Mergers and Acquisitions (CenterPoint Energy) (Tables)

3 Months Ended

Mar. 31, 2019

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The Merger is being accounted for in accordance with ASC 805, Business Combinations, with CenterPoint Energy as the accounting acquirer of Vectren. Identifiable assets acquired and liabilities assumed have been recorded at their estimated fair values on the Merger Date.

Vectren’s regulated operations, comprised of electric generation and electric and natural gas energy delivery services, are subject to the rate-setting authority of the FERC, the IURC and the PUCO, and are accounted for pursuant to U.S. generally accepted accounting principles for regulated operations. The rate-setting and cost-recovery provisions currently in place for Vectren’s regulated operations provide revenues derived from costs including a return on investment of assets and liabilities included in rate base. Thus, the fair values of Vectren’s tangible and intangible assets and liabilities subject to these rate-setting provisions approximate their carrying values. Accordingly, neither the assets and liabilities acquired, nor the unaudited pro forma financial information, reflect any adjustments related to these amounts. The fair value of regulatory assets not earning a return have been determined using the income approach and are considered Level 3 fair value measurements due to the use of significant judgmental and unobservable inputs.

The fair value of Vectren’s assets acquired and liabilities assumed that are not subject to the rate-setting provisions, including identifiable intangibles, have been determined using the income approach and the market approach. The valuation of Vectren’s long-term debt is primarily considered a Level 2 fair value measurement. All other valuations are considered Level 3 fair value measurements due to the use of significant judgmental and unobservable inputs, including projected timing and amount of future cash flows and discount rates reflecting risk inherent in the future market prices.

The following table presents the preliminary purchase price allocation as of March 31, 2019 (in millions):



Cash and cash equivalents	$	16
Other current assets	601
Property, plant and equipment, net	5,147
Identifiable intangibles	402
Regulatory assets	335
Other assets	151
Total assets acquired	6,652
Current liabilities	690
Regulatory liabilities	944
Other liabilities	891
Long-term debt	2,401
Total liabilities assumed	4,926
Net assets acquired	1,726
Goodwill	4,256
Total purchase price consideration	$	5,982

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

The estimated fair value of the identifiable intangible assets and related useful lives as included in the preliminary purchase price allocation include:



	Weighted Average Useful Lives	Estimated Fair Value
	(in years)	(in millions)
Operation and maintenance agreements	24	$	48
Customer relationships	19	229
Construction backlog	1	54
Trade names	10	71
Total		$	402

Business Acquisition, Pro Forma Information [Table Text Block]

The unaudited pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of the consolidated results of operations that would have been achieved had the Merger taken place on the dates indicated or the future consolidated results of operations of the combined company.



		Three Months Ended March 31,
		2019		2018
	(in millions)
Operating revenues		$	3,780	$	3,618
Net income		185		100