UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 24, 2023
CENTERPOINT ENERGY, INC.
(Exact name of registrant as specified in its charter)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2).
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02. Results of Operations and Financial Conditions.
On October 26, 2023, CenterPoint Energy, Inc. (“CenterPoint Energy”) reported third quarter 2023 earnings. For additional information regarding CenterPoint Energy’s third quarter 2023 earnings, please refer to CenterPoint Energy’s press release attached to this report as Exhibit 99.1 (the “Press Release”), which Press Release is incorporated by reference herein.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On October 26, 2023, the Board of Directors (the “Board”) of CenterPoint Energy, announced an update regarding CenterPoint Energy's Chief Executive Officer succession planning. The Board announced the retirement of Mr. David J. Lesar from his positions as Chief Executive Officer and as a member of the Board of CenterPoint Energy, effective January 5, 2024. The retirement of Mr. Lesar from CenterPoint Energy is not the result of any disagreement with CenterPoint Energy on any matter relating to CenterPoint Energy's operations, policies and practices, including any matters concerning CenterPoint Energy's controls or any financial or accounting-related matters or disclosures.
In connection with Mr. Lesar’s retirement and on the approval and recommendation of the Compensation Committee of the Board (the “Compensation Committee”) and approval of the Board (acting solely through its independent directors), CenterPoint Energy has approved (i) in recognition of Mr. Lesar’s continued employment through the end of 2023, a lump sum cash payment equal to the amount of Mr. Lesar’s award under CenterPoint Energy, Inc. Short Term Incentive Plan for the 2023 performance year, determined at the approved achievement level for other executive officers, and (ii) in accordance with CenterPoint Energy's long-term incentive plans and past practice for other retirement-eligible employees, “enhanced retirement” benefits under Mr. Lesar’s outstanding 2021, 2022, and 2023 restricted stock unit awards and 2022 and 2023 performance share unit awards, in each case as set forth under the applicable award agreement.
In connection with Mr. Lesar’s retirement, Jason P. Wells, President and Chief Operating Officer of CenterPoint Energy, was appointed Chief Executive Officer and as a member of the Board of CenterPoint Energy, effective January 5, 2024. Mr. Wells, 45, has served as President and Chief Operating Officer of CenterPoint Energy since January 2023. He served as Executive Vice President and Chief Financial Officer of CenterPoint Energy from September 2020 to December 2022. Prior to joining CenterPoint Energy, Mr. Wells served as Executive Vice President and Chief Financial Officer of PG&E Corporation, a publicly traded electric utility holding company serving approximately 16 million customers through its subsidiary Pacific Gas and Electric Company, from June 2019 to September 2020. He previously served as Senior Vice President and Chief Financial Officer of PG&E Corporation from January 2016 to June 2019 and as Vice President, Business Finance of Pacific Gas and Electric Company from August 2013 to January 2016. He also served in various finance and accounting roles of increasing responsibility at Pacific Gas and Electric Company. Mr. Wells earned his bachelor’s degree and master’s degree in accounting, both from the University of Florida. He is a certified public accountant. Mr. Wells serves on the Boards of M.D. Anderson Cancer Center, Central Houston, Inc., and the Bauer College Board of the C.T. Bauer College of Business at the University of Houston, as well as the Advisory Board of the Kinder Institute for Urban Research at Rice University. PG&E Corporation filed Chapter 11 bankruptcy on January 29, 2019 and successfully emerged from bankruptcy on July 1, 2020.
In connection with Mr. Wells’ appointment, he will step down from his role as Chief Operating Officer of CenterPoint Energy, effective concurrent with his appointment as Chief Executive Officer, and Mr. Wells will also continue to serve as President of CenterPoint Energy.
Mr. Wells will serve as a member of the Board of CenterPoint Energy until the expiration of his term on the date of CenterPoint Energy's annual meeting of shareholders in 2024 and until his successor is elected and qualified. Mr. Wells is expected to stand for election as a director at CenterPoint Energy's annual meeting of shareholders in 2024. Mr. Wells will not be appointed to any committees of the Board.
The above appointments of Mr. Wells were not pursuant to any agreement between Mr. Wells and any other person. There is no family relationship between Mr. Wells and any director or executive officer of CenterPoint Energy, and there are no transactions between Mr. Wells and CenterPoint Energy that are required to be reported under Item 404(a) of Regulation S-K.
In connection with Mr. Wells’ appointment, and on the approval and recommendation of the Compensation Committee and approval of the Board (acting solely through its independent directors), CenterPoint Energy has approved, effective January 5, 2024, the following compensation arrangements for Mr. Wells: (i) a base annual salary of $1,150,000; and (ii) short-term and long-term incentive plan target award levels of 125% and 500%, respectively, of his base annual
salary. A copy of the press release containing the announcement of CenterPoint Energy's Chief Executive Officer transition is attached as Exhibit 99.2.
Item 7.01. Regulation FD Disclosure.
CenterPoint Energy is holding a conference call to discuss its third quarter 2023 earnings on October 26, 2023. Information about the call can be found in the Press Release furnished herewith as Exhibit 99.1. For additional information regarding CenterPoint Energy’s third quarter 2023 earnings, please refer to the supplemental materials which are being posted on CenterPoint Energy’s website and are attached to this report as Exhibit 99.3 (the “Supplemental Materials”), which Supplemental Materials are incorporated by reference herein.
On October 26, 2023, CenterPoint Energy also issued a press release announcing CenterPoint Energy's Chief Executive Officer transition. A copy of the press release is furnished as Exhibit 99.2 and is incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
The information in the press releases and the Supplemental Materials is being furnished, not filed, pursuant to Items 2.02 and 7.01, respectively. Accordingly, the information in the press releases and the Supplemental Materials will not be incorporated by reference into any registration statement filed by CenterPoint Energy under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CENTERPOINT ENERGY, INC. | ||||||||
| Date: October 26, 2023 | By: | /s/ Monica Karuturi | ||||||
| Monica Karuturi | ||||||||
| Executive Vice President and General Counsel | ||||||||
1 CenterPoint Energy reports strong Q3 results, raises full year 2023 guidance and capital plan, and initiates 2024 guidance • Reported GAAP earnings and non-GAAP earnings of $0.40 per diluted share for Q3 2023 • Increased non-GAAP EPS guidance range for 2023 from $1.48-$1.50 to $1.49-$1.51 which now represents a 9% growth target at the midpoint over 2022 actual results; expected to be the third consecutive year of 9% growth1 • Increased 10-year capital plan to $43.9 billion, a $500 million increase through 2030 which includes an increase of $200 million in 2023 and $300 million in 2024 and 2025 • Initiated 2024 non-GAAP EPS guidance range of $1.61-$1.63, which represents an 8% growth over the increased 2023 midpoint and further maintains growth targets of 8% for 2024 and the mid-to-high end of 6%-8% annually thereafter through 20301 Houston – October 26, 2023 - CenterPoint Energy, Inc. (NYSE: CNP) or “CenterPoint” today reported income available to common shareholders of $256 million, or $0.40 per diluted share on a GAAP basis for the third quarter of 2023. Non-GAAP EPS for the third quarter 2023 was also $0.40, a 25% increase to the comparable quarter of 2022. These strong third quarter results were primarily driven by growth and regulatory recovery, which contributed $0.09 per share of favorability, and weather, which contributed another $0.05 per share of favorability as compared to the third quarter of 2022. These drivers were partially offset by an unfavorable variance of $0.08 per share attributable to increased interest expense over the comparable quarter of 2022. “This quarter is another great example of this management team meeting or exceeding expectations while continuing to demonstrate that there’s still potential for additional incremental earnings power,” said Dave Lesar, CEO of CenterPoint. “Heading into the final quarter of 2023 and looking to 2024, we are anticipating continued headwinds of higher interest rates and persistent inflation but will continue to manage through these conditions, targeting an earnings growth rate that is amongst the top in the sector. This includes an 8% non-GAAP EPS growth target for 2024, and mid-to-high end of 6-8% growth target annually thereafter through 2030.” 1 CenterPoint is unable to present a quantitative reconciliation of forward-looking non-GAAP diluted earnings per share without unreasonable effort because changes in the value of ZENS (as defined herein) and related securities, future impairments, and other unusual items are not estimable and are difficult to predict due to various factors outside of management’s control. For more information contact Media: Communications Media.Relations@CenterPointEnergy.com Investors: Jackie Richert / Ben Vallejo Phone 713.207.6500
2 “Given the extreme weather conditions causing significant stress on our system, especially in our Houston Electric service territory, our team did a tremendous job of keeping the power flowing for our customers,” said Lesar. “We understand that it’s a privilege to serve such a vital role in our communities and it’s certainly not one we take lightly.” Lesar added, “We are pleased to announce yet another increase to our customer-driven 10-year capital plan by an incremental $500 million through 2030. This will include approximately $200 million in 2023 and approximately $300 million in 2024 and 2025. As stated in prior quarters, we will incorporate incremental capital when we believe we can operationally execute it, efficiently fund it, and effectively recover it. Our focus continues to be on delivering industry leading growth each and every year, while over-delivering for our customers, investors, and other stakeholders.”
3 Earnings Outlook Given CenterPoint’s divestiture of its remaining midstream investments during 2022, CenterPoint will be presenting a consolidated non-GAAP EPS guidance range for 2023. In addition to presenting its financial results in accordance with GAAP, including presentation of income (loss) available to common shareholders and diluted earnings (loss) per share, CenterPoint provides guidance based on non-GAAP income and non-GAAP diluted earnings per share. Generally, a non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance that excludes or includes amounts that are not normally excluded or included in the most directly comparable GAAP financial measure. Management evaluates CenterPoint’s financial performance in part based on non-GAAP income and non-GAAP earnings per share. Management believes that presenting these non-GAAP financial measures enhances an investor’s understanding of CenterPoint’s overall financial performance by providing them with an additional meaningful and relevant comparison of current and anticipated future results across periods. The adjustments made in these non-GAAP financial measures exclude items that management believes do not most accurately reflect the company’s fundamental business performance. These excluded items are reflected in the reconciliation tables of this news release, where applicable. CenterPoint’s non-GAAP income and non-GAAP diluted earnings per share measures should be considered as a supplement to, and not as a substitute for, or superior to, income available to common shareholders and diluted earnings per share, which respectively are the most directly comparable GAAP financial measures. These non-GAAP financial measures also may be different than non-GAAP financial measures used by other companies. 2022 and 2023 non-GAAP EPS; 2023 and 2024 non-GAAP EPS guidance range Beginning in 2022, CenterPoint no longer separated utility and midstream operations and reported on a consolidated non-GAAP EPS basis. • 2022 non-GAAP EPS excluded: ◦ Earnings or losses from the change in value of ZENS and related securities; ◦ Gain and impact, including related expenses, associated with Arkansas and Oklahoma gas LDC sales ◦ Income and expense related to ownership and disposal of Energy Transfer common and Series G preferred units, and a corresponding amount of debt related to the units. • 2023 non-GAAP EPS and 2023 and 2024 non-GAAP EPS guidance excludes: ◦ Earnings or losses from the change in value of ZENS and related securities; and ◦ Gain and impact, including related expenses, associated with mergers and divestitures, such as the divestiture of Energy Systems Group, LLC. In providing 2023 non-GAAP EPS and 2023 and 2024 non-GAAP EPS guidance, CenterPoint does not consider the items noted above and other potential impacts such as changes in accounting standards, impairments, or other unusual items, which could have a material impact on GAAP reported results for the applicable guidance period. The 2023 and 2024 non-GAAP EPS guidance ranges also consider assumptions for certain significant variables that may impact earnings, such as customer growth and usage including normal weather, throughput, recovery of capital invested, effective tax rates, financing activities and related interest rates, and regulatory and judicial proceedings. To the extent actual results deviate from these assumptions, the 2023 and/or 2024 non-GAAP EPS guidance ranges
4 may not be met, or the projected annual non-GAAP EPS growth rate may change. CenterPoint is unable to present a quantitative reconciliation of forward-looking non-GAAP diluted earnings per share without unreasonable effort because changes in the value of ZENS and related securities, future impairments, and other unusual items are not estimable and are difficult to predict due to various factors outside of management’s control. Reconciliation of Consolidated income (loss) available to common shareholders and diluted earnings (loss) per share (GAAP) to non-GAAP income and non-GAAP diluted earnings per share Quarter Ended September 30, 2023 Dollars in millions Diluted EPS (1) Consolidated income (loss) available to common shareholders and diluted EPS $ 256 $ 0.40 ZENS-related mark-to-market (gains) losses: Equity securities (net of taxes of $10) (2)(3) (39) (0.06) Indexed debt securities (net of taxes of $10) (2) 37 0.06 Impacts associated with mergers and divestitures (net of taxes of $0) (2) 2 - Consolidated on a non-GAAP basis $ 256 $ 0.40 1) Quarterly diluted EPS on both a GAAP and non-GAAP basis are based on the weighted average number of shares of common stock outstanding during the quarter, and the sum of the quarters may not equal year-to-date diluted EPS. 2) Taxes are computed based on the impact removing such item would have on tax expense. Taxes related to the operating results of Energy Systems Group, as well as cash taxes payable and other tax impacts related to the sale of Energy Systems Group in the second quarter of 2023, are excluded from non-GAAP EPS. 3) Comprised of common stock of AT&T Inc., Charter Communications, Inc. and Warner Bros. Discovery, Inc. Reconciliation of Consolidated income (loss) available to common shareholders and diluted earnings (loss) per share (GAAP) to non-GAAP income and non-GAAP diluted earnings per share Quarter Ended September 30, 2022 Dollars in millions Diluted EPS (1) Consolidated income (loss) available to common shareholders and diluted EPS $ 189 $ 0.30 ZENS-related mark-to-market (gains) losses: Equity securities (net of taxes of $43) (2)(3) 163 0.25 Indexed debt securities (net of taxes of $44) (2)(4) (166) (0.26) Midstream-related earnings (net of taxes of $1) (2)(4) (1) - Impacts associated with mergers and divestitures (net of taxes of $20) (2) 21 0.03 Consolidated on a non-GAAP basis $ 206 $ 0.32 1) Quarterly diluted EPS on both a GAAP and non-GAAP basis are based on the weighted average number of shares of common stock outstanding during the quarter, and the sum of the quarters may not equal year-to-date diluted EPS. 2) Taxes are computed based on the impact removing such item would have on tax expense. 3) Comprised of common stock of AT&T Inc., Charter Communications, Inc. and Warner Bros. Discovery, Inc.
5 4) Includes earnings and expenses related to ownership and disposal of Energy Transfer units, a corresponding amount of debt related to the units and an allocation of associated corporate overhead. Filing of Form 10-Q for CenterPoint Energy, Inc. Today, CenterPoint Energy, Inc. filed with the Securities and Exchange Commission (SEC) its Quarterly Report on Form 10-Q for the quarter ended September 30, 2023. A copy of that report is available on the company’s website, under the Investors section. Investors and others should note that we may announce material information using SEC filings, press releases, public conference calls, webcasts, and the Investor Relations page of our website. In the future, we will continue to use these channels to distribute material information about the company and to communicate important information about the company, key personnel, corporate initiatives, regulatory updates, and other matters. Information that we post on our website could be deemed material; therefore, we encourage investors, the media, our customers, business partners and others interested in our company to review the information we post on our website. Webcast of Earnings Conference Call CenterPoint’s management will host an earnings conference call on October 26, 2023, at 7:00 a.m. Central time / 8:00 a.m. Eastern time. Interested parties may listen to a live audio broadcast of the conference call on the company’s website under the Investors section. A replay of the call can be accessed approximately two hours after the completion of the call and will be archived on the website for at least one year. About CenterPoint Energy, Inc. As the only investor owned electric and gas utility based in Texas, CenterPoint Energy, Inc. (NYSE: CNP) is an energy delivery company with electric transmission and distribution, power generation and natural gas distribution operations that serve more than 7 million metered customers in Indiana, Louisiana, Minnesota, Mississippi, Ohio and Texas. As of September 30, 2023, the company owned approximately $39 billion in assets. With approximately 9,000 employees, CenterPoint Energy and its predecessor companies have been in business for more than 150 years. For more information, visit CenterPointEnergy.com. Forward-looking Statements This news release includes, and the earnings conference call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this news release, the words "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "objective," "plan," "potential," "predict," "projection," "should," "target," "will" or other similar words are intended to identify forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual events and results may differ materially from those expressed or implied by these forward-looking statements. Examples of forward-looking statements in this news release or on the earnings conference call include statements regarding capital investments (including with respect to incremental capital opportunities, deployment of capital, renewables projects, and financing of such projects), the timing of and projections for upcoming rate cases for CenterPoint and its subsidiaries, the timing and extent of CenterPoint’s recovery, including with regards to its generation transition plans and projects, mobile generation spend, projects included in CenterPoint’s Natural Gas Innovation Plan, and projects included under its 10-year capital plan, the extent of anticipated benefits from new legislation, future earnings and guidance, including long-term growth rate, customer charges, operations and maintenance expense reductions, financing plans (including the timing of any future equity issuances, securitization, credit metrics and parent level debt), the timing and anticipated benefits of our generation transition plan, including our exit from coal and our 10-year capital plan, ZENS and impacts of the maturity of ZENS, tax planning opportunities, future financial performance and results of operations, including with respect to regulatory actions and recoverability of capital investments, customer rate affordability, value creation, opportunities and expectations, expected customer growth, ESG strategy, including our net zero and carbon emissions reduction goals, and any other statements that are not historical facts are forward-looking statements. Each forward-looking statement contained in this news release or discussed on the earnings conference call speaks only as of the date of this release or the earnings conference call. Important factors that could cause actual results to differ materially from those indicated by the provided forward-looking information include, but are not limited to, risks and uncertainties relating to: (1) CenterPoint’s business strategies and strategic initiatives, restructurings, including the internal restructuring of certain subsidiaries, joint ventures and acquisitions or dispositions of assets or businesses, including the completed sales of our Natural Gas businesses in Arkansas and Oklahoma, and Energy Systems Group, LLC, and the exit from midstream, which we cannot assure you will have the anticipated benefits
6 to us; (2) industrial, commercial and residential growth in CenterPoint’s service territories and changes in market demand; (3) CenterPoint’s ability to fund and invest planned capital, and the timely recovery of its investments; (4) financial market and general economic conditions, including access to debt and equity capital and inflation, interest rates and instability of banking institutions, and their effect on sales, prices and costs; (5) continued disruptions to the global supply chain and increases in commodity prices; (6) actions by credit rating agencies, including any potential downgrades to credit ratings; (7) the timing and impact of regulatory proceedings and actions and legal proceedings, including those related to Houston Electric’s mobile generation and the February 2021 winter storm event; (8) legislative decisions, including tax and developments related to the environment such as global climate change, air emissions, carbon, waste water discharges and the handling of coal combustion residuals, among others, and CenterPoint’s net zero and carbon emissions reduction goals; (9) the impact of pandemics, including the COVID-19 pandemic; (10) the recording of impairment charges; (11) weather variations and CenterPoint’s ability to mitigate weather impacts, including the approval and timing of securitization issuances; (12) changes in business plans; (13) CenterPoint’s ability to execute on its initiatives, targets and goals, including its net zero and carbon emissions reduction goals and operations and maintenance goals; and (14) other factors discussed CenterPoint’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and CenterPoint’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023, and September 30, 2023, including in the “Risk Factors” and “Cautionary Statement Regarding Forward- Looking Information” sections of such reports, and other reports CenterPoint or its subsidiaries may file from time to time with the Securities and Exchange Commission.
1 CenterPoint Energy Announces Leadership Succession Jason P. Wells to Become CEO; David J. Lesar to Support Transition Houston – October 26, 2023 - CenterPoint Energy, Inc. (NYSE: CNP) today announced a leadership transition that helps position the company to continue driving sustainable value for customers, communities, investors and employees. The Board has unanimously appointed Jason P. Wells, CenterPoint Energy President and Chief Operating Officer, to become President and Chief Executive Officer and a member of the Board of Directors, effective January 5, 2024. David J. Lesar will retire from his role as CEO and a member of the Board at that time. Mr. Lesar will continue to work closely with Mr. Wells to support a seamless transition. “On behalf of the Board of Directors, I thank Dave for his outstanding leadership and commitment to CenterPoint Energy, and for his relentless pursuit of unlocking the strength and potential of our company to firmly position us among the premium-valued utilities in our industry,” said Earl M. Cummings, Chair of the Board. “Today’s announcement reflects the Board’s longstanding and robust leadership succession planning and stakeholder engagement process. We look forward to continuing to benefit from Dave’s experience and expertise through the transition period. Jason shares the same unwavering commitment to the pursuit of excellence that Dave has fostered and has played a pivotal role in establishing and executing on CenterPoint Energy’s utility-focused strategy and charting the company’s growth trajectory. The Board is confident that Jason is the right leader to continue to advance the company’s strategy and drive stakeholder value.” Mr. Wells said, “It is an exciting time in CenterPoint Energy’s long history. Together, we have worked to advance our vision as a pure-play, regulated and premium utility. We are successfully executing our industry-leading capital investment plan with a focus on safety, reliability, resiliency, growth and enabling cleaner energy investments to benefit our community and all our stakeholders. Dave’s outstanding leadership has been instrumental in transforming the company into one of the most tangible growth stories in the industry. As we enter this next chapter, I look forward to working with Dave over the next few months to ensure a seamless transition for all of our stakeholders and I thank him for his partnership. I am honored to lead the exceptional and dedicated team at CenterPoint Energy that puts customers and communities at the forefront of all we do. I look forward to continuing to engage with our stakeholders and sharing my vision for our great company’s future in the coming months.” Mr. Lesar said, “It has been an honor and a privilege to lead CenterPoint Energy these past three-plus years and to work with our outstanding people to transform the company into the leader it is today. I am incredibly proud of the significant achievements we’ve accomplished together and the work we have done to make the pursuit of progress possible on our path to a premium market valuation. We have reached this momentous milestone after a rigorous For more information contact Media: Communications Media.Relations@CenterPointEnergy.com Investors: Jackie Richert / Ben Vallejo Phone 713.207.6500
2 and purposeful succession journey, and I am confident that Jason is the best leader to be at the helm of our company as it continues to move forward.” About Jason P. Wells Mr. Wells joined CenterPoint Energy in 2020, and over the last three years has held several executive leadership positions, including Executive Vice President and Chief Financial Officer. In this role, he was responsible for the company’s Finance organization and electric generation transition plan. Most recently, Mr. Wells served as President and Chief Operating Officer and is responsible for the company’s utilities operations, including electric, natural gas and power generation. Mr. Wells is focused on safety, promoting excellence across operations and executing on the company’s industry-leading growth plan. Previously, Mr. Wells held positions of increasing responsibility with PG&E Corporation for 13 years. He served as EVP and CFO overseeing the financial activities of the nearly $60 billion enterprise. In his roles as Chief Financial Officer, Mr. Wells successfully led the execution of more than $50 billion in capital markets and strategic transactions. Mr. Wells serves on the boards of the Greater Houston Partnership, Central Houston, Inc., M.D. Anderson Cancer Center, and the Bauer College of Business at the University of Houston. He is also on the advisory board of the Kinder Institute for Urban Research at Rice University. In addition, he served on the board of the San Francisco- Marin Food Bank in 2020 and was a board member and treasurer of Habitat for Humanity Greater San Francisco from 2013 to 2019. He holds bachelor’s and master’s degrees in accounting, both from the University of Florida, and is a Certified Public Accountant (CPA). About CenterPoint Energy, Inc. As the only investor owned electric and gas utility based in Texas, CenterPoint Energy, Inc. (NYSE: CNP) is an energy delivery company with electric transmission and distribution, power generation and natural gas distribution operations that serve more than 7 million metered customers in Indiana, Louisiana, Minnesota, Mississippi, Ohio and Texas. As of September 30, 2023, the company owned approximately $39 billion in assets. With approximately 9,000 employees, CenterPoint Energy and its predecessor companies have been in business for more than 150 years. For more information, visit CenterPointEnergy.com. Forward-looking Statements This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this news release, the words "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "objective," "plan," "potential," "predict," "projection," "should," "target," "will" or other similar words are intended to identify forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual events and results may differ materially from those expressed or implied by these forward-looking statements. Any statements in this news release regarding future events, such as CenterPoint Energy's long-term capital plan and its ability to execute on its long-term capital plan and generation transition plans, future financial performance of CenterPoint Energy, executive management continuity and executive succession planning, achievement of emissions reduction goals, Board composition and any other statements that are not historical facts are forward-looking statements. Each forward-looking statement contained in this news release speaks only as of the date of this release. Important factors that could cause actual results to differ materially from those indicated by the provided forward-looking information include risks and uncertainties relating to: (1) the impact of pandemics, including the COVID-19 pandemic; (2) financial market conditions; (3) general economic conditions; (4) the timing and impact of future regulatory and legislative decisions; (5) effects of competition; (6) weather variations; (7) changes in business plans; (8) continued disruptions to the global supply chain and increases in commodity prices; (9) legislative decisions, including tax and developments related to the environment such as global climate change, air emissions, carbon and waste water discharges; (10) CenterPoint Energy's ability to execute on its initiatives, targets and goals and operations and
3 maintenance goals and (11) other factors, risks and uncertainties discussed in CenterPoint Energy's Annual Report on Form 10- K for the fiscal year ended December 31, 2022 and CenterPoint's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023, and other reports CenterPoint Energy or its subsidiaries may file from time to time with the Securities and Exchange Commission.
Establishing a path towards PREMIUM T h r o u g h S u s t a i n a b l e G r o w t h … THIRD QUARTER 2023 INVESTOR UPDATE October 26, 2023 Exhibit 99.3
Cautionary Statement and Other Disclaimers This presentation and the oral statements made in connection herewith contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact included in this presentation and the oral statements made in connection herewith are forward-looking statements made in good faith by CenterPoint Energy, Inc. (“CenterPoint Energy” or the “Company”) and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995, including statements concerning CenterPoint Energy’s expectations, beliefs, plans, objectives, goals, strategies, future operations, events, financial position, earnings and guidance, growth, costs, prospects, capital investments or performance or underlying assumptions and other statements that are not historical facts. You should not place undue reliance on forward-looking statements. You can generally identify our forward-looking statements by the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “objective,” “plan,” “potential,” “predict,” “projection,” “should,” “target,” “will,” or other similar words. The absence of these words, however, does not mean that the statements are not forward-looking. Examples of forward-looking statements in this presentation and the oral statements made in connection herewith include statements about capital investments (including with respect to incremental capital opportunities, deployment of capital, renewables projects, and financing of such projects), the timing of and projections for upcoming rate cases for CenterPoint and its subsidiaries, the timing and extent of CenterPoint's recovery, including with regards to its generation transition plans and projects, mobile generation spend, projects included in CenterPoint's Natural Gas Innovation Plan, and projects included under its 10-year capital plan, the extent of anticipated benefits of new legislation, future earnings and guidance, including long-term growth rate, customer charges, operations and maintenance expense reductions, financing plans (including the timing of any future equity issuances, securitization, credit metrics and parent level debt), the timing and anticipated benefits of our generation transition plan, including our exit from coal and our 10-year capital plan, the Company’s 2.0% Zero-Premium Exchangeable Subordinated Notes due 2029 (“ZENS”) and impacts of the maturity of ZENS, tax planning opportunities, future financial performance and results of operations, including with respect to regulatory actions and recoverability of capital investments, customer rate affordability, value creation, opportunities and expectations, expected customer growth, and ESG strategy, including our net zero and carbon emissions reduction goals. We have based our forward-looking statements on our management’s beliefs and assumptions based on information currently available to our management at the time the statements are made. We caution you that assumptions, beliefs, expectations, intentions, and projections about future events may and often do vary materially from actual results. Therefore, we cannot assure you that actual results will not differ materially from those expressed or implied by our forward-looking statements. Some of the factors that could cause actual results to differ from those expressed or implied by our forward-looking statements include, but are not limited to, risks and uncertainties relating to: (1) CenterPoint Energy’s business strategies and strategic initiatives, restructurings, including the internal restructuring of certain subsidiaries, joint ventures and acquisitions or dispositions of assets or businesses, including the completed sales of our Natural Gas businesses in Arkansas and Oklahoma, and Energy Systems Group, and the exit from midstream, which we cannot assure you will have the anticipated benefits to us; (2) industrial, commercial and residential growth in CenterPoint Energy’s service territories and changes in market demand; (3) CenterPoint Energy’s ability to fund and invest planned capital, and the timely recovery of its investments; (4) financial market and general economic conditions, including access to debt and equity capital, inflation, interest rates and instability of banking institutions and their effect on sales, prices and costs; (5) continued disruptions to the global supply chain and increases in commodity prices; (6) actions by credit rating agencies, including any potential downgrades to credit ratings; (7) the timing and impact of regulatory proceedings and actions and legal proceedings, including those related to Houston Electric’s mobile generation and the February 2021 winter storm event; (8) legislative decisions, including tax and developments related to the environment such as global climate change, air emissions, carbon, waste water discharges and the handling of coal combustion residuals, among others, and CenterPoint Energy’s net zero and carbon emissions reduction goals; (9) the impact of pandemics, including the COVID-19 pandemic; (10) the recording of impairment charges; (11) weather variations and CenterPoint Energy’s ability to mitigate weather impacts, including approval and timing of securitization issuances; (12) changes in business plans; (13) CenterPoint Energy’s ability to execute on its initiatives, targets and goals, including its net zero and carbon emissions reduction goals and operations and maintenance goals; and (14) other factors discussed in CenterPoint Energy’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and CenterPoint Energy’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023, and September 30, 2023, including under “Risk Factors,” “Cautionary Statements Regarding Forward-Looking Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Certain Factors Affecting Future Earnings” in such reports and in other filings with the Securities and Exchange Commission (“SEC”) by the Company, which can be found at www.centerpointenergy.com on the Investor Relations page or on the SEC website at www.sec.gov. This presentation contains time sensitive information that is accurate as of the date hereof (unless otherwise specified as accurate as of another date). Some of the information in this presentation is unaudited and may be subject to change. We undertake no obligation to update the information presented herein except as required by law. Investors and others should note that we may announce material information using SEC filings, press releases, public conference calls, webcasts and the Investor Relations page of our website. In the future, we will continue to use these channels to distribute material information about the Company and to communicate important information about the Company, key personnel, corporate initiatives, regulatory updates and other matters. Information that we post on our website could be deemed material; therefore, we encourage investors, the media, our customers, business partners and others interested in our Company to review the information we post on our website. Use of Non-GAAP Financial Measures In addition to presenting its financial results in accordance with generally accepted accounting principles (GAAP), including presentation of income (loss) available to common shareholders and diluted earnings (loss) per share, the Company also provides guidance based on non-GAAP income and non-GAAP diluted earnings per share and also provides non-GAAP funds from operations / non-GAAP rating agency adjusted debt (“FFO/Debt”). Generally, a non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance that excludes or includes amounts that are not normally excluded or included in the most directly comparable GAAP financial measure. Please refer to the Appendix for detailed discussion of the use of non-GAAP financial measures presented herein. 2
Note: Refer to slide 2 for information on forward-looking statements and slide 22 for information on non-GAAP EPS assumptions and non-GAAP measures. (1) Refer to slide 16 and slide 18 for reconciliation of non-GAAP measures to GAAP measures (2) Refers to non-GAAP EPS annual growth rate for 2022A – 2030E Target based on long-term plan assumptions (3) Refers to 10-year capital plan from 2021A-2030E (4) Based on Moody’s methodology; FFO/Debt is a non-GAAP measure (5) O&M includes Electric and Natural Gas business, based on goal of 1% - 2% annual average savings (6) Securitization includes CEHE Transition Bond Company IV bonds ending by 2024 and SIGECO Securitization bonds (7) Internal projection through 2030 On track Premium Value Proposition: Tracking Delivery Delivered non-GAAP EPS(1) of $0.40 in Q3 2023 despite higher interest rate environment and continued inflationary pressures Initiating 2024 non-GAAP EPS guidance range of $1.61 - $1.63 – 8% growth over 2023 midpoint and target mid-to-high end of 6% - 8% annually 2025 -2030(2) Increasing capital plan through 2030(3) by a total of $500M to $43.9B; ~$200M to be included in 2023 capital plan and ~$300M in 2024 - 2025 Maintaining balance sheet health; long term FFO/Debt(4) target of 14% - 15% through 2030 Keeping rates affordable; maintained O&M discipline(5), securitization rolling off or extending cost recovery(6), and customer growth(7) Prior $43.4B capital plan does not require external equity; incremental capital to be efficiently funded; expect to introduce ~$250M ATM program in 2024 Sustainable Growth for Shareholders 14 quarters of meeting/exceeding expectations On track On track On track On track On track 10-Year Plan Deliverables Progress Sustainable Positive Impact on Our Environment Sustainable, Resilient, and Affordable Service for Customers Retired A.B. Brown coal facility; continue to target full exit of operating coal generation by end of 2027 CNP Value Proposition Raising 2023 full-year guidance to $1.49 - $1.51 non-GAAP EPS – 9% growth over 2022 at the midpoint; targeting 3rd consecutive year at 9% On track 3
Focused on Strong Balance Sheet and Efficient Funding Reduced floating rate debt to $1.8B, or ~10%, of total debt outstanding. Reported 14.3% FFO/debt as of TTM 3Q 2023(4); targeting 14% - 15%(4) through 2030, and expect to introduce modest ~$250M ATM in ‘24 to efficiently fund incremental capital Rate Cases Remain ‘On – Track’ Four upcoming rate cases tracking well; Texas Gas expected to be filed as a single combined rate case by November 1, Minnesota gas and Indiana electric are still on target for November and December; Houston Electric filing is now targeted for Q2 of 2024 Increased Capital Plan(3) Increased current plan through 2030 by $500 million; ~$200MM of which is expected to be deployed in 2023; ~$300 million expected to be deployed in 2024 and 2025; brings total capital plan through 2030 to $43.9B. Investments support growth, resiliency, safety, and reliability for the benefit of customers and are not reliant on ‘Big Bets’ Note: Refer to slide 2 for information on forward-looking statements and slide 22 for information on non-GAAP EPS assumptions and non-GAAP measures (1) Refer to slide 16, 18, and slide 20 for reconciliation of non-GAAP measures to GAAP measures (2) Meets prior growth target of 8% (3) Refers to 10-year capital plan from 2021A-2030E. Over 80% expected to be recovered through regulatory interim mechanisms (4) See slide 20 for additional information on FFO/Debt calculation (5) Securitization includes CEHE bonds ending by 2024 (6) Internal projection through 2030 (7) Subject to Public Utility Commission of Texas approval ….Extending track record of execution Continued Focus on Customer Affordability Next CEHE securitization charges coming off bill in ‘24 (~4% of 2023 average residential customer bill)(5) creates incremental bill headroom for our customers; 1% - 2% annual organic growth(6); target 1% - 2% annual average O&M savings Constructive Regulatory Outcomes Reached an all-party settlement in principle on emergency generation (Temporary Emergency Electric Energy Facilities or “TEEEF”) at Houston Electric(7); received reapproval for Posey Solar project at Indiana Electric Increased 2023 Guidance and Initiated 2024 Guidance Delivered non-GAAP EPS(1) of $0.40 for Q3; Raising full-year guidance range to $1.49 - $1.51 non-GAAP EPS; Initiating 2024 guidance of $1.61 - $1.63 non-GAAP EPS(2); Reiterate mid to high-end of 6% - 8% non-GAAP EPS annual growth for 2025 to 2030 Takeaways... 4
Regulatory Schedule Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TX (E) IN (E) TX (G) MN (G) N. IN (G) OH (G) S. IN (G) LA (G) MS (G) EH No Rate Case Planned Until Mid-2024 No Rate Case Planned Until Post-2025 No Rate Case Planned Until Post-2025 Evidentiary Hearing FO Final Order CPCN (Posey) CPCN (Wind) ROE / Equity Ratio ’23 Rate Base(2) 9.40% / 42.5% $12.0B 10.40% / 43.5% $2.0B 9.64% / 55.5%(1) $2.0B 9.39% / 51.0% $2.0B 9.80% / 46.8% $2.0B N/A / 51.1% $1.0B 9.70% / 46.2% $0.6B 9.95% / 52.0% $0.4B 9.75% / 50.0% $0.3B Total = $22.3B Upcoming Rate Case Activity No Rate Case Planned Until Post-2025 No Rate Case Planned Until Post-2025 CPCN (Pike County) GRC GRC FO GRC EH EH FO FO 5 Note: Refer to slide 2 for information on forward-looking statements. TCOS – Transmission Cost of Service; DCRF – Distribution Cost Recovery Factor CPCN – Certificate of Public Convenience and Necessity (1) TX Gas regulatory metrics reflect jurisdictional average (2) Represents the latest available information, may differ slightly from regulatory filings 2nd TCOS Filing / 2nd DCRF Filing GRC General Rate Case
Interim Regulatory Mechanism Update (Cont’d) DCRF (Houston Electric) Filed ~$85MM revenue requirement increase (April) Filed for black box settlement for a revenue requirement increase of ~$70MM net revenue increase Recovery commenced September 1st Indiana IRP Update Electric CPCNs(2): Wind Project: Approved June 2023; expected to be placed in service by end of 2026 Posey Solar: Reapproved on September 6, 2023; expected to be placed in service in 2025 Pike County Solar: Expected to be refiled; expected to be placed in service by the end of 2026 Securitization and Other Updates Indiana Coal Retirements A.B. Brown facility retired on October 7, 2023 Minnesota Natural Gas Innovation Act Filed for the recovery of ~$106MM over 5 years that will fund 25 projects to further Minnesota customer emission goals ….Constructive across our footprint Note: Refer to slide 2 for information on forward-looking statements. TCOS: Transmission Cost of Service; TEEEF – Temporary Emergency Electric Energy Facilities; DCRF – Distribution Cost Recovery Factor; CPCN – Certificate of Public Convenience and Necessity (1) See full regulatory schedule on slide 5 (2) See slide 15 for additional information regarding renewables timeline (3) Subject to Public Utility Commission of Texas approval Key Regulatory Updates…. 6 Rate Case Update(1) Texas Gas Expected to be filed by November 1st Houston Electric Now plan to file in Q2 2024 MN Gas and IN Electric still ‘on - track’ November and December, respectively Interim Regulatory Mechanism Update TCOS (Houston Electric) Filed in August 2023 with additional ~$44MM revenue requirement Rates updated October 2023 TEEEF (Houston Electric) Second filing made in April 2023 seeking recovery of costs representing ~$188MM revenue requirement, increase of $149MM over last year Began recovery through interim rates on September 1st Parties reached agreement in principle on all issues(3)
Q3 2023 v Q3 2022 Non-GAAP EPS(1) Primary Drivers Note: Refer to slide 22 for information on non-GAAP EPS assumptions and non-GAAP measures. (1) Refer to slide 16 and slide 18 for reconciliation of non-GAAP measures to GAAP measures (2) Primarily driven by favorable AFUDC Growth and Rate Recovery Ongoing Cost Management & Interest ExpenseWeather / Usage Electric $0.01 Growth $0.07 Rate recovery Gas $0.01 Rate recovery Electric $0.04 Gas $0.01 Other $0.02 Other (2) 7 Interest Expense $0.08 O&M - Q3 2022 Non-GAAP EPS Q3 2023 Non-GAAP EPS
Capital Expenditures by Segment…. FY YTD FY FY 5-YR 10-YR 2022 2023 2023E(3) 2024E Plan Plan Electric(4) ~$3.1B ~$2.1B ~$2.5B ~$2.2B $13.7B $26.7B Natural Gas ~$1.7B ~$1.3B ~$1.7B ~$1.5B $7.4B $17B Corporate and Other ~$40MM ~$6MM ~$10MM ~$12MM $0.1B $0.2B Total Capital Expenditures(4) ~$4.8B ~$3.4B ~$4.2B (was $4.0B) ~$3.7B ~$21.2B (was ~$20.7B) ~$43.9B (was ~$43.4B+) Note: Refer to slide 2 for information on forward-looking statements. (1) Refers to capital plan from 2021A to 2025E (2) Refers to capital plan from 2021A to 2030E (3) Represents 2023 capital estimated as of 09/30/2023 (4) Includes incremental and accelerated investments in 2021 and 2022 related to capital leases for temporary emergency mobile generation units Current 5-Yr Plan(1) Continued Incremental Capital Opportunities • Increased & accelerated C&I electrification • Accelerated EV adoption • Additional grid modernization projects ….Continued execution of capital plan for the benefit of customers 8 10-Yr Plan(2) Through 2030
Continued Focus on Balance Sheet Strength $2.5B CNP $2B $2.4B $1.8B CNP $1.9B CERC $0.5B $0.1B SIGECO $0.1B $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 Q4 2022 Q1 2023 Q2 2023 Q3 2023 B a la n c e ( $ i n B ill io n s ) 9 ….and, mitigating exposure to floating interest rates $4.5B $2.6B 10% of total Floating Rate Exposure FFO / Debt - Moody’s methodology (1) Q4 2022 Q1 2023 Q2 2023 Q3 2023 15.4% 14.2% 13.9% 14.3% Note: Refer to slide 2 for information on forward-looking statements. (1) Based on Moody’s methodology with certain adjustments noted on slide 20; target based on plan assumptions; See slide 20 for reconciliation to nearest GAAP measures and slide 22 for information regarding non-GAAP EPS assumptions and non-GAAP measures Target 14% - 15% FFO/Debt Thru 2030… Reduced Floating Rate Exposure by ~60%... 2024 2025 2026 Floating Rate Sr. Notes @ 5.8% $700M $ - $ - Senior Notes @ 2.50% $500M $ - $ - Senior Notes @ 1.45%, 5.25% $ - $ - $900M Convertible Senior Notes @ 4.25% $ - $ - $1,000M General Mortgage Bonds @ 2.40% $ - $ - $300M Private Placement Notes @ 5.02% $ - $ - $60M IGC Senior Notes @ 6.53% $ - $10M $ - First Mortgage Bonds @ 3.5% $23M $ - $ - First Mortgage Bonds @ 3.45% $ - $41M $ - Total $1,223M $51M $2,260M SIGECO Upcoming Maturities CNP (Parent) CEHE CERC
Contacts Jackie Richert Vice President Corporate Planning, Investor Relations and Treasurer Tel. (713) 207 – 9380 jackie.richert@centerpointenergy.com Ben Vallejo Director Investor Relations and Corporate Planning Tel. (713) 207 – 5461 ben.vallejo@centerpointenergy.com General Contact Tel. (713) 207 – 6500 https://investors.centerpointenergy.com/contact-us 10
Appendix 11
Average Monthly CEHE Charges (per 1,000 kWh) Customer Affordability Houston Electric Rates (Based on new capital plan) Customer Growth Structural Headroom O&M Discipline Effective Rates Future Expected Bill Mitigants 1-2% annual customer growth CEHE’s Securitization bonds ending(2) ~4% reduction of vol. charge (2024) 1-2% O&M average reduction per year(3) ….Executing capital plan while working to keeping rates affordable Nearly flat charges on customer bills over the last 10 years at Houston Electric ~2.8% average annual inflation rate for that same period Note: Refer to slide 2 for information on forward-looking statements. (1) Full-year projection 2023 rate as of September 2023 (2) Refers to Houston Electric’s securitization bonds; One tranche of transition bonds remain, with a scheduled final payment date in 2024 (3) Projections based on internal forecast and are based on annual targets 12 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 ~$49 ~$49(1)
Capital Plan & Regulatory Mechanisms ….No big bets with limited regulatory uncertainty Note: Refer to slide 2 for information on forward-looking statements. (1) Includes capital expenditures that is expected to be recovered through interim mechanisms but requires approval of Certificate of Public Convenience and Necessity. (2) Includes capital expenditures that is expected to be recovered through interim mechanisms and riders. Excludes capital expenditures that require approvals for Certificate of Public Convenience and Necessity. Regulatory Highlights Stakeholder Benefits Existing Mechanisms for timely recovery of major storm costs Reasonable cost recovery minimizes customer impact and earnings volatility Winter storm cost recovery underway in all impacted states Reasonable cost recovery minimizes customer impact and earnings volatility Generation transition proceedings in Indiana on plan Cleaner energy transition good for communities Greater Than 80% of 10-year Capital plan expected to be recoverable through interim mechanisms (2) Interim Mechanisms ~80% Interim mechanisms with CPCN required ~5% Rate case with forward test year ~10% Traditional rate case ~5% (2) (1) 13
Weather and Throughput Data Note: Data as of 09/30/2023. (1) End of period number of metered customers (2) As compared normal weather for service area; Normal weather is based on past 10-year weather in service area (3) Only pertains to HDD Electric Natural Gas 3Q 2023 3Q 2022 2023 vs 2022 Th ro ug hp ut (in G W h) Residential 13,851 11,970 16% Total 35,029 30,330 15% M et er ed C us to m er s (1 ) Residential 2,578,969 2,527,383 2% Total 2,906,307 2,850,910 2% W ea th er v s N or m al (2 ) Cooling Degree Days 389 92 298 Heating Degree Days (1) 1 (2) Houston Cooling Degree Days 410 95 315 Houston Heating Degree Days 0 0 0 3Q 2023 3Q 2022 2023 vs 2022 Th ro ug hp ut (in B cf ) Residential 14 15 (7)% Commercial and Industrial 84 81 4% Total 98 96 2% M et er ed C us to m er s (1 ) Residential 3,967,080 3,920,848 1% Commercial and Industrial 299,915 296,144 1% Total 4,266,995 4,216,992 1% W ea th er v s N or m al (2 ) Heating Degree Days (28) (4) (24) Texas Heating Degree Days 0 0 0 14 Margin Sensitivities CEHE IE TX Gas(3) Per HDD / CDD $50k - $70k $20k - $30k $30k - $40k
Generation Project Timeline 15 Note: Refer to slide 2 for information on forward-looking statements. The above highlighted projects are now expected to be placed in service in 2026 which we previously anticipated to go into service in 2025.
Reconciliation of Consolidated income available to common shareholders and diluted earnings per share (GAAP) to non-GAAP income and non-GAAP diluted earnings per share Quarter Ended September 30, 2023 Dollars in millions Diluted EPS (1) Consolidated income available to common shareholders and diluted EPS $ 256 $ 0.40 ZENS-related mark-to-market (gains) losses: Equity securities (net of taxes of $10) (2)(3) (39) (0.06) Indexed debt securities (net of taxes of $10) (2) 37 0.06 Impacts associated with mergers and divestitures (net of taxes of $0) (2) 2 - Consolidated on a non-GAAP basis $ 256 $ 0.40 16 (1) Quarterly diluted EPS on both a GAAP and non-GAAP basis are based on the weighted average number of shares of common stock outstanding during the quarter, and the sum of the quarters may not equal year-to-date diluted EPS (2) Taxes are computed based on the impact removing such item would have on tax expense. Taxes related to the operating results of Energy Systems Group, as well as cash taxes payable and other tax impacts related to the sale of Energy Systems Group in the second quarter of 2023, are excluded from non-GAAP EPS (3) Comprised of common stock of AT&T Inc., Charter Communications, Inc., and Warner Bros. Discovery, Inc.
Reconciliation of Consolidated income available to common shareholders and diluted earnings per share (GAAP) to non-GAAP income and non-GAAP diluted earnings per share Year-to-Date Ended September 30, 2023 Dollars in millions Diluted EPS (1) Consolidated income available to common shareholders and diluted EPS $ 675 $ 1.07 ZENS-related mark-to-market (gains) losses: Equity securities (net of taxes of $12) (2)(3) (45) (0.07) Indexed debt securities (net of taxes of $11) (2) 31 0.06 Impacts associated with mergers and divestitures (net of taxes of $55) (2)(4) 77 0.12 Consolidated on a non-GAAP basis $ 748 $ 1.18 17 (1) Quarterly diluted EPS on both a GAAP and non-GAAP basis are based on the weighted average number of shares of common stock outstanding during the quarter, and the sum of the quarters may not equal year-to-date diluted EPS (2) Taxes are computed based on the impact removing such item would have on tax expense. Taxes related to the operating results of Energy Systems Group, as well as cash taxes payable and other tax impacts related to the sale of Energy Systems Group in the second quarter of 2023, are excluded from non-GAAP EPS (3) Comprised of common stock of AT&T Inc., Charter Communications, Inc., and Warner Bros. Discovery, Inc. (4) Includes $4.4 million of pre-tax operating loss for the six months ended June 30, 2023, related to Energy Systems Group, a divested non-regulated business, as well as the $12.4 million loss on sale and approximately $2 million of other indirect related transaction costs associated with the divestiture in the second quarter of 2023
Reconciliation of Consolidated income available to common shareholders and diluted earnings per share (GAAP) to non-GAAP income and non-GAAP diluted earnings per share Quarter Ended September 30, 2022 Dollars in millions Diluted EPS (1) Consolidated income available to common shareholders and diluted EPS $ 189 $ 0.30 ZENS-related mark-to-market (gains) losses: Equity securities (net of taxes of $43) (2)(3) 163 0.25 Indexed debt securities (net of taxes of $44) (2) (166) (0.26) Midstream-related earnings (net of taxes of $1) (2)(4) (1) - Impacts associated with mergers and divestitures (net of taxes of $20) (2) 21 0.03 Consolidated on a non-GAAP basis $ 206 $ 0.32 18 (1) Quarterly diluted EPS on both a GAAP and non-GAAP basis are based on the weighted average number of shares of common stock outstanding during the quarter, and the sum of the quarters may not equal year-to-date diluted EPS (2) Taxes are computed based on the impact removing such item would have on tax expense (3) Comprised of common stock of AT&T Inc., Charter Communications, Inc., and Warner Bros. Discovery, Inc. (4) Includes earnings and expenses related to ownership and disposal of Energy Transfer units, a corresponding amount of debt related to the units and an allocation of associated corporate overhead
Reconciliation of Consolidated income available to common shareholders and diluted earnings per share (GAAP) to non-GAAP income and non-GAAP diluted earnings per share Year-to-Date Ended September 30, 2022 Dollars in millions Diluted EPS (1) Consolidated income available to common shareholders and diluted EPS $ 886 $ 1.40 ZENS-related mark-to-market (gains) losses: Equity securities (net of taxes of $78) (2)(3) 293 0.46 Indexed debt securities (net of taxes of $80) (2) (301) (0.47) Midstream-related earnings (net of taxes of $9) (2)(4) (34) (0.05) Impacts associated with mergers and divestitures (net of taxes of $148) (2) (149) (0.24) Consolidated on a non-GAAP basis $ 695 $ 1.10 19 (1) Quarterly diluted EPS on both a GAAP and non-GAAP basis are based on the weighted average number of shares of common stock outstanding during the quarter, and the sum of the quarters may not equal year-to-date diluted EPS (2) Taxes are computed based on the impact removing such item would have on tax expense (3) Comprised of common stock of AT&T Inc., Charter Communications, Inc., and Warner Bros. Discovery, Inc. (4) Includes earnings and expenses related to ownership and disposal of Energy Transfer units, a corresponding amount of debt related to the units and an allocation of associated corporate overhead. Includes costs associated with early extinguishment of $600 million debt at CenterPoint Energy, Inc. of approximately $35 million, net of taxes
Twelve month to date ended and as of period ended, respectively ($ in millions) Q4 2022 Q1 2023 Q2 2023 Q3 2023 Net cash provided by operating activities $1,810 $2,943 $3,314 $3,542 Add back: Accounts receivable and unbilled revenues, net 461 (91) (122) 28 Inventory 259 296 132 (28) Taxes receivable 19 7 15 67 Accounts payable (203) 35 68 121 Other current assets and liabilities 5 173 (39) (141) Adjusted cash from operations 2,351 3,363 3,368 3,589 Plus: Rating agency adjustments(1) 146 (947) (946) (951) Non-GAAP funds from operations (FFO) $2,497 $2,416 $2,422 $2,649 Total Debt, Net Short-term Debt: Short-term borrowings 511 500 2 4 Current portion of VIE Securitization Bonds long-term debt 156 156 170 170 Indexed debt, net 7 6 6 5 Current portion of other long-term debt 1,346 57 756 1,255 Long-term Debt: VIE Securitization bonds, net 161 161 408 408 Other long-term debt, net 14,675 15,622 15,624 16,430 Total Debt, net 16,856 16,502 16,966 18,272 Plus: Rating agency adjustments(2) (622) 491 508 123 Non-GAAP rating agency adjusted debt $16,234 $16,993 $17,474 $18,395 Net cash provided by operating activities / total debt, net 10.7% 17.8% 19.5% 19.4% Non-GAAP FFO / Non-GAAP rating agency adjusted debt (“FFO/Debt”) 15.4% 14.2% 13.9% 14.3% Reconciliation: Net Cash Provided by Operating Activities and Total Debt, Net to non-GAAP Funds from Operations (FFO) and non-GAAP Rating Agency Adjusted Debt 20(1) Based on Moody’s methodology, including adjustments related to total lease costs (net of lease income), Series A preferred stock dividends, non-recurring items and defined benefit plan. CNP further reduces FFO for non-recurring Winter Storm Uri related securitization proceeds. (2) Based on Moody’s methodology, including adjustments related to Series A preferred stock, pension benefit obligations, and operating lease liabilities. CNP also adjusts for non-recurring Winter Storm Uri debt
Regulatory Information Information Location Electric Estimated 2022 year-end rate base by jurisdiction Authorized ROE and capital structure by jurisdiction Definition of regulatory mechanisms Projected regulatory filing schedule Regulatory Information – Electric Natural Gas Estimated 2022 year-end rate base by jurisdiction Authorized ROE and capital structure by jurisdiction Definition of regulatory mechanisms Projected regulatory filing schedule Regulatory Information – Gas Estimated amortization for pre-tax equity earnings related to Houston Electric’s securitization bonds Regulatory Information – Electric (Pg. 5) Rate changes and Interim mechanisms filed Form 10-Q – Rate Change Applications section 21
Additional Information Use of Non-GAAP Financial Measures In this presentation and the oral statements made in connection herewith, CenterPoint Energy presents, based on diluted earnings per share, non-GAAP income, non-GAAP earnings per share (“non-GAAP EPS”), as well as non-GAAP funds from operations / non-GAAP rating agency adjusted debt (“FFO/Debt”) which are not generally accepted accounting principles (“GAAP”) financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance that excludes or includes amounts that are not normally excluded or included in the most directly comparable GAAP financial measure. 2022 and 2023 non-GAAP EPS excluded and 2023 and 2024 non-GAAP EPS guidance excludes: (a) Earnings or losses from the change in value of ZENS and related securities, (b) (for 2022) Gain and impact, including related expenses, associated with Arkansas and Oklahoma gas LDC sales, (c) (for 2022) Income and expense related to ownership and disposal of Energy Transfer common and Series G preferred units, and a corresponding amount of debt related to the units and (d) (for 2023 and 2024) Impact, including related expenses, associated with mergers and divestitures such as the divestiture of Energy Systems Group. In providing this guidance, CenterPoint Energy does not consider the items noted above and other potential impacts such as changes in accounting standards, impairments or other unusual items, which could have a material impact on GAAP reported results for the applicable guidance period. The 2023 and 2024 non-GAAP EPS guidance ranges also considers assumptions for certain significant variables that may impact earnings, such as customer growth and usage including normal weather, throughput, recovery of capital invested, effective tax rates, financing activities and related interest rates, and regulatory and judicial proceedings. To the extent actual results deviate from these assumptions, the 2023 and 2024 non-GAAP EPS guidance ranges may not be met or the projected annual non-GAAP EPS growth rate may change. CenterPoint Energy is unable to present a quantitative reconciliation of forward-looking non-GAAP diluted earnings per share because changes in the value of ZENS and related securities, future impairments, and other unusual items are not estimable and are difficult to predict due to various factors outside of management’s control. Funds from operations excludes from net cash provided by operating activities accounts receivable and unbilled revenues, net, inventory, taxes receivable, accounts payable, and other current assets and liabilities, and includes certain adjustments consistent with Moody’s methodology, including adjustments related to total lease costs (net of lease income), Series A preferred stock dividends, non-recurring items and defined benefit plan, as well as non-recurring Winter Strom Uri related securitization proceeds. Non-GAAP rating agency adjusted debt adds to Total Debt, net certain adjustments consistent with Moody’s methodology, including adjustments related to Series A preferred stock, pension benefit obligations, and operating lease liabilities, as well as non-recurring Winter Storm Uri debt. CenterPoint Energy is unable to present a quantitative reconciliation of forward-looking FFO/Debt because certain adjustments and other unusual items are not estimable and are difficult to predict due to various factors outside of management's control. The appendix to this presentation contains a reconciliation of income (loss) available to common shareholders and diluted earnings (loss) per share to the basis used in providing guidance, as well as a reconciliation of net cash provided by operating activities / total debt, net to FFO/Debt. Management evaluates the Company’s financial performance in part based on non-GAAP income, non-GAAP EPS and long-term FFO/Debt. Management believes that presenting these non-GAAP financial measures enhances an investor’s understanding of CenterPoint Energy’s overall financial performance by providing them with an additional meaningful and relevant comparison of current and anticipated future results across periods. The adjustments made in these non-GAAP financial measures exclude items that Management believes do not most accurately reflect the Company’s fundamental business performance. These excluded items are reflected in the reconciliation tables, where applicable. CenterPoint Energy’s non-GAAP income, non-GAAP EPS and non-GAAP FFO/Debt financial measures should be considered as a supplement to, and not as a substitute for, or superior to, income available to common shareholders, diluted earnings per share (in the case of non-GAAP EPS) and net cash provided by operating activities to total debt, net which, respectively, are the most directly comparable GAAP financial measures. These non-GAAP financial measures also may be different than non-GAAP financial measures used by other companies. Net Zero Disclaimer Our Scope 1 emissions estimates are calculated from emissions that directly come from our operations. Our Scope 2 emissions estimates are calculated from emissions that indirectly come from our energy usage, but because Texas is in an unregulated market, our Scope 2 estimates do not take into account Texas electric transmission and distribution assets in the line loss calculation and exclude emissions related to purchased power between 2024E-2026E. Our Scope 3 emissions estimates are based on the total natural gas supply delivered to residential and commercial customers as reported in the U.S. Energy Information Administration (EIA) Form EIA-176 reports and do not take into account the emissions of transport customers and emissions related to upstream extraction. While we believe that we have a clear path towards achieving our net zero emissions (Scope 1 and Scope 2) by 2035 goals, our analysis and path forward required us to make a number of assumptions. These goals and underlying assumptions involve risks and uncertainties and are not guarantees. Should one or more of our underlying assumptions prove incorrect, our actual results and ability to achieve net zero emissions by 2035 could differ materially from our expectations. Certain of the assumptions that could impact our ability to meet our net zero emissions goals include, but are not limited to: emission levels, service territory size and capacity needs remaining in line with Company expectations (inclusive of changes related to the sale of our Natural Gas businesses in Arkansas and Oklahoma); regulatory approval of Indiana Electric's generation transition plan; impacts of future environmental regulations or legislation; impacts of future carbon pricing regulation or legislation, including a future carbon tax; price, availability and regulation of carbon offsets; price of fuel, such as natural gas; cost of energy generation technologies, such as wind and solar, natural gas and storage solutions; adoption of alternative energy by the public, including adoption of electric vehicles; rate of technology innovation with regards to alternative energy resources; our ability to implement our modernization plans for our pipelines and facilities; the ability to complete and implement generation alternatives to Indiana Electric's coal generation and retirement dates of Indiana Electric's coal facilities by 2035; the ability to construct and/or permit new natural gas pipelines; the ability to procure resources needed to build at a reasonable cost, the lack of or scarcity of resources and labor, the lack of any project cancellations, construction delays or overruns and the ability to appropriately estimate costs of new generation; impact of any supply chain disruptions; changes in applicable standards or methodologies; and enhancement of energy efficiencies. 22