Reportable Business Segments

The Registrants’ determination of reportable business segments considers the strategic operating units under which the Registrants manage sales, allocate resources and assess performance of various products and services to wholesale or retail customers in differing regulatory environments. The Registrants use operating income as the measure of profit or loss for the business segments other than Midstream Investments, where equity in earnings is used.

As of September 30, 2018, reportable business segments by Registrant are as follows:



	Electric Transmission & Distribution	Natural Gas Distribution	Energy Services	Midstream Investments	Other Operations
CenterPoint Energy	X	X	X	X	X
Houston Electric	X
CERC		X	X	(1)	X

(1)

In the three months ended September 30, 2018, CERC completed the Internal Spin. Previously, CERC’s equity method investment in Enable was included in the Midstream Investments segment. CERC’s equity in earnings in Enable, net of basis difference amortization and income tax, has been classified as discontinued operations for all periods presented. See Note 9 for further discussion on the Internal Spin and the associated discontinued operations presentation.

Electric Transmission & Distribution consists of the electric transmission and distribution function. Natural Gas Distribution consists of intrastate natural gas sales to, and natural gas transportation and distribution for, residential, commercial, industrial and institutional customers. Energy Services consists of non-rate regulated natural gas sales and services operations. Midstream Investments consists of the equity investment in Enable (excluding the Enable Series A Preferred Units). Other Operations consists primarily of other corporate operations which support all of the business operations.

Houston Electric consists of a single reportable business segment and therefore is not included in the tabular business segment presentation below. Operating income (loss) amounts for 2017 have been recast to reflect the adoption of ASU 2017-07 (see Note 2 for further information).

Financial data for business segments is as follows:

CenterPoint Energy



	Three Months Ended September 30,
	2018									2017
	Revenues from External Customers			Net Intersegment Revenues			Operating Income (Loss)			Revenues from External Customers			Net Intersegment Revenues			Operating Income
	(in millions)
Electric Transmission & Distribution	$	897	(1)	$	—		$	227		$	843	(1)	$	—		$	254
Natural Gas Distribution	402			8			3			390			8			25
Energy Services	910			10			(9		)	861			10			7
Midstream Investments (2)	—			—			—			—			—			—
Other Operations	3			—			5			4			—			11
Eliminations	—			(18		)	—			—			(18		)	—
Consolidated	$	2,212		$	—		$	226		$	2,098		$	—		$	297



	Nine Months Ended September 30,
	2018									2017
	Revenues from External Customers			Net Intersegment Revenues			Operating Income (Loss)			Revenues from External Customers			Net Intersegment Revenues			Operating Income
	(in millions)
Electric Transmission & Distribution	$	2,502	(1)	$	—		$	523		$	2,234	(1)	$	—		$	511
Natural Gas Distribution	2,032			26			166			1,767			24			235
Energy Services	3,008			57			(20		)	2,964			34			58
Midstream Investments (2)	—			—			—			—			^—			—
Other Operations	11			—			(5		)	11			—			24
Eliminations	—			(83		)	—			—			(58		)	—
Consolidated	$	7,553		$	—		$	664		$	6,976		$	—		$	828


(1)	CenterPoint Energy’s and Houston Electric’s Electric Transmission & Distribution revenues from major customers are as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(in millions)
Affiliates of NRG	$	213	$	221	$	543	$	540
Affiliates of Vistra Energy Corp.	79		72		192		172


(2)	CenterPoint Energy’s Midstream Investments’ equity earnings, net are as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(in millions)
Enable	$	81	$	68	$	208	$	199

CERC



	Three Months Ended September 30,
	2018								2017
	Revenues from External Customers		Net Intersegment Revenues			Operating Income (Loss)			Revenues from External Customers		Net Intersegment Revenues			Operating Income (Loss)
	(in millions)
Natural Gas Distribution	$	402	$	8		$	3		$	390	$	8		$	25
Energy Services	910		10			(9		)	861		10			7
Other Operations	—		—			(1		)	—		—			(1		)
Eliminations	—		(18		)	—			—		(18		)	—
Consolidated	$	1,312	$	—		$	(7	)	$	1,251	$	—		$	31



	Nine Months Ended September 30,
	2018								2017
	Revenues from External Customers		Net Intersegment Revenues			Operating Income (Loss)			Revenues from External Customers		Net Intersegment Revenues			Operating Income (Loss)
	(in millions)
Natural Gas Distribution	$	2,032	$	26		$	166		$	1,767	$	24		$	235
Energy Services	3,008		57			(20		)	2,964		34			58
Other Operations	—		—			—			—		—			(4		)
Eliminations	—		(83		)	—			—		(58		)	—
Consolidated	$	5,040	$	—		$	146		$	4,731	$	—		$	289

CenterPoint Energy and CERC



	Total Assets
	September 30, 2018								December 31, 2017
	CenterPoint Energy				CERC				CenterPoint Energy				CERC
	(in millions)
Electric Transmission & Distribution	$	10,436			$	—			$	10,292			$	—
Natural Gas Distribution	6,557				6,557				6,608				6,608
Energy Services	1,253				1,253				1,521				1,521
Midstream Investments	2,457				—				2,472				—
Assets of discontinued operations	—				—			(1)	—				2,472			(1)
Other Operations	2,206			(2)	110				2,497			(2)	70
Eliminations	(681		)		(615		)		(654		)		(559		)
Consolidated	$	22,228			$	7,305			$	22,736			$	10,112


(1)	On September 4, 2018, CERC completed the Internal Spin. For further information regarding the Internal Spin, see Note 9.


(2)	Includes pension and other postemployment-related regulatory assets of $566 million and $600 million, respectively, as of September 30, 2018 and December 31, 2017.