Earnings Per Share (CenterPoint Energy)

9 Months Ended

Sep. 30, 2022

The Series C Preferred Stock issued in May 2020 were considered participating securities since these shares participated in dividends on Common Stock on a pari passu, pro rata, as-converted basis. As a result, beginning June 30, 2020, earnings per share on Common Stock was computed using the two-class method required for participating securities during the periods the Series C Preferred Stock was outstanding. As of May 7, 2021, all of the remaining outstanding Series C Preferred Stock were converted into shares of Common Stock and earnings per share on Common Stock and, as such, the two-class method was no longer applicable beginning June 30, 2021.

Basic earnings per common share is computed by dividing income available to common shareholders from continuing operations by the basic weighted average number of common shares outstanding during the period. Participating securities are excluded from basic weighted average number of common shares outstanding. Diluted earnings per common share is computed by dividing income available to common shareholders from continuing operations by the weighted average number of common shares outstanding, including all potentially dilutive common shares, if the effect of such common shares is dilutive.

Diluted earnings per share reflects the dilutive effect of potential common shares from share-based awards and convertible preferred shares. The dilutive effect of Series B Preferred Stock and Series C Preferred Stock is computed using the if-converted method, as applicable, which assumes conversion of Series B Preferred Stock and Series C Preferred Stock at the beginning of the period, giving income recognition for the add-back of the preferred share dividends, amortization of beneficial conversion feature, and undistributed earnings allocated to preferred shareholders. The dilutive effect of restricted stock is computed using the treasury stock method, as applicable, which includes the incremental shares that would be hypothetically vested in excess of the number of shares assumed to be hypothetically repurchased with the assumed proceeds.

The following table reconciles numerators and denominators of CenterPoint Energy’s basic and diluted earnings per common share.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in millions, except per share and share amounts)
Numerator:
Income from continuing operations	$	202	$	150	$	923	$	630
Less: Preferred stock dividend requirement (Note 18)	13		23		37		82


Income available to common shareholders from continuing operations - basic and diluted	189		127		886		548



Income available to common shareholders from discontinued operations - basic and diluted	—		68		—		202
Income available to common shareholders - basic and diluted	$	189	$	195	$	886	$	750
Denominator:
Weighted average common shares outstanding - basic	629,509,000		604,607,000		629,374,000		580,819,000
Plus: Incremental shares from assumed conversions:
Restricted stock	3,559,000		4,775,000		3,559,000		4,775,000

Series C Preferred Stock	—		—		—		15,809,000
Weighted average common shares outstanding - diluted	633,068,000		609,382,000		632,933,000		601,403,000


Anti-dilutive Incremental Shares Excluded from Denominator for Diluted Earnings Computation:

Series B Preferred Stock	—		24,179,000		—		31,962,000


Earnings Per Common Share:
Basic earnings per common share - continuing operations	$	0.30	$	0.21	$	1.41	$	0.94
Basic earnings per common share - discontinued operations	—		0.11		—		0.35
Basic Earnings Per Common Share	$	0.30	$	0.32	$	1.41	$	1.29
Diluted earnings per common share - continuing operations	$	0.30	$	0.21	$	1.40	$	0.91
Diluted earnings per common share - discontinued operations	—		0.11		—		0.34
Diluted Earnings Per Common Share	$	0.30	$	0.32	$	1.40	$	1.25