CNPCenterPoint Energy

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.

Rest of the question

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 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.

This response addresses questions 1 and 2 from the Comment Letter. The Company acknowledges the Staff’s comments. We did not intend to present a non-GAAP measure, and we respectfully propose to make the following changes to the Company’s discussion of consolidated results for all periods presented in future Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K beginning with the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022 which the Company currently expects to file on August 2, 2022.

Rest of the answer

The changes to Management’s Discussion & Analysis of consolidated results will primarily cross-reference to information disclosed elsewhere within the respective Form 10-Q or Form 10-K, as the case may be, and will include the following:

•We will quantify the impact of items described in these comparisons for consolidated results, consistent with the requirements of Item 303(a), (b), (b)(2)(i), and (c) of Regulation S-K; and

•We will remove the categories of “key factors” and “excluding those items.” The period over period variances will only be categorized as factors that increased Income available to common shareholders and factors that decreased Income available to common shareholders, with quantification of each item described.

An illustrative example of the future revisions based on the Company’s Form 10-Q for the quarterly period ended March 31, 2022 is as follows:

Three months ended March 31, 2022 compared to three months ended March 31, 2021

Income available to common shareholders increased $184 million primarily due to the following items:

•an increase in Net income of $7 million for the Electric reportable segment, as further discussed below;

•an increase in Net income of $169 million for the Natural Gas reportable segment, as further discussed below;

•an increase in Income available to common shareholders of $91 million for Corporate and Other, primarily due to the net gain of $86 million on Energy Transfer equity securities discussed further in Note 10 to the Interim Condensed Financial Statements, and a decrease of $16 million in Income allocated to preferred shareholders, primarily due to the conversion of the Series B Preferred Stock to Common Stock during 2021; and

•a decrease in Income of $83 million from Discontinued operations, discussed further in Note 3 to the Interim Condensed Financial Statements.

When the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 is filed, we respectfully propose to include quantification of the consolidated results of operation discussion for 2021 compared to 2020 as follows:

2021 Compared to 2020

CenterPoint Energy reported Income available to common shareholders of $1,391 million for 2021 compared to a Loss available to common shareholders of $949 million for 2020. The increase in Income available to common shareholders of $2,340 million was primarily due to the following items:

•an increase in Net income of $245 million for the Electric reportable segment, as further discussed below;

•an increase in Net income of $125 million for the Natural Gas reportable segment, as further discussed below;

•a decrease in Income available to common shareholders of $104 million for Corporate and Other, primarily due to the net loss of $122 million on Energy Transfer equity securities discussed further in Note 12 to the consolidated financial statements; and

•an increase in Income of $2,074 million from Discontinued operations, discussed further in Note 4 to the consolidated financial statements.

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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.

Rest of the question

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.

We acknowledge the Staff’s comments, and we respectfully propose to make revisions in future filings consistent with the disclosures described above. We did not intend to present a non-GAAP measure. Read in the reply ↗

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.

Rest of the question

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.

We respectfully acknowledge the Staff’s comments and the requirements in Item 10(e) of Regulation S-K. We did not intend to present a measure of non-GAAP margin, and we agree to remove all subtotals of revenues less cost of revenues in future filings for all periods presented beginning with the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022, which the Company currently expects to file on August 2, 2022.

Rest of the answer

Additionally, the Company will describe favorable and unfavorable variances to each GAAP line item, for example, (i) revenues and (ii) cost of natural gas, fuel and purchased power costs, separately within the tabular explanations by major income statement caption, instead of discussing the variance to the subtotal of revenues less cost of revenues in the aggregate for our electric and natural gas reportable segments as well as the discussion of the results of CERC.

An illustrative example of the future disclosures based on the discussion of Natural Gas results for the quarterly period ended March 31, 2022 included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 is as follows:

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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

Rest of the question

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. Sincerely,

We acknowledge the Staff’s comments and respectfully confirm that there has been no such quantification by litigants of damages sought by counterparties in the litigation referenced by this disclosure. Thus, we are unable to provide the information noted, discussed further below. As a result of being unable to quantify the potential losses associated with this litigation, we have disclosed the following on page 165 of the Company’s Annual Report for the fiscal year ended December 31, 2021 (the 2021 Form 10-K): “CenterPoint Energy, Houston Electric and CERC are unable to predict the

Rest of the answer

consequences of any such matters or to estimate a range of potential losses.”

Plaintiffs in the multi-district litigation (MDL) associated with the February 2021 Winter Storm Event have not made settlement demands on the defendants. All proceedings, including discovery, are stayed pending the MDL judge’s ruling on potentially dispositive legal motions (e.g., motions to dismiss and pleas to the jurisdiction) filed in five bellwether cases by various groups of defendants. As such, there have not yet been any expert reports, or other discovery regarding damages. Given that the litigation is still in its initial stages and the lack of information noted above, the Company is currently unable to estimate or quantify potential damages. Therefore, we are unable to disclose any quantification of damages or estimated exposure to possible loss. We are continuing to defend against the claims in the litigation, will continue to review and assess potential exposure in the litigation each period, and will update our disclosures accordingly, including providing an estimate of possible loss per ASC 450-20-50-3 to 50-4 when such information is available. Additionally, while we respectfully acknowledge that GAAP requirements for evaluating, recording and disclosing loss contingencies are separate and distinct from insurance recoveries, CenterPoint Energy and its subsidiaries have general and excess liability insurance policies that provide coverage for third party bodily injury and property damage claims.

We acknowledge the Staff’s comment on our disclosure in Management’s Discussion and Analysis that “CenterPoint Energy does not, at this time, anticipate long-term financial impacts associated with the February 2021 Winter Storm Event.”

We respectfully propose to make the following changes in the Company’s future Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K, as appropriate, and with respect to the first two bullets below, beginning with the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022 that the Company currently expects to file on August 2, 2022:

•to add clarity in the existing disclosures in the Company’s consolidated financial statements to describe why the Company is unable to quantify the possible loss associated with the February 2021 Winter Storm Event, including additional detail about the complexities and uncertainties of these proceedings, the likely continued stay of discovery, and the lack of information available to quantify potential exposure;

•to include in the Company’s consolidated financial statements a statement about its insurance coverage for damages. An example as follows: CenterPoint Energy and its subsidiaries have general and excess liability insurance policies that provide coverage for third party bodily injury and property damage claims; and

•to more distinctly describe potential financial impacts from litigation separate from other potential financial impacts.

Additionally, we will continue to cross-reference to the consolidated financial statements, updated as described within, such as our reference to Note 16 on page 43 of the 2021 Form 10-K for disclosures of future impacts related to litigation or loss contingency matters.

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We note that natural gas expense was 49% of natural gas distribution revenue in 2015, 59% in 2014 and 56% in 2013. Please expand your discussion to explain why natural gas expense decreased as a percentage of revenue and whether you expect this trend to continue.

The regulations of the states in which our natural gas distribution business (NGD) operates allow it to pass through the full cost of natural gas to its customers. The cost of natural gas is passed through directly to the customer without mark-up. Accordingly, NGD revenues from gas sales and natural gas expense do not impact operating income or results from operations for the segment, in spite of wide fluctuations of natural gas expense based on commodity prices.

Rest of the answer

These fluctuations in the prices of natural gas cause natural gas expense to be a higher or lower percentage of NGD revenues but do not impact operating income. Additionally, we do not believe that an analysis of natural gas expense as a percentage of revenues would provide meaningful information to investors, as the percentage of natural gas expense to revenue is so dependent on commodity prices; therefore, we do not comment on expected future trends. We believe the key items that impact NGD’s results of operations are discussed in our filing, such as rate increases, usage as it impacts volumetric delivery revenues, customer growth and weather.

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We note your disclosure of revenues by product and service in your segment footnote on page 121. Please tell us how you considered presenting separate line items on your income statement for revenues from products and revenues from services. Similarly, please tell us how you considered separate line item presentation of cost of sales related to products and cost of sales related to services.

Rest of the question

Refer to Rule 5-03(b) of Regulation S-X.

We acknowledge and understand the requirements of Rules 5-03(b)(1) and (2) of Regulation S-X. We believe the financial data for business segments disclosed in Note 17 of our Consolidated Financial Statements, Reportable Business Segments (2015 Form 10-K, page 120), provides the information required by Rule 5-03(b) and information sufficient to reasonably inform the investor about revenue and related costs and expenses for the components of our operations.

Rest of the answer

The operations of our Electric Transmission & Distribution and Natural Gas Distribution business segments (2015 Form 10-K, page 120) comprise our public utility operations and the related disclosures are consistent with the requirements under Rule 5-03(b)(1)(b) and Rule 5-03(b)(2)(b). The revenues from the remaining segments comprise our non-utility operations, which is primarily product revenue under Rule 5-03(b)(1). All other revenues classes represent less than 10% of consolidated revenues.

The Revenues by Products and Services table in Note 17 of our Consolidated Financial Statements, Reportable Business Segments (2015 Form 10-K, page 121) reflects information about products and services required by Accounting Standards Codification ASC 280-10-50-40 Segment Reporting, which requires disclosures of revenues from external customers for each product and service.

Utility and non-utility natural gas expense is available to investors in the disclosures in our Management’s Discussion and Analysis of Financial Condition and Results of Operations (2015 Form 10-K, pages 54-55).

In preparing our response to the Comment Letter, we reviewed the financial statements of other public utility companies with both rate-regulated and non-rate regulated revenues. Based on our review, many public utility companies present their rate-regulated and non-rate regulated revenues separately on the face of their statements of operation. Accordingly, we plan to revise our statement of consolidated income in our 2016 Form 10-K to separately present operating revenues and natural gas expense from utility and non-utility operations on the face of the Company’s statements of consolidated income.

The following is an example of our proposed statement of consolidated income with an explanation of each revenue line item:

Year Ended December 31,

2015

2014

2013

(in millions)

Utility revenues (1)

$ 5,448

$ 6,116

$ 5,407

Non-utility revenues (2)

1,938

3,110

2,699

Revenues

7,386

9,226

8,106

Expenses (3):

Utility natural gas

1,264

1,878

1,543

Non-utility natural gas

1,838

3,043

2,365

Operation and maintenance

2,007

1,969

1,847

Depreciation and amortization

970

1,013

954

Taxes other than income

374

388

387

Total

6,453

8,291

7,096

Operating Income

$ 933

$ 935

$ 1,010

Notes

(1)

Includes public utility revenues for electric delivery and gas sales. We believe the presentation of the rate-regulated utilities’ operating revenues and expenses presented above is consistent with the requirements in Rule 5-03(b)(1)(b) and Rule 5-03(b)(2)(b) for the operating revenues and expenses of our public utilities.

(2)

CenterPoint Energy’s non-utility revenue is primarily composed of unregulated natural gas sales from its Energy Services business segment. We elected to combine non-utility revenues from sales of tangible products, revenues from services and other revenues in this line item as allowed under Rule 5-03(b).

(3)

Utility revenues related to electric delivery consist entirely of electric transmission and distribution. CenterPoint Energy does not make direct or wholesale sales of electricity or own or operate any electric generating facilities. On behalf of retail electric providers (REPs), CenterPoint Energy delivers electricity from power plants to substations, from one substation to another, and to retail electric customers taking power at above certain kilovolts. End users purchase their electricity directly from REPs, and CenterPoint Energy delivers electricity from the REPs to the retail customer. Because we do not sell electricity, we do not incur or report any costs of electricity sold related to utility electric revenues.

The following is CenterPoint Energy’s analysis of non-utility revenues by class to assess the appropriateness of combining non-utility revenues under Rule 5-03(b):

Non-utility revenues by type, net of eliminations

Non-utility revenues

Sales of tangible product

Non-utility gas sales

$ 1,897

26%

$ 3,057

33%

$ 2,341

29%

Revenues from services

Gas transportation

-%

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We note you have only presented one line item for Shareholder’s Equity. Please tell us how you have complied with Rules 5-02.29 and .30 of Regulation S-X and revise as necessary. Notes to Consolidated Financial Statements 8. Fair Value Measurements

The Company has historically disclosed the items required by Rules 5-02.29 and .30 of Regulation S-X in our Statements of Consolidated Shareholders’ Equity on page 81. The Company believes that the information required under this rule is readily available to investors and not less prominently presented on our Statements of Consolidated Shareholders’ Equity.

Rest of the answer

Management believes that streamlining the disclosure to make it less repetitive provides value to investors and the information required by Rule 5-02.29 and .30 is presented in our Total Shareholders’ Equity on the Statements of Consolidated Shareholders’ Equity on page 81, which agrees to the corresponding line item in the Consolidated Balance Sheets on page 78.

Notes to Consolidated Financial Statements

8. Fair Value Measurements

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We note that you recorded a $1,225 million other than temporary impairment on your equity method investment, Enable Midstream Partners, LP (“Enable”). We further note that your impairment analyses compared the estimated fair value of your investment in Enable to its carrying value and that the fair value of Enable was determined using multiple valuation methodologies under both the market and income approaches.

Rest of the question

Please explain to us your fair value analysis that supports the amount of impairment recorded in more detail. In doing so, please provide us with the significant assumptions used and the basis for those assumptions. Please also tell us how you weighted the income and market approaches and the basis for such allocation.

See Attachment A for the Company’s fair value analysis that supports the amount of the other than temporary impairment recorded on our investment in Enable for the year-ended December 31, 2015, and includes a discussion of the significant assumptions, basis for those assumptions, and weighting and basis of each approach.

Attachments

A - Enable Investment Other than Temporary Impairment Valuation as of December 31, 2015

Attachment A

Enable Investment Other than Temporary Impairment Valuation as of December 31, 2015

Background

In our Annual Report on Form 10-K for the year ended December

Rest of the answer

31, 2015, CenterPoint Energy (CenterPoint) recognized an other-than-temporary impairment (OTTI) on its equity investment in Enable Midstream Partners, LP (Enable) of $1,225 million. Our fair value analysis and assumptions are discussed below.

Valuation Methods Considered

Generally, for equity investments in public companies that are actively traded, fair value would be determined based on the security’s trading price multiplied by the number of shares held. However, CenterPoint does not believe that the trading price as of December 31, 2015 of the common units representing limited partner interests in Enable (LP units) fully captures the fair value of its investment in Enable. First, Enable’s LP units have limited float; Enable’s LP units that are traded on the NYSE represent only 7% of Enable’s total outstanding units. Second, CenterPoint’s investment in Enable also includes 50% of the management rights (GP interest) in the general partner (GP) of Enable which allows CenterPoint the ability to exercise significant influence over Enable. CenterPoint also owns a 40% interest in the incentive distribution rights (IDRs) held by the GP of Enable. As such, management followed the guidance provided by ASC 820 “Fair Value Measurement” to utilize valuation approaches that can capture the full aspects of CenterPoint’s investment in Enable.

ASC 820-10-35-24B states that in some cases, multiple valuation techniques will be appropriate. If multiple valuation techniques are used to measure fair value, the results (that is, respective indications of fair value) shall be evaluated considering the reasonableness of the range of values indicated by those results. A fair value measurement is the point within that range that is most representative of fair value in the circumstances.

ASC 820 recognizes three valuation approaches to measure fair value: the cost approach, market approach, and income approach.

Cost Approach

The Cost Approach is generally utilized for long-lived assets. For an equity investment in a master limited partnership within the natural gas midstream industry, the Cost Approach is not considered the typical market participant view of fair value as it does not capture the going-concern value of the business, and accordingly was not used.

Market Approach

CenterPoint utilized several methods under the Market Approach:

a.

LP Unit Market Price Adjusted for Value of GP interest - $2,386 million

CenterPoint evaluated the price that would provide a representation of Enable’s year end LP unit market price. CenterPoint’s considerations included the closing trading price of Enable's LP units on December 31, 2015 of $9.20 (or $2,151 million for CenterPoint's LP unit holdings) and the volatility in both the trading price and trading volume of Enable’s LP units in 2015. CenterPoint determined that due to the volatility, the use of a volume weighted average trading price (VWAP) would be more representative of the market value as of the valuation date.

CenterPoint used a 30 trading day VWAP as of December 31, 2015 of $8.50 to estimate the market price at year-end, which resulted in an extended value of CenterPoint’s LP unit investment of $1,988 million, excluding the value of CenterPoint's GP interest. A 30-day VWAP was determined to be the appropriate period of time to mitigate volatility in the trading activity.

The trading price provides only a market value for the LP units held by CenterPoint. To consider the value of CenterPoint's GP interest, CenterPoint applied a 20% premium to the 30-day VWAP to reflect our significant influence. This premium was based on similar MLP acquisitions in the past ten years. Based on this analysis, the total value of our GP interest was $398 million.

b.

Recent Market Transactions for Comparable Companies - $2,385 million

CenterPoint calculated one-day trading premiums based on two announced transactions: the acquisitions of Williams Companies Inc. by Energy Transfer Equity, L.P. and MarkWest Energy Partners, L.P. by MPLX LP during the second and third quarter of 2015, respectively. The calculated premium of 20% was applied to the 30-day VWAP of Enable and then multiplied the resulting adjusted unit price by the number of units held by CenterPoint to estimate fair value. The fair value of the LP units and GP interest using this method was calculated by taking Enable’s 30 trading day VWAP as of December 31, 2015 of $8.50 (discussed above) multiplied by the market premium from the comparable transactions.

c.

EBITDA to Total Enterprise Value for Comparable Companies - $2,752 million

EBITDA/Total Enterprise Value (TEV) multiples were calculated for selected companies within the Alerian Natural Gas MLP Index (ANGI Index), a composite of natural gas infrastructure master limited partnerships made up of 20 constituents earning the majority of their cash flow from pipeline transportation, gathering, processing, and storage of natural gas and natural gas liquids. CenterPoint believes that the selected companies provide a broad, yet relevant set of companies with which to compare Enable and by using a subset of the ANGI Index, the analysis has already removed a large set of companies that are less relevant as peers to Enable. EBITDA/TEV multiples for the selected companies were calculated using the last twelve months of reported EBITDA and the total enterprise value of the entities on December 31, 2015. The average of the EBITDA/TEV multiples were compared to the individual EBITDA/TEV multiple for Enable to calculate a premium of approximately 38%, inclusive of GP and LP interests. The fair value of the LP units and GP interest using this method was calculated by taking Enable’s 30-trading day VWAP as of December 31, 2015 of $8.50 (discussed above) plus the incremental value of the calculated premium from the comparable companies.

Income Approach

Discounted Cash Flow (DCF) - $2,574 million

Fair value was determined using Enable’s most recently available forecasted distributions on its LP units for the period from 2016 to 2020. Cash flows for the LP units were forecasted beyond the financial plan by using a terminal value growth rate of 2.0%, considering supporting information including the steady state growth of US Gross Domestic Product, and setting the LP distribution for the terminal value period to establish a 1.0 coverage ratio assumption.

The discount rate of 10.52% was calculated using the Capital Asset Pricing Model (CAPM) applied to a set of Enable’s peers, defined as the ANGI Index. Inputs to the CAPM model are the risk free rate (2.47%, based on average 10-year and 20-year treasury rates), beta (1.15, based on a set of peer companies), and market risk premium (7%, based on Ibbotson data).

Weighted Valuation Approach

ASC 820 states that valuation techniques used to measure fair value should maximize the use of relevant observable inputs, such as exchange markets, and minimize the use of unobservable inputs. CenterPoint noted that the valuation based off of the 30 trading day VWAP would be the most observable indicator of the fair value of CenterPoint’s investment in Enable.

CenterPoint management believes the LP Unit Market Price Adjusted for Value of GP interest, reflected by the 30 trading day VWAP as of December 31, 2015, is the best representation of Enable’s fair value as it utilizes the highest level of input in the fair value hierarchy. However, due to the limited float of Enable’s LP units, management believes that a market participant would consider other valuation approaches in determining fair value. The LP Unit Market Price Adjusted for Value of GP interest approach was weighted 55% while the other two market approaches were each weighted 15%, totaling 85% reliance on market approaches that utilize observable market data. The remaining 15% weighting was applied to the income approach discounted cash flow method. Management determined that a lower weighting on the income approach was appropriate due to the reliance this method places on Enable management estimates in a volatile time in the market when producer plans and commodity prices were changing frequently.

As of December 31, 2015

Valuation Method

Fair Value

Weighting

Weighted

Value

(rounded)

LP Units Market Price Adjusted for Value of GP interest (a)

$

2,386

%

1,310

Recent Market Transactions for Comparable Companies

2,385

355

EBITDA to Total Enterprise Value for Comparable Companies

2,752

410

Discounted Cash Flow

2,574

385

Fair value of LP and GP interest

2,460

Fair value of IDRs (b)

134

Total Fair Value

2,594

(a) LP market price applied is 30 trading day VWAP as of December 31, 2015

(b) Estimated using the income valuation approach by assessing the value of the projected cash flows

Based on the estimated fair value of Enable on December 31, 2015, CenterPoint recognized an OTTI on its equity investment in Enable Midstream Partners, LP (Enable) of $1,225 million for the year-ended December 31, 2015, resulting in a book value of its investment in Enable of $2,594 billion. CenterPoint believes the approaches and assumptions outlined represent reasonable assumptions that a market participant would make in assessing the fair value of its holdings in Enable as a whole, resulting in the best estimated fair value of its investment in Enable as of December 31, 2015.

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We have reviewed your response to comment 3. We believe separate presentation of common stock and other stockholders’ equity line items on the balance sheet is warranted pursuant to Rules 5-02.29 and .30 of Regulation S-X, especially in light of the shift from a retained earnings balance to an accumulated deficit balance during the year.

Rest of the question

Since investors generally spend more time examining the income statement and balance sheet, we believe that presentation of these line items on the face of the balance sheet provides more prominent disclosure than sole presentation in the statement of stockholders’ equity. Either provide us with additional support as to why you believe you have complied with Rules 5-02.29 and .30 or revise as necessary in future filings.

The Company will separately present common stock and other stockholders’ equity line items on its balance sheets in future filings, beginning with its December 31, 2016 Form 10-K. Read in the reply ↗