View:
United States securities and exchange commission logo
July 20, 2022
Jason Wells
Chief Financial Officer
CenterPoint Energy, Inc.
1111 Louisiana St.
Houston, TX 77002
Re: CenterPoint Energy,
Inc.
Form 10-K for the
Fiscal Year ended December 31, 2021
Filed February 22,
2022
File No. 001-31447
Dear Mr. Wells:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year ended December 31, 2021
Management's Discussion and Analysis of Financial Condition and Results
of Operations
CenterPoint Energy Consolidated Results of Operations, page 45
1. We note that you
describe, though without quantification, various key factors that are
associated with the
change in net income or loss attributable to common shareholders, as
well as key factors
that are associated with the change in unspecified non-GAAP
measures, arising from
your exclusion of effects attributed to other key factors, in
comparing the various
periods. We see that you have taken a similar approach in your
interim report for the
fiscal quarter ended March 31, 2022.
We believe that you
will need to revise your disclosures in the annual and interim reports
to quantify the impact
of each key factor described in these comparisons, consistent with
the requirements of
Item 303(a), (b), (b)(2)(i), and (c) of Regulation S-K; the magnitude
Jason Wells
FirstName
CenterPointLastNameJason
Energy, Inc. Wells
Comapany
July NameCenterPoint Energy, Inc.
20, 2022
July 20,
Page 2 2022 Page 2
FirstName LastName
and relative contribution of each key factor on the overall change in
net income or loss
attributable to common shareholders should be clear. Please submit the
revisions that you
propose to address these concerns in amendments to your annual and
interim reports.
2. We note that you disclose, along with your descriptions of key factors
that
impacted income or loss attributed to common shareholders,
quantification of the overall
change on an adjusted basis, i.e. excluding amounts associated with
"those items" though
without specification or quantification of the particular items or of
the adjusted amounts.
For example, near the end of page 45, you explain that income
available to common
shareholders increased $191 million in 2021, excluding those items,
and following the
first three points on page 46, you explain that income available to
common shareholders in
2020 increased $115 million, excluding those items. We see that you
have taken a similar
approach in your interim report for the fiscal quarter ended March 31,
2022.
We believe that you should quantify the non-GAAP measures that are
being utilized in
your discussion and analysis, and provide the disclosures that are
prescribed by Item 10(e)
of Regulation S-K, including equally prominent disclosure of and
reconciliation from the
most comparable GAAP based measure. Please submit the revisions that
you propose to
address these concerns in amendments to your annual and interim
reports.
CenterPoint Energy's Results of Operations by Reportable Segment, page 46
3. We note that you present measures described as revenues less cost of
revenues in your
tabulations on pages 47, 49 and 53, and reference these amounts in
your variance
explanations on pages 48, 50, and 54, covering your results of
operations for the segments
and CERC. We see that you have taken a similar approach in your
interim report for the
fiscal quarter ended March 31, 2022.
However, these measures appear to be incomplete, due to the exclusion
of depreciation
and amortization and certain operation and maintenance costs that
would be attributable to
cost of revenues under GAAP. If your cost of revenues measures are
incomplete, the
margin measures should be identified as non-GAAP measures, and you
should provide
the disclosures prescribe by Item 10(e) of Regulation S-K, including
equally prominent
disclosure of, and a reconciliation from, the most comparable GAAP
based measure,
which we believe would be a GAAP measure of gross profit or margin.
Alternatively, if you did not intend to present non-GAAP margin
measures you may
correct your compilation of cost of revenues and the margin measures
to conform with
GAAP. Please submit the revisions that you propose to address these
concerns in
amendments to your annual and interim reports.
Jason Wells
CenterPoint Energy, Inc.
July 20, 2022
Page 3
Financial Statements
Note 16 - Commitments and Contingencies
Litigation Related to the February 2021 Winter Storm Event, page 164
4. We note your disclosure explaining that you or your subsidiaries have
received claims and
lawsuits filed by plaintiffs alleging personal injury, property damage
and other injuries
and damages associated with the Winter Storm Event, and have become
involved in
various investigations, litigation and regulatory and legal
proceedings regarding efforts to
restore power and compliance with NERC, ERCOT and PUCT rules and
directives.
You further clarify that you or your subsidiaries are named as
defendants in litigation
arising from this event, including claims for wrongful death, personal
injury, property
damage, impacts on businesses, shareholders and other matters. You
indicate that you are
unable to estimate a range of potential losses, although you have not
quantified any
damages sought by the counterparties in the matters referenced by this
disclosure, or the
corresponding disclosure on page 40 of your recent interim report.
Given that you are unable to estimate the possible loss or range of
loss, we understand that
you are unable to conclude that your exposure to loss would not
encompass the amounts
of damages claimed. Therefore, you should disclose any quantification
of damages
sought by the counterparties in the litigation referenced by this
disclosure to comply with
FASB ASC 450-20-50-3. Please revise your disclosure to include such
information or to
clarify if there has been no such quantification by the litigants.
Also revise your disclosure on page 42, stating that "CenterPoint
Energy does not, at this
time, anticipate long-term financial impacts associated with the
February 2021 Winter
Storm Event," to clarify if your expectations are for near-term
settlement of
litigation rather than a more distant timeframe, where the impacts
could nevertheless be
material, or to clarify if you have assessed your exposure to material
loss as remote.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff. You may contact Jenifer Gallagher, Staff
Accountant at (202)
551-3706 or Karl Hiller, Branch Chief at (202) 551-3686 with any questions.
FirstName LastNameJason Wells Sincerely,
Comapany NameCenterPoint Energy, Inc.
Division of
Corporation Finance
July 20, 2022 Page 3 Office of Energy
& Transportation
FirstName LastName