Goodwill and Other Intangibles (CenterPoint Energy and CERC)

6 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangibles (CenterPoint Energy and CERC)

Goodwill and Other Intangibles (CenterPoint Energy and CERC)

Goodwill (CenterPoint Energy and CERC)

CenterPoint Energy’s goodwill by reportable segment is as follows:

	June 30, 2022		December 31, 2021
	(in millions)
Electric (1)	$	936	$	936
Natural Gas (2)	2,920		2,920
Corporate and Other	438		438
Total	$	4,294	$	4,294

CERC’s goodwill has been recast to reflect the Restructuring and is as follows:

	June 30, 2022		December 31, 2021
	(in millions)
Goodwill (2) (3)	$	1,583	$	1,583

(1)Amount presented is net of the accumulated goodwill impairment charge of $185 million recorded in 2020.

(2)Excludes $398 million and $144 million, respectively, of goodwill attributable to the Arkansas and Oklahoma Natural Gas businesses which was reflected on CenterPoint Energy’s and CERC’s respective Condensed Consolidated Balance Sheets in Current assets held for sale as of December 31, 2021 and disposed following the completion of the sale in January 2022. For further information, see Note 3.

(3)Includes $972 million of goodwill attributable to the businesses transferred in the Restructuring as of both June 30, 2022 and December 31, 2021. See below for a discussion of the goodwill valuation determination.

When the net assets or equity interest transferred in a common-control transaction constitute a business, goodwill is included with the net assets transferred at the parent company’s historical basis. CenterPoint Energy applied a relative fair value methodology to determine the amount of goodwill to allocate to CERC from its natural gas reporting unit as part of the Restructuring.

When a disposal group reflects a component of a reporting unit and meets the definition of a business, the goodwill within that reporting unit is allocated to the disposal group based on the relative fair value of the components representing a business that will be retained and disposed. Goodwill attributable to the disposed Natural Gas businesses was classified as held for sale as of December 31, 2021 and excluded from the table above.

Other Intangibles (CenterPoint Energy)

The tables below present information on CenterPoint Energy’s intangible assets, excluding goodwill, recorded in Other non-current assets on CenterPoint Energy’s Condensed Consolidated Balance Sheets and the related amortization expense included in Depreciation and amortization on CenterPoint Energy’s Condensed Statements of Consolidated Income.

	June 30, 2022						December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Balance		Gross Carrying Amount		Accumulated Amortization		Net Balance
	(in millions)
Customer relationships	$	33	$	(14)	$	19	$	33	$	(12)	$	21
Trade names	16		(6)		10		16		(5)		11
Operation and maintenance agreements (1)	12		(1)		11		12		(1)		11
Other	2		(1)		1		2		(1)		1
Total	$	63	$	(22)	$	41	$	63	$	(19)	$	44

(1)Amortization expense related to the operation and maintenance agreements and construction backlog is included in Non-utility cost of revenues, including natural gas on CenterPoint Energy’s Condensed Statements of Consolidated Income.

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions)
Amortization expense of intangible assets recorded in Depreciation and amortization	$	2	$	2	$	3	$	3

CenterPoint Energy estimates that amortization expense of intangible assets with finite lives for the next five years will be as follows:

	Amortization  Expense
	(in millions)
Remaining six months of 2022	$	3
2023	6
2024	5
2025	5
2026	5
2027	4