Equity

3 Months Ended

Mar. 31, 2020

Equity

Dividends Declared and Paid (CenterPoint Energy)

CenterPoint Energy paid dividends on its Common Stock during the three months ended March 31, 2020 and 2019 as presented in the table below:



Declaration Date	Record Date	Payment Date	Per Share		Total (in millions)
February 3, 2020	February 20, 2020	March 12, 2020	$	0.2900	$	145
Total 2020			$	0.2900	$	145

December 12, 2018	February 21, 2019	March 14, 2019	$	0.2875	$	144
Total 2019			$	0.2875	$	144

CenterPoint Energy paid dividends on its Series A Preferred Stock during the three months ended March 31, 2020 and 2019 as presented in the table below:



Declaration Date	Record Date	Payment Date	Per Share		Total (in millions)
February 3, 2020	February 14, 2020	March 2, 2020	$	30.6250	$	25
Total 2020			$	30.6250	$	25

December 12, 2018	February 15, 2019	March 1, 2019	$	32.1563	$	26
Total 2019			$	32.1563	$	26

CenterPoint Energy paid dividends on its Series B Preferred Stock during the three months ended March 31, 2020 and 2019 as presented in the table below:



Declaration Date	Record Date	Payment Date	Per Share		Total (in millions)
February 3, 2020	February 14, 2020	March 2, 2020	$	17.5000	$	17
Total 2020			$	17.5000	$	17

December 12, 2018	February 15, 2019	March 1, 2019	$	17.5000	$	17
Total 2019			$	17.5000	$	17

Dividend Requirement on Preferred Stock (CenterPoint Energy)



		Three Months Ended March 31,
		2020		2019
	(in millions)
Series A Preferred Stock		$	12	$	12
Series B Preferred Stock		17		17
Total preferred stock dividend requirement		$	29	$	29

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated comprehensive income (loss) are as follows:




	Three Months Ended March 31,
	2020								2019
	CenterPoint Energy			Houston Electric			CERC		CenterPoint Energy			Houston Electric			CERC
	(in millions)
Beginning Balance	$	(98	)	$	(15	)	$	10	$	(108	)	$	(14	)	$	5
Other comprehensive income (loss) before reclassifications:
Deferred gain (loss) from interest rate derivatives (1)	—			—			—		(1		)	(1		)	—
Other comprehensive loss from unconsolidated affiliates	(3		)	—			—		—			—			—
Amounts reclassified from accumulated other comprehensive loss:
Actuarial losses (2)	2			—			—		2			—			—
Reclassification of deferred loss from cash flow hedges realized in net income	—			—			—		1			—			—
Tax expense	(1		)	—			—		(1		)	—			—
Net current period other comprehensive income (loss)	(2		)	—			—		1			(1		)	—
Ending Balance	$	(100	)	$	(15	)	$	10	$	(107	)	$	(15	)	$	5

(1)

Gains and losses are reclassified from Accumulated other comprehensive income into income when the hedged transactions affect earnings. The reclassification amounts are included in Interest and other finance charges in each of the Registrants’ respective Statements of Consolidated Income. Over the next twelve months estimated amortization from Accumulated Comprehensive Income into income is expected to be immaterial.


(2)	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.

Series C Preferred Stock Private Placement (CenterPoint Energy)

On May 6, 2020, CenterPoint Energy entered into agreements for the private placement of 725,000 shares of its Series C Preferred Stock, at a price of $1,000 share, resulting in gross proceeds of $725 million.

The Series C Preferred Stock is 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. At liquidation, the Series C Preferred Stock will rank pari passu to the existing Series A Preferred Stock and Series B Preferred Stock and senior to the Common Stock, but will participate in a liquidation only on an as-converted to Common Stock basis.

Conversion of the Series C Preferred Stock is mandatory upon the occurrence of any of the following triggers: (i) the 12-month anniversary date of the preferred stock purchase agreements, (ii) a bankruptcy event, and (iii) a fundamental change in CenterPoint Energy, including, among other things certain change of control events. Upon a mandatory conversion, each share of Series C Preferred Stock will convert into the number of Common Stock equal to the quotient of $1,000 divided by the prevailing conversion price, which is initially $15.31. In a conversion at the 12-month anniversary date, in lieu of issuing Common Stock, CenterPoint Energy may, at its election, make a cash payment equal to the product of (i) the then current market price of the Common Stock multiplied by (ii) the number of shares of Common Stock that such holder would have been entitled to receive in a conversion. Following the six-month anniversary date of the issuance of the Series C Preferred Stock, holders of Series C Preferred Stock also have an optional right to convert their holdings to Common Stock at any time, subject to a limit on conversion of no more than 4.9% of the outstanding Common Stock. The conversion price is subject to adjustment for subdivisions and combinations, dividends or distributions payable in common stock. If all of the 725,000 shares of Series C Preferred Stock converted at the current conversion price, CenterPoint Energy would issue an incremental 47,354,670 shares of Common Stock.

CenterPoint Energy may not issue more than a specified amount of outstanding Common Stock upon conversion of Preferred Stock. Once such specified amount has been reached, each Series C Preferred Stock holder electing to convert or subject to mandatory conversion will receive a cash payment equal to the product of (i) the market price of the Common Stock multiplied by (ii) the number of shares of Common Stock that such holder would have been entitled to receive in a conversion.

Series C Preferred Stock holders have no voting rights, except that the affirmative vote of a majority of outstanding Series C Preferred Stock is required for the company to (i) create any class or series of securities that is senior to the Series C Preferred Stock; (ii) reclassify or amend any authorized securities of CenterPoint Energy if reclassification would render the relevant security on a parity with or senior to the Series C Preferred Stock; or (iii) increase the authorized amount or issue any additional shares of Series C Preferred Stock.

The vote of at least 66 2/3% of the outstanding shares of Series C Preferred Stock is needed to amend the terms of the Series C Preferred Stock in any manner that would adversely alter or change the rights of the Series C Preferred Stock, subject to certain exceptions.

Common Stock Private Placement (CenterPoint Energy)

On May 6, 2020, CenterPoint Energy entered into agreements for the private placement of 41,977,612 shares of its Common Stock, at a price of $16.08 share, resulting in gross proceeds of $675 million.