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. The transaction closed on April 9, 2020.

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 at closing. The sale was considered an asset sale for tax purposes, requiring net deferred tax liabilities of approximately $125 million as of March 31, 2020 to be excluded from the Infrastructure Services Disposal Group and to be recognized as a deferred income tax benefit by CenterPoint Energy upon closing.

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.

Because the Infrastructure Services Disposal Group met the held for sale criteria during the three months ended March 31, 2020 and the proposed sale was completed on April 9, 2020, all Infrastructure Services Disposal Group assets and liabilities as of March 31, 2020 have been classified as current assets and liabilities held for sale. The assets and liabilities 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.

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. This transaction does not include CEIP and its assets. The transaction is expected to close in the second quarter of 2020.

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 will be 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 at closing. The sale will be considered an asset sale for tax purposes, requiring the net deferred tax asset of approximately $3 million as of March 31, 2020 to be included within the retained component of the reporting unit and to be recognized as a deferred tax expense by CenterPoint Energy upon closing.

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.

Because the Energy Services Disposal Group met the held for sale criteria and the proposed sale is expected to be completed within one year, all Energy Services Disposal Group assets and liabilities as of March 31, 2020 have been classified as current assets and liabilities held for sale. The assets and liabilities 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, include the following:



	March 31, 2020
	CenterPoint Energy								CERC
	Infrastructure Services Disposal Group		Energy Services Disposal Group			Total			Energy Services Disposal Group
	(in millions)
Receivables, net	$	216	$	355		$	571		$	355
Accrued unbilled revenues	57		2			59			2
Natural gas inventory	—		52			52			52
Materials and supplies	6		—			6			—
Non-trading derivative assets	—		213			213			213
Property, plant and equipment, net	313		29			342			29
Goodwill	138		—			138			—
Loss on assets held for sale	—		(70		)	(70		)	(70		)
Other	242		94			336			94
Total current assets held for sale	$	972	$	675		$	1,647		$	675

Accounts payable	$	46	$	206		$	252		$	206
Taxes accrued	2		—			2			—
Non-trading derivative liabilities	—		36			36			36
Benefit obligations	—		4			4			4
Other	60		29			89			29
Total current liabilities held for sale	$	108	$	275		$	383		$	275



	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, they are reflected as discontinued operations on CenterPoint Energy’s and CERC’s Statements of Consolidated Income, as applicable, and as a result, prior periods have been recast to reflect the earnings or losses from such businesses as income from discontinued operations, net of tax.



	Three Months Ended March 31,
	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	$	222		$	146		$	886		$	1,242	$	1,108		$	1,388	$	886		$	1,242
Expenses:															—
Non-utility cost of revenues	44			43			808			1,185		852			1,228		808			1,185
Operation and maintenance	163			96			20			17		183			113		20			17
Depreciation and amortization	—			9			—			4		—			13		—			4
Taxes other than income taxes	1			—			1			—		2			—		1			—
Total	208			148			829			1,206		1,037			1,354		829			1,206
Income (loss) from Discontinued Operations before income taxes	14			(2		)	57			36		71			34		57			36
Loss from classification to held for sale (2)	96			—			138			—		234			—		132			—
Income tax expense (benefit)	(5		)	—			(12		)	8		(17		)	8		(11		)	8
Net income (loss) from Discontinued Operations	$	(77	)	$	(2	)	$	(69	)	$	28	$	(146	)	$	26	$	(64	)	$	28

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:



	Three Months Ended March 31,
	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	$	—	$	9	$	—	$	4	$	—	$	4
Amortization of intangible assets in Non-utility cost of revenues	—		2		—		—		—		—
Write-down of natural gas inventory	—		—		3		1		3		1
Capital expenditures	16		27		1		1		1		1
Non-cash transactions:
Accounts payable related to capital expenditures	2		3		4		6		4		6

Other Sale Related Matters (CenterPoint Energy and CERC). CES provides 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.

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 March 31,
	2020		2019 (1)		2020		2019 (1)
	CenterPoint Energy				CERC
	(in millions)
Pipeline construction and repair services capitalized	$	34	$	19	$	—	$	1
Pipeline construction and repair service charges in operations and maintenance expense	1		4		1		1