CenterPoint Energy Sells Arkansas Utilities for $775M

Ticker: CNP · Form: 8-K · Filed: 2024-08-28T00:00:00.000Z

Sentiment: neutral

Topics: divestiture, acquisition, strategic-focus

Related Tickers: SUMT

TL;DR

CNP selling Arkansas ops to Summit for $775M, closing H1 2025.

AI Summary

CenterPoint Energy Inc. announced on August 28, 2024, that it has entered into a definitive agreement to sell its Arkansas electric and natural gas utility businesses to Summit Utilities, Inc. for approximately $775 million. This strategic divestiture is expected to close in the first half of 2025, subject to regulatory approvals.

Why It Matters

This sale allows CenterPoint Energy to focus on its core utility operations in Texas, potentially leading to improved efficiency and resource allocation for its main business segments.

Risk Assessment

Risk Level: medium — The transaction is subject to regulatory approvals, which introduces uncertainty regarding the closing timeline and final terms.

Key Numbers

Key Players & Entities

FAQ

What specific assets are being sold by CenterPoint Energy?

CenterPoint Energy is selling its Arkansas electric and natural gas utility businesses.

Who is the buyer of CenterPoint Energy's Arkansas operations?

The buyer is Summit Utilities, Inc.

What is the total value of the transaction?

The definitive agreement is for approximately $775 million.

When is the transaction expected to close?

The transaction is expected to close in the first half of 2025.

What is the primary reason for this divestiture?

The divestiture is part of CenterPoint Energy's strategy to focus on its core utility operations in Texas.

Filing Stats: 1,151 words · 5 min read · ~4 pages · Grade level 13.8 · Accepted 2024-08-28 15:05:55

Key Financial Figures

Filing Documents

01 Other Events

Item 8.01 Other Events. In August 2024, CenterPoint Energy Houston Electric, LLC ("Houston Electric"), an indirect, wholly-owned subsidiary of CenterPoint Energy, Inc. (the "Company"), announced its Greater Houston Resiliency Initiative ("GHRI"), which includes a series of targeted actions to improve the resiliency of Houston Electric's electric grid this hurricane season. On August 28, 2024, Houston Electric announced the completion of core resiliency actions as part of the first phase of its GHRI, which included certain vegetation management and pole installation goals. Additionally, Houston Electric announced a new series of resiliency actions, including (1) a second phase of GHRI, which will include actions strengthening grid resiliency, improving public and customer communications and strengthening local, community and emergency partnerships; and (2) a longer-term proposal, for approximately $5 billion in resiliency investment from 2026 to 2028, which Houston Electric intends to include in a new system resiliency plan that is expected to be filed with the Public Utility Commission of Texas on or before January 31, 2025 following feedback from customers, external experts and other stakeholders, including elected officials and local agencies. The Company also announced its proposal to forego approximately $110 million of profit related to its storm hardening and temporary emergency generation efforts, which will be represented by two components. First, Houston Electric intends to absorb approximately $70 million in incremental storm hardening expenses incurred in connection with accelerated operational activities after Hurricane Beryl. Second, Houston Electric does not intend to file in future years beginning in 2028 for approximately $40 million in anticipated equity profit associated with load-shed oriented temporary emergency generation leased by Houston Electric through the remaining regulatory life of the leases in 2032 as new dispatchable generation com

01 Regulation FD Disclosure

Item 7.01 Regulation FD Disclosure. On August 28, 2024, the Company issued a press release announcing certain of the matters described in Item 8.01. A copy of this press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference. The information provided in this Item 7.01 (including Exhibit 99.1) shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing. The Company reaffirms its previously announced non-GAAP earnings guidance.

Forward-Looking Statements

Forward-Looking Statements This Current Report 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, which include statements regarding our resiliency investments, timing, forgoing profits and related matters, 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 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; and (5) other factors, risks and uncertainties discussed in CenterPoint Energy's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and CenterPoint's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024 and other reports CenterPoint Energy or its subsidiaries may file from time to time with the Securities and Exchange Commission.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits. EXHIBIT NUMBER EXHIBIT DESCRIPTION 99.1 Press Release issued by the Company on August 28, 2024 104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document 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: August 28, 2024 By: /s/ Kristie L. Colvin Kristie L. Colvin Senior Vice President and Chief Accounting Officer 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 HOUSTON ELECTRIC, LLC Date: August 28, 2024 By: /s/ Kristie L. Colvin Kristie L. Colvin Senior Vice President and Chief Accounting Officer

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