AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 3/6 · 18/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Regulatory recovery is demonstrated, but exclusive delivery rights and barriers protecting economic returns are not established.
durability · — · Recovery across periods supports continuity, but franchise duration and sustained excess economic returns remain unknown.
customer dependency · — · Specified non-bypassable charges demonstrate recovery rights, but do not establish general customer dependency or delivery switching barriers.
erosion resilience · — · Actual recovery mitigates shocks, while municipal entry and regulatory changes remain possible. The evidence cannot establish resilience of a competitive advantage.
Pricing power—
Insufficient evidence for every rubric criterion; no category score is inferred.
realized pricing · 2/4 · Effective rates began amortizing specified costs in 2025, and Posey Solar entered rate recovery. These are realized pricing outcomes, but demonstrate regulated recovery rather than broad discretionary price increases.
retention · — · The passages do not establish customer retention or repeat-demand outcomes. Specific non-bypassable recovery charges cannot substitute for evidence of continued utility demand.
margin resilience · 2/4 · Dollar-for-dollar recovery of certain commitments and actual recognized equity returns provide protection. Volume declines can still reduce results, and sustained realized margin resilience is not supplied.
contractual freedom · 1/4 · Pricing freedom is weak: project recovery requires regulatory authorization, allowable returns are regulated, and legislation imposes performance-based rewards or penalties.
Predictability49
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 50.00
- Revenue growth volatility (pp)
- 8.13
- Positive FCF years (%)
- 0.00
- FCF margin volatility (pp)
- 10.44
Financial strength6
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 0.00
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 12.15
- currentRatioGrade
- 12.86
- Net debt / operating income (x)
- 10.87
- Interest coverage (x)
- 2.34
- Current ratio (x)
- 0.91
Capital allocation—
Missing required inputs: sbcRevenue. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 6.49
- 3-year average dilution (%)
- 1.22
- cashConversionGrade
- 0.00
Management50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · First-half 2026 operating cash flow of $1.060 billion funded only part of $2.568 billion in capital expenditures; debt financing and $165 million of equity issuance supported spending. Commissioned, recoverable investment provides a positive outcome, but financing dependence and a larger prospective capital plan limit demonstrated discipline.
incentive alignment · 2/4 · The actual 2025 program links 70% of long-term incentives to three-year EPS and relative shareholder returns, with recoupment policies. Adjusted metrics, discretionary short-term payouts and a below-threshold P/E modifier exception make alignment mixed. Grant design is not evidence of vesting or payout.
execution · 2/4 · Posey Solar entered service and rate recovery, demonstrating completed execution. Actual winter-storm service disruption provides contrary operating evidence. This assessment uses specific operating outcomes rather than unverified claims of superior reliability or future capital-plan delivery.
governance · 2/4 · Independent committees, exclusion of executives from their own compensation decisions and recoupment policies establish functioning governance mechanisms. Management reported effective disclosure controls; these disclosures do not demonstrate exceptional oversight outcomes or comprehensive shareholder protections.
Evidence
Each of the aforementioned regulatory assets are being amortized over five years beginning April 28, 2025, which was the date that rates became effective following the PUCT’s final order in the Houston Electric rate case.
Regulatory matters: storm and bad-debt assets; rates effective April 28, 2025 · Filed 19/02/2026
Indiana Electric began recovering on the asset through updated base rates on June 17, 2025.
Acquisition of Posey Solar: recovery through updated base rates · Filed 23/04/2026
The table below reflects the amount of allowed equity return recognized by each Registrant in its Condensed Statements of Consolidated Income for the period presented: Three Months Ended June 30, 2026 2025 CenterPoint Energy Houston Electric CERC CenterPoint Energy Houston Electric CERC (in millions) Allowed equity return recognized $ 35 $ 33 $ 1 $ 7 $ 5 $ 1 Six Months Ended June 30, 2026 2025 CenterPoint Energy Houston Electric CERC CenterPoint Energy Houston Electric CERC (in millions) Allowed equity return recognized $ 47 $ 43 $ 2 $ 9 $ 6 $ 2 February 2021 Winter Storm Event In February 2021, certain of the Registrants’ jurisdictions experienced an extreme and unprecedented winter weather event that resulted in prolonged freezing temperatures, which impacted their businesses.
Regulatory matters: allowed equity return recognized through June 30, 2026 · Filed 28/07/2026
The Texas Natural Gas Securitization Finance Corporation issued customer rate relief bonds in March 2023, and on March 23, 2023, CenterPoint Energy and CERC, collectively, received approximately $1.1 billion in cash proceeds from the issuance and sale of the state’s customer rate relief bonds.
Regulatory matters: cash proceeds from Texas customer rate relief bonds · Filed 19/02/2026
The purchase was subject to terms and conditions in an order approved by the IURC on September 6, 2023, allowing Indiana Electric to recover project costs, net of PTCs, in rate base rather than a levelized rate, through base rates or the CECA mechanism, depending on which provides more timely recovery.
Posey Solar acquisition: approved project cost recovery · Filed 28/07/2026
If events were to occur that would make the recovery of these assets and liabilities no longer probable, the Registrants would be required to write off or write down these regulatory assets and liabilities.
Accounting for rate regulation: write-off condition · Filed 19/02/2026
If one or more municipalities in our service territories create new or supplemental utilities, or impair the franchises under which we serve customers in the applicable municipalities, it could result in lower growth and reduced demand for and usage of electricity and natural gas in such service territories.
Demand risks: municipal utilities and franchise impairment · Filed 19/02/2026
Further, deregulation or other changes in law in our service territories could allow third-party suppliers to contract directly with customers for their natural gas and electric supply requirements.
Demand risks: potential direct supply contracting after legal changes · Filed 19/02/2026
•apply a customer affordability performance metric and a service restoration performance metric to each year of the multi-year rate plan and use such metric to provide financial rewards or penalties based on the electricity supplier’s measured performance of the metric;
Indiana legislation: affordability and service restoration performance incentives · Filed 28/07/2026
Costs arising from certain of these commitments are pass-through costs, generally collected dollar-for-dollar from retail customers through regulator-approved cost recovery mechanisms.
Purchase obligations: dollar-for-dollar cost pass-through · Filed 28/07/2026
Although Houston Electric’s and Indiana Electric’s transmission and distribution businesses are subject to regulated allowable rates of return and recovery of certain costs under periodic adjustment clauses, overall declines in electricity delivered and used as a result of economic downturn or recession could reduce revenues and cash flows, thereby diminishing results of operations.
Demand risks: regulated allowable returns and volume exposure · Filed 19/02/2026
AND SUBSIDIARIES CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (Unaudited) Six Months Ended June 30, 2026 2025 (in millions) Cash Flows from Operating Activities: Net income $ 560 $ 495 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 868 733 Deferred income taxes 220 74 Loss on sale — 43 (Gain) loss on equity securities 106 (122) (Gain) loss on indexed debt securities (104) 121 Pension and postretirement contributions (40) (87) Changes in other assets and liabilities: Accounts receivable and unbilled revenues, net 349 214 Inventory (8) 24 Accounts payable (330) (330) Other current assets (193) 118 Other current liabilities (235) (251) Other non-current assets (130) (9) Other non-current liabilities (7) 2 Other operating activities, net 4 (55) Net cash provided by operating activities 1,060 970 Cash Flows from Investing Activities: Capital expenditures (2,568) (2,167) Payment for asset acquisition — (357) Proceeds from divestitures — 1,219 Other investing activities, net 41 (36) Net cash used in investing activities (2,527) (1,341) Cash Flows from Financing Activities: Decrease in short-term borrowings, net — (3) Proceeds from (payments of) commercial paper, net (502) 1,056 Proceeds from long-term debt and term loans, net 3,441 735 Payments of long-term debt and term loans, including make-whole premiums (1,271) (1,030) Payment of debt issuance costs (24) (12) Payment of dividends on Common Stock (302) (287) Proceeds from issuances of Common Stock, net 165 — Other financing activities, net (18) (19) Net cash provided by financing activities 1,489 440 Net Increase in Cash, Cash Equivalents and Restricted Cash 22 69 Cash, Cash Equivalents and Restricted Cash at Beginning of Period 49 30 Cash, Cash Equivalents and Restricted Cash at End of Period $ 71 $ 99 Supplemental Disclosure of Cash Flow Information Cash paid for interest, net of capitalized interest $ 510 $ 487 Cash paid (refunds received) for income taxes, net 11 (5) Supplemental Disclosure of Non-cash Transactions Accounts payable related to capital expenditures $ 451 $ 309 See Combined Notes to Interim Condensed Financial Statements 5 Table of Contents CENTERPOINT ENERGY, INC.
Consolidated cash flows: six months ended June 30, 2026 and 2025 · Filed 28/07/2026
Posey Solar was placed into service on May 30, 2025.
Posey Solar: actual in-service date · Filed 28/07/2026
The February 2021 Winter Storm Event impacted wholesale prices of CenterPoint Energy’s and CERC’s natural gas purchases and their ability to serve customers in their natural gas service territories, including due to the reduction in available natural gas capacity and impacts to CenterPoint Energy’s and CERC’s natural gas supply portfolio activities, and the effects of weather on their systems and their ability to transport natural gas, among other things.
February 2021 Winter Storm Event: actual service and supply impacts · Filed 28/07/2026
ELEMENT FORM OF AWARD PERIOD PURPOSE Fixed Base Salary Cash One year ✓ Fixed, competitive level of compensation based on scope and complexity of role, individual experience, and performance to attract and retain top talent At Risk Short-Term Incentive Cash One year ✓ Rewards delivery of near-term financial and non-financial, operational objectives aligned with the Company’s long-term business strategy ✓ Considers individual performance and contributions to Company performance ✓ Short-term incentive funding is based on achieving a non-GAAP Adjusted EPS goal as well as non-financial performance goals relating to safety, operational excellence, and customer satisfaction ✓ Payout of individual awards is wholly subject to discretion of Human Capital and Compensation Committee Long-Term Incentives Performance Share Units (PSUs) 70% Three-year cliff vesting, subject to cumulative Adjusted EPS performance ✓ Rewards creation of long-term value through cumulative Adjusted EPS ✓ Aligns with shareholder interests ✓ PSUs based on cumulative Adjusted EPS represent 35% of total long-term incentive value Three-year cliff vesting, subject to relative stock performance ✓ Incentivizes Company outperformance relative to peer companies ✓ Aligns with shareholder interests ✓ TSR performance based on a percentile achievement based on position relative to peer group ✓ Price-to-earnings (P/E) modifier provides for a minimum payout level if the P/E ratio ranks in the top quartile of our peer group ✓ PSUs based on TSR represent 35% of total long-term incentive value Restricted Stock Units (RSUs) 30% Three-year ratable vesting, subject to continued employment and positive operating income ✓ Promotes retention, facilitates stock ownership, and supports succession planning ✓ Aligns with long-term shareholder interests ✓ RSUs represent 30% of total long-term incentive value and will vest only if CenterPoint Energy achieves positive operating income for the last full calendar year preceding the applicable vesting date CenterPoint Energy, Inc.
Executive compensation: 2025 incentive composition and conditions · Filed 04/03/2026
No payout is earned below threshold performance except in the case of awards based on the TSR performance objective when the P/E modifier applies as described.
Executive compensation: below-threshold payout exception · Filed 04/03/2026
We also maintain a separate policy for the recoupment of incentive compensation from any officer, regardless of culpability, in the event of an accounting restatement where the restatement would have resulted in a lower amount of incentive compensation and for the recoupment of any compensation, including time-based restricted awards, from any employee who is found to have engaged in wrongdoing in connection with corporate criminal misconduct.
Executive compensation: maintained recoupment policies · Filed 04/03/2026
The Board has determined that all of the members of each committee are independent within the meaning of the NYSE listing standards and categorical standards noted above.
Board committees: independence determinations · Filed 04/03/2026
Our executive officers do not determine or approve any element or component of their own compensation, nor are they present during the Human Capital and Compensation Committee’s discussions regarding their own compensation.
Executive compensation: executives excluded from their own pay decisions · Filed 04/03/2026
Based on those evaluations, the principal executive officer and principal financial officer, in each case, concluded that the disclosure controls and procedures were effective as of June 30, 2026 to provide assurance that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and such information is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding disclosure.
Controls and procedures: management effectiveness conclusion at June 30, 2026 · Filed 28/07/2026
The state’s customer rate relief bonds are backed in part by customer rate relief property, including customer rate relief charges, which are non-bypassable uniform monthly volumetric charges to be paid by all existing and future sales customers as a component of each regulated utility’s gas cost, separate from their base rate.
Texas customer rate relief bonds: non-bypassable customer charges · Filed 19/02/2026
Updated 10-Year Capital Plan. In July 2026, CenterPoint Energy announced an increase in its 10-year capital plan of $1.2 billion to reflect total planned capital expenditures of approximately $66.7 billion through 2035.
Recent events: July 2026 capital plan increase · Filed 28/07/2026
In 2008, the PUCO approved an exit of the merchant function in CenterPoint Energy’s and CERC’s Ohio natural gas service territory, allowing Ohio customers to purchase substantially all natural gas directly from retail marketers rather than from CenterPoint Energy or CERC.
Market risk: Ohio customers purchasing gas from retail marketers · Filed 19/02/2026
