Reportable Segments

The Registrants’ determination of reportable 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 reportable segments other than Midstream Investments, where equity in earnings is used.

As of December 31, 2018, reportable 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)

On September 4, 2018, CERC completed the Internal Spin. Previously, CERC’s equity method investment in Enable was included in CERC’s Midstream Investments reportable segment. CERC’s equity in earnings in Enable, net of basis difference amortization and income tax, have been classified as discontinued operations for all periods presented. See Note 11 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 segment, Electric Transmission & Distribution, and therefore is not included in the tabular reportable segment presentation below.

Operating income (loss) amounts for 2017 and 2016 have been recast to reflect the adoption of ASU 2017-07 (see Note 2(r) for further information).

Long-lived assets include net property, plant and equipment, goodwill and other intangibles and equity investments in unconsolidated subsidiaries. Intersegment sales are eliminated in consolidation.

Financial data for reportable segments and products and services are as follows:

CenterPoint Energy



	Revenues from External Customers			Intersegment Revenues			Depreciation and Amortization		Operating Income			Total Assets				Expenditures for Long-Lived Assets
	(in millions)
As of and for the year ended December 31, 2018:
Electric Transmission & Distribution	$	3,232	(1)	$	—		$	917	$	623		$	10,509			$	952
Natural Gas Distribution	2,931			36			277		266			6,956				638
Energy Services	4,411			110			16		(47		)	1,558				20
Midstream Investments (2)	—			—			—		—			2,482				—
Other Operations	15			—			33		(11		)	6,156			(3)	110
Eliminations	—			(146		)	—		—			(652		)		—
Consolidated	$	10,589		$	—		$	1,243	$	831		$	27,009			1,720
Reconciling items																(69		)
Capital expenditures per Statements of Consolidated Cash Flows																$	1,651



	Revenues from External Customers			Intersegment Revenues			Depreciation and Amortization		Operating Income		Total Assets				Expenditures for Long-Lived Assets
	(in millions)
As of and for the year ended December 31, 2017:
Electric Transmission & Distribution	$	2,997	(1)	$	—		$	724	$	636	$	10,292			$	924
Natural Gas Distribution	2,606			33			260		348		6,608				523
Energy Services	3,997			52			19		126		1,521				11
Midstream Investments (2)	—			—			—		—		2,472				—
Other Operations	14			—			33		26		2,497			(3)	36
Eliminations	—			(85		)	—		—		(654		)		—
Consolidated	$	9,614		$	—		$	1,036	$	1,136	$	22,736			1,494
Reconciling items															(68		)
Capital expenditures per Statements of Consolidated Cash Flows															$	1,426
As of and for the year ended December 31, 2016:
Electric Transmission & Distribution	$	3,060	(1)	$	—		$	838	$	653	$	10,211			$	858
Natural Gas Distribution	2,380			29			242		321		6,099				510
Energy Services	2,073			26			7		21		1,102				5
Midstream Investments (2)	—			—			—		—		2,505				—
Other Operations	15			—			39		28		2,681			(3)	33
Eliminations	—			(55		)	—		—		(769		)		—
Consolidated	$	7,528		$	—		$	1,126	$	1,023	$	21,829			1,406
Reconciling items															8
Capital expenditures per Statements of Consolidated Cash Flows															$	1,414


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



	Year Ended December 31,
	2018		2017		2016
	(in millions)
Affiliates of NRG	$	705	$	713	$	698
Affiliates of Vistra Energy Corp.	251		229		220


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



	Year Ended December 31,
	2018		2017		2016
	(in millions)
Enable	$	307	$	265	$	208


(3)	Total assets included pension and other postemployment-related regulatory assets of $665 million, $600 million and $759 million as of December 31, 2018, 2017 and 2016, respectively. Additionally, total assets as of December 31, 2018 included $3.9 billion of temporary investments included in Cash and cash equivalents on CenterPoint Energy’s Consolidated Balance Sheets.

CERC



	Revenues from External Customers		Intersegment Revenues			Depreciation and Amortization		Operating Income			Total Assets (1)				Expenditures for Long-Lived Assets
	(in millions)
As of and for the year ended December 31, 2018:
Natural Gas Distribution	$	2,931	$	36		$	277	$	266		$	6,956			$	638
Energy Services	4,411		110			16		(47		)	1,558				20
Other Operations	1		—			—		3			66				—
Eliminations	—		(146		)	—		—			(366		)		—
Consolidated	$	7,343	$	—		$	293	$	222		$	8,214			658
Reconciling items															(25		)
Capital expenditures per Statements of Consolidated Cash Flows															$	633
As of and for the year ended December 31, 2017:
Natural Gas Distribution	$	2,606	$	33		$	260	$	348		$	6,608			$	523
Energy Services	3,997		52			19		126			1,521				11
Discontinued operations	—		—			—		—			2,472			(1)	—
Other Operations	—		—			—		(7		)	70				—
Eliminations	—		(85		)	—		—			(559		)		—
Consolidated	$	6,603	$	—		$	279	$	467		$	10,112			534
Reconciling items															(21		)
Capital expenditures per Statements of Consolidated Cash Flows															$	513
As of and for the year ended December 31, 2016:
Natural Gas Distribution	$	2,380	$	29		$	242	$	321		$	6,099			$	510
Energy Services	2,073		26			7		21			1,102				5
Discontinued operations	—		—			—		—			2,505			(1)	—
Other Operations	1		—			—		(1		)	75				—
Eliminations	—		(55		)	—		—			(563		)		—
Consolidated	$	4,454	$	—		$	249	$	341		$	9,218			515
Reconciling items															2
Capital expenditures per Statements of Consolidated Cash Flows															$	517


(1)	On September 4, 2018, CERC completed the Internal Spin. For further information regarding the Internal Spin, see Note 11.



	Year Ended December 31,
	2018						2017						2016
Revenues by Products and Services:	CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC		CenterPoint Energy		Houston Electric		CERC
	(in millions)
Electric delivery	$	3,232	$	3,234	$	—	$	2,997	$	2,998	$	—	$	3,060	$	3,059	$	—
Retail gas sales	4,161		—		4,161		3,634		—		3,634		3,329		—		3,329
Wholesale gas sales	3,008		—		3,008		2,811		—		2,811		977		—		977
Gas transportation and processing	32		—		32		29		—		29		23		—		23
Energy products and services	156		—		142		143		—		129		139		—		125
Total	$	10,589	$	3,234	$	7,343	$	9,614	$	2,998	$	6,603	$	7,528	$	3,059	$	4,454