 million to $ 101.9 million.

On January 17, 2025, PUCT staff filed testimony recommending no adjustments to Houston Electric’s request.

Houston Electric’s rebuttal testimony was filed January 21, 2025.

On January 29, 2025, the parties represented to the ALJ that a settlement in principle had been reached and requested an abatement to memorialize and finalize the settlement.

The case was abated and parties will file finalized settlement documents or a status update by February 26, 2025.

Prior to authorizing Houston Electric to recover these costs, the PUCT must first determine the amount of reasonable and necessary system restoration costs.

On January 24, 2025, Houston Electric filed a request for a Financing Order for the distribution costs included in the November 8, 2024 Application for Determination of System Restoration Costs.

The ultimate recovery of the costs (or a portion thereof) is expected to be sought through the issuance and sale of non-recourse securitization bonds for distribution-related costs and the TCOS capital mechanism for transmission-related costs.

However, neither the amount nor timing of the recovery is certain.

See Note 12 for further information regarding a term loan facility to fund certain costs related to the May 2024 Storm Events.

Hurricane Beryl

On July 8, 2024, Hurricane Beryl made landfall in Texas, bringing sustained winds, storm surges and torrential rain into Houston Electric’s service territory.

Hurricane Beryl caused significant damage to Houston Electric’s electric delivery system.

Based on currently available information, as of December 31, 2024, Houston Electric estimates that total costs to restore the electric delivery facilities damaged as a result of Hurricane Beryl will be approximately $ 1.1 billion, excluding carrying costs.

As of December 31, 2024, Houston Electric had recorded $ 654 million in Property, plant and equipment and $ 442 million in Regulatory assets, excluding carrying costs, for such restoration costs.

Houston Electric is deferring certain storm restoration costs as management believes it is probable that such costs will be recovered through the regulatory process.

Similar to the costs related to the May 2024 Storm Events, insurance coverage was not available for damages to much of our transmission and distribution assets.

The ultimate recovery of the costs (or a portion thereof) relating to Hurricane Beryl is expected to be sought through the issuance and sale of non-recourse securitization bonds for distribution-related costs.

However, neither the amount nor timing of the recovery is certain.

(8) Stock-Based Incentive Compensation Plans and Employee Benefit Plans

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Forfeitures are estimated on the date of grant based on historical averages and estimates are updated periodically throughout the vesting period.

The performance awards granted in 2023, 2022 and 2021 are distributed based upon the achievement of certain objectives over a three-year performance cycle.

The stock unit awards granted in 2023, 2022 and 2021 are service based, subject to the achievement of a performance goal.

The stock unit awards generally vest at the end of a three-year period;

however, stock unit awards granted to non-employee directors vest immediately upon grant.

Upon vesting, shares of the performance awards and stock unit awards are issued to the participants along with the value of dividend equivalents earned over the performance cycle or vesting period.

The following table summarizes CenterPoint Energy’s expenses related to LTIPs for 2023, 2022 and 2021:

The performance awards granted in 2024, 2023 and 2022 are distributed based upon the achievement of certain performance conditions or market conditions over a three-year performance cycle.

The performance conditions are based on CenterPoint Energy’s cumulative adjusted EPS and certain carbon emissions reduction goals.

The market condition is based on CenterPoint Energy’s total shareholder return relative to a specified peer group.

Upon vesting, shares under the performance awards, as determined based on achievement of the applicable performance goals, are issued to the participants along with the value of dividend equivalents earned over the performance cycle.

The stock unit awards granted in 2024, 2023 and 2022 are service based and subject to CenterPoint Energy’s achievement of positive operating income for the last full calendar year preceding the applicable vesting date.

Stock units awarded in 2024 are service based, and vest under a three-year ratable vesting schedule, with one-third vesting as of each of the first three anniversaries of the grant date.

Each vesting is subject to the achievement of a performance goal.

Stock unit awards granted to employees in 2023 and 2022 cliff vest at the end of a three-year period.

Stock unit awards granted to non-employee directors vest immediately upon grant.

Upon vesting, shares under the stock unit awards are issued to the participants along with the value of dividend equivalents earned over the applicable vesting period.

The following table summarizes CenterPoint Energy’s expenses related to LTIPs for the periods presented:

Year Ended December 31,

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LTIP compensation expense (1) $ 34 $ 65 $ 51

$ 65 $ 51 $ 48

Income tax benefit recognized 8 15 12

Actual tax benefit realized for tax deductions 19 17 6

(1) Amounts presented in the table above are included in Operation and maintenance expense in CenterPoint Energy’s Statements of Consolidated Income and shown prior to any amounts capitalized.

The following tables summarize CenterPoint Energy’s LTIP activity for 2023

Year Ended December 31, 2023

(1) Included in Operation and maintenance expense in CenterPoint Energy’s Statements of Consolidated Income, net of any amounts capitalized.

The following tables summarize CenterPoint Energy’s LTIP activity for the year ended December 31, 2024:

(Thousands) Weighted-Average

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(2) Reflects the impact of current expectations of achievement and stock price.

Additional information related to the Performance Awards and Stock Unit Awards is as follows:

Additional information related to the Performance Awards and Stock Unit Awards was as follows for the periods presented:

Year Ended December 31,

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(b) Pension Benefits (CenterPoint Energy)

CenterPoint Energy maintains a non-contributory qualified defined benefit pension plan covering eligible employees and is closed to new participants, with benefits determined using a cash balance formula.

In addition to the non-contributory qualified defined benefit pension plan, CenterPoint Energy maintains unfunded non-qualified benefit restoration plans which allow participants to receive the benefits to which they would have been entitled under CenterPoint Energy’s non-contributory qualified pension plan except for federally mandated limits on qualified plan benefits or on the level of compensation on which qualified plan benefits may be calculated.

CenterPoint Energy also maintains three additional qualified defined benefit pension plans, two of which are closed to new participants and one of which is completely frozen, and a non-qualified supplemental retirement plan.

The defined benefit pension plans cover eligible full-time regular employees and retirees of Vectren and are primarily non-contributory.

In December 2022, the CenterPoint Energy pension plan completed an annuity lift-out, a transaction that provided for the purchase of an irrevocable group annuity contract to fund pension plan annuities of retirees from previously divested businesses, as part of a de-risking strategy.

This annuity lift-out reduced the plan’s pension obligation by $ 138 million and plan assets by $ 136 million which were transferred to an insurance company.

CenterPoint Energy maintains a non-contributory qualified defined benefit pension plan covering certain eligible employees, which is closed to new participants.

CenterPoint Energy also maintains three additional qualified defined benefit pension plans, two of which are closed to new participants and one of which is frozen, that cover certain eligible employees and retirees of Vectren and are primarily non-contributory.

In addition to the qualified defined benefit pension plans, CenterPoint Energy maintains unfunded non-qualified benefit restoration plans which allow participants to receive the benefits to which they would have been entitled under CenterPoint Energy’s qualified pension plan except for federally mandated limits on qualified plan benefits or on the level of compensation on which qualified plan benefits may be calculated.

CenterPoint Energy also maintains a frozen non-qualified supplemental retirement plan covering certain former executives of Vectren.

In December 2022, the CenterPoint Energy Retirement Plan, a tax-qualified defined benefit pension plan, completed the 2022 Annuity Purchase to fund the annuities of certain retirees of the non-regulated business units of CenterPoint Energy (including previously divested businesses), as part of a de-risking strategy.

The 2022 Annuity Purchase reduced the plan’s benefit obligation by $ 138 million and plan assets by $ 136 million, which were transferred to the annuity provider.

The $ 138 million transferred benefit obligation represented 9.4 % of CenterPoint Energy’s total benefit obligation as of its last remeasurement prior to the transaction.

As a result of this transaction, CenterPoint Energy incurred a settlement charge of $ 47 million.

In addition, CenterPoint Energy was relieved of all responsibility for these pension obligations’ and an insurance company is now required to pay and administer the retirement benefits owed to 1,119 retirees and beneficiaries, with no changes to the amount, timing or form of retirement benefit payments.

CenterPoint Energy’s net periodic cost includes the following components relating to pension, including the non-qualified benefit plans:

In addition, CenterPoint Energy was relieved of all responsibility for these pension obligations and the annuity

provider assumed the obligation to pay and administer the pension benefits for the 1,119 impacted retirees and beneficiaries, with no changes to the amount, timing or form of the benefit payments.

CenterPoint Energy’s net periodic cost includes the following components relating to pension, including the non-qualified benefit plans, for the periods presented:

Year Ended December 31,

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Service cost (1) $ 25 $ 25 $ 29

$ 25 $ 29 $ 39

Interest cost (2) 73 76 73

Expected return on plan assets (2) ( 75 ) ( 76 ) ( 87 )

( 76 ) ( 87 ) ( 103 )

Amortization of net loss (2) 28 28 31

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Net periodic cost $ 51 $ 53 $ 172

(1) Amounts presented in the table above are included in Operation and maintenance expense in CenterPoint Energy’s Statements of Consolidated Income, net of regulatory deferrals and amounts capitalized.

(2) Amounts presented in the table above are included in Other, net in CenterPoint Energy’s Statements of Consolidated Income, net of regulatory deferrals.

(1) Included in Operation and maintenance expense in CenterPoint Energy’s Statements of Consolidated Income, net of amounts capitalized and regulatory deferrals.

(2) Included in Other income (expense), net in CenterPoint Energy’s Statements of Consolidated Income, net of regulatory deferrals.

(3) A one-time, non-cash settlement cost is required when the total lump sum distributions or other settlements of plan benefit obligations during a plan year exceed the service cost and interest cost components of the net periodic cost for that year.

In 2023 and 2022, CenterPoint Energy recognized non-cash settlement cost due to lump sum settlement payments.

The transfer of assets related to the 2022 Annuity Lift-Out is considered a lump sum settlement payment.

CenterPoint Energy used the following assumptions to determine net periodic cost relating to pension benefits:

The transfer of assets related to the 2022 Annuity Purchase is considered a lump sum settlement payment.

CenterPoint Energy used the following assumptions to determine net periodic cost relating to pension benefits for the periods presented:

Year Ended December 31,

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In determining net periodic benefit cost, CenterPoint Energy uses fair value, as of the beginning of the year, as its basis for determining expected return on plan assets except for two of Vectren’s qualified defined benefit pension plans which use a market related value of assets.

The following table summarizes changes in the benefit obligation, plan assets, the amounts recognized in the Consolidated Balance Sheets as well as the key assumptions of CenterPoint Energy’s pension plans.

The measurement dates for plan assets and obligations were December 31, 2023 and 2022.

The following table summarizes changes in the benefit obligation, changes in plan assets, the amounts recognized in the Consolidated Balance Sheets as well as the key actuarial assumptions of CenterPoint Energy’s pension plans.

The measurement dates for plan assets and benefit obligations were December 31, 2024 and 2023.

December 31, 2024 December 31, 2023

(in millions, except for actuarial assumptions)

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Actuarial (gain) loss (1) ( 42 ) 41

Plan amendment — —

Benefit obligation, end of year 1,477 1,548

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Discount rate (2) 5.60 % 4.95 %

4.95 % 5.15 %

Expected return on plan assets (3) 7.00 6.50

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Interest crediting rate 3.00 3.00

(1) Significant sources of loss for 2023 include the decrease in discount rate from 5.15 % to 4.95 %, partially offset by significant sources of gain that include actual return on assets exceeding expected return on plan assets during 2023.

(1) Significant sources of actuarial gain for 2024 include the increase in discount rate from 4.95 % to 5.60 %, offset by losses due to expected return on plan assets exceeding actual return on plan assets.

(2) The discount rate assumption was determined by matching the projected cash flows of CenterPoint Energy’s plans against a hypothetical yield curve of high-quality corporate bonds represented by a series of annualized individual discount rates from one-half to 99 years.

(3) The expected rate of return assumption was developed using the targeted asset allocation of CenterPoint Energy’s plans and the expected return for each asset class.

(4) Benefits paid for 2022 includes $ 136 million related to the 2022 Annuity Lift-Out.

The following table displays pension benefits related to CenterPoint Energy’s pension plans that have accumulated benefit obligations in excess of plan assets:

The following table displays pension benefits related to CenterPoint Energy’s pension plans that have accumulated benefit obligations in excess of plan assets as of the dates presented:

December 31, 2024 December 31, 2023

(Qualified) Pension

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CenterPoint Energy provides certain healthcare and life insurance benefits for eligible retired employees on both a contributory and non-contributory basis.

The Registrants’ employees (other than employees of Vectren and its subsidiaries) who were hired before January 1, 2018 and who have met certain age and service requirements at retirement, as defined in the plans, are eligible to participate in these benefit plans, provided, however, that life insurance benefits are available only for eligible retired employees who retired before January 1, 2022.

The Registrants’ employees (other than employees of Vectren and its subsidiaries) who were hired before January 1, 2018 and who have met certain age and service requirements at retirement, as defined in the plan, are eligible to participate in these benefits, provided, however, that life insurance benefits are available only for eligible retired employees who retired before January 1, 2022.

Employees hired on or after January 1, 2018 are not eligible for these benefits, except that such employees represented by IBEW Local Union 66 are eligible to participate in certain of the benefits, subject to the applicable age and service requirements.

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Postretirement benefits are accrued over the active service period of employees.

The net postretirement benefit cost includes the following components:

The net postretirement benefit cost includes the following components for the periods presented:

Year Ended December 31,

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Service cost (1) $ 1 $ — $ 1 $ 1 $ — $ 1 $ 2 $ — $ 1

$ 1 $ — $ 1 $ 2 $ — $ 1 $ 2 $ — $ 1

Interest cost (2) 13 5 4 13 5 5 9 4 3

13 5 5 9 4 3 9 4 3

Expected return on plan assets (2) ( 6 ) ( 4 ) ( 1 ) ( 5 ) ( 4 ) ( 1 ) ( 5 ) ( 4 ) ( 1 )

( 5 ) ( 4 ) ( 1 ) ( 5 ) ( 4 ) ( 1 ) ( 4 ) ( 3 ) ( 1 )

Amortization of prior service cost (credit) (2) ( 2 ) ( 5 ) 2 ( 2 ) ( 5 ) 2 ( 3 ) ( 4 ) 2

( 2 ) ( 5 ) 2 ( 3 ) ( 4 ) 2 ( 4 ) ( 5 ) 1

Amortization of net loss (2) ( 8 ) ( 4 ) ( 3 ) ( 8 ) ( 4 ) ( 3 ) ( 4 ) ( 2 ) ( 1 )

Net postretirement benefit cost (credit) $ ( 2 ) $ ( 8 ) $ 3 $ ( 1 ) $ ( 8 ) $ 4 $ ( 1 ) $ ( 6 ) $ 4

(1) Amounts presented in the table above are included in Operation and maintenance expense in each of the Registrants’ respective Statements of Consolidated Income, net of regulatory deferrals and amounts capitalized.

(2) Amounts presented in the table above are included in Other, net in each of the Registrants’ respective Statements of Consolidated Income, net of regulatory deferrals.

The following assumptions were used to determine net periodic cost relating to postretirement benefits:

(1) Included in Operation and maintenance expense in each of the Registrants’ respective Statements of Consolidated Income, net of amounts capitalized and regulatory deferrals.

(2) Included in Other income (expense), net in each of the Registrants’ respective Statements of Consolidated Income, net of regulatory deferrals.

The following assumptions were used to determine net periodic cost relating to postretirement benefits for the periods presented:

Year Ended December 31,

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Expected return on plan assets 5.21 5.36 4.77 5.13 5.26 4.69 3.22 3.32 2.86

5.13 5.26 4.69 3.22 3.32 2.86 3.20 3.30 2.85

The following table summarizes changes in the benefit obligation, plan assets, the amounts recognized in consolidated balance sheets and the key assumptions of the postretirement plans.

The following table summarizes changes in the benefit obligation, changes in plan assets, the amounts recognized in the Consolidated Balance Sheets and the key actuarial assumptions of the postretirement plans.

The measurement dates for plan assets and benefit obligations were December 31, 2024 and 2023.

December 31, 2024 December 31, 2023

CenterPoint Energy Houston Electric CERC CenterPoint Energy Houston Electric CERC

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Benefits paid ( 21 ) ( 8 ) ( 9 ) ( 20 ) ( 8 ) ( 8 )

Plan amendment — — — 3 — 2

Actuarial (gain) loss (1) ( 22 ) ( 9 ) ( 8 ) — ( 1 ) —

Other transfers

Benefit obligation, end of year 242 104 85 263 113 93

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Actual investment return 6 4 2 10 8 2

Other transfers

( 8 ) ( 8 ) — — — —

Fair value of plan assets, end of year 103 77 26 112 86 26

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Year that the cost trend rates reach the ultimate trend rate - Post-65 2034 2034 2034 2033 2033 2033

(1) Significant sources of loss for 2023 include updated life insurance rates and the decrease in discount rate from 5.15 % to 4.95 %.

(1) Significant sources of actuarial gain for 2024 include increase in discount rate from 4.95 % to 5.60 %, offset by losses from updated claims and demographic review.

(2) The discount rate assumption was determined by matching the projected cash flows of the plans against a hypothetical yield curve of high-quality corporate bonds represented by a series of annualized individual discount rates from one-half to 99 years.

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To the extent that excess liability does not relate to a rate-regulated utility, the offset is recorded as a reduction to equity in accumulated other comprehensive income.

Amounts recognized in accumulated other comprehensive loss (gain) consist of the following:

Amounts recognized in accumulated other comprehensive loss (income) consist of the following as of the dates presented:

December 31, 2024 December 31, 2023

Benefits Postretirement

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Unrecognized prior service cost — 9 8 — 12 10

Net amount recognized in accumulated other comprehensive loss (gain)

$ 69 $ ( 22 ) $ ( 17 ) $ 70 $ ( 23 ) $ ( 17 )

The changes in plan assets and benefit obligations recognized in other comprehensive income during 2023 are as follows:

Net amount recognized in accumulated other comprehensive loss (income) $ 52 $ ( 25 ) $ ( 18 ) $ 69 $ ( 22 ) $ ( 17 )

The changes in plan assets and benefit obligations recognized in other comprehensive income for the year ended December 31, 2024 are as follows:

Benefits Postretirement

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(in millions)

Net loss (gain) $ 2 $ — $ 1

Amortization of net loss ( 3 ) 2 ( 2 )

Net actuarial loss (gain)

$ ( 13 ) $ ( 4 ) $ —

Amortization of net actuarial loss (gain)

( 4 ) 2 ( 2 )

Amortization of prior service cost — ( 1 ) 1

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Fixed income 54 % 64 %

The following tables set forth by level, within the fair value hierarchy (see Note 10), CenterPoint Energy’s pension plan assets at fair value as of December 31, 2023 and 2022:

Fair Value Measurements as of December 31,

The following tables set forth by level, within the fair value hierarchy (see Note 9), CenterPoint Energy’s pension plan assets at fair value as of the dates presented:

December 31, 2024 December 31, 2023

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

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Cash $ 36 $ — $ — $ 36 $ 21 $ — $ — $ 21

Corporate bonds:

Investment grade or above — 469 — 469 — 467 — 467

Equity securities:

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Cash received as collateral from securities lending 88 — — 88 94 — — 94

94 — — 94 47 — — 47

Obligation to return cash received as collateral from securities lending ( 88 ) — — ( 88 ) ( 94 ) — — ( 94 )

treasuries and government agencies 156 — — 156 178 — — 178

Corporate bonds:

Investment grade or above — 428 — 428 — 469 — 469

Mortgage-backed securities

— 12 — 12 — 15 — 15

Asset-backed securities

— 1 — 1 — 1 — 1

Municipal bonds — 19 — 19 — 25 — 25

International government bonds — 13 — 13 — 9 — 9

Obligation to return cash received as collateral from securities lending

( 94 ) — — ( 94 ) ( 47 ) — — ( 47 )

Financial instruments — ( 3 ) — ( 3 ) — ( 4 ) — ( 4 )

— ( 4 ) — ( 4 ) — — — —

Total investments at fair value $ 220 $ 470 $ — 690 $ 229 $ 515 $ — 744

Investments measured by net asset value per share or its equivalent (1) (2) 442 460

Total Investments

Fair value of plan assets

$ 1,132 $ 1,204

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(2) The amounts invested in pooled investment funds were 100% allocated to real estate.

The amounts invested common collective trust funds were allocated as follows:

As of December 31,

The amounts invested common collective trust funds were allocated as follows as of the dates presented:

December 31, 2024 December 31, 2023

International equities 38 % 40 %

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Level 2 investments, which do not have a quoted price in active market, are valued using the market data provided by independent pricing services or major market makers, to arrive at a price a dealer would pay for the security.

The pension plans utilized both exchange traded and over-the-counter financial instruments such as futures, interest rate options and swaps that were marked to market daily with the gains/losses settled in the cash accounts.

The pension plans did not include any holdings of CenterPoint Energy Common Stock as of December 31, 2024 or 2023.

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Cash 0 % 2 % 0 % 2 % 0 % 2 %

The following table sets forth by level, within the fair value hierarchy (see Note 10), the Registrants’ postretirement plan assets at fair value as of December 31, 2023 and 2022:

Fair Value Measurements as of December 31,

(Level 3) Total

The following table sets forth by level, within the fair value hierarchy (see Note 9), the Registrants’ postretirement plan assets, all of which were mutual funds, at fair value as of the dates presented:

December 31, 2024 December 31, 2023

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

(in millions)

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CERC 26 — — 26 26 — — 26

The amounts invested in mutual funds were allocated as follows:

As of December 31,

The amounts invested in mutual funds were allocated as follows as of the dates presented:

December 31, 2024 December 31, 2023

CenterPoint Energy Houston Electric CERC CenterPoint Energy Houston Electric CERC

Fixed income 72 % 72 % 71 % 74 % 74 % 74 %

equities 19 % 18 % 21 % 20 % 19 % 22 %

International equities 7 % 8 % 7 % 8 % 9 % 6 %

Fixed income 74 % 74 % 72 % 72 % 72 % 71 %

(g) Benefit Plan Contributions

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Postretirement benefit plans 9 1 5 8 1 5

The following benefit payments are expected to be paid by the pension and postretirement benefit plans:

Benefits Postretirement Benefits

Benefit payments are expected to be paid by the pension and postretirement benefit plans as follows:

Pension Benefits Postretirement Benefits

Energy CenterPoint

11 unchanged sentences

Participating Registrants provide matching contributions and, as of January 1, 2020, for certain eligible employees, non-elective contributions up to certain limits.

CenterPoint Energy, through the Merger, also acquired additional defined contribution retirement savings plans sponsored by Vectren and its subsidiaries that are qualified under sections 401(a) and 401(k) of the Code, one of which merged into the CenterPoint Energy Savings Plan as of January 1, 2020 and one of which merged into the CenterPoint Energy Savings Plan as of January 1, 2022.

As of January 1, 2022, the CenterPoint Energy Savings Plan is the only remaining qualified defined contribution retirement savings plan maintained by CenterPoint Energy.

The CenterPoint Energy Savings Plan has significant holdings of Common Stock.

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CenterPoint Energy allocates the savings plan benefit expense to Houston Electric and CERC related to their respective employees.

The following table summarizes the Registrants’ savings plan benefit expense for 2023, 2022 and 2021:

The following table summarizes the Registrants’ savings plan benefit expense for the periods presented:

Year Ended December 31,

2 unchanged sentences

(in millions)

Savings plan benefit

Savings plan benefit expenses (1)

$ 72 $ 27 $ 23 $ 67 $ 23 $ 20 $ 72 $ 23 $ 22

1 unchanged sentence

(i) Other Benefits Plans

The Registrants participate in CenterPoint Energy’s plans that provide postemployment benefits for certain former or inactive employees, their beneficiaries and covered dependents, after employment but before retirement (primarily healthcare and life insurance benefits for participants in the long-term disability plan).

CenterPoint Energy maintains non-qualified deferred compensation plans that provide benefits payable to eligible directors, officers and select employees or their designated beneficiaries at specified future dates or upon termination, retirement or death.

Benefit payments are made from the general assets of the participating Registrants or, in the case of certain plans, from a rabbi trust that is a grantor trust and remains subject to the claims of general creditors under applicable state and federal law.

Expenses related to other benefit plans were recorded as follows:

Expenses related to other benefit plans were recorded as follows for the periods presented:

Year Ended December 31,

2 unchanged sentences

(in millions)

Postemployment benefits

$ ( 1 ) $ — $ — $ 4 $ 1 $ 1 $ 3 $ 1 $ 2

Deferred compensation plans $ 3 $ — $ — $ ( 1 ) $ — $ — $ 1 $ — $ —

( 1 ) — — 1 — — 3 — —

Amounts related to other benefit plans were included in Benefit Obligations in the Registrants’ accompanying Consolidated Balance Sheets as follows:

2 unchanged sentences

(in millions)

Postemployment benefits $ 5 $ 2 $ 3 $ 9 $ 3 $ 4

Deferred compensation plans $ 22 $ 3 $ 1 $ 26 $ 3 $ 1

2 unchanged sentences

CenterPoint Energy has a change in control plan, which was amended and restated on May 1, 2017.

The plan generally provides, to the extent applicable, in the case of a change in control of CenterPoint Energy and covered termination of employment, for severance benefits of up to three times annual base salary plus bonus, and other benefits.

The plan generally provides, to the extent applicable, in the case of the occurrence of both a change in control of CenterPoint Energy and a covered

termination of employment, for severance benefits of up to three times annual base salary plus bonus and other benefits.

Certain CenterPoint Energy officers are participants under the plan.

Certain key employees of a subsidiary of Vectren have employment agreements that provide payments and other benefits upon a covered termination of employment.

As of December 31, 2024, the Registrants’ employees were covered by collective bargaining agreements as follows:

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IBEW Local 66 May 2026 17 % 53 % — %

17 % 53 % — %

OPEIU Local 12 December 2025 2 % — % 2 %

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UWUA Local 175 October 2027

40 % 53 % 48 %

The collective bargaining agreements with Teamsters Local 135 related to SIGECO employees and Utility Workers Union of America, Local 175 related to VEDO employees are scheduled to expire in September 2024 and October 2024, respectively, and negotiations of these agreements are expected to be completed before the respective expirations.

Board of Directors Actions .

On July 22, 2021, CenterPoint Energy announced the decision of the independent directors of the Board to implement a new independent Board leadership and governance structure and appointed a new independent chair

of the Board.

To implement this new governance structure, the independent directors of the Board eliminated the Executive Chairman position that was formerly held by Milton Carroll.

On the approval and recommendation of the Compensation Committee and approval of the Board (acting solely through its independent directors), CenterPoint Energy entered into a separation agreement between CenterPoint Energy and Mr.

Carroll, dated July 21, 2021.

Under the terms of the separation agreement, Mr.

Carroll exited the positions of Executive Chairman on July 21, 2021 and Board member on September 30, 2021.

Under the terms of the separation agreement, Mr.

Carroll received a lump sum cash payment of $ 28 million and his separation was treated as an “enhanced retirement” for purposes of his outstanding 2019, 2020 and 2021 equity award agreements.

On the approval and recommendation of the Compensation Committee and approval of the Board (acting solely through its independent directors), CenterPoint Energy has entered into a retention incentive agreement with David J.

Lesar, President and Chief Executive Officer of CenterPoint Energy, dated July 20, 2021.

For information about the classification of this award, see Note 12.

(9) Derivative Instruments

The Registrants are exposed to various market risks.

These risks arise from transactions entered into in the normal course of business.

The Registrants, from time to time, utilize derivative instruments such as swaps and options to mitigate the impact of changes in commodity prices, weather and interest rates on operating results and cash flows.

(a) Non-Trading Activities

Commodity Derivative Instruments (CenterPoint Energy and CERC).

CenterPoint Energy and CERC, through the Indiana Utilities they respectively own, enter into certain derivative instruments, including physical forward contracts, to mitigate the effects of commodity price movements.

Outstanding derivative instruments designated as economic hedges at the Indiana Utilities hedge long-term variable rate natural gas purchases.

The Indiana Utilities have authority to refund and recover mark-to-market gains and losses associated with hedging natural gas purchases, and thus the gains and losses on derivatives are deferred in a regulatory liability or asset.

All other financial instruments do not qualify or are not designated as cash flow or fair value hedges.

As of both December 31, 2023 and 2022, the notional volumes of both CenterPoint Energy’s and CERC’s natural gas derivatives were 27,421 MMBtu per day.

Interest Rate Risk Derivative Instruments.

From time to time, the Registrants may enter into interest rate derivatives that are designated as economic or cash flow hedges.

The objective of these hedges is to offset risk associated with interest rates borne by the Registrants in connection with an anticipated future fixed rate debt offering or other exposure to variable rate debt.

Houston Electric and the Indiana Utilities have authority to refund and recover mark-to-market gains and losses associated with hedging financing activity, and thus the gains and losses on derivatives are deferred in a regulatory liability or asset.

For the impacts of cash flow hedges to Accumulated other comprehensive income, see Note 12.

The table below summarizes CenterPoint Energy’s and Houston Electric’s outstanding interest rate hedging activity:

December 31, 2023 December 31, 2022

Hedging Classification Notional Principal

(in millions)

CenterPoint Energy:

Economic hedge (1)

Cash flow hedge (2) (3)

Houston Electric:

Cash flow hedge (3)

(1) Relates to interest rate derivative instruments at SIGECO that terminated on May 1, 2023 .

(2) Relates to interest rate derivative instruments at CenterPoint Energy with a termination date of December 31, 2029.

The interest rate swap agreements were designated as cash flow hedges of forecasted transactions.

CenterPoint Energy records all changes in the fair value of cash flow hedges in accumulated other comprehensive income (loss) until the underlying hedged transaction occurs, when it reclassifies that amount into earnings.

(3) Relates to interest rate derivative instruments at Houston Electric with a termination date of June 28, 2024.

The interest rate treasury lock agreements were designated as cash flow hedges of forecasted transactions.

Houston Electric records

all changes in the fair value of cash flow hedges to a regulatory asset or liability, which is amortized over the life of the associated debt being hedged.

(b) Derivative Fair Values and Income Statement Impacts

CenterPoint Energy’s outstanding interest rate derivatives designated as cash flow hedges described above were not material as of December 31, 2023 and are included in current non-trading derivative liabilities on CenterPoint Energy’s Consolidated Balance Sheets.

Houston Electric’s outstanding interest rate derivatives designated as cash flow hedges described above were not material as of December 31, 2023 and are included in prepaid expenses and other current assets on Houston Electric’s Consolidated Balance Sheets.

The tables below provide a balance sheet overview of CenterPoint Energy’s and CERC’s derivative assets and liabilities as of December 31, 2023 and 2022.

December 31, 2023 December 31, 2022

Balance Sheet Location Derivative

Fair Value Derivative

CenterPoint Energy:

(in millions)

Derivatives not designated as hedging instruments:

Natural gas derivatives (1)

Current Assets:

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

Interest rate derivatives Current Assets:

Non-trading derivative assets — — 1 —

Natural gas derivatives (1)

Other Assets:

Non-trading derivative assets — — 2 —

Natural gas derivatives (1)

Current Liabilities:

Non-trading derivative liabilities

Natural gas derivatives (1)

Other Liabilities:

Non-trading derivative liabilities

Indexed debt securities derivative (2)

Current Liabilities — 605 — 578

Total 39 % 53 % 47 %

(1) Natural gas contracts are subject to master netting arrangements.

This netting applies to all undisputed amounts due or past due.

However, the mark-to-market fair value of each natural gas contract is in a liability or asset position with no offsetting amount as of December 31, 2023 and 2022, respectively.

(2) Derivative component of the ZENS obligation that represents the ZENS holder’s option to receive the appreciated value of the reference shares at maturity and other payments to which they may be entitled.

See Note 11 for further information.

December 31, 2023 December 31, 2022

Balance Sheet Location Derivative

Fair Value Derivative Liabilities

Fair Value Derivative

Fair Value Derivative Liabilities

(in millions)

Derivatives not designated as hedging instruments:

Natural gas derivatives (1)

Current Assets:

Non-trading derivative assets $ — $ — $ 7 $ —

Natural gas derivatives (1)

Other Assets:

Non-trading derivative assets — — 2 —

Natural gas derivatives (1)

Current Liabilities:

Non-trading derivative liabilities — 8 — —

Natural gas derivatives (1)

Other Liabilities:

Non-trading derivative liabilities — 3 — —

Total $ — $ 11 $ 9 $ —

(1) Natural gas contracts are subject to master netting arrangements.

This netting applies to all undisputed amounts due or past due.

However, the mark-to-market fair value of each natural gas contract is in a liability or asset position with no offsetting amount as of December 31, 2023 and 2022, respectively.

The table below provides the related income statement impacts of derivative activity for the years ending December 31, 2023, 2022 and 2021.

Year Ended December 31,

Income Statement Location 2023 2022 2021

CenterPoint Energy:

(in millions)

Effects of derivatives not designated as hedging instruments:

Indexed debt securities derivative (1)

Gain (loss) on indexed debt securities $ ( 27 ) $ 325 $ 50

Total CenterPoint Energy

$ ( 27 ) $ 325 $ 50

(1) The indexed debt securities derivative is recorded at fair value and changes in the fair value are recorded in CenterPoint Energy’s Statements of Consolidated Income.

Certain of CenterPoint Energy’s and CERC’s derivative instruments contain provisions that require CenterPoint Energy and CERC to maintain an investment grade credit rating on their respective long-term unsecured unsubordinated debt from S&P and Moody’s.

If CenterPoint Energy’s or CERC’s debt were to fall below investment grade, it would be in violation of these provisions, and the counterparties to the derivative instruments could request immediate payment or additional collateral.

December 31, 2023 December 31, 2022

CenterPoint Energy CERC CenterPoint Energy CERC

(in millions)

Aggregate fair value of derivatives containing material adverse change provisions in a net liability position

$ 9 $ 8 $ — $ —

Fair value of collateral already posted — — — —

Additional collateral required to be posted if credit risk contingent features triggered 9 8 — —

The collective bargaining agreements with Gas Workers Union Local 340, IBEW Local 949 and OPEIU Local 12 related to CERC employees in Minnesota, as well as with IBEW Local 702 related to SIGECO employees, are scheduled to expire in April 2025, December 2025, December 2025 and June 2025, respectively, and negotiations of these agreements are expected to be completed before the respective expirations.

(9) Fair Value Measurements

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The Registrants determine the appropriate level for each financial asset and liability on a quarterly basis and recognize transfers between levels at the end of the reporting period.

The following tables present information about the Registrants’ assets and liabilities (including derivatives that are presented net) measured at fair value on a recurring basis as of December 31, 2023 and December 31, 2022, and indicate the fair value hierarchy of the valuation techniques utilized by the Registrants to determine such fair value.

As of December 31, 2024 and December 31, 2023, the Registrants did not have any assets or liabilities classified as Level 3.

The following tables present information about the Registrants’ assets and liabilities measured at fair value on a recurring basis as of December 31, 2024 and December 31, 2023 and indicate the fair value hierarchy of the valuation techniques utilized by the Registrants to determine such fair value:

CenterPoint Energy

5 unchanged sentences

Investments, including money market funds (1) 22 — — 22 31 — — 31

31 — — 31 32 — — 32

Interest rate derivatives

— — — — — 1 — 1

Natural gas derivatives (1)

— 1 — 1 — — — —

Total assets $ 583 $ 1 $ — $ 584 $ 572 $ — $ — $ 572

Indexed debt securities derivative $ — $ 619 $ — $ 619 $ — $ 605 $ — $ 605

$ — $ 605 $ — $ 605 $ — $ 578 $ — $ 578

Natural gas derivatives (2)

— 3 — 3 — 12 — 12

Total liabilities $ — $ 622 $ — $ 622 $ — $ 617 $ — $ 617

1 unchanged sentence

December 31, 2024 December 31, 2023

Level 1 Level 2 Level 3 Total

Level 2 Level 3 Total Level 1

Level 2 Level 3 Total

Assets (in millions)

Investments, including money market funds (1) $ 5 $ — $ — $ 5 $ 14 $ — $ — $ 14

$ 14 $ — $ — $ 14 $ 17 $ — $ — $ 17

Total assets $ 5 $ — $ — $ 5 $ 14 $ — $ — $ 14

December 31, 2024 December 31, 2023

Level 1 Level 2 Level 3 Total

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Assets (in millions)

Investments, including money market funds (1) $ 15 $ — $ — $ 15 $ 15 $ — $ — $ 15

$ 15 $ — $ — $ 15 $ 14 $ — $ — $ 14

Natural gas derivatives (1)

— 1 — 1 — — — —

Total assets $ 15 $ 1 $ — $ 16 $ 15 $ — $ — $ 15

2 unchanged sentences

Total liabilities $ — $ 2 $ — $ 2 $ — $ 11 $ — $ 11

(1) Amounts are included in Prepaid expenses and other current assets in the respective Consolidated Balance Sheets.

During 2023 and 2022, CenterPoint Energy did not have any assets or liabilities designated as Level 3.

(1) Included in Prepaid expenses and other current assets in the respective Consolidated Balance Sheets.

(2) Included in Other current liabilities in the respective Consolidated Balance Sheets.

Items Measured at Fair Value on a Nonrecurring Basis

For a discussion of the valuation of the Arkansas and Oklahoma Natural Gas businesses in 2021, see Note 4.

As a result of classifying the Louisiana and Mississippi natural gas LDC businesses as held for sale, CenterPoint Energy and CERC used a market approach consisting of contractual sales price adjusted for estimated working capital and other contractual purchase price adjustments to determine the fair value of the businesses classified as held for sale, which are Level 2 inputs.

Neither CenterPoint Energy nor CERC recognized any gains or losses upon classification as held for sale for the year ended December 31, 2024.

See Note 4 for further information.

Estimated Fair Value of Financial Instruments

The fair values of cash and cash equivalents, investments in debt and equity securities classified as “trading” and short-term borrowings are estimated to be approximately equivalent to carrying amounts and have been excluded from the table below.

The carrying amounts of non-trading derivative assets and liabilities and CenterPoint Energy’s equity securities, including ZENS related derivative liabilities, are stated at fair value and are excluded from the table below.

The fair value of each debt instrument is determined by multiplying the principal amount of each debt instrument by a combination of historical

trading prices and comparable issue data.

The fair values of cash and cash equivalents, investments in equity securities measured at fair value and short-term borrowings under AMAs are estimated to be approximately equivalent to carrying amounts and have been excluded from the table below.

The carrying amounts of non-trading derivative assets and liabilities and CenterPoint Energy’s ZENS indexed debt securities derivative are stated at fair value and are excluded from the table below.

The fair value of each debt instrument is determined by multiplying the principal amount of each debt instrument by a combination of historical trading prices and

comparable issue data.

These liabilities, which are not measured at fair value in the Registrants’ Consolidated Balance Sheets, but for which the fair value is disclosed, would be classified as Level 2 in the fair value hierarchy.

December 31, 2024 December 31, 2023

CenterPoint Energy (1)

Houston Electric (1)

CERC CenterPoint Energy (1)

Houston Electric (1)

Long-term debt, including current maturities

(in millions)

CenterPoint Energy (1) Houston Electric (1) CERC CenterPoint Energy (1) Houston Electric (1) CERC

Long-term debt, including current maturities (in millions)

Carrying amount $ 20,961 $ 8,822 $ 5,184 $ 18,609 $ 7,587 $ 4,670

$ 18,609 $ 7,587 $ 4,670 $ 16,338 $ 6,353 $ 4,826

17,804 6,917 4,627 14,990 5,504 4,637

(1) Includes Securitization Bond debt.

Fair value 19,597 7,746 5,032 17,804 6,917 4,627

(1) Includes Securitization Bonds, as applicable.

(10) Equity Securities and Indexed Debt Securities (ZENS) (CenterPoint Energy)

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Gains and losses on equity securities, net of transaction costs, are recorded as Gain (loss) on equity securities in CenterPoint Energy’s Statements of Consolidated Income.

The following table presents information on CenterPoint Energy's equity securities for each period indicated:

The following table presents unrealized gains (losses), net on equity securities owned by CenterPoint Energy for each period presented:

Year Ended December 31,

6 unchanged sentences

Energy Transfer Series G Preferred Units (1)

Total Gains (Losses) on Equity Securities

$ 31 $ ( 227 ) $ ( 172 )

(1) In 2022, CenterPoint Energy completed the execution of its previously announced plan to exit the midstream sector by selling the remaining Energy Transfer Common Units and Energy Transfer Series G Preferred Units it held.

CenterPoint Energy recorded unrealized gains (losses) of $ 31 million, $( 313 ) million, and $( 52 ) million for the years ended December 31, 2023, 2022, and 2021, respectively, for equity securities held as of December 31, 2023, 2022, and 2021.

CenterPoint Energy and its subsidiaries hold shares of certain securities detailed in the table below, which are classified as trading securities.

Total unrealized gains (losses) on equity securities, net $ 20 $ 31 $ ( 227 )

(1) In 2022, CenterPoint Energy completed the execution of its previously announced plan to exit the midstream sector by selling its remaining Energy Transfer Common Units and Energy Transfer Series G Preferred Units.

CenterPoint Energy and its subsidiaries hold shares of certain securities, which are classified as trading securities.

Shares of AT&T Common, Charter Common and WBD Common are expected to be held to facilitate CenterPoint Energy’s ability to meet its obligation under the ZENS.

The following table presented the shares held by CenterPoint Energy and their carrying value for each period presented:

Shares Held at December 31, Carrying Value at December 31,

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The number and identity of the reference shares attributable to each ZENS are adjusted for certain corporate events.

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

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

December 31, 2024 December 31, 2023

AT&T Common 0.7185 0.7185

2 unchanged sentences

CenterPoint Energy pays interest on the ZENS at an annual rate of 2 % plus the amount of any quarterly cash dividends paid in respect of the reference shares attributable to the ZENS.

The principal amount of the ZENS is subject to increases or decreases to the extent that the annual yield from interest and cash dividends on the reference shares is less than or more than 2.309 %.

The principal amount of the ZENS is subject to increases or decreases to the extent that the annual yield from interest and cash dividends on the reference shares attributable to the ZENS is less than or more than 2.309 %.

The adjusted principal amount is defined in the ZENS instrument as “contingent principal.” As of December 31, 2024, the ZENS, having an original principal amount of $ 828 million and a contingent principal amount of $ 9 million, were outstanding and were exchangeable, at the option of the holders, for cash equal to 95 % of the market value of the reference shares attributable to the ZENS.

3 unchanged sentences

The bifurcated debt component accretes through interest charges annually up to the contingent principal amount of the ZENS in 2029.

Such accretion will be reduced by annual cash interest payments, as described above.

The derivative component is recorded at fair value and changes in the fair value of the derivative component are recorded in CenterPoint Energy’s Statements of Consolidated Income.

Such accretion will be reduced by annual cash interest payments, as previously described.

The derivative component is recorded at fair value and changes in the fair value of the derivative component are recorded as Gain (loss) on indexed debt securities in CenterPoint Energy’s Statements of Consolidated Income.

Changes in the fair value of the ZENS-Related Securities held by CenterPoint Energy are expected to substantially offset changes in the fair value of the derivative component of the ZENS.

The following table sets forth summarized financial information regarding CenterPoint Energy’s investment in ZENS-Related Securities and each component of CenterPoint Energy’s ZENS obligation.

The following table provides summarized financial information related to CenterPoint Energy’s investment in ZENS-Related Securities and each component of CenterPoint Energy’s ZENS obligation for the periods presented:

Securities Debt

11 unchanged sentences

Distribution to ZENS holders — ( 2 ) —

Gain on indexed debt securities — — ( 325 )

Loss on ZENS-Related Securities ( 313 ) — —

Loss on indexed debt securities — — 27

Gain on ZENS-Related Securities 31 — —

Balance as of December 31, 2023 538 5 605

7 unchanged sentences

Dividends Declared and Paid (CenterPoint Energy)

CenterPoint Energy declared and paid dividends on its Common Stock during 2023, 2022 and 2021 as presented in the table below:

CenterPoint Energy’s dividends declared and dividends paid during 2024, 2023 and 2022 are presented below:

Dividends Declared Per Share Dividends Paid Per Share

2 unchanged sentences

Series A Preferred Stock (1) $ — $ 30.625 $ 61.250 $ — $ 61.250 $ 61.250

30.6250 61.2500 61.2500 61.2500 61.2500 61.2500

Series B Preferred Stock (2)

— — 35.0000 — — 52.5000

Series C Preferred Stock (3)

— — — — — 0.1600

(1) All of the outstanding shares of Series A Preferred Stock were redeemed during 2023 as further described below.

(2) All of the outstanding shares of Series B Preferred Stock were converted to Common Stock during 2021.

(3) The Series C Preferred Stock was entitled to participate in any dividend or distribution (excluding those payable in Common Stock) with the Common Stock on a pari passu, pro rata, as-converted basis.

The per share amount reflects the dividend per share of Common Stock as if the Series C Preferred Stock were converted into Common Stock.

All of the outstanding Series C Preferred Stock was converted to Common Stock during 2021.

Preferred Stock (CenterPoint Energy)

Liquidation Preference Per Share Shares Outstanding as of December 31, Outstanding Value as of December 31,

Common Stock (CenterPoint Energy)

(a) Underwritten Offering

On August 9, 2024, CenterPoint Energy issued 9,754,194 shares of Common Stock in an underwritten public offering at a price of $ 25.36 per share, for net proceeds of $ 247 million after deducting issuance costs.

The proceeds from the offering were used for the repayment of a portion of CenterPoint Energy’s then-outstanding commercial paper.

(b) Equity Distribution Agreement

On January 10, 2024, CenterPoint Energy entered into an Equity Distribution Agreement with certain financial institutions with respect to the offering and sale from time to time of shares of Common Stock, having an aggregate gross sales price of up to $ 500 million.

Sales of Common Stock may be made by any method permitted by applicable law and deemed to be an “at the market offering” as defined in Rule 415 of the Securities Act of 1933, as amended.

CenterPoint Energy may also enter into one or more forward sales agreements pursuant to master forward confirmations.

The offer and sale of Common Stock under the Equity Distribution Agreement will terminate upon the earliest of (1) the sale of all Common Stock subject to the Equity Distribution Agreement, (2) termination of the Equity Distribution Agreement or (3) May 17, 2026.

During the year ended

December 31, 2024, CenterPoint Energy issued 8,790,848 shares of Common Stock through the ATM Managers under the Equity Distribution Agreement, representing aggregate cash proceeds of $ 247 million, which was net of compensation paid by CenterPoint Energy to the ATM Managers of $ 2 million.

As of December 31, 2024, CenterPoint Energy had not entered into any forward sale agreements under the at-the-market program.

Additionally, as of December 31, 2024, CenterPoint Energy had $ 250 million of remaining capacity available under the program.

Series A Preferred Stock (CenterPoint Energy)

Liquidation Preference Per Share

Share Outstanding as of December 31,

Outstanding Value as of December 31,

2024 2023 2022 2024 2023 2022

1 unchanged sentence

Series A Preferred Stock (1) $ 1,000 — — 800,000 $ — $ — $ 790

$ 1,000 — 800,000 800,000 $ — $ 790 $ 790

— 800,000 800,000 $ — $ 790 $ 790

(1) All of the outstanding shares of Series A Preferred Stock were redeemed during 2023 as further described below.

Dividend Requirement on Preferred Stock

Income Allocated to Series A Preferred Shareholders

Year Ended December 31,

2 unchanged sentences

Series A Preferred Stock $ — $ 50 $ 49

Series B Preferred Stock — — 46

Total income allocated to preferred shareholders

$ 50 $ 49 $ 95

Series A Preferred Stock

Prior to the redemption of all outstanding shares of Series A Preferred Stock in September 2023, the aggregate liquidation value of the Series A Preferred Stock was $ 800 million with a per share liquidation value of $ 1,000 .

Prior to the redemption of all outstanding shares of Series A Preferred Stock in September 2023, as further described below, the aggregate liquidation value of the Series A Preferred Stock was $ 800 million with a per share liquidation value of $ 1,000 .

The Series A Preferred Stock was redeemable at CenterPoint Energy’s election on or after September 1, 2023, for cash at a redemption price of $ 1,000 per share, plus any accumulated and unpaid dividends thereon to, but excluding, the redemption date.

2 unchanged sentences

Cumulative dividends earned during the applicable periods are presented on CenterPoint Energy’s Statements of Consolidated Income as Preferred stock dividend requirement.

The Series A Preferred Stock, with respect to anticipated dividends and distributions upon CenterPoint Energy’s liquidation or dissolution, or winding-up of CenterPoint Energy’s affairs, ranked:

• senior to Common Stock and to each other class or series of capital stock established after the initial issue date of the Series A Preferred Stock that is expressly made subordinated to the Series A Preferred Stock;

• on a parity with any class or series of capital stock established after the initial issue date of the Series A Preferred Stock that is not expressly made senior or subordinated to the Series A Preferred Stock;

• junior to any class or series of capital stock established after the initial issue date of the Series A Preferred Stock that is expressly made senior to the Series A Preferred Stock;

• junior to all existing and future indebtedness (including indebtedness outstanding under CenterPoint Energy’s credit facilities, senior notes and commercial paper) and other liabilities with respect to assets available to satisfy claims against CenterPoint Energy;

• structurally subordinated to any existing and future indebtedness and other liabilities of CenterPoint Energy’s subsidiaries and capital stock of CenterPoint Energy’s subsidiaries held by third parties.

Voting Rights.

Holders of the Series A Preferred Stock generally did not have voting rights.

Redemption of Series A Preferred Stock.

On September 1, 2023, CenterPoint Energy redeemed all 800,000 outstanding shares of Series A Preferred Stock, in whole for cash at a redemption price of $ 1,000 per share, plus any accumulated and unpaid dividends thereon to, but excluding, the redemption date.

Temporary Equity (CenterPoint Energy)

Lesar, then President and Chief Executive Officer of CenterPoint Energy, dated July 20, 2021.

Pursuant to the retention incentive agreement, Mr.

Lesar received equity-based awards under CenterPoint Energy’s LTIP covering a total of 1 million shares of Common Stock (Total Stock Award), which were granted in multiple annual awards.

Lesar received 400 thousand restricted stock units in July 2021 that vested in December 2022 and 400 thousand restricted stock units and 200 thousand restricted stock units in February 2022 and February 2023, respectively, that vested in December 2023.

For accounting purposes, the 1 million shares under the Total Stock Award, consisting of the equity-based awards described above, were considered granted in July 2021.

In the event that death, disability, termination without cause or resignation for good reason, as defined in the retention incentive agreement, had occurred prior to the full Total Stock Award being awarded, CenterPoint Energy would have paid a lump sum cash payment equal to the value of the unawarded equity-based awards, based on the closing trading price of Common Stock on the date of the event’s occurrence.

Because the equity-based awards would have been redeemable for cash prior to being awarded upon events that were not probable at the grant date, the equity associated with any unawarded equity-based awards were classified as Temporary Equity as of December 31, 2022 on CenterPoint Energy’s Consolidated Balance Sheets.

As of December 31, 2023, all restricted stock units have been awarded to Mr.

Lesar and no amounts are reflected in Temporary Equity on CenterPoint Energy’s Consolidated Balance Sheets.

Accumulated Other Comprehensive Income (Loss) (CenterPoint Energy and CERC)

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

On September 1, 2023, CenterPoint Energy redeemed all 800,000 outstanding shares of Series A Preferred Stock, in whole for cash at a redemption price of $ 1,000 .

Accumulated Other Comprehensive Income (Loss) (CenterPoint Energy, Houston Electric and CERC)

Changes in accumulated other comprehensive income (loss) are as follows for the periods presented:

Year Ended December 31,

CenterPoint Energy CERC CenterPoint Energy CERC

CenterPoint Energy Houston Electric CERC CenterPoint Energy Houston Electric CERC

(in millions)

2 unchanged sentences

Remeasurement of pension and other postretirement plans 16 ( 1 ) 2 ( 8 ) — —

Amounts reclassified from accumulated other comprehensive loss:

Net deferred gain from cash flow hedges 4 — — 1 — —

Prior service cost (1)

Amounts reclassified from accumulated other comprehensive income (loss):

Prior service cost (benefit) (1) 1 — 1 1 — ( 2 )

Actuarial losses (gain) (1) 2 — ( 2 ) 1 — 2

Reclassification of deferred gain from cash flow hedges realized in net income

( 1 ) — — — — —

Actuarial losses (1)

Settlement (2)

Reclassification of deferred loss from cash flow hedges realized in net income — — 1 —

Tax benefit (expense) ( 4 ) — — 1 — —

Net current period other comprehensive income (loss) ( 4 ) — 33 6

Other comprehensive income (loss) 18 ( 1 ) 1 ( 4 ) — —

Ending Balance $ ( 17 ) $ ( 1 ) $ 17 $ ( 35 ) $ — $ 16

(1) Amounts are included in the computation of net periodic cost and are reflected in Other, net in each of the Registrants’ respective Statements of Consolidated Income.

(2) Amounts presented represent a one-time, non-cash settlement cost (benefit), prior to regulatory deferrals, which are required when the total lump sum distributions or other settlements of plan benefit obligations during a plan year exceed the service cost and interest cost components of the net periodic cost for that year.

Amounts presented in the table above are included in Other income (expense), net in CenterPoint Energy’s Statements of Consolidated Income, net of regulatory deferrals.

(1) Amounts are included in the computation of net periodic cost and are reflected in Other income (expense), net in each of the Registrants’ respective Statements of Consolidated Income.

(12) Short-term Borrowings and Long-term Debt

2 unchanged sentences

December 31, 2024 December 31, 2023

Long-Term Current (1)

Long-Term Current (1) Long-Term Current (1)

(in millions)

1 unchanged sentence

ZENS due 2029 (2) $ — $ 2 $ — $ 5

$ — $ 5 $ — $ 7

CenterPoint Energy senior notes 1.45 % to 5.25 % due 2026 to 2049

3,950 — 3,250 850

CenterPoint Energy junior subordinated notes 6.70 % to 7.00 % due 2055

CenterPoint Energy pollution control bonds 5.125 % due 2028 (3)

CenterPoint Energy commercial paper (4) 382 — 1,036 —

1,036 — 1,770 —

SIGECO first mortgage bonds 3.450 % to 6.00 % due 2025 to 2055 (5)

1 unchanged sentence

SIGECO securitization bonds 5.026 % to 5.172 % due 2036 to 2041 (6)

Other debt — — — 4

311 13 324 17

Unamortized debt issuance costs ( 48 ) — ( 35 ) —

2 unchanged sentences

CERC debt (see details below) 5,174 10 4,670 4

4,670 4 3,495 1,842

Total CenterPoint Energy debt $ 20,397 $ 566 $ 17,559 $ 1,059

Houston Electric:

Short Term Borrowings:

$ — $ 500 $ — $ —

Long-term debt:

General mortgage bonds 2.35 % to 6.95 % due 2026 to 2053 (7)

3 unchanged sentences

Transition bonds 3.028 % due 2024

— 161 161 156

Unamortized debt issuance costs ( 62 ) — ( 59 ) —

3 unchanged sentences

Inventory financing (9) $ — $ — $ — $ 4

$ — $ 4 $ — $ 11

Term loan — — — 500

Total CERC short-term borrowings — 4 — 511

Long-term debt:

25 unchanged sentences

(in millions, except for interest rates)

Houston Electric (1)

March 2023 General Mortgage Bonds

$ 600 4.95 % 2033

Houston Electric (1) February 2024 General Mortgage Bonds $ 400 5.15 % 2034

Houston Electric (2)

March 2023 General Mortgage Bonds

300 5.30 % 2053

June 2024 Term Loan 500 SOFR (9) + 1.00 %

Houston Electric (3)

September 2023 General Mortgage Bonds

500 5.20 % 2028

October 2024 General Mortgage Bonds 500 5.05 % 2035

Total Houston Electric 1,400

February 2023 Term Loan

500 SOFR (4) + 0.85 %

February 2023 Senior Notes

600 5.25 % 2028

February 2023 Senior Notes

600 5.40 % 2033

May 2023 Senior Notes

300 5.25 % 2028

June 2024 Senior Notes 400 5.40 % 2034

Total CERC 400

CenterPoint Energy (5)

March 2023 First Mortgage Bonds

100 4.98 % 2028

May 2024 Senior Notes 700 5.40 % 2029

CenterPoint Energy (6)

March 2023 First Mortgage Bonds

August 2024 First Mortgage Bonds

100 5.18 % 2034

CenterPoint Energy (6)

March 2023 Term Loan

250 SOFR (4) + 1.50 %

CenterPoint Energy (9)

June 2023 Securitization Bonds

August 2024 First Mortgage Bonds

60 5.28 % 2036

CenterPoint Energy (7)

August 2023 Convertible Notes 1,000 4.25 % 2026

August 2024 Junior Subordinated Notes

400 7.00 % 2055

CenterPoint Energy (7)

August 2023 Senior Notes 400 5.25 % 2026

August 2024 Junior Subordinated Notes

400 6.85 % 2055

CenterPoint Energy (8)

October 2023 First Mortgage Bonds

October 2024 Junior Subordinated Notes

500 6.70 % 2055

Total CenterPoint Energy $ 3,960

(1) Total proceeds from Houston Electric’s March 2023 issuances of general mortgage bonds, net of transaction expenses and fees, were approximately $ 890 million.

Approximately $ 593 million of such proceeds were used for general limited liability company purposes, including capital expenditures, working capital and the repayment of all or a portion of Houston Electric’s borrowings under the CenterPoint Energy money pool, and approximately $ 296 million of such proceeds will be disbursed or allocated to finance or refinance, in part or in full, new or existing projects that meet stated criteria.

(2) Total proceeds from Houston Electric’s September 2023 issuances of general mortgage bonds, net of transaction expenses and fees, of approximately $ 496 million were used for general limited liability company purposes, including capital expenditures, working capital and the repayment of all of Houston Electric’s borrowings under the CenterPoint Energy money pool.

(3) Total proceeds, net of transaction expenses and fees, of approximately $ 500 million were used for general corporate purposes, including the repayment of CERC’s outstanding commercial paper balances.

(4) As defined in the term loan agreement, which includes an adjustment of 0.10 % per annum.

(5) Total proceeds from CERC’s February 2023 issuances of senior notes, net of transaction expenses and fees, of approximately $ 1.2 billion were used for general corporate purposes, including the repayment of (i) all or a portion of CERC’s outstanding 0.700 % senior notes due 2023, (ii) all or a portion of CERC’s outstanding floating rate senior notes due 2023 and (iii) a portion of CERC’s outstanding commercial paper balances.

(6) Total proceeds, including issuance premiums and approximately $ 3 million of accrued interest, and net of transaction expenses and fees, of approximately $ 308 million were used for general corporate purposes, including repayment of a portion of CERC’s outstanding $ 500 million term loan due February 2024.

(1) Total proceeds from Houston Electric’s February 2024 issuance of general mortgage bonds, net of transaction expenses and fees, were approximately $ 395 million, which were used for general limited liability company purposes, including capital expenditures and working capital purposes.

(2) On June 28, 2024, Houston Electric borrowed $ 100 million aggregate principal amount available under the term loan agreement.

In September 2024, Houston Electric borrowed $ 200 million aggregate principal amount available under the term loan agreement.

In November 2024, Houston Electric requested additional commitments under the term loan agreement and borrowed $200 million under the term loan agreement.

Houston Electric has used the proceeds thereof for working capital purposes to support liquidity needs from the May 2024 Storm Events and general limited liability company purposes.

(3) Total net proceeds from Houston Electric’s October 2024 issuance of general mortgage bonds, net of transaction expenses and fees, were approximately $ 494 million, which were used for general limited liability company purposes, including capital expenditures and working capital purposes.

(4) Total proceeds from CERC’s June 2024 issuance of senior notes, net of transaction expenses and fees, were approximately $ 396 million which were used for general corporate purposes, including the repayment of a portion of CERC’s outstanding commercial paper.

(5) Total proceeds from CenterPoint Energy’s May 2024 issuance of senior notes, net of transaction expenses and fees, were approximately $ 693 million which were used for general corporate purposes including the redemption of $ 350 million aggregate principal amount of CenterPoint Energy’s outstanding floating rate senior notes due 2024 and the repayment of a portion of CenterPoint Energy’s outstanding commercial paper.

(6) Issued by SIGECO.

Total proceeds from SIGECO’s March 2023 issuances of first mortgage bonds, net of transaction expenses and fees, of approximately $ 179 million were used for general corporate purposes, including repaying short-term debt.

(8) Total proceeds, net of transaction expenses and fees, of approximately $ 250 million were used for general corporate purposes, including the repayment of CenterPoint Energy’s outstanding commercial paper balances.

The full outstanding amount of the term loan, including accrued and unpaid interest, was repaid in March 2023 and, following the repayment, the term loan agreement was terminated.

(9) Issued by SIGECO Securitization Subsidiary.

Total proceeds from SIGECO Securitization Subsidiary’s June 2023 issuance of SIGECO Securitization Bonds, net of transaction expenses and fees, of approximately $ 337 million were used to pay SIGECO the purchase price of the securitization property.

SIGECO used the net proceeds from the sale of the securitization property (after payment of upfront financing costs) to reimburse or pay for qualified costs approved by the IURC related to the completed retirement of its A.B.

Brown 1 and 2 coal-powered generation units.

See Notes 2 and 7 for further details.

(10) Total proceeds, net of discounts, transaction fees and expenses, of $ 985 million were used for general corporate purposes, including the redemption of CenterPoint Energy’s Series A Preferred Stock after its September 1, 2023 redemption date, and the repayment of a portion of CenterPoint Energy’s outstanding commercial paper.

See additional information below.

(11) Total proceeds, net of discounts, transaction fees and expenses, of $ 397 million were used for general corporate purposes and the repayment of a portion of CenterPoint Energy’s outstanding commercial paper.

(12) SIGECO issued in three tranches:

(i) $ 180 million first mortgage bonds bearing interest at 5.75 % due 2029;

(ii) $ 105 million first mortgage bonds bearing interest at 5.91 % due 2030;

and (iii) $ 185 million first mortgage bonds bearing interest at 6.00 % due 2034.

The net proceeds of $ 467 million were used for general corporate purposes.

In April 2023, SIGECO executed a remarketing agreement to remarket five series of tax-exempt debt issued by the Indiana Finance Authority, and secured by SIGECO first mortgage bonds, of approximately $ 148 million, comprised of:

(i) $ 107 million aggregate principal amount of Environmental Improvement Refunding Revenue Bonds, Series 2013, originally issued by the Indiana Finance Authority on April 26, 2013, and (ii) $ 41 million aggregate principal amount of Environmental Improvement Refunding Revenue Bonds, Series 2014, originally issued by the Indiana Finance Authority on September 24, 2014, which closed on May 1, 2023.

In July 2023, SIGECO executed a remarketing agreement to remarket two series of tax-exempt debt issued by the City of Mount Vernon, Indiana and Warrick County, Indiana, and secured by SIGECO first mortgage bonds, of approximately $ 38 million, comprised of:

(i) $ 23 million aggregate principal amount of Environmental Improvement Revenue Bonds, Series 2015 issued by the City of Mount Vernon and (ii) $ 15 million aggregate principal amount of Environmental Improvement Revenue Bonds, Series 2015 issued by Warrick County, which closed on September 1, 2023.

Effective September 1, 2023, the bonds of each series bear interest at a fixed rate of 4.250 % per annum to the earlier of (i) its redemption date or (ii) September 1, 2028, at which time the bonds are subject to mandatory tender.

Total proceeds from SIGECO’s August 2024 issuance of first mortgage bonds, net of transaction expenses and fees, of approximately $ 159 million were used for general corporate purposes, including repaying short-term debt and long-term debt at maturity or otherwise.

See Note 20 for additional information.

(7) Total proceeds from CenterPoint Energy’s August 2024 issuance of junior subordinated notes, net of transaction expenses and fees, were approximately $ 790 million, which were used for general corporate purposes, including the

redemption of $ 500 million aggregate principal amount of CenterPoint Energy’s outstanding 2.50 % senior notes due 2024 and the repayment of a portion of CenterPoint Energy’s outstanding commercial paper.

(8) Total proceeds from CenterPoint Energy’s October 2024 issuance of junior subordinated notes, net of transaction expenses and fees, were approximately $ 494 million, which were used for general company purposes including the repayment of a portion of CenterPoint Energy’s outstanding commercial paper.

(9) The borrowings under the term loan agreement bear interest at Houston Electric’s option, at a rate equal to either (i) Term SOFR (as defined in the term loan agreement), which includes an adjustment of 0.10 % per annum plus a margin of 1.0 %, or (ii) the Alternate Base Rate (as defined in the term loan agreement)

Junior Subordinated Notes.

As described in the table above, in August 2024, CenterPoint Energy issued $ 400 million aggregate principal amount of Junior Subordinated Series A Notes and $ 400 million aggregate principal amount of Junior Subordinated Series B Notes.

Interest on the August Junior Subordinated Notes accrues from August 14, 2024 and is payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2025, and maturing on February 15, 2055.

The Junior Subordinated Series A Notes bear interest (i) from and including August 14, 2024 to, but excluding, February 15, 2030 at the rate of 7.000 % per annum and (ii) from and including February 15, 2030, during each five-year period following February 15, 2030, at a rate per annum equal to the Five-Year Treasury Rate (as defined in the Junior Subordinated Notes Indenture) as of two business days prior to the beginning of the applicable Junior Subordinated Series A Interest Reset Period plus a spread of 3.254 %, with such rate per annum to be reset on each five-year anniversary of February 15, 2030.

The Junior Subordinated Series B Notes bear interest (i) from and including August 14, 2024, but excluding, February 15, 2035 at the rate of 6.850 % per annum and (ii) from and including February 15, 2035, during each five-year period following February 15, 2035, at a rate per annum equal to the Five-Year Treasury Rate (as defined in the Junior Subordinated Notes Indenture) as of two business days prior to the beginning of the applicable Junior Subordinated Series B Interest Reset Period plus a spread of 2.946 %, with such rate per annum to be reset on each five-year anniversary of February 15, 2035.

As described in the table above, in October 2024, CenterPoint Energy issued $ 500 million aggregate principal amount of Junior Subordinated Series C Notes.

Interest on the Junior Subordinated Series C Notes accrues from October 31, 2024 and is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on May 15, 2025, and maturing on May 15, 2055.

The Junior Subordinated Series C Notes bear interest (i) from and including October 31, 2024 to, but excluding May 15, 2030 at the rate of 6.700 % per annum and (ii) from and including May 15, 2030, during each five-year period following May 15, 2030 at a rate per annum equal to the Five-Year Treasury Rate (as defined in the Junior Subordinated Notes Indenture) as of two business days prior to the beginning of the applicable Junior Subordinated Series C Interest Reset Period plus a spread of 2.586 %, with such rate per annum to be reset on each five-year anniversary of May 15, 2030.

So long as no event of default (as defined in the prospectus supplement relating to the offering of the Junior Subordinated Notes) with respect to a given series of Junior Subordinated Notes has occurred and is continuing, CenterPoint Energy may, at its option, defer interest payments on such series of Junior Subordinated Notes, from time to time, for one or more deferral periods of up to 20 consecutive semiannual interest payment periods, except that no such optional deferral period (as defined in the prospectus supplement relating to the offering of the Junior Subordinated Notes) may extend beyond the final maturity date of such series of Junior Subordinated Notes or end on a day other than the day immediately preceding an interest payment date.

During any optional deferral period, CenterPoint Energy (and its majority-owned subsidiaries, as applicable) will not (subject to certain exceptions as described in the Junior Subordinated Notes Indenture):

(i) declare or pay any dividends or distributions on any of CenterPoint Energy’s capital stock;

(ii) redeem, purchase, acquire or make a liquidation payment with respect to any of CenterPoint Energy’s capital stock;

(iii) pay any principal, interest (to the extent such interest is deferrable) or premium on, or repay, repurchase or redeem any of CenterPoint Energy’s indebtedness that ranks equally with or junior to the Junior Subordinated Notes in right of payment (including debt securities of other series, such as the other series of the Junior Subordinated Notes issued);

or (iv) make any payments with respect to any guarantees by CenterPoint Energy of any indebtedness if such guarantees rank equally with or junior to the Junior Subordinated Notes in right of payment.

The Junior Subordinated Notes are CenterPoint Energy’s unsecured obligations and rank junior and subordinate in right of payment to the prior payment in full of CenterPoint Energy’s existing and future Senior Indebtedness (as defined in the Junior Subordinated Notes Indenture).

Convertible Senior Notes.

Interest on the Convertible Notes described in the table above is payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2024.

Interest on the Convertible Notes is payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2024.

The Convertible Notes will mature on August 15, 2026, unless earlier converted or repurchased by CenterPoint Energy in accordance with their terms.

Prior to the close of business on the business day immediately preceding May 15, 2026, the Convertible Notes are convertible only under certain conditions.

On or after May 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Convertible Notes at any time at the conversion rate then in effect, irrespective of the conditions.

On or after May 15, 2026 until the close of business on the second scheduled trading

day immediately preceding the maturity date, holders of the Convertible Notes may convert all or any portion of their Convertible Notes at any time at the conversion rate then in effect, irrespective of the conditions.

CenterPoint Energy may not redeem the Convertible Notes prior to the maturity date and no sinking fund is provided for the Convertible Notes.

Upon conversion of the Convertible Notes, CenterPoint Energy will pay cash up to the aggregate principal amount of the Convertible Notes to be converted and pay or deliver, as the case may be, cash, shares of Common Stock, or a combination of cash and shares of Common Stock, at CenterPoint Energy’s election, in respect of the remainder, if any, of CenterPoint

Energy’s conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted.

The conversion rate for the Convertible Notes is initially 27.1278 shares of Common Stock per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $ 36.86 per share of Common Stock).

The initial conversion price of the Convertible Notes represents a premium of approximately 25.0 % over the last reported sale price of the Common Stock on the New York Stock Exchange on August 1, 2023.

The initial conversion price of the Convertible Notes represents a premium of approximately 25.0 % over the last reported sale price of the Common Stock on the NYSE on August 1, 2023.

Initially, a maximum of 33,909,700 shares of Common Stock may be issued upon conversion of the Convertible Notes based on the initial maximum conversion rate of 33.9097 shares of Common Stock per $1,000 principal amount of Convertible Notes.

The conversion rate will be subject to adjustment in some events (as described in the Convertible Notes Indenture) but will not be adjusted for any accrued and unpaid interest.

In addition, following certain corporate events that occur prior to the maturity date of the Convertible Notes, CenterPoint Energy will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Convertible Notes in connection with such a corporate event.

In addition, following certain corporate events that occur prior to the maturity date of the Convertible Notes, CenterPoint Energy will, in certain circumstances, increase the conversion rate for a holder of Convertible Notes who elects to convert its Convertible Notes in connection with such a corporate event.

If CenterPoint Energy undergoes a fundamental change (as defined in the Convertible Notes Indenture), holders of the Convertible Notes may require CenterPoint Energy to repurchase for cash all or any portion of their Convertible Notes at a fundamental change repurchase price equal to 100 % of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

7 unchanged sentences

(in millions)

March 2023 Term Loan (1)

$ 500 SOFR (2) + 0.70 %

March 2023 Senior Notes 700 0.70 % 2023

March 2023 Floating Rate Senior Notes 575 Three-month LIBOR plus 0.5 %

CERC May 2023 Term Loan (3)

500 SOFR (2) + 0.85 %

December 2023 Senior Notes

57 3.72 % 2023

Total CERC 2,332

CenterPoint Energy (1)

January 2023 First Mortgage Bonds 11 4.00 % 2044

CenterPoint Energy March 2023 Term Loan (1)

250 SOFR (2) + 1.50 %

March 2024 First Mortgage Bonds $ 22 3.50 % 2024

CenterPoint Energy (2)

December 2023 Floating Rate Senior Notes 350 SOFR plus 0.65 %

May 2024 Senior Notes

350 SOFR + 0.65 %

CenterPoint Energy (3)

December 2023 First Mortgage Bonds 80 6.72 % 2029

September 2024 Senior Notes 500 2.50 % 2024

Total CenterPoint Energy $ 872

(1) The full outstanding amount of the term loan, including accrued and unpaid interest, was repaid in March 2023 and, following the repayment, the term loan agreement was terminated.

(2) As defined in the term loan agreement, which includes an adjustment of 0.10 % per annum.

(3) The full outstanding amount of the term loan, including accrued and unpaid interest, was repaid in May 2023 and, following the repayment, the term loan agreement was terminated.

(4) On December 16, 2022, SIGECO provided notice of redemption and on January 17, 2023, SIGECO redeemed $ 11 million aggregate principal amount of SIGECO’s outstanding first mortgage bonds due 2044 at a redemption price equal to 100 % of the principal amount of the first mortgage bonds to be redeemed plus accrued and unpaid interest thereon, if any, to, but excluding, the redemption date.

(5) On November 30, 2023, CenterPoint Energy provided notice of redemption and on December 15, 2023, CenterPoint Energy redeemed $ 350 million aggregate principal amount of outstanding floating rate senior notes due 2024 at a redemption price equal to 100 % of the principal amount of the floating rate senior notes to be redeemed plus accrued and unpaid interest thereon, if any, to, but excluding, the redemption date.

(6) On November 17, 2023, SIGECO provided notice of redemption and on December 19, 2023, SIGECO redeemed $ 80 million aggregate principal amount of outstanding first mortgage bonds due 2029 at a redemption price equal to the sum of remaining principal and interest payments discounted at the treasury yield plus 10 basis points, plus interest accrued to the redemption date and an applicable make-whole premium.

The Registrants recorded the following losses on early extinguishment of debt, including make-whole premiums and recognition of deferred debt related costs, in Interest expense and other finance charges on their respective Statements of Consolidated Income unless specified otherwise:

(1) On February 6, 2024, SIGECO provided notice of redemption and on March 1, 2024, SIGECO paid down the outstanding principal of $ 22 million aggregate principal amount of SIGECO’s outstanding first mortgage bonds due 2024 at a redemption price equal to 100 % of the principal amount of the first mortgage bonds to be redeemed plus accrued and unpaid interest thereon, if any, to, but excluding, the redemption date.

(2) On May 13, 2024, CenterPoint Energy redeemed $ 350 million aggregate principal amount of its outstanding floating rate senior notes due 2024 at a redemption price equal to 100 % of the principal amount to be redeemed plus accrued and unpaid interest thereon.

(3) In September 2024, CenterPoint Energy redeemed $ 500 million aggregate principal amount of its outstanding 2.50 % senior notes due 2024 at a redemption price equal to 100 % of the principal amount to be redeemed plus accrued and unpaid interest thereon.

CenterPoint Energy and Houston Electric recorded the following losses on early extinguishment of debt, including make-whole premiums and recognition of deferred debt related costs, in Interest expense and other finance charges on their respective Statements of Consolidated Income unless specified otherwise:

Year Ended December 31,

2024 2023 2022

(in millions)

CenterPoint Energy (1) $ — $ 11 $ 47

$ 11 $ 47 $ 53

Houston Electric (2) — — 2

12 unchanged sentences

The Registrants had the following revolving credit facilities as of December 31, 2024:

Date Registrant Size of

Facility Draw Rate of SOFR plus (1)

Financial Covenant Limit on Debt for Borrowed Money to Capital Ratio Debt for Borrowed Money to Capital

Registrant Execution

Facility Draw Rate of SOFR plus (1) Financial Covenant Limit on Debt for Borrowed Money to Capital Ratio Debt for Borrowed Money to Capital

Ratio as of December 31, 2024 (2)

(in millions)

December 6, 2022 CenterPoint Energy $ 2,400 1.500 % 65 % (3) 59.6 % December 6, 2027

December 6, 2022 CenterPoint Energy (4)

250 1.125 % 65 % 46.5 % December 6, 2027

December 6, 2022 Houston Electric 300 1.250 % 67.5 % (3) 52.6 % December 6, 2027

December 6, 2022 CERC

1,050 1.125 % 65 % 40.2 % December 6, 2027

CenterPoint Energy December 6, 2022 $ 2,400 1.500 % 65 % (3) 59.3 % December 6, 2027

CenterPoint Energy (4) December 6, 2022 250 1.125 % 65 % 44.8 % December 6, 2027

Houston Electric December 6, 2022 300 1.250 % 67.5 % (3) 53.3 % December 6, 2027

CERC December 6, 2022 1,050 1.125 % 65 % 41.4 % December 6, 2027

Total $ 4,000

1 unchanged sentence

(2) As defined in the revolving credit facility agreement, excluding Securitization Bonds.

administrative agent that Houston Electric has incurred system restoration costs reasonably likely to exceed $ 100 million in a consecutive 12 -month period, all or part of which Houston Electric intends to seek to recover through securitization financing.

(3) For CenterPoint Energy and Houston Electric, the financial covenant limit will temporarily increase to 70 % if Houston Electric experiences damage from a natural disaster in its service territory and CenterPoint Energy certifies to the administrative agent that Houston Electric has incurred system restoration costs reasonably likely to exceed $ 100 million in a consecutive 12 -month period, all or part of which Houston Electric intends to seek to recover through securitization financing.

Such temporary increase in the financial covenant would be in effect from the date CenterPoint Energy delivers its certification until the earliest to occur of (i) the completion of the securitization financing, (ii) the first anniversary of CenterPoint Energy’s certification or (iii) the revocation of such certification.

(4) This credit facility was issued by SIGECO.

(5) See Note 20 for discussion of subsequent events associated with the revolving credit facilities.

The Registrants, as well as the subsidiaries of CenterPoint Energy discussed above, were in compliance with all financial debt covenants as of December 31, 2024.

10 unchanged sentences

CenterPoint Energy (1) $ 2,400 $ — $ — $ 382 4.59 % $ 2,400 $ — $ — $ 1,036 5.54 %

$ 2,400 $ — $ — $ 1,036 5.54 % $ 2,400 $ — $ 11 $ 1,770 4.71 %

CenterPoint Energy (2) 250 — — — — % 250 — — — — %

250 — — — — % 250 — — — — %

Houston Electric 300 — — — — % 300 — — — — %

4 unchanged sentences

As of December 31, 2024, maturities of long-term debt through 2029, excluding the ZENS obligation and unamortized discounts, premiums and issuance costs, were as follows:

CERC Securitization Bonds

Energy (1) Houston

Electric (1) CERC Securitization Bonds

(in millions)

16 unchanged sentences

(13) Income Taxes

The components of the Registrant’s income tax expense (benefit) were as follows:

The components of the Registrants’ income tax expense (benefit) were as follows for the periods presented:

Year Ended December 31,

1 unchanged sentence

(in millions)

CenterPoint Energy - Continuing Operations

CenterPoint Energy

Current income tax expense (benefit):

2 unchanged sentences

Total current expense (benefit)

( 26 ) 139 340

Deferred income tax expense (benefit):

3 unchanged sentences

Total income tax expense $ 195 $ 170 $ 360

CenterPoint Energy - Discontinued Operations

Current income tax expense:

Federal $ — $ — $ 91

Total current expense — — 126

Deferred income tax expense (benefit):

Federal — — 127

State — — ( 52 )

Total deferred expense (benefit) — — 75

Total income tax expense (benefit) $ — $ — $ 201

Houston Electric

3 unchanged sentences

Total current expense 77 8 39

Deferred income tax expense (benefit):

Deferred income tax expense:

Federal 60 159 86

Total deferred expense (benefit) 160 86 32

Total deferred expense 61 160 86

Total income tax expense $ 138 $ 168 $ 125

CERC - Continuing Operations

Current income tax expense (benefit):

1 unchanged sentence

State ( 6 ) 3 28

Total current expense (benefit) 15 58 ( 25 )

Total current expense 49 15 58

Deferred income tax expense (benefit):

3 unchanged sentences

Total income tax expense (benefit) $ 104 $ ( 26 ) $ 236

A reconciliation of income tax expense (benefit) using the federal statutory income tax rate to the actual income tax expense and resulting effective income tax rate is as follows:

A reconciliation of income tax expense (benefit) using the federal statutory income tax rate to the actual income tax expense and resulting effective income tax rate were as follows:

Year Ended December 31,

1 unchanged sentence

(in millions)

CenterPoint Energy - Continuing Operations (1) (2) (3)

CenterPoint Energy (1) (2) (3)

Income before income taxes $ 1,214 $ 1,087 $ 1,417

5 unchanged sentences

State law change, net of federal income tax ( 47 ) ( 69 ) —

( 13 ) ( 8 ) ( 6 )

Equity AFUDC ( 12 ) ( 13 ) ( 8 )

Excess deferred income tax amortization ( 43 ) ( 44 ) ( 51 )

5 unchanged sentences

Effective tax rate 16 % 16 % 25 %

CenterPoint Energy - Discontinued Operations (4)

Income before income taxes

$ — $ — $ 1,019

Federal statutory income tax rate — % — % 21 %

Expected federal income tax expense

Increase (decrease) in tax expense resulting from:

State income tax expense, net of federal income tax — — 14

State law change, net of federal income tax — — ( 27 )

Total — — ( 13 )

Total income tax expense

$ — $ — $ 201

Effective tax rate — % — % 20 %

Houston Electric (4) (5) (6)

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Effective tax rate 20 % 22 % 20 %

Year Ended December 31,

2023 2022 2021

(in millions)

CERC - Continuing Operations (8) (9) (10)

CERC (7) (8) (9)

Income before income taxes $ 644 $ 486 $ 961

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Total income tax expense (benefit) $ 104 $ ( 26 ) $ 236

$ ( 26 ) $ 236 $ 76

Effective tax rate 16 % ( 5 ) % 25 %

(1) Recognized a $ 47 million benefit for the impact of state apportionment changes and Louisiana statutory rate change that resulted in the remeasurement of state deferred taxes, a $ 43 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions, a $ 17 million valuation allowance established against Louisiana and Mississippi NOL, since those NOLs will not be utilized due to the Louisiana and Mississippi natural gas LDC businesses sale and a $ 12 million benefit for the impact of AFUDC equity.

(2) Recognized a $ 69 million benefit for the impact of state apportionment changes that resulted in the remeasurement of state deferred taxes of the unitary group, a $ 44 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions, a $ 13 million benefit for the impact of AFUDC equity, and a $ 28 million expense for the gain on the Energy Systems Group sale.

(3) Recognized a $ 51 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions, an $ 8 million benefit for the impact of AFUDC equity, and a $ 84 million expense for the goodwill impairment on the Arkansas and Oklahoma Natural Gas business sale.

(3) Recognized a $ 75 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions, a $ 23 million benefit for the impact of state law changes that resulted in the remeasurement of state deferred taxes in those jurisdictions, a $ 6 million benefit for the impact of AFUDC equity, and a $ 15 million benefit for the impact of a change in the NOL carryforward period in Louisiana from 20 years to an indefinite period allowing for the release of the valuation allowance on certain Louisiana NOLs.

(4) Recognized a $ 27 million benefit for the impact of state law changes that resulted in the remeasurement of state deferred taxes in those jurisdictions.

(5) Recognized a $ 17 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions.

(4) Recognized a $ 17 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in Texas.

(5) Recognized a $ 17 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions.

(6) Recognized a $ 18 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions.

(7) Recognized a $ 45 million benefit for the impact of state apportionment changes and Louisiana statutory rate change that resulted in the remeasurement of state deferred taxes, a $ 17 million valuation allowance established against Louisiana and Mississippi NOL, since those NOLs will not be utilized due to the Louisiana and Mississippi natural gas LDC businesses sale, and a $ 15 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions.

(8) Recognized a $ 66 million benefit for the impact of state apportionment changes that resulted in the remeasurement of state deferred taxes of the unitary group, and a $ 23 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions.

(9) Recognized a $ 28 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions, and a $ 30 million expense for the goodwill impairment on the Arkansas and Oklahoma Natural Gas business sale.

(10) Recognized a $ 9 million benefit for the impact of state law changes that resulted in the remeasurement of state deferred taxes in those jurisdictions, a $ 30 million benefit for the amortization of the net regulatory EDIT liability as decreed by regulators in certain jurisdictions, and a $ 15 million benefit for the impact of a change in the NOL carryforward period in Louisiana from 20 years to an indefinite period allowing for the release of the valuation allowance on certain Louisiana NOLs.

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities were as follows:

The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities were as follows:

December 31, 2024 December 31, 2023

(in millions)

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Asset retirement obligations 98 96

Other 150 124

Valuation allowance ( 35 ) ( 10 )

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Regulatory liabilities 158 176

Loss and credit carryforward

Asset retirement obligations 9 6

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Asset retirement obligations 82 86

Valuation allowance ( 25 ) —

Total deferred tax assets 1,040 593

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Tax Attribute Carryforwards and Valuation Allowance .

CenterPoint Energy has no federal NOL carryforwards and no federal charitable contribution carryforwards as of December 31, 2023.

As of December 31, 2023, CenterPoint Energy had $ 1 billion of state NOL carryforwards that expire between 2024 and 2042, and $ 2 million of state tax credits, net of valuation allowance, which do not expire.

As of December 31, 2024, CenterPoint Energy has federal NOL carryforwards of $ 3.3 billion, which have an indefinite carryforward period.

As of December 31, 2024, CenterPoint Energy has federal charitable contribution carryforwards of $ 51 million which expire between 2029 and 2030.

As of December 31, 2024, CenterPoint Energy has federal corporate alternative minimum tax carryforwards of $ 124 million which have an indefinite carryforward period.

As of December 31, 2024, CenterPoint Energy has $ 2.1 billion of gross state NOL carryforwards which

expire between 2025 and 2043, and $ 3 million of state tax credits, net of valuation allowance, which do not expire.

CenterPoint Energy reported a valuation allowance against certain state NOL and credit carryforwards because it is more likely than not that the benefit will not be realized.

CERC has $ 931 million of federal NOL carryforwards which have an indefinite carryforward period.

CERC has $ 657 million of gross state NOL carryforwards which expire between 2024 and 2042, and $ 2 million of state tax credits, net of valuation allowance, which do not expire.

A reconciliation of CenterPoint Energy’s beginning and ending balance of unrecognized tax benefits, excluding interest and penalties, for 2023 and 2022 are as follows:

As of December 31, 2024, Houston Electric has $ 1.7 billion of federal NOL carryforwards which have an indefinite carryforward period.

As of December 31, 2024, Houston Electric has federal corporate alternative minimum tax carryforwards of $ 48 million which have an indefinite carryforward period.

As of December 31, 2024, CERC has federal NOL carryforwards of $ 2.3 billion which have an indefinite carryforward period.

As of December 31, 2024, CERC has federal corporate alternative minimum tax carryforwards of $ 101 million which have an indefinite carryforward period.

As of December 31, 2024, CERC has $ 1.2 billion of gross state NOL carryforwards which expire between 2025 and 2043, and $ 3 million of state tax credits, net of valuation allowance, which do not expire.

A reconciliation of CenterPoint Energy’s beginning and ending balance of unrecognized tax benefits, excluding interest and penalties, are as follows for the periods presented:

Year Ended December 31,

2024 2023 2022

(in millions)

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Balance, end of year $ 25 $ 25 $ 26

CenterPoint Energy’s net unrecognized tax benefits, including penalties and interest, were $ 29 million as of December 31, 2023 and are included in other non-current liabilities in the Consolidated Financial Statements.

Included in the balance of uncertain tax positions as of December 31, 2023 are $ 25 million of tax benefits that, if recognized, would affect the effective tax rate.

As of December 31, 2024, CenterPoint Energy reported net unrecognized tax benefits, including penalties and interest, of $ 32 million which were included in Other non-current liabilities in the Consolidated Balance Sheets.

Included in the balance of uncertain tax positions as of December 31, 2024 were $ 25 million of tax benefits that, if recognized, would affect the effective tax rate.

The Registrants recognize interest accrued related to unrecognized tax benefits and penalties as income tax expense.

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Tax Audits and Settlements .

Tax years through 2018 and tax year 2021 have been audited and settled with the IRS for CenterPoint Energy.

Tax years 2019-2020 remain open.

For the 2019-2023 tax years, the Registrants are participants in the IRS’s Compliance Assurance Process.

Vectren’s pre-Merger 2014-2019 tax years have been audited and settled with the IRS.

Tax years through 2022 have been audited and settled with the IRS for CenterPoint Energy.

For tax years 2023 and 2024, the Registrants are participants in the IRS’s Compliance Assurance Process.

(14) Commitments and Contingencies

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Commitments include minimum purchase obligations related to CenterPoint Energy’s and CERC’s Natural Gas reportable segment and CenterPoint Energy’s Electric reportable segment.

A purchase obligation is defined as an agreement to purchase goods or services that is enforceable and legally binding on the registrant and that specifies all significant terms, including:

fixed or minimum quantities to be purchased;

fixed, minimum or variable price provisions;

and the approximate timing of the transaction.

Contracts with minimum payment provisions have various quantity requirements and durations and are not classified as non-trading derivative assets and liabilities in CenterPoint Energy’s and CERC’s Consolidated Balance Sheets as of December 31, 2023 and 2022.

These contracts meet an exception as “normal purchases contracts” or do not meet the definition of a derivative.

Contracts with minimum payment obligations have various quantity requirements and durations and are not classified as non-trading derivative assets and liabilities in CenterPoint Energy’s and CERC’s Consolidated Balance Sheets as of December 31, 2024 and 2023 because these contracts meet an exception as “normal purchases contracts” or do not meet the definition of a derivative.

Natural gas and coal supply commitments also include transportation contracts that do not meet the definition of a derivative.

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On September 6, 2023, the IURC issued an order approving the CPCN.

The Posey Solar project is expected to be placed in service in 2025.

The Posey Solar project is expected to be placed in service in the second quarter of 2025.

See Note 20 for additional details.

On January 11, 2023, the IURC issued an order approving the settlement agreement granting Indiana Electric a CPCN to purchase and acquire the 130 MW Pike County solar project through a BTA and approved the estimated cost.

The IURC also designated the project as a clean energy project as well as approved the proposed levelized rate and associated ratemaking and accounting treatment.

Due to inflationary pressures, the developer disclosed that costs have exceeded the agreed upon levels in the BTA.

Once pricing is updated and parties determine whether to continue with the project, Indiana Electric may have to refile for approval of the project with the IURC, which could delay the in-service date from 2025 to 2026.

If Indiana Electric is not able to reach a mutually acceptable solution with the developers of the Pike County Solar project, Indiana Electric may seek to terminate the project.

As of December 31, 2023, other than discussed below, undiscounted minimum purchase obligations are approximately:

The IURC also

designated the project as a clean energy project as well as approved the proposed levelized rate and associated ratemaking and accounting treatment.

Due to inflationary pressures, the developer disclosed that costs exceeded the agreed upon levels in the BTA.

After negotiations, Indiana Electric and the developer were not able to agree upon updated pricing.

As a result, on March 15, 2024, Indiana Electric provided notice to the IURC that it was exercising its right to terminate the BTA, which terminated all further obligations of Indiana Electric with respect to the project.

As of December 31, 2024, CenterPoint Energy and CERC had the following undiscounted minimum purchase obligations:

CenterPoint Energy CERC

Natural Gas Supply

Electric Supply (1)

Natural Gas Supply Electric Supply (1) Other (2)

Natural Gas Supply

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2029 459 94 2 456

2029 and beyond 1,707 737 328 1,684

(1) CenterPoint Energy’s undiscounted minimum payment obligations related to PPAs with commitments ranging from 15 years to 25 years and its purchase commitment under its BTA in Posey County, Indiana at the original contracted amount, prior to any renegotiation, and its BTA in Pike County, Indiana, are included above.

(2) The undiscounted payment obligations relate primarily to technology hardware and software agreements.

Excluded from the table above are estimates for cash outlays from other PPAs through Indiana Electric that do not have minimum thresholds but do require payment when energy is generated by the provider.

Thereafter 1,566 1,303 190 1,544

Total $ 4,251 $ 1,842 $ 413 $ 4,211

(1) Related to PPAs with commitments ranging from 15 years to 25 years.

(2) Related primarily to technology hardware and software agreements.

Excluded from the table above are estimates for cash outlays from other PPAs through Indiana Electric that do not have minimum thresholds but require payment when energy is generated by the provider.

Costs arising from certain of these commitments are pass-through costs, generally collected dollar-for-dollar from retail customers through regulator-approved cost recovery mechanisms.

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For amounts outstanding under these AMAs, see Note 12.

CenterPoint Energy recognizes guarantee obligations at fair value.

On May 21, 2023, CenterPoint Energy, through Vectren Energy Services, entered into the Equity Purchase Agreement to sell Energy Systems Group.

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For those obligations where potential exposure can be estimated, management estimates the maximum exposure under these guarantees to be approximately $ 465 million as of December 31, 2024 and expects the exposure to decrease pro rata.

This exposure primarily relates to energy savings guarantees on federal energy savings performance contracts.

This exposure primarily relates to energy savings guarantees on federal

energy savings performance contracts.

Other parent company level guarantees, certain of which do not contain a cap on potential liability, were issued prior to the sale of Energy Systems Group in support of federal operations and maintenance projects for which a maximum exposure cannot be estimated based on the nature of the projects.

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No additional guarantees were provided by CenterPoint Energy in favor of Energy Systems Group subsequent to the closing of the sale on June 30, 2023.

While there can be no assurance that performance under any of these parent company guarantees will not be required in the future, CenterPoint Energy considers the likelihood of a material amount being incurred as remote.

CenterPoint Energy believes that, from Energy Systems Group ’s inception in 1994 to the closing of the sale of Energy Systems Group on June 30, 2023, Energy Systems Group had a history of generally meeting its performance obligations and energy savings guarantees and its installed products operated effectively.

CenterPoint Energy recorded no amounts on its Consolidated Balance Sheets as of December 31, 2023 and December 31, 2022 related to its obligation under the outstanding guarantees.

CenterPoint Energy recorded no amounts on its Consolidated Balance Sheets as of December 31, 2024 and 2023 related to its obligation under the outstanding guarantees.

(d) Legal, Environmental and Other Matters

Legal Matters

Litigation Related to Hurricane Beryl.

Various federal, state and local governmental and regulatory agencies and other entities, such as the Texas Governor’s office, the Texas legislature and the PUCT, have called for or are conducting inquiries and investigations into Hurricane Beryl, the efforts made by Houston Electric to prepare for, and respond to, this event, including the electric service outage issues, and the procurement of TEEEF.

Moreover, additional governmental and regulatory agencies and other entities may conduct such inquiries and investigations, as well.

There are significant uncertainties around these inquiries and investigations and potential results and consequences, including with respect to our recovery of costs incurred as a result of Hurricane Beryl and whether any financial penalties will be assessed or changes to Houston Electric’s system, service territories, operations and/or regulatory treatment will result therefrom.

Further, on January 22, 2025, a putative shareholder of CenterPoint Energy, Donel Davidson, filed a derivative petition in Harris County District Court, Texas, alleging breach of fiduciary duty and unjust enrichment on behalf of CenterPoint Energy against certain of its current and former directors and officers citing, in part, the topics of these inquiries and investigations.

The action seeks to recover damages and other relief from the defendants on behalf of CenterPoint Energy.

Additionally, on February 12, 2025, a second putative shareholder of CenterPoint Energy made a demand on the Board to investigate the same basic allegations raised in the derivative petition filed by Donel Davidson.

CenterPoint Energy and Houston Electric are subject to current and potential future litigation and claims arising out of Hurricane Beryl, which litigation and claims could include allegations of, among other things, personal injury, property damage, various economic losses in connection with loss of power, unlawful business practices, and others.

As of December 31, 2024, three putative class actions had been filed against CenterPoint Energy and/or Houston Electric in the District Courts of Harris County, Texas, on behalf of individuals or entities who claim losses due to power outages lasting at least 48 hours as a result of Hurricane Beryl, such actions consisting of the following proposed classes:

(1) all restaurants in Harris County, Galveston County, and Montgomery County;

(2) all residential customers;

and (3) all health, wellness, medical and beauty facilities in Harris County.

These putative classes assert claims and theories of negligence, gross negligence, nuisance, fraud, and/or violation of Houston Electric’s tariff for retail delivery service, and each seeks damages in excess of $ 100 million for, among other things, business interruption, property damage and loss, cost of repair, loss of use and market value, lost income, nuisance, extreme mental anguish and/or punitive damages.

In addition, as of December 31, 2024, two individual actions had been filed in Harris County District Courts asserting claims of negligence, negligence per se and/or gross negligence against CenterPoint Energy and Houston Electric.

The plaintiffs in these actions allege personal injury and/or property damage from downed power lines and seek damages in excess of $ 1 million.

CenterPoint Energy and Houston Electric intend to vigorously defend themselves against the lawsuits.

CenterPoint Energy and its subsidiaries have general and excess liability insurance policies that provide coverage for third party bodily injury and property damage claims.

Given the nature of some allegations, it is possible that the insurers could dispute coverage for some types of claims or damages that may be alleged by plaintiffs, and CenterPoint Energy has received from two insurers denials of indemnity coverage in the putative class actions based on the failure to supply exclusion.

Those insurers have also reserved their rights with respect to coverage in those actions.

CenterPoint Energy and Houston Electric intend to continue to pursue all available insurance coverage for all of these matters.

To date, there have not been demands, quantification, disclosure or discovery of damages by any party to any of the above legal matters that are sufficient to enable CenterPoint Energy and its subsidiaries to estimate exposure.

Given that, as well as the preliminary nature of the proceedings, the numerosity of parties and complexity of issues involved, and the uncertainties of

litigation, CenterPoint Energy and its subsidiaries are unable to predict the outcome or consequences of any of the foregoing matters or to estimate a range of potential losses.

For more information regarding Hurricane Beryl, see Note 7.

Litigation Related to the February 2021 Winter Storm Event.

Various legal proceedings are still pending against numerous entities with respect to the February 2021 Winter Storm Event, including against CenterPoint Energy, Utility Holding, LLC, Houston Electric, and CERC.

Like other Texas energy companies and TDUs, CenterPoint Energy and Houston Electric have become involved in certain investigations, litigation and other regulatory and legal proceedings regarding their efforts to restore power during the storm and their compliance with NERC, ERCOT and PUCT rules and directives.

Additionally, like other natural gas market participants, CERC has been named in litigation alleging gas market manipulation.

CenterPoint Energy, Utility Holding, LLC, and Houston Electric, along with hundreds of other defendants (including ERCOT, power generation companies, other TDUs, natural gas producers, REPs, and other entities) have received claims and lawsuits filed by plaintiffs alleging wrongful death, personal injury, property damage and other injuries and damages.

As of December 31, 2023, there are approximately 220 pending lawsuits that are consolidated in Texas state court in Harris County, Texas, as part of the MDL proceeding related to the February 2021 Winter Storm Event, and CenterPoint Energy and Houston Electric, along with numerous other entities, have been named as defendants in approximately 155 of those lawsuits.

One of the lawsuits in the MDL is a putative class action on behalf of everyone who received electric power via ERCOT grid and sustained a power outage between February 10, 2021 and February 28, 2021.

Additionally, Utility Holding, LLC is currently named as a defendant in one lawsuit in which CenterPoint Energy and Houston Electric are also named as defendants.

CenterPoint Energy, Utility Holding, and Houston Electric, along with hundreds of other defendants (including ERCOT, power generation companies, other TDUs, natural gas producers, REPs, and other entities) received claims and lawsuits filed by plaintiffs alleging wrongful death, personal injury, property damage and other injuries and damages.

As of December 31, 2024, there were approximately 220 pending lawsuits that are consolidated in Texas state court in Harris County, Texas, as part of the MDL proceeding related to the February 2021 Winter Storm Event, and CenterPoint Energy and Houston Electric, along with numerous other entities, have been named as defendants in approximately 155 of those lawsuits.

One of the lawsuits in the MDL is a putative class action on behalf of everyone who received electric power via the ERCOT grid and sustained a power outage between February 10, 2021 and February 28, 2021.

Additionally, Utility Holding is currently named as a defendant in one lawsuit in which CenterPoint Energy and Houston Electric are also named as defendants.

The judge overseeing the MDL issued an initial case management order and stayed all proceedings and discovery.

Per the case management order, the judge entertained dispositive motions in five representative or “bellwether” cases and, in late January 2023, issued rulings on them.

In a recent opinion in an unrelated matter, the Texas Supreme Court held that ERCOT is entitled to sovereign immunity.

The judge ruled that ERCOT has sovereign immunity as a governmental entity and dismissed the suits against it.

In a subsequent opinion in an unrelated matter, the Texas Supreme Court held that ERCOT is entitled to sovereign immunity.

This ruling will apply to claims against ERCOT in the MDL.

The MDL judge also dismissed all claims against the natural gas defendants (which list of natural gas defendants incorrectly included Utility Holding, LLC) and the REP defendants and some causes of action against the other defendants.

CenterPoint Energy expects that the claims against Utility Holding, LLC will ultimately be dismissed in light of the judge’s initial rulings.

The MDL judge also dismissed all claims against the natural gas defendants (which list of natural gas defendants incorrectly included Utility Holding) and the REP defendants and some causes of action against the other defendants.

CenterPoint Energy expects that the claims against Utility Holding will ultimately be dismissed in light of the judge’s initial rulings.

As to the TDU and generator defendants, the judge dismissed some causes of action but denied the motions to dismiss claims for negligence, gross negligence, and nuisance, which denial the TDU defendants and generator defendants asked the courts of appeals to overturn.

A three-judge panel of the Court of Appeals for the Fourteenth District of Texas heard oral argument in the TDU mandamus proceeding on October 23, 2023.

An opinion in that proceeding has not yet been issued.

On December 14, 2023, a three-judge panel of the Court of Appeals for the First District of Texas issued an opinion in the generator mandamus proceeding, granting the generators’ mandamus request and ordering that plaintiffs’ remaining claims against the generators be dismissed.

The plaintiffs are expected to seek rehearing before the entire First Court of Appeals of that panel’s ruling.

The MDL judge is allowing defendants (including Houston Electric) to file several additional motions on preliminary legal issues, and otherwise the cases remain stayed.

CenterPoint Energy, Utility Holding, LLC, and Houston Electric intends to vigorously defend themselves against the claims raised.

On April 2, 2024, a three-judge panel of the Court of Appeals for the Fourteenth District of Texas issued an opinion in the TDU mandamus proceeding, granting in part and denying in part the TDUs’ mandamus request.

In its opinion, the panel granted the TDUs’ mandamus request relating to the TDUs’ motion to dismiss the plaintiffs’ claims for (1) negligence, (2) negligent nuisance and (3) strict liability nuisance and ordered those claims be dismissed.

The panel denied the TDUs’ mandamus request relating to the TDUs’ motion to dismiss the plaintiffs’ gross negligence and intentional nuisance claims.

On May 22, 2024, the TDUs filed a mandamus petition with the Supreme Court of Texas, seeking dismissal of the remaining claims.

The Supreme Court of Texas subsequently asked for briefing on the merits and, on December 20, 2024, set the TDUs’ mandamus petition for oral argument, which occurred on February 19, 2025.

In the generator mandamus proceeding that was pending in the Court of Appeals for the First District of Texas, a three-judge panel granted the generators’ mandamus request and ordered dismissal of all claims asserted against the generators’ defendants.

The plaintiffs asked the entire First Court of Appeals to rehear the panel’s decision.

On November 26, 2024, the First Court of Appeals denied that motion.

The plaintiffs filed a petition for writ of mandamus with the Supreme Court of Texas on January 31, 2025.

The MDL judge allowed defendants (including Houston Electric) to file several additional motions on preliminary legal issues.

These motions included the TDUs’ motion to dismiss under Chapter 150 of the Texas Civil Practice and Remedies Code, which was filed in one of the bellwether cases and argued that all of plaintiffs’ claims should be dismissed because the plaintiffs did not include a sufficient certificate by a qualified engineer with their petition, as required by Texas law, as well as a motion to deny class certification in the putative class action.

On November 13, 2024, the MDL Court granted the TDUs’ motion to dismiss under Chapter 150, and on December 3, 2024, the plaintiffs filed a notice of appeal of that ruling.

On January 8, 2025, the MDL Court denied class certification in the putative class action.

Following issuance of the order denying class certification, a new lawsuit was filed on behalf of approximately 140 plaintiffs in Harris County District Court against hundreds of defendants, including CenterPoint Energy and Houston Electric.

In addition, plaintiffs filed a notice of appeal of the denial of class certification on January 27, 2025.

Aside from addressing certain additional preliminary legal issues, the cases remain stayed in the MDL Court.

CenterPoint Energy, Utility Holding, and Houston Electric intend to vigorously defend themselves against the claims raised.

CenterPoint Energy and Houston Electric have also responded to inquiries from the Texas Attorney General and the Galveston County District Attorney’s Office, and various other regulatory and governmental entities also conducted inquiries, investigations and other reviews of the February 2021 Winter Storm Event and the efforts made by various entities to prepare for, and respond to, the event, including the electric generation shortfall issues.

In February 2023, twelve lawsuits were filed in state district court in Harris County and Tom Green County, Texas, against dozens of gas market participants in Texas, including natural gas producers, processors, pipelines, marketers, sellers, traders,

gas utilities, and financial institutions.

Plaintiffs named CERC as a defendant, along with “CenterPoint Energy Services, Inc.,” incorrectly identifying it as CERC’s parent company (CenterPoint Energy previously divested CES).

Plaintiffs named CERC as a defendant, along with “CenterPoint Energy Services, Inc.,” incorrectly identifying it as CERC’s parent company (CenterPoint Energy previously divested CenterPoint Energy Services, Inc.).

One lawsuit filed in Harris County is a putative class action on behalf of two classes of electric and natural gas customers (those who experienced a loss of electricity and/or natural gas, and those who were charged securitization-related surcharges on a utility bill or were otherwise charged higher rates for electricity and/or gas during the February 2021 Winter Storm Event), potentially including millions of class members.

Two other lawsuits ( one filed in Harris County and one in Tom Green County) are brought by an entity that purports to be an assignee of claims by tens of thousands of persons and entities that have assigned claims to the plaintiff.

Two other lawsuits ( one filed in Harris County and one in Tom Green County) were brought by an entity that purports to be an assignee of the claims of tens of thousands of persons and entities.

These, and nine other similar lawsuits filed in Harris County, generally allege that the defendants engaged in gas market manipulation and price gouging, including by intentionally withholding, suppressing, or diverting supplies of natural gas in connection with the February 2021 Winter Storm Event, Winter Storm Elliott, and other severe weather conditions, and through financial market manipulation.

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and other relief.

As of December 31, 2023, most of the lawsuits have not been served, but the three cases in which defendants were served were tagged for transfer to the existing MDL proceeding referenced above.

The plaintiffs in those three cases filed motions to remand the lawsuits back to their original trial courts and out of the MDL.

On August 1, 2023, the judge overseeing the MDL denied the motions to remand.

On November 29, 2023, the MDL panel denied Plaintiffs’ joint motion for reconsideration of the MDL judge’s orders denying remand, and the time to appeal the MDL panel’s decision has passed.

These lawsuits remain pending in the MDL, and CERC intends to vigorously defend itself against the claims raised, including by raising jurisdictional challenges to the plaintiffs’ claims.

The nine other similar lawsuits filed in Harris County have also been tagged for transfer to the MDL proceeding, but the defendants, including CERC, have not been served.

All twelve lawsuits have been tagged for transfer to the existing MDL proceeding referenced above, but only three of the cases have been served against the defendants, including CERC.

These gas market cases are in addition to the 220 cases noted above regarding electric market issues.

On February 2, 2024, CERC filed pleas to the jurisdiction in the three cases in which it was served;

CERC also partially joined the other defendants’ motions to dismiss and additional pleas to the jurisdiction.

On April 2, 2024, plaintiffs in the three served cases filed amended petitions rather than responding to pleas to the jurisdiction and motions to dismiss.

Among other changes, plaintiffs in these three cases dismissed CenterPoint Energy Services, Inc., but maintained the same three causes of action as to the remaining defendants.

CERC has vigorously defended itself against the claims raised, including filing updated pleas to the jurisdiction on May 17, 2024 in response to plaintiffs’ amended petitions – and will continue to do so.

On August 12, 2024, plaintiffs in the putative class action filed a motion for leave to amend to add additional plaintiffs/class representatives.

Defendants opposed this motion on September 20, 2024.

On September 23, 2024, the MDL judge heard oral argument on CERC’s plea to the jurisdiction and defendants’ motions to dismiss and other pleas to the jurisdiction.

On November 7, 2024 and November 11, 2024, the MDL judge granted defendants’ motion to dismiss and CERC’s plea to the jurisdiction in all three cases.

As a result of these rulings, all claims against CERC were dismissed with prejudice.

Plaintiffs have appealed these rulings, and the appeals have been assigned to the Court of Appeals for the First District of Texas.

On December 4, 2024, the MDL judge denied as moot plaintiff’s motion for leave to amend to add additional plaintiffs/class representatives in the putative class action case.

On January 17, 2025, the plaintiffs in the putative class action case filed an unopposed motion to dismiss their appeal, which the Court of Appeals granted on February 4, 2025, dismissing the appeal.

Plaintiffs’ opening briefs in the remaining two cases are scheduled to be filed on March 28, 2025.

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CenterPoint Energy and its subsidiaries have general and excess liability insurance policies that provide coverage for third party bodily injury and property damage claims.

As CenterPoint Energy previously noted, given the nature of certain of the plaintiffs’ allegations, insurance coverage may not be available other than for third party bodily injury and property damage claims caused by an accident, and one of CenterPoint Energy’s insurers recently denied coverage for intentional injury as alleged by plaintiffs in the gas market cases.

CenterPoint Energy and its subsidiaries intend to continue to pursue any and all available insurance coverage for all of these matters.

As CenterPoint Energy previously noted, given the nature of certain of the plaintiffs’ allegations, insurance coverage may not be available other than for third party bodily injury and property damage claims caused by an accident, and one of CenterPoint Energy’s insurers has reserved its rights with respect to coverage for plaintiffs’ intentional nuisance claims as well as plaintiffs’ claims in the gas market cases.

CenterPoint Energy and its subsidiaries intend to continue to pursue all available insurance coverage for all of these matters.

Jefferson Parish .

Several parishes and the State of Louisiana filed 42 suits under Louisiana’s State and Local Coastal Resources Management Act (SCLRMA) against hundreds of oil and gas companies seeking compensatory damages for contamination and erosion of the Louisiana coastline allegedly caused by historical oil and gas operations.

One of the defendants in one of the lawsuits (filed in 2013 only by the Parish of Jefferson) is Primary Fuels, Inc., a predecessor company of CenterPoint Energy, which operated in Louisiana from 1983-1989.

Several parishes and the State of Louisiana filed 42 suits under Louisiana’s State and Local Coastal Resources Management Act against hundreds of oil and gas companies seeking compensatory damages for contamination and erosion of the Louisiana coastline allegedly caused by historical oil and gas operations.

All 42 suits were removed to Louisiana federal courts twice and were stayed for several years pending the district courts’ consideration of various motions to remand and multiple appeals of remand orders.

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However, as of December 31, 2024, the federal district court had not ruled on Jefferson Parish’s motion to remand to state court the lawsuit which includes Primary Fuels among the defendants.

Because of the procedurally preliminary nature of the proceedings, lack of information about both the scope of and damages for Jefferson Parish’s claim against Primary Fuels, the numerosity of parties and complexity of issues involved, and the uncertainties of litigation, CenterPoint Energy and its subsidiaries are unable to predict the outcome or consequences of this matter or to estimate a range of potential losses.

Because of the procedurally preliminary nature of the proceedings, lack of information about both the scope of and damages for Jefferson Parish’s claim against Primary Fuels, Inc., the numerosity of parties and complexity of issues involved, and the uncertainties of litigation, CenterPoint Energy and its subsidiaries are unable to predict the outcome or consequences of this matter or to estimate a range of potential losses.

CenterPoint Energy will continue to vigorously defend itself against the claims raised and pursue any and all available insurance coverage.

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The costs CenterPoint Energy or CERC, as applicable, expect to incur to fulfill their respective obligations are estimated by management using assumptions based on actual costs incurred, the timing of expected future payments and inflation factors, among others.

events may require remedial activities which are not presently foreseen, and those costs may not be subject to PRP or insurance recovery.

While CenterPoint Energy and CERC have recorded obligations for all costs which are probable and estimable, including amounts they are presently obligated to incur in connection with activities at these sites, it is possible that future events may require remedial activities which are not presently foreseen, and those costs may not be subject to PRP or insurance recovery.

(i) Minnesota MGPs (CenterPoint Energy and CERC) .

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The remaining sites have been submitted to the IDEM’s VRP.

CenterPoint Energy has also identified its involvement in 5 manufactured gas plant sites in SIGECO’s service territory, all of which are currently enrolled in the IDEM’s VRP.

CenterPoint Energy has also identified its involvement in five manufactured gas plant sites in SIGECO’s service territory, all of which are currently enrolled in the IDEM’s VRP.

CenterPoint Energy is currently conducting some level of remedial activities, including groundwater monitoring at certain sites.

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In April 2015, the EPA finalized its CCR Rule, which regulates ash as non-hazardous material under the RCRA.

The final rule allows beneficial reuse of ash, and the majority of the ash generated by Indiana Electric’s generating plants will continue to be reused.

In July 2018, the EPA released its final CCR Rule Phase I Reconsideration which extended the deadline to October 31, 2020 for ceasing placement of ash in ponds that exceed groundwater protections standards or that fail to meet location restrictions.

In August 2019, the EPA proposed additional “Part A” amendments to its CCR Rule with respect to beneficial reuse of ash and other materials.

The Part A amendments were finalized in August 2020 and extended the deadline to cease placement of ash in ponds to April 11, 2021, discussed further

The Part A amendments do not restrict Indiana Electric’s current beneficial reuse of its fly ash.

On May 18, 2023, the EPA issued a proposed revision to the CCR rule that could potentially expand the scope of units regulated under the federal CCR rule (the CCR “Legacy” rule).

The CCR Legacy rule seeks to include legacy CCR surface impoundments (inactive surface impoundments at inactive generating facilities) as well as new “CCR management units” at active or inactive facilities otherwise subject to federal CCR regulations.

The potential impact of the CCR Legacy rule is uncertain at this time, and if finalized could require Registrant to conduct additional CCR investigations.

The final rule allows beneficial reuse of ash, and a portion of the ash generated by Indiana Electric’s generating plants will continue to be reused.

Indiana Electric has three ash ponds, two at the F.B.

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Brown facility.

Under the existing CCR Rule, Indiana Electric is required to perform integrity assessments, including ground water monitoring, at its F.B.

Under the CCR Rule, Indiana Electric is required to perform integrity assessments, including ground water monitoring, at its F.B.

Culley and A.B.

Brown generating stations.

The ground water studies were necessary to determine the remaining service life of the ponds and whether a pond must be retrofitted with liners or closed in place.

Indiana Electric’s Warrick generating unit is not included in the scope of the CCR Rule as this unit has historically been part of a larger generating station that predominantly serves an adjacent industrial facility.

Groundwater monitoring indicates potential groundwater impacts adjacent to Indiana Electric’s ash impoundments, and further analysis is ongoing.

The CCR Rule required companies to complete location restriction determinations by October 18, 2018.

Indiana Electric completed its evaluation and determined that one F.B.

Culley pond (Culley East) and the A.B.

Brown pond fail the aquifer placement location restriction.

As a result of this failure, Indiana Electric was required to cease disposal of new ash in the ponds and commence closure of the ponds by April 11, 2021, unless approved for an extension.

CenterPoint Energy filed timely extension requests available under the CCR Rule that would allow Indiana Electric to continue to use the ponds through October 15, 2023.

On October 5, 2022, the EPA issued a proposed conditional approval of the Part A extension request for the A.B.

Both the Culley East and A.B.

Brown facility have been taken out of service in a timely manner per the commitments made to the EPA in the extension requests filed for both ponds .

Pursuant to the CCR Rule, both the Culley East and A.B.

Brown facilities were taken out of service in a timely manner per the commitments made to the EPA in the extension requests filed for both ponds.

On April 24, 2019, Indiana Electric received an order from the IURC approving recovery in rates of costs associated with the closure of the Culley West pond, which has already completed closure activities.

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On November 1, 2022, Indiana Electric filed for a CPCN to recover federally mandated costs associated with closure of the Culley East Pond, its third and final ash pond.

Indiana Electric is also seeking accounting and ratemaking relief for the project, and on June 8, 2023, Indiana Electric filed a revised CPCN for recovery of the federally mandated ash pond costs.

The project costs are estimated to be approximately $ 52 million, inclusive of overheads.

In July 2018, Indiana Electric filed a Complaint for Damages and Declaratory Relief against its insurers seeking reimbursement of defense, investigation and pond closure costs incurred to comply with the CCR Rule, and has since reached confidential settlement agreements with its insurers.

The proceeds of these settlements will offset costs that have been and will be incurred to close the ponds.

As of December 31, 2023, CenterPoint Energy has recorded an approximate $ 116 million ARO, which represents the discounted value of future cash flow estimates to close the ponds at A.B.

Indiana Electric sought accounting and ratemaking relief for the project, and on June 8, 2023, Indiana Electric filed a revised CPCN for recovery of the federally mandated ash pond costs.

On February 7, 2024 the IURC approved the federally mandated costs, both incurred and projected, of $ 52 million in capital costs, plus an estimated $ 133,000 in annual operation and maintenance expenses, for recovery through the ECA.

As of December 31, 2024, CenterPoint Energy had recorded an approximate $ 121 million ARO, which represents the discounted value of future cash flow estimates to close the ponds at A.B.

Brown and F.B.

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changing environmental regulations;

and proceeds received from the settlements in the aforementioned insurance proceeding.

and proceeds received from the settlements in a previously settled insurance proceeding.

In addition to these AROs, Indiana Electric also anticipates equipment purchases of between $ 60 million and $ 80 million to complete the A.B.

Brown closure project.

Clean Water Act Permitting of Groundwater Discharges .

On April 25, 2024, the EPA released its final Hazardous and Solid Waste Management System;

Disposal of Coal Combustion Residuals from Electric Utilities;

Legacy CCR Surface Impoundments rule (CCR Legacy Rule), which was published in the federal register in May 2024.

The CCR Legacy Rule requires companies to investigate previously closed impoundments that were used historically for ash disposal or locations which have had ash placed on them in amounts set forth in the CCR Legacy Rule.

The Registrants have completed their preliminary review of potential sites that will require further investigation under the CCR Legacy Rule and identified certain sites in Indiana for further evaluation.

During 2024, Indiana Electric recorded an approximate $ 11 million ARO with a corresponding increase of $ 11 million to Property, plant and equipment for amounts recoverable for electric generation stations that are currently in service.

These estimates reflect the discounted value of future estimated capping costs for an area of historic ash placement at F.B.

Indiana Electric will continue to refine the assumptions, engineering analyses and resulting cost estimates associated with this ARO and such refinement could materially impact the amount of the estimated ARO.

Clean Water Act Permitting of Groundwater and Power Plant Discharges .

In April 2020, the U.S.

Supreme Court issued an opinion providing that indirect discharges via groundwater or other non-point sources are subject to permitting and liability under the Clean Water Act when they are the functional equivalent of a direct discharge.

On November 27, 2023, the EPA published draft guidance regarding the application of the “functional equivalent” analysis as related to permitting of certain discharges through groundwater to surface waters.

The Registrants are evaluating the extent to which this decision and the proposed EPA guidance will affect Clean Water Act permitting requirements and/or liability for their operations.

On November 27, 2023, the EPA published draft guidance regarding the application of the “functional equivalent” analysis as related to permitting of certain

discharges through groundwater to surface waters.

The Registrants do not currently anticipate impacts from this guidance, but groundwater monitoring continues under the CCR Rule.

In 2015, the EPA finalized revisions to the existing steam electric wastewater discharge standards which set more stringent wastewater discharge limits and effectively prohibited further wet disposal of coal ash in ash ponds.

In February 2019, the IURC approved Indiana Electric’s Effluent Limitation Guidelines Compliance Plan for its F.B.

Culley Generating Station, which was completed in compliance with the requirements of the Effluent Limitation Guidelines.

On April 25, 2024, the EPA released its final Supplemental Effluent Limitation Guidelines and Standards for the Steam Electric Generating Point Source Category.

The Registrants currently anticipate that they will be in compliance with the Supplemental ELG Guidelines at the Culley facility due to previous wastewater treatment upgrades.

Other Environmental.

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In addition, the Registrants have been, or may be, named from time to time as defendants in litigation related to such sites.

Although the ultimate outcome of such matters cannot be predicted at this time, the

Registrants do not expect these matters, either individually or in the aggregate, to have a material adverse effect on their financial condition, results of operations or cash flows.

Although the ultimate outcome of such matters cannot be predicted at this time, the Registrants do not expect these matters, either individually or in the aggregate, to have a material adverse effect on their financial condition, results of operations or cash flows.

Other Proceedings

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(15) Earnings Per Share (CenterPoint Energy)

Basic earnings per common share is computed by dividing income available to common shareholders from continuing operations by the weighted average number of common shares outstanding during the period.

Basic earnings per common share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period.

Participating securities are excluded from weighted average number of common shares outstanding in the computation of basic earnings per common share.

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

Diluted earnings per common share reflects the dilutive effect of potential common shares from share-based awards and convertible preferred shares.

The dilutive effect of the restricted stock, Series B Preferred Stock and Series C Preferred Stock is computed using the if-converted method, which assumes conversion of the restricted stock, Series B Preferred Stock and Series C Preferred Stock at the beginning of the period, giving income recognition for the add-back of the preferred share dividends, amortization of beneficial conversion feature, and undistributed earnings allocated to preferred shareholders.

Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding, including all potentially dilutive common shares, if the effect of such common shares is dilutive.

Diluted earnings per common share reflects the dilutive effect of potential common shares from share-based awards.

The dilutive effect of restricted stock is computed using the if-converted method, which assumes conversion of the restricted stock at the beginning of the period.

The dilutive effect of restricted stock is computed using the treasury stock method, as applicable, which includes the incremental shares that would be hypothetically vested in excess of the number of shares assumed to be hypothetically repurchased with the assumed proceeds.

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For the year ended December 31, 2024, the convertible debt was not in the money;

therefore, no incremental shares were assumed converted or included in the diluted earnings per common share calculation.

therefore, no incremental shares were assumed converted or included in the diluted earnings per common share calculation below.

For further details on the Convertible Notes, see Note 12.

The Series C Preferred Stock issued in May 2020 were considered participating securities since these shares participated in dividends on Common Stock on a pari passu, pro rata, as-converted basis.

As a result, beginning June 30, 2020, earnings per share on Common Stock was computed using the two-class method required for participating securities during the periods the Series C Preferred Stock was outstanding.

As of May 7, 2021, all of the remaining outstanding shares of Series C Preferred Stock were converted into shares of Common Stock and earnings per share on Common Stock and the two-class method was no longer applicable beginning June 30, 2021.

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

Basic earnings per common share is determined by dividing Income available to common shareholders - basic by the Weighted average common shares outstanding - basic for the applicable period.

Diluted earnings per common share is determined by the inclusion of potentially dilutive common stock equivalent shares that may occur if securities to issue Common Stock were exercised or converted into Common Stock.

For the Year Ended December 31,

The following table reconciles numerators and denominators of CenterPoint Energy’s basic and diluted earnings per common share for the periods presented:

Year Ended December 31,

2024 2023 2022

(in millions, except per share and share amounts)

Income from continuing operations $ 917 $ 1,057 $ 668

Net income $ 1,019 $ 917 $ 1,057

Preferred stock dividend requirement (Note 11)

Income available to common shareholders from continuing operations - basic and diluted 867 1,008 573

Income available to common shareholders from discontinued operations - basic and diluted — — 818

Income available to common shareholders - basic and diluted $ 1,019 $ 867 $ 1,008

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Restricted stock 974,000 2,232,000 2,931,000

Series C Preferred Stock (1)

— — 11,824,000

Weighted average common shares outstanding - diluted 644,137,000 633,179,000 632,346,000

Anti-dilutive Incremental Shares Excluded from Denominator for Diluted Earnings Computation:

Series B Preferred Stock (2)

— — 23,906,000

Earnings per Common Share:

Basic earnings per common share - continuing operations $ 1.37 $ 1.60 $ 0.97

Basic earnings per common share - discontinued operations — — 1.38

Basic Earnings Per Common Share $ 1.37 $ 1.60 $ 2.35

Diluted earnings per common share - continuing operations $ 1.37 $ 1.59 $ 0.94

Diluted earnings per common share - discontinued operations — — 1.34

Diluted Earnings Per Common Share $ 1.37 $ 1.59 $ 2.28

(1) As of December 31, 2021, all of the outstanding Series C Preferred Stock has been converted into Common Stock.

For further information, see Note 12.

(2) As of December 31, 2021, all of the outstanding Series B Preferred Stock has been converted into Common Stock.

For further information, see Note 12.

Basic $ 1.58 $ 1.37 $ 1.60

Diluted $ 1.58 $ 1.37 $ 1.59

(16) Reportable Segments

The Registrants’ determination of reportable segments considers the strategic operating units under which its CODM manages sales, allocates resources and assesses performance of various products and services to wholesale or retail customers in differing regulatory environments.

Each Registrant’s CODM views net income as the measure of profit or loss for the reportable segments.

As of December 31, 2023, reportable segments by Registrant are as follows:

As of December 31, 2024, reportable segments by Registrant and information about each Registrant’s CODM were as follows:

CenterPoint Energy

• CenterPoint Energy’s Electric reportable segment consisted of electric transmission and distribution services in the Texas Gulf Coast area in the ERCOT region and electric transmission and distribution services primarily to southwestern Indiana and includes power generation and wholesale power operations in the MISO region.

• CenterPoint Energy’s Natural Gas reportable segment consists of (i) intrastate natural gas sales to, and natural gas transportation and distribution for residential, commercial, industrial and institutional customers in Indiana, Louisiana, Minnesota, Mississippi, Ohio and Texas;

• CenterPoint Energy’s Natural Gas reportable segment consists of (i) intrastate natural gas sales to, and natural gas transportation and distribution for residential, commercial and industrial customers in Indiana, Louisiana, Minnesota, Mississippi, Ohio and Texas;

and (ii) permanent pipeline connections through interconnects with various interstate and intrastate pipeline companies through CEIP.

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CenterPoint Energy’s Corporate and Other also includes office buildings and other real estate used for business operations.

CenterPoint Energy’s CODM, the Chief Executive Officer, evaluates performance for all of its reportable segments based on segment net income.

The CODM uses segment net income to allocate resources as part of the budgeting and forecasting process as well as during periodic budget-to-actual reviews.

Houston Electric

• Houston Electric’s single reportable segment consisted of electric transmission services to transmission service customers in the ERCOT region and distribution service to REPs in the Texas Gulf Coast area that includes the city of Houston.

• CERC’s single reportable segment following the Restructuring consisted of (i) intrastate natural gas sales to, and natural gas transportation and distribution for residential, commercial, industrial and institutional customers in Indiana, Louisiana, Minnesota, Mississippi, Ohio and Texas;

Houston Electric’s CODM, the President and Chief Executive Officer, evaluates performance for its single reportable segment based on segment net income.

The CODM uses segment net income to allocate resources as part of the budgeting and forecasting process as well as during periodic budget-to-actual reviews.

• CERC’s single reportable segment following the Restructuring consisted of (i) intrastate natural gas sales to, and natural gas transportation and distribution for residential, commercial and industrial customers in Indiana, Louisiana, Minnesota, Mississippi, Ohio and Texas;

and (ii) permanent pipeline connections through interconnects with various interstate and intrastate pipeline companies through CEIP.

CERC’s CODM, the President and Chief Executive Officer, evaluates performance for its single reportable segment based on segment net income.

The CODM uses segment net income to allocate resources as part of the budgeting and forecasting process as well as during periodic budget-to-actual reviews.

Expenditures for long-lived assets include property, plant and equipment.

Intersegment sales are eliminated in consolidation, except as described in Note 4.

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

Financial data for reportable segments is as follows:

CenterPoint Energy

Customers Intersegment Revenues

Amortization Interest Income (1) Interest Expense Income Tax Expense

(Benefit) Net Income (Loss)

(in millions)

For the year ended December 31, 2023:

Electric $ 4,290 $ — $ 872 $ 19 $ ( 303 ) $ 189 $ 654

Natural Gas 4,276 3 513 10 ( 188 ) ( 25 ) 533

Year Ended December 31, 2024

Corporate and Other

Eliminations — ( 3 ) — ( 54 ) 54 — —

Total Reportable Segments

(in millions)

Revenues from external customers

$ 4,590 $ 4,048 $ 5 $ 8,643 $ — $ 8,643

For the year ended December 31, 2022:

Electric $ 4,108 $ — $ 793 $ 4 $ ( 235 ) $ 147 $ 603

Natural Gas 4,946 — 466 2 ( 137 ) 243 492

Corporate and Other 267 — 29 59 ( 214 ) ( 30 ) ( 38 )

Eliminations — — — ( 62 ) 62 — —

Intersegment revenues

— 2 — 2 ( 2 ) —

Customers Intersegment Revenues

Amortization Interest Income (1) Interest Expense Income Tax Expense

(Benefit) Net Income (Loss)

Utility natural gas, fuel and purchased power 198 1,520 ( 1 ) 1,717 ( 2 ) 1,715

Non-utility cost of revenues, including natural gas — 3 — 3 — 3

Operation and maintenance expenses 2,072 881 ( 4 ) 2,949 — 2,949

Depreciation and amortization 877 542 20 1,439 — 1,439

Taxes other than income taxes 304 237 6 547 — 547

Interest expense 372 207 286 865 ( 27 ) 838

Income tax expense (benefit) 157 108 ( 70 ) 195 — 195

Interest income (1) ( 18 ) ( 2 ) ( 14 ) ( 34 ) 27 ( 7 )

Other income, net (2) ( 43 ) ( 12 ) — ( 55 ) — ( 55 )

Net income (loss)

$ 671 $ 566 $ ( 218 ) $ 1,019 $ — $ 1,019

Year Ended December 31, 2023

Electric Natural Gas Corporate and Other Total Reportable Segments

(in millions)

For the year ended December 31, 2021:

Electric $ 3,763 $ — $ 775 $ — $ ( 226 ) $ 95 $ 475

Natural Gas 4,336 — 527 1 ( 141 ) 80 403

Corporate and Other 253 — 14 118 ( 278 ) ( 65 ) ( 210 )

Eliminations — — — ( 116 ) 116 — —

Continuing Operations

Revenues from external customers $ 4,290 $ 4,276 $ 130 $ 8,696 $ — $ 8,696

Intersegment revenues — 3 — 3 ( 3 ) —

Utility natural gas, fuel and purchased power 176 1,888 — 2,064 ( 3 ) 2,061

Non-utility cost of revenues, including natural gas — 3 96 99 — 99

Operation and maintenance expenses 1,880 949 21 2,850 — 2,850

Depreciation and amortization 872 513 16 1,401 — 1,401

Taxes other than income taxes 272 245 8 525 — 525

Interest expense 303 188 264 755 ( 54 ) 701

Income tax expense (benefit) 189 ( 25 ) 6 170 — 170

Interest income (1) ( 19 ) ( 10 ) ( 34 ) ( 63 ) 54 ( 9 )

Other expense (income), net (2)

( 37 ) ( 5 ) 23 ( 19 ) — ( 19 )

Discontinued Operations, net

(1) Interest income from Securitization Bonds of $ 4 million, less than $ 1 million, and $ 1 million for the years ended December 31, 2023, 2022 and 2021, respectively, is included in Other income, net on both CenterPoint Energy’s and Houston Electric’s respective Statements of Consolidated Income.

Net income (loss) $ 654 $ 533 $ ( 270 ) $ 917 $ — $ 917

Year Ended December 31, 2022

Electric Natural Gas Corporate and Other Total Reportable Segments

(in millions)

Revenues from external customers $ 4,108 $ 4,946 $ 267 $ 9,321 $ — $ 9,321

Utility natural gas, fuel and purchased power 222 2,665 — 2,887 — 2,887

Non-utility cost of revenues, including natural gas — 4 200 204 — 204

Operation and maintenance expenses 1,864 919 50 2,833 — 2,833

Depreciation and amortization 793 466 29 1,288 — 1,288

Taxes other than income taxes 275 261 7 543 — 543

Interest expense 235 137 214 586 ( 62 ) 524

Income tax expense (benefit) 147 243 ( 30 ) 360 — 360

Interest income (1) ( 4 ) ( 2 ) ( 60 ) ( 66 ) 62 ( 4 )

Other income, net (2) ( 27 ) ( 239 ) ( 105 ) ( 371 ) — ( 371 )

Net income (loss) $ 603 $ 492 $ ( 38 ) $ 1,057 $ — $ 1,057

(1) Interest income from Securitization Bonds of $ 3 million, $ 4 million, and less than $ 1 million for the years ended December 31, 2024, 2023 and 2022, respectively, is included in Other income (expense), net on CenterPoint Energy’s Statements of Consolidated Income.

(2) Other income (expense), net primarily includes AFUDC equity, non-service cost for pension and postretirement benefits, Gain (loss) on equity securities, Gain (loss) on indexed debt securities and Gain (loss) on sale.

Total Assets Expenditures for Long-lived Assets

December 31, December 31,

As of December 31,

Year Ended December 31,

2023 2024 2023 2022

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Corporate and Other, net of eliminations (1) 1,249 1,197 26 13 107

1,197 1,479 13 107 42

Continuing Operations 43,768

39,715 4,649 4,370 4,415

Divestitures/Discontinued Operations

$ 39,715 $ 38,546 $ 4,370 $ 4,418 $ 3,399

Divestitures (2)

Consolidated $ 43,768 $ 39,715 $ 4,649 $ 4,370 $ 4,418

(1) Total assets included pension and other postemployment-related regulatory assets of $ 384 million and $ 385 million as of December 31, 2024 and 2023, respectively.

Divestitures and Discontinued Operations (CenterPoint Energy and CERC)

For further information regarding CenterPoint Energy’s and CERC’s divestitures and discontinued operations, see Note 4.

(2) For further information regarding CenterPoint Energy’s and CERC’s divestitures, see Note 4.

Houston Electric

Houston Electric consists of a single reportable segment.

therefore, a tabular reportable segment presentation has not been

For financial data related to income and expenses for the single reportable segment, see Houston Electric’s Statements of Consolidated Income.

For financial data related to segment total assets, see Houston Electric’s Consolidated Balance Sheets.

Financial data related to interest income and expenditures for long-lived assets is as follows:

Year Ended December 31,

2024 2023 2022

(in millions)

Interest income (1)

$ 16 $ 14 $ 3

Expenditures for long-lived assets

2,738 2,309 2,302

(1) Reflected in Other income (expense), net on Houston Electric’s Statements of Consolidated Income.

CERC consists of a single reportable segment.

therefore, a tabular reportable segment presentation has not been included.

For financial data related to income and expenses for the single reportable segment, see CERC’s Statements of Consolidated Income.

For financial data related to segment total assets, see CERC’s Consolidated Balance Sheets.

Financial data related to interest income and expenditures for long-lived assets is as follows:

Year Ended December 31,

2024 2023 2022

(in millions)

Interest income (1)

Expenditures for long-lived assets

1,485 1,568 1,616

(1) Reflected in Other income (expense), net on CERC’s Statements of Consolidated Income.

Major Customers (Houston Electric)

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2024 2023 2022

Revenues by Products and Services:

CenterPoint Energy Houston Electric CERC CenterPoint Energy Houston Electric CERC CenterPoint Energy Houston Electric CERC

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Gas transportation 11 — 11 11 — 11 12 — 12

11 — 11 12 — 12 12 — 12

Energy products and services 206 — 198 317 — 187 442 — 175

317 — 187 442 — 175 420 — 167

Total $ 8,643 $ 3,939 $ 3,925 $ 8,696 $ 3,677 $ 4,149 $ 9,321 $ 3,412 $ 4,800

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Supplemental Disclosure of Cash Flow Information

CenterPoint Energy elected not to separately disclose discontinued operations on its Statements of Consolidated Cash Flows.

The tables below provide supplemental disclosure of cash flow information:

The tables below provide supplemental disclosure of cash flow information for the periods presented:

2024 2023 2022

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(in millions)

Cash Payments/Receipts:

Interest, net of capitalized interest (under further review)

$ 664 $ 287 $ 175 $ 480 $ 223 $ 104 $ 489 $ 208 $ 130

Cash Payments (Refunds):

Interest, net of capitalized interest $ 805 $ 321 $ 190 $ 664 $ 287 $ 175 $ 480 $ 223 $ 104

Income tax payments (refunds), net (1) ( 9 ) 26 3 215 12 115 421 142 37

215 12 115 421 142 37 ( 46 ) 20 ( 7 )

Non-cash transactions:

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467 381 103 246 166 74 335 168 139

Fair value of Energy Transfer Common Units received for Enable Merger

— — — — — — 1,672 — —

Fair value of Energy Transfer Series G Preferred Units received for Enable Merger

— — — — — — 385 — —

ROU assets obtained in exchange for lease liabilities (2) 18 — 13 3 1 — 7 6 —

3 1 — 7 6 — 2 — —

(1) CenterPoint Energy’s $ 215 million income tax payments in 2023 were attributable to recovery of extraordinary gas costs incurred in the February 2021 Winter Storm through the Railroad Commission ordered securitization.

(2) Excludes ROU assets obtained through prepayment of the lease liabilities.

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

December 31, 2024 December 31, 2023

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Cash and cash equivalents (1) $ 24 $ 14 $ 2 $ 90 $ 76 $ 1

$ 90 $ 76 $ 1 $ 74 $ 75 $ —

Restricted cash included in Prepaid expenses and other current assets (2) 6 — — 19 13 —

19 13 — 17 13 —

Total cash, cash equivalents and restricted cash shown in Statements of Consolidated Cash Flows $ 30 $ 14 $ 2 $ 109 $ 89 $ 1

$ 109 $ 89 $ 1 $ 91 $ 88 $ —

(1) Cash and cash equivalents related to VIEs as of December 31, 2024 and 2023 included $ 21 million and $ 90 million, respectively, at CenterPoint Energy and $ 14 million and $ 76 million, respectively, at Houston Electric.

(2) Restricted cash primarily related to accounts established by CenterPoint Energy and Houston Electric in connection with the issuance of the Securitization Bonds to collateralize the Securitization Bonds that were issued in these financing transactions.

These restricted cash accounts are not available for withdrawal until the maturity of the Securitization Bonds.

Supplemental Disclosure of Balance Sheet Information

Included in other current liabilities on CERC’s Consolidated Balance Sheets as of December 31, 2024 and 2023 was $ 98 million and $ 118 million, respectively, of credits related to customers on budget billing programs.

Included in other current liabilities on Houston Electric’s Consolidated Balance Sheets as of December 31, 2023 and 2022 was $ 47 million and $ 35 million, respectively, of accrued contributions in aid of construction.

Included in other current liabilities on Houston Electric’s Consolidated Balance Sheets as of December 31, 2024 and 2023 was $ 85 million and $ 47 million, respectively, of builder deposits.

(18) Related Party Transactions (Houston Electric and CERC)

Houston Electric and CERC participate in a money pool through which they can borrow or invest on a short-term basis.

Houston Electric and CERC participate in CenterPoint Energy’s money pool through which they can borrow or invest on a short-term basis.

Funding needs are aggregated and external borrowing or investing is based on the net cash position.

The net funding requirements of the money pool are expected to be met with borrowings under CenterPoint Energy’s revolving credit facility or the sale of CenterPoint Energy’s commercial paper.

The table below summarizes money pool activity:

The net funding requirements of the CenterPoint Energy money pool are expected to be met with borrowings under CenterPoint Energy’s revolving credit facility or the sale of CenterPoint Energy’s commercial paper.

The table below summarizes CenterPoint Energy money pool activity for the periods presented:

December 31, 2024 December 31, 2023

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(in millions, except interest rates)

Money pool investments (borrowings) (1)

Money pool investments (1)

$ 368 $ — $ 238 $ 1

Weighted average interest rate 4.65 % — % 5.59 % 5.59 %

5.59 % 5.59 % 4.75 % 4.75 %

(1) Included in Accounts and notes receivable (payable)–affiliated companies in Houston Electric’s and CERC’s Consolidated Balance Sheets, as applicable.

Houston Electric and CERC affiliate-related net interest income (expense) were as follows:

(1) Included in Accounts and notes receivable–affiliated companies in Houston Electric’s and CERC’s respective Consolidated Balance Sheets as of December 31, 2024 and 2023, as applicable.

Houston Electric and CERC affiliate-related transactions were as follows:

Year Ended December 31,

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Interest income (expense), net (2) $ 9 $ 2 $ 2 $ 10 $ — $ ( 18 )

$ 2 $ 10 $ — $ ( 18 ) $ — $ ( 38 )

(1) Includes affiliate-related net interest expense of Indiana Gas and VEDO to reflect the Restructuring.

(1) Includes affiliate-related net interest expense of Indiana Gas and CEOH to reflect the Restructuring.

(2) Interest income is included in Other, net and interest expense is included in Interest expense and other finance charges on Houston Electric’s and CERC’s respective Statements of Consolidated Income.

1 unchanged sentence

The costs of services have been charged directly to Houston Electric and CERC using methods that management believes are reasonable.

These methods include negotiated usage rates, dedicated asset assignment and proportionate corporate formulas based on operating expenses, assets, gross margin, employees and a composite of assets, gross margin and employees.

Houston Electric provides certain

services to CERC.

These methods include usage rates, dedicated asset assignment and proportionate corporate formulas based on operating expenses, assets, gross margin, employees and a composite of assets, gross margin and employees.

Houston Electric provides certain services to CERC.

These services are billed at actual cost, either directly or as an allocation and include fleet services, shop services, geographic services, surveying and right-of-way services, radio communications, data circuit management and field operations.

2 unchanged sentences

These charges are not necessarily indicative of what would have been incurred had Houston Electric and CERC not been affiliates.

Amounts charged for these services are included primarily in Operation and maintenance expenses:

The table below presents amounts charged for these services, which are included primarily in Operation and maintenance expenses on Houston Electric’s and CERC’s respective Statements of Consolidated Income, for the periods presented:

Year Ended December 31,

4 unchanged sentences

Net affiliate service charges (billings) ( 5 ) 5 ( 10 ) 10 15 ( 15 )

( 10 ) 10 15 ( 15 ) ( 7 ) 7

The table below presents transactions among Houston Electric, CERC and their parent, Utility Holding.

The table below presents transactions among Houston Electric, CERC and their parent, Utility Holding, for the periods presented:

Year Ended December 31,

6 unchanged sentences

Net assets acquired in the Restructuring (1) — — — — — 2,345

— — — 2,345 — —

Non-cash capital contribution from parent in payment for property, plant and equipment below — — — — 38 54

1 unchanged sentence

Property, plant and equipment from parent (2) — — — — 103 115

— — 103 115 — —

(1) The Restructuring was a common control transaction that required the recasting of financial information to the earliest period presented.

Therefore, the net asset transfer is not reflected during the year ended December 31, 2022 on CERC’s Statements of Consolidated Changes in Equity.

Therefore, the net asset transfer was not reflected during the year ended December 31, 2022 on CERC’s Statements of Consolidated Changes in Equity.

(2) Property, plant and equipment purchased from CenterPoint Energy at its net carrying value on the date of purchase.

An arrangement is determined to be a lease at inception based on whether the Registrant has the right to control the use of an identified asset.

When a secured borrowing rate is not readily available, unsecured borrowing rates are adjusted for the effects of collateral to determine the incremental borrowing rate.

Each Registrant uses the implicit rate for agreements in which it is a lessor.

Lease income and expense for operating leases and ROU amortization for finance leases are recognized on a straight-line basis over the lease term.

For classes of leases in which lease and non-lease components are not combined, consideration is allocated between components based on the stand-alone prices.

Sublease income is not significant to the Registrants.

The Registrants’ lease agreements do not contain any material residual value guarantees, material restrictions or material covenants.

There are no lease transactions with related parties.

Agreements in which the Registrants are lessors do not include

provisions for the lessee to purchase the assets.

Because risk is minimal, the Registrants do not take any significant actions to manage risk associated with the residual value of their leased assets.

The Registrants’ operating lease agreements are primarily equipment and real property leases, including land and office facility leases.

CenterPoint Energy and Houston Electric also have finance lease agreements for mobile generators.

The Registrants’ lease terms may include options to extend or terminate a lease when it is reasonably certain that those options will be exercised.

The Registrants have elected an accounting policy that exempts leases with terms of one year or less from the recognition requirements of ASC 842.

In 2021, Houston Electric entered into a temporary short-term lease and long-term leases for mobile generation.

The short-term lease agreement allows Houston Electric to take delivery of TEEEF assets on a short-term basis with an initial term ending on September 30, 2022 and extended until December 31, 2022.

At such time, the short-term lease agreement expired and all mobile generation assets were leased under the long-term lease agreement.

Per Houston Electric’s short-term lease accounting policy election, a ROU asset and lease liability were not reflected on Houston Electric’s Consolidated Balance Sheets.

In 2021, Houston Electric entered into a temporary short-term lease and long-term leases for temporary generation.

The short-term lease agreement expired on December 31, 2022.

Effective January 1, 2023, all temporary generation assets were leased under the long-term lease agreement.

Expenses associated with the short-term lease, including carrying costs, are deferred to a regulatory asset and totaled $ 89 million and $ 100 million as of December 31, 2024 and 2023, respectively.

1 unchanged sentence

The total cash payments under the long-term lease totaled $ 664 million, with the final $ 485 million paid in 2022.

These assets were previously available under the short-term lease agreement.

Houston Electric derecognized the finance lease liability when the extinguishment criteria in Topic 405 - Liabilities was achieved.

1 unchanged sentence

The remaining finance lease liability associated with the commenced long-term TEEEF agreement was not significant as of December 31, 2024 and 2023 and relates to removal costs that will be incurred at the end of the lease term.

As of December 31, 2023, Houston Electric has secured a first lien on the assets leased under the prepayment agreement, except for assets with lease payments totaling $ 97 million.

The $ 97 million prepayment is being held in an escrow account, not controlled by Houston Electric, and the funds will be released when a first lien can be secured by Houston Electric.

Expenses associated with the long-term lease, including depreciation expense on the right of use asset and carrying costs, are deferred to a regulatory asset and totaled $ 124 million and $ 60 million as of December 31, 2023 and 2022, respectively.

The long-term lease agreement contains a termination clause that can be exercised in the event of material adverse regulatory actions.

If the right to terminate is elected, subject to the satisfaction of certain conditions, 75 % of Houston Electric’s prepaid lease costs that is attributable to the period from the effective date of termination to the end of the lease term would be refunded.

In December 2022, the long-term lease agreement was amended to include a disallowance reimbursement clause that can be exercised in the event that any regulatory proceeding or settlement agreement results in a disallowance of Houston Electric’s recovery of deferred costs under either the long-term lease agreement, short-term lease agreement or any other quantifiable adverse financial impact to Houston Electric.

The disallowance reimbursement clause expired on December 31, 2023 and Houston Electric can no longer seek relief in the event of an unfavorable regulatory ruling.

As of December 31, 2024, Houston Electric had secured a first lien on the assets leased under the prepayment agreement, except for assets with lease payments totaling $ 79 million, which is being held in an escrow account, not controlled by Houston Electric, and the funds will be released when a first lien can be secured by Houston Electric.

Expenses associated with the long-term lease, including variable costs associated with the operation and maintenance of the temporary generation assets, depreciation expense on the right of use asset and carrying costs, are deferred to a regulatory asset as a recoverable cost under the 2021 Texas legislation and totaled $ 158 million and $ 124 million as of December 31, 2024 and 2023, respectively.

For further discussion of the regulatory impacts, see Note 7.

Houston Electric will also incur variable costs throughout the lease term for the operation and maintenance of the generators.

Lease costs, including variable and ROU asset amortization costs, are deferred to Regulatory assets as incurred as a recoverable cost under the 2021 Texas legislation.

See Note 7 for further information regarding recovery of these deferred costs.

The components of lease cost, included in Operation and maintenance expense on the Registrants’ respective Statements of Consolidated Income, are as follows:

The components of lease cost, included in Operation and maintenance expense on the Registrants’ respective Statements of Consolidated Income, are as follows for the periods presented:

Year Ended December 31,

2024 2023 2022

CenterPoint Energy Houston

8 unchanged sentences

(1) CenterPoint Energy and Houston Electric defer finance lease costs for TEEEF to Regulatory assets for recovery rather than to Depreciation and Amortization in the Statements of Consolidated Income.

The components of lease income were as follows:

The components of lease income were as follows for the periods presented:

Year Ended December 31,

2024 2023 2022

CenterPoint Energy Houston

6 unchanged sentences

Total lease income $ 8 $ — $ 5 $ 8 $ 1 $ 4 $ 7 $ 1 $ 3

Supplemental balance sheet information related to leases was as follows:

Supplemental balance sheet information related to leases was as follows for the periods presented:

December 31, 2024 December 31, 2023

2 unchanged sentences

Electric CERC

(in millions, except lease term and discount rate)

(in millions)

Operating ROU assets (1) $ 27 $ 5 $ 15 $ 13 $ 6 $ 4

$ 13 $ 6 $ 4 $ 19 $ 6 $ 5

Finance ROU assets (2) 430 430 — 526 526 —

526 $ 526 — 621 621 —

Total leased assets $ 457 $ 435 $ 15 $ 539 $ 532 $ 4

Current operating lease liability (3) $ 3 $ 1 $ 1 $ 3 $ 1 $ 1

$ 3 $ 1 $ 1 $ 5 $ 1 $ 2

Non-current operating lease liability (4) 25 3 14 10 5 3

10 $ 5 3 14 5 4

Total leased liabilities (5) $ 28 $ 4 $ 15 $ 13 $ 6 $ 4

$ 13 $ 6 $ 4 $ 19 $ 6 $ 6

(1) Included in Other assets in the Registrants’ respective Consolidated Balance Sheets, net of accumulated amortization.

(2) Included in Property, Plant and Equipment in the Registrants’ respective Consolidated Balance Sheets, net of accumulated amortization.

(3) Included in Current other liabilities in the Registrants’ respective Consolidated Balance Sheets.

(4) Included in Other non-current liabilities in the Registrants’ respective Consolidated Balance Sheets.

(5) Finance lease liabilities were not material as of December 31, 2024 or 2023.

As of December 31, 2024 and 2023, the weighted-average remaining lease term and weighted-average discount rate for the Registrants’ finance and operating leases were as follows:

December 31, 2024 December 31, 2023

CenterPoint Energy Houston

Electric CERC CenterPoint Energy Houston

Electric CERC

Weighted-average remaining lease term (in years) - operating leases 17.7 2.9 20.6 4.7 3.9 3.1

2 unchanged sentences

Weighted-average discount rate - finance leases 3.60 % 3.60 % — 3.60 % 3.60 % —

(1) Reported within Other assets in the Registrants’ respective Consolidated Balance Sheets, net of accumulated amortization.

(2) Reported within Property, Plant and Equipment in the Registrants’ respective Consolidated Balance Sheets, net of accumulated amortization.

(3) Reported within Current other liabilities in the Registrants’ respective Consolidated Balance Sheets.

(4) Reported within Other liabilities in the Registrants’ respective Consolidated Balance Sheets.

(5) Finance lease liabilities were not material as of December 31, 2023 or 2022 and are reported within Other long-term debt in the Registrants’ respective Consolidated Balance Sheets when applicable.

As of December 31, 2024, finance lease liabilities were not significant to the Registrants.

4 unchanged sentences

2025 $ 4 $ 2 $ 2

2029 and beyond 2 — —

Thereafter 30 — 19

Total lease payments 45 4 26

2 unchanged sentences

As of December 31, 2024, future minimum finance lease payments to be received were not significant to the Registrants.

As of December 31, 2023, maturities of undiscounted operating lease payments to be received are as follows:

As of December 31, 2024, maturities of undiscounted operating lease payments to be received were as follows:

Energy Houston

2 unchanged sentences

2025 $ 9 $ 1 $ 6

2029 and beyond 173 — 170

Thereafter 1 — —

Total lease payments to be received $ 32 $ 1 $ 21

Other information related to leases is as follows:

Other information related to leases is as follows for the periods presented:

Year Ended December 31,

9 unchanged sentences

(20) Subsequent Events

January 2024 Equity Distribution Agreement (CenterPoint Energy)

Sales of Common Stock may be made by any method permitted by applicable law and deemed to be an “at the market offering” as defined in Rule 415 of the Securities Act of 1933.

CenterPoint Energy may also enter into one or more forward sales agreements pursuant to master forward confirmations.

The offer and sale of Common Stock under the Equity Distribution Agreement will terminate upon the earliest of (1) the sale of all Common Stock subject to the Equity Distribution

Agreement, (2) termination of the Equity Distribution Agreement, or (3) May 17, 2026.

As of February 20, 2024, CenterPoint Energy has not issued any shares of Common Stock under the Equity Distribution Agreement and has not entered into any forward sale agreements.

Proposed Divestiture of Louisiana and Mississippi Natural Gas Local Distribution Companies (CenterPoint Energy and CERC)

On February 19, 2024, CERC Corp.

entered into the LAMS Asset Purchase Agreement, pursuant to which CERC Corp.

has agreed to sell its Louisiana and Mississippi regulated natural gas local distribution company businesses.

The purchase price for the Louisiana and Mississippi regulated natural gas local distribution company businesses is $ 1.2 billion and subject to adjustment as set forth in the LAMS Asset Purchase Agreement, including adjustments based on net working capital, regulatory assets and liabilities and capital expenditures at closing.

The completion of the proposed transaction is subject to customary closing conditions, including (i) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) approval of the LPSC, (iii) approval of the MPSC, (iv) no Material Adverse Effect (as defined in the LAMS Asset Purchase Agreement) having occurred, and (v) customary closing conditions regarding the accuracy of the representations and warranties and compliance by the parties with the respective obligations under the LAMS Asset Purchase Agreement.

The proposed transaction is not subject to a financing condition and is expected to close by the end of the first quarter of 2025, subject to satisfaction of the foregoing conditions.

Credit Facilities

On January 29, 2025, CenterPoint Energy, Houston Electric, CERC and SIGECO each entered into Extension Agreements to, among other things, extend the maturity date of the lenders’ commitments under each of their respective Credit Agreements by one year, from December 6, 2027 to December 6, 2028.

SIGECO First Mortgage Bonds (CenterPoint Energy)

On January 31, 2025, SIGECO issued $ 165 million aggregate principal amount of 5.69 % First Mortgage Bonds, Series 2025A, Tranche A due 2055.

Total net proceeds from SIGECO’s January 2025 issuance of first mortgage bonds, net of transaction expenses and fees, were approximately $ 164 million, which will be used for the acquisition of Posey Solar.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data