Divestiture of Infrastructure Services (CenterPoint Energy). On February 3, 2020, CenterPoint Energy, through its subsidiary VUSI, entered into the Securities Purchase Agreement to sell the Infrastructure Services Disposal Group to PowerTeam Services. Subject to the terms and conditions of the Securities Purchase Agreement, PowerTeam Services agreed to purchase all of the outstanding equity interests of VISCO for approximately $850 million, subject to customary adjustments set forth in the Securities Purchase Agreement, including adjustments based on VISCO’s net working capital at closing, indebtedness, cash and cash equivalents and transaction expenses. The transaction closed on April 9, 2020 for $850 million in cash. Additionally, as of June 30, 2020, CenterPoint Energy recorded a receivable from PowerTeam Services for working capital and other adjustments set forth in the Security Purchase Agreement, discussed further below.

In February 2020, certain assets and liabilities representing the Infrastructure Services Disposal Group met the held for sale criteria and represented all of the businesses within the reporting unit. In accordance with the Securities Purchase Agreement, VISCO was converted from a wholly-owned corporation to a limited liability company that was disregarded for federal income tax purposes immediately prior to the closing of the transaction resulting in the sale of membership units. The sale was considered an asset sale for tax purposes, requiring net deferred tax liabilities of approximately $127 million as of April 9, 2020, the date the transaction closed, to be recognized as a deferred income tax benefit by CenterPoint Energy. Additionally, CenterPoint Energy recognized current tax expense of $159 million as a result of the cash taxes payable upon sale.

Upon classifying the Infrastructure Services Disposal Group as held for sale and in connection with the preparation of CenterPoint Energy’s financial statements for the three months ended March 31, 2020, CenterPoint Energy recorded a goodwill impairment of approximately $82 million, plus an additional loss of $14 million for cost to sell. CenterPoint Energy recognized a pre-tax gain of $3 million in connection with the closing of the transaction of the Infrastructure Services Disposal Group during

the three months ended June 30, 2020. In connection with the closing of the transaction and as of June 30, 2020, CenterPoint Energy recorded a receivable from PowerTeam Services for working capital and other customary adjustments set forth in the Securities Purchase Agreement, and a gain or loss on sale in future periods may be incurred by CenterPoint Energy for differences between the estimated receivable as of June 30, 2020 and the actual amount of the payment.

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

Divestiture of Energy Services (CenterPoint Energy and CERC). On February 24, 2020, CenterPoint Energy, through its subsidiary CERC Corp., entered into the Equity Purchase Agreement to sell the Energy Services Disposal Group to Symmetry Energy Solutions Acquisition. This transaction did not include CEIP and its assets or MES. Symmetry Energy Solutions Acquisition agreed to purchase all of the outstanding equity interests of the Energy Services Disposal Group for approximately $400 million, subject to customary adjustments set forth in the Equity Purchase Agreement, and inclusive of an estimate of the cash adjustment for the Energy Services Disposal Group’s net working capital at closing, indebtedness and transaction expenses. The transaction closed on June 1, 2020 for approximately $286 million in cash. Additionally, as of June 30, 2020, CenterPoint Energy recorded a receivable from Symmetry Energy Solutions Acquisition for working capital and other adjustments set forth in the Equity Purchase Agreement that CenterPoint Energy has estimated to be approximately $75 million.

In February 2020, certain assets and liabilities representing the Energy Services Disposal Group met the criteria to be classified as held for sale and represented substantially all of the businesses within the reporting unit. In accordance with the Equity Purchase Agreement, CES was converted from a wholly-owned corporation to a limited liability company that is disregarded for federal income tax purposes immediately prior to the closing of the transaction resulting in the sale of membership units. The sale was considered an asset sale for tax purposes, requiring the net deferred tax liability of approximately $3 million as of June 1, 2020, the date the transaction closed, to be recognized as a deferred tax benefit by CenterPoint Energy and CERC upon closing. Additionally, CenterPoint Energy and CERC recognized current tax expense of $3 million as a result of the cash taxes payable upon sale.

Upon classifying the Energy Services Disposal Group as held for sale and in connection with the preparation of CenterPoint Energy’s and CERC’s respective financial statements for the three months ended March 31, 2020, CenterPoint Energy and CERC recorded a goodwill impairment of approximately $62 million and a loss on assets held for sale of approximately $70 million, plus an additional loss of $6 million for cost to sell recorded only at CenterPoint Energy. CenterPoint Energy and CERC recognized a reduction to the loss on classification to held for sale of $39 million in connection with the closing of the sale of the Energy Services Disposal Group during the three months ended June 30, 2020. In connection with the closing of the sale and as of June 30, 2020, CenterPoint Energy and CERC recorded a receivable from Symmetry Energy Solutions Acquisition for customary adjustments set forth in the Equity Purchase Agreement and, a gain or loss on sale in future periods may be incurred by CenterPoint Energy and CERC for differences between the estimated receivable as of June 30, 2020 and the actual amount of the payment.

As a result of the sale of the Energy Services and Infrastructure Services Disposal Groups, there were no assets or liabilities classified as held for sale as of June 30, 2020. The assets and liabilities of the Infrastructure Services and Energy Services Disposal Groups as of December 31, 2019 have been recast as assets and liabilities held for sale and retained their current or long-term classification applicable as of December 31, 2019. Long-lived assets are not depreciated or amortized once they are classified as held for sale. The assets and liabilities of the Infrastructure Services and Energy Services Disposal Groups classified as held for sale in CenterPoint Energy’s and CERC’s Condensed Consolidated Balance Sheets, as applicable, as of December 31, 2019 included the following:



	December 31, 2019
	CenterPoint Energy						CERC
	Infrastructure Services Disposal Group		Energy Services Disposal Group		Total		Energy Services Disposal Group
	(in millions)
Receivables, net	$	192	$	445	$	637	$	445
Accrued unbilled revenues	109		8		117		8
Natural gas inventory	—		67		67		67
Materials and supplies	6		—		6		—
Non-trading derivative assets	—		136		136		136
Other	4		35		39		35
Total current assets held for sale	311		691		1,002		691
Property, plant and equipment, net	295		26		321		26
Goodwill	220		62		282		62
Non-trading derivative assets	—		58		58		58
Other	234		67		301		67
Total non-current assets held for sale	749		213		962		213
Total assets held for sale	$	1,060	$	904	$	1,964	$	904

Accounts payable	$	45	$	299	344		$	299
Taxes accrued	2		—		2		—
Non-trading derivative liabilities	—		44		44		44
Other	40		25		65		25
Total current liabilities held for sale	87		368		455		368
Non-trading derivative liabilities	—		14		14		14
Benefit obligations	—		4		4		4
Other	16		9		25		9
Total non-current liabilities held for sale	16		27		43		27
Total liabilities held for sale	$	103	$	395	$	498	$	395

Because the Infrastructure Services and Energy Services Disposal Groups met the held for sale criteria and their disposals also represent a strategic shift to CenterPoint Energy and CERC, as applicable, the earnings and expenses directly associated with these dispositions, including operating results of the businesses through the date of sale, are reflected as discontinued operations on CenterPoint Energy’s and CERC’s Statements of Consolidated Income, as applicable. As a result, prior periods have also been recast to reflect the earnings or losses from such businesses as income from discontinued operations, net of tax.



	Three Months Ended June 30,
	2020			2019		2020			2019		2020			2019		2020			2019
	CenterPoint Energy															CERC
	Infrastructure Services Disposal Group					Energy Services Disposal Group					Total					Energy Services Disposal Group
	(in millions)
Revenues	$	28		$	326	$	281		$	852	$	309		$	1,178	$	281		$	852
Expenses:
Non-utility cost of revenues	6			89		300			801		306			890		300			801
Operation and maintenance	21			195		14			17		35			212		14			17
Depreciation and amortization	—			15		—			3		—			18		—			3
Taxes other than income taxes	—			—		2			—		2			—		2			—
Total	27			299		316			821		343			1,120		316			821
Income (loss) from Discontinued Operations before income taxes	1			27		(35		)	31		(34		)	58		(35		)	31
Gain (loss) on classification to held for sale, net (2) (3)	3			—		39			—		42			—		39			—
Income tax expense (benefit)	30			6		8			8		38			14		8			5
Net income (loss) from Discontinued Operations	$	(26	)	$	21	$	(4	)	$	23	$	(30	)	$	44	$	(4	)	$	26



	Six Months Ended June 30,
	2020			2019 (1)		2020			2019		2020			2019		2020			2019
	CenterPoint Energy															CERC
	Infrastructure Services Disposal Group					Energy Services Disposal Group					Total					Energy Services Disposal Group
	(in millions)
Revenues	$	250		$	472	$	1,167		$	2,094	$	1,417		$	2,566	$	1,167		$	2,094
Expenses:
Non-utility cost of revenues	50			132		1,108			1,986		1,158			2,118		1,108			1,986
Operation and maintenance	184			291		34			34		218			325		34			34
Depreciation and amortization	—			24		—			7		—			31		—			7
Taxes other than income taxes	1			—		3			—		4			—		3			—
Total	235			447		1,145			2,027		1,380			2,474		1,145			2,027
Income (loss) from Discontinued Operations before income taxes	15			25		22			67		37			92		22			67
Gain (loss) on classification to held for sale, net (2) (3)	(93		)	—		(99		)	—		(192		)	—		(93		)	—
Income tax expense (benefit)	25			6		(4		)	16		21			22		(3		)	13
Net income (loss) from Discontinued Operations	$	(103	)	$	19	$	(73	)	$	51	$	(176	)	$	70	$	(68	)	$	54

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



	Six Months Ended June 30,
	2020		2019		2020		2019		2020		2019
	CenterPoint Energy								CERC
	Infrastructure Services Disposal Group				Energy Services Disposal Group				Energy Services Disposal Group
	(in millions)
Depreciation and amortization	$	—	$	24	$	—	$	7	$	—	$	7
Amortization of intangible assets in Non-utility cost of revenues	—		9		—		—		—		—
Write-down of natural gas inventory	—		—		3		3		3		3
Capital expenditures	16		38		1		7		1		7
Non-cash transactions:
Accounts payable related to capital expenditures	2		—		4		4		4		4

Other Sale Related Matters (CenterPoint Energy and CERC). CES provided natural gas supply to CenterPoint Energy’s and CERC’s NGD under contracts executed in a competitive bidding process, with the duration of some contracts extending into 2021. In addition, CERC is the natural gas transportation provider for a portion of CES’s customer base and will continue to be the transportation provider for these customers as long as these customers retain a relationship with the divested CES business.



	Three Months Ended June 30,
	2020 (1)		2019		2020 (1)		2019
	CenterPoint Energy				CERC
	(in millions)
Transportation revenue	$	18	$	32	$	18	$	32
Natural gas expense	3		16		3		16

	Six Months Ended June 30,
	2020 (2)		2019		2020 (2)		2019
	CenterPoint Energy				CERC
	(in millions)
Transportation revenue	$	34	$	48	$	34	$	48
Natural gas expense	48		80		47		79

NGD has AMAs associated with its utility distribution service in Arkansas, Louisiana, Mississippi, Oklahoma and Texas. The AMAs are with the Energy Services Disposal Group and will expire in 2021. Pursuant to the provisions of the agreements, NGD sells natural gas and agrees to repurchase an equivalent amount of natural gas during the winter heating seasons at the same cost. These transactions are accounted for as inventory financing. CenterPoint Energy and CERC had outstanding obligations related to the AMAs of $14 million and $-0- as of June 30, 2020 and December 31, 2019, respectively.

The Infrastructure Services Disposal Group provides pipeline construction and repair services to CenterPoint Energy’s and CERC’s NGD. In accordance with consolidation guidance in ASC 980—Regulated Operations, costs incurred by NGD utilities for these pipeline construction and repair services are not eliminated in consolidation when capitalized and included in rate base by the NGD utility. Amounts charged for these services that are not capitalized are included primarily in Operation and maintenance expenses. Fees incurred by CenterPoint Energy’s and CERC’s NGD for pipeline construction and repair services are as follows:



	Three Months Ended June 30,
	2020 (1)		2019		2020 (1)		2019
	CenterPoint Energy				CERC
	(in millions)
Pipeline construction and repair services capitalized	$	—	$	48	$	—	$	8
Pipeline construction and repair service charges in operations and maintenance expense	—		—		—		—

	Six Months Ended June 30,
	2020 (2)		2019 (3)		2020 (2)		2019 (3)
	CenterPoint Energy				CERC
	(in millions)
Pipeline construction and repair services capitalized	$	34	$	67	$	—	$	9
Pipeline construction and repair service charges in operations and maintenance expense	1		4		1		1