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•	the performance of Enable, the amount of cash distributions we receive from Enable, Enable’s ability to redeem the Series A Preferred Units in certain circumstances and the value of our interest in Enable, and factors that may have a material impact on such performance, cash distributions and value, including factors such as:

◦	competitive conditions in the midstream industry, and actions taken by Enable’s customers and competitors, including the extent and timing of the entry of additional competition in the markets served by Enable;

◦

the timing and extent of changes in the supply of natural gas and associated commodity prices, particularly prices of natural gas and NGLs, the competitive effects of the available pipeline capacity in the regions served by Enable, and the effects of geographic and seasonal commodity price differentials, including the effects of these circumstances on re-contracting available capacity on Enable’s interstate pipelines;

◦	the demand for crude oil, natural gas, NGLs and transportation and storage services;

◦	environmental and other governmental regulations, including the availability of drilling permits and the regulation of hydraulic fracturing;

◦	recording of non-cash goodwill, long-lived asset or other than temporary impairment charges by or related to Enable;

◦	changes in tax status;

◦	access to debt and equity capital; and

◦	the availability and prices of raw materials and services for current and future construction projects;

•	state and federal legislative and regulatory actions or developments affecting various aspects of our businesses (including the businesses of Enable), including, among others, energy deregulation or re-regulation, pipeline integrity and safety, health care reform, financial reform, tax legislation and actions regarding the rates charged by our regulated businesses;

•	timely and appropriate rate actions that allow recovery of costs and a reasonable return on investment;

•	industrial, commercial and residential growth in our service territories and changes in market demand, including the effects of energy efficiency measures and demographic patterns;

•	future economic conditions in regional and national markets and their effect on sales, prices and costs;

•	weather variations and other natural phenomena, including the impact of severe weather events on operations and capital;

•	our ability to mitigate weather impacts through normalization or rate mechanisms, and the effectiveness of such mechanisms;

•	the timing and extent of changes in commodity prices, particularly natural gas, and the effects of geographic and seasonal commodity price differentials;

•	problems with regulatory approval, construction, implementation of necessary technology or other issues with respect to major capital projects that result in delays or in cost overruns that cannot be recouped in rates;

•	local, state and federal legislative and regulatory actions or developments relating to the environment, including those related to global climate change;

•	the impact of unplanned facility outages;

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•	any direct or indirect effects on our facilities, operations and financial condition resulting from terrorism, cyber-attacks, data security breaches or other attempts to disrupt our businesses or the businesses of third parties, or other catastrophic events such as fires, earthquakes, explosions, leaks, floods, droughts, hurricanes, pandemic health events or other occurrences;

•	our ability to invest planned capital and the timely recovery of our investment in capital;

•	our ability to control operation and maintenance costs;

•	actions by credit rating agencies;

•	the sufficiency of our insurance coverage, including availability, cost, coverage and terms;

•	the investment performance of our pension and postretirement benefit plans;

•	commercial bank and financial market conditions, our access to capital, the cost of such capital, and the results of our financing and refinancing efforts, including availability of funds in the debt capital markets;

•	changes in interest rates or rates of inflation;

•	inability of various counterparties to meet their obligations to us;

•	non-payment for our services due to financial distress of our customers;

•	effectiveness of our risk management activities;

•	timely and appropriate regulatory actions allowing securitization or other recovery of costs associated with any future hurricanes or natural disasters;

•	our potential business strategies and strategic initiatives, including restructurings, joint ventures and acquisitions or dispositions of assets or businesses, which we cannot assure you will be completed or will have the anticipated benefits to us;

•	acquisition and merger activities involving us or our competitors;

•	our or Enable’s ability to recruit, effectively transition and retain management and key employees and maintain good labor relations;

•	the ability of GenOn (formerly known as RRI Energy, Inc., Reliant Energy and RRI), a wholly-owned subsidiary of NRG, and its subsidiaries to satisfy their obligations to us, including indemnity obligations, or obligations in connection with the contractual arrangements pursuant to which we are their guarantor;

•	the outcome of litigation;

•	the ability of REPs, including REP affiliates of NRG and Energy Future Holdings Corp., to satisfy their obligations to us and our subsidiaries;

•	changes in technology, particularly with respect to efficient battery storage or the emergence or growth of new, developing or alternative sources of generation;

•	the timing and outcome of any audits, disputes and other proceedings related to taxes;

•	the effective tax rates;

•	the effect of changes in and application of accounting standards and pronouncements; and

•	other factors we discuss in “Risk Factors” in Item 1A of Part I of our 2015 Form 10-K, which is incorporated herein by reference, and other reports we file from time to time with the SEC.

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•	Houston Electric, which engages in the electric transmission and distribution business in the Texas Gulf Coast area that includes the city of Houston; and

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CERC Corp. (together with its subsidiaries), which owns and operates natural gas distribution systems. A wholly-owned subsidiary of CERC Corp. offers variable and fixed-price physical natural gas supplies primarily to commercial and industrial customers and electric and natural gas utilities. As of September 30, 2016, CERC Corp. also owned approximately 55.4% of the limited partner interests in Enable, which owns, operates and develops natural gas and crude oil infrastructure assets.

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(1)	Net periodic cost in these tables is before considering amounts subject to overhead allocations for capital expenditure projects or for amounts subject to deferral for regulatory purposes.

(2)	A one-time, non-cash settlement charge is required when lump sum distributions or other settlements of plan benefit obligations during a plan year exceed the service cost and interest cost components of net periodic cost for that year.  Due to the amount of lump sum payment distributions from the non-qualified pension plan during the three and nine months

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(3)

A curtailment gain or loss is required when the expected future services of a significant number of current employees are reduced or eliminated for the accrual of benefits. In May 2016, Houston Electric entered into a renegotiated collective bargaining agreement with the IBEW Local Union 66 that provides that for Houston Electric union employees covered under the agreement who retire on or after January 1, 2017, retiree medical and prescription drug coverage will be provided exclusively through the NECA/IBEW Family Medical Care Plan in exchange for the payment of monthly premiums as determined under the agreement. As a result, the accrued postretirement benefits related to such future Houston Electric union retirees were eliminated. Houston Electric recognized a curtailment gain of $3 million as an accelerated recognition of the prior service credit that would otherwise be recognized in future periods.

(1)	Total other comprehensive income (loss) related to the remeasurement of the postretirement plan.

(2)	These accumulated other comprehensive components are included in the computation of net periodic cost.

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(a)	Non-Trading Activities

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(b)	Derivative Fair Values and Income Statement Impacts

(1)	The fair value shown for natural gas contracts is comprised of derivative gross volumes totaling 1,080 Bcf or a net 16 Bcf short position.  Of the net short position, basis swaps constitute a net 128 Bcf long position.

(2)

Natural gas contracts are presented on a net basis in the Condensed Consolidated Balance Sheets as they are subject to master netting arrangements. This netting applies to all undisputed amounts due or past due and causes derivative assets (liabilities) to be ultimately presented net in a liability (asset) account within the Condensed Consolidated Balance Sheets. The net of total non-trading natural gas derivative assets and liabilities was a $50 million asset as shown on CenterPoint Energy’s Condensed Consolidated Balance Sheets (and as detailed in the table below), and was comprised of the natural gas contracts derivative assets and liabilities separately shown above, offset by collateral netting of $6 million.

(3)	Derivative Assets and Derivative Liabilities include no material amounts related to physical forward transactions with Enable.

(1)	Gross amounts recognized include some derivative assets and liabilities that are not subject to master netting arrangements.

(2)	The derivative assets and liabilities on the Condensed Consolidated Balance Sheets exclude accounts receivable or accounts payable that, should they exist, could be used as offsets to these balances in the event of a default.

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(1)	The fair value shown for natural gas contracts is comprised of derivative gross volumes totaling 767 Bcf or a net 112 Bcf long position.  Of the net long position, basis swaps constitute 133 Bcf.

(2)

Natural gas contracts are presented on a net basis in the Condensed Consolidated Balance Sheets as they are subject to master netting arrangements. This netting applies to all undisputed amounts due or past due and causes derivative assets (liabilities) to be ultimately presented net in a liability (asset) account within the Condensed Consolidated Balance Sheets. The net of total non-trading natural gas derivative assets and liabilities was a $109 million asset as shown on CenterPoint Energy’s Condensed Consolidated Balance Sheets (and as detailed in the table below), and was comprised of the natural gas contracts derivative assets and liabilities separately shown above, offset by collateral netting of $56 million.

(3)	Derivative Assets and Derivative Liabilities include no material amounts related to physical forward transactions with Enable.

(1)	Gross amounts recognized include some derivative assets and liabilities that are not subject to master netting arrangements.

(2)	The derivative assets and liabilities on the Condensed Consolidated Balance Sheets exclude accounts receivable or accounts payable that, should they exist, could be used as offsets to these balances in the event of a default.

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(c)	Credit Risk Contingent Features

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(1)	Amounts represent the impact of legally enforceable master netting arrangements that allow CenterPoint Energy to settle positive and negative positions and also include cash collateral of $6 million posted with the same counterparties.

(2)	Amounts are included in Prepaid Expenses and Other Current Assets in the Condensed Consolidated Balance Sheets.

(3)	Natural gas derivatives include no material amounts related to physical forward transactions with Enable.

(1)	Amounts represent the impact of legally enforceable master netting arrangements that allow CenterPoint Energy to settle positive and negative positions and also include cash collateral of $56 million posted with the same counterparties.

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(2)	Amounts are included in Prepaid Expenses and Other Current Assets in the Condensed Consolidated Balance Sheets.

(3)	Natural gas derivatives include no material amounts related to physical forward transactions with Enable.

(1)	CenterPoint Energy did not have significant Level 3 sales during either of the three or nine months ended September 30, 2016 or 2015.

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(1)

Equity in earnings (losses) of unconsolidated affiliates includes CenterPoint Energy’s share of Enable’s earnings adjusted for the amortization of the basis difference of CenterPoint Energy’s original investment in Enable and its underlying equity in Enable’s net assets. The basis difference is amortized over approximately 33 years, the average life of the assets to which the basis difference is attributed.

(2)

These amounts include CenterPoint Energy’s share of Enable’s impairment of goodwill and long-lived assets and the impairment of CenterPoint Energy’s equity method investment in Enable totaling $862 million during the three and nine months ended September 30, 2015. This impairment is partially offset by $68 million and $163 million of earnings for the three and nine months ended September 30, 2015, respectively.

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(a)	Short-term Borrowings

(b)	Long-term Debt

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(1)	Weighted average interest rate was 0.81% and 0.79% as of September 30, 2016 and December 31, 2015, respectively.

(2)	Weighted average interest rate was 1.637% as of December 31, 2015.

(3)	Weighted average interest rate was 0.76% and 0.81% as of September 30, 2016 and December 31, 2015, respectively.

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(a)	Natural Gas Supply Commitments

(b)	Legal, Environmental and Other Matters

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(c)	Guarantees

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(1)	1,759,000 incremental shares from assumed conversions of restricted stock have not been included in the computation of diluted earnings (loss) per share for either the three months or nine months ended September 30, 2015, as their inclusion would be anti-dilutive.

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(1)	Electric Transmission & Distribution revenues from major customers are as follows:

(2)	Midstream Investments’ equity earnings (losses) are as follows:

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(a)

These amounts include CenterPoint Energy’s share of Enable’s impairment of goodwill and long-lived assets and the impairment of CenterPoint Energy’s equity method investment in Enable totaling $862 million during the three and nine months ended September 30, 2015. This impairment is partially offset by $68 million and $163 million of earnings for the three and nine months ended September 30, 2015, respectively.

(3)	Included in total assets of Other Operations as of September 30, 2016 and December 31, 2015 are pension and other postemployment-related regulatory assets of $775 million and $814 million, respectively.

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Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF CENTERPOINT ENERGY, INC. AND SUBSIDIARIES

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•	a $867 million increase in equity earnings from our investment in Enable, as 2015 results included impairment charges of $862 million, discussed further in Note 8;

•	a $211 million increase in the gain on marketable securities included in Other Income, net shown above;

•	a $19 million increase in operating income (discussed below by segment);

•	a $9 million increase in cash distributions on Series A Preferred Units included in Other Income, net shown above;

•	a $5 million decrease in interest expense due to lower weighted average interest rates on outstanding debt; and

•	a $2 million decrease in interest expense related to lower outstanding balances of our Securitization Bonds.

•	a $201 million increase in losses on the underlying value of the indexed debt securities related to the ZENS included in Other Income, net shown above.

•	a $863 million increase in equity earnings from our investment in Enable, as 2015 results included impairment charges of $862 million, discussed further in Note 8;

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•	a $259 million increase in the gain on marketable securities included in Other Income, net shown above;

•	a $13 million increase in cash distributions on Series A Preferred Units included in Other Income, net shown above;

•	a $10 million decrease in interest expense due to lower weighted average interest rates on outstanding debt;

•	a $10 million decrease in interest expense related to lower outstanding balances of our Securitization Bonds; and

•	a $9 million increase in operating income (discussed below by segment).

•	a $322 million increase in income tax expense due to higher income before tax;

•	a $320 million increase in the loss on indexed debt securities related to the ZENS included in Other Income, net shown above, resulting from a loss of $117 million from the Charter merger in 2016 compared to a loss of $7 million from Verizon’s acquisition of AOL in 2015 and increased losses of $210 million in the underlying value of the indexed debt securities;

•	a $4 million decrease in interest income included in Other Income, net shown above; and

•	a $3 million decrease in dividend income included in Other Income, net shown above.

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(1)	Represents the amount necessary to pay interest on the Securitization Bonds.

•	customer growth of $10 million from the addition of over 51,000 new customers;

•	higher equity return of $7 million, primarily related to true-up proceeds;

•	higher DCRF revenues of $6 million, primarily due to the implementation of new rates in September from the 2016 filing; and

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•	higher transmission-related revenues of $18 million, which were partially offset by increased transmission costs billed by transmission providers of $13 million.

•	customer growth of $24 million from the addition of over 51,000 new customers;

•	higher transmission-related revenues of $65 million, which were partially offset by increased transmission costs billed by transmission providers of $41 million; and

•	higher equity return of $17 million, primarily related to true-up proceeds.

•	higher depreciation, primarily due to ongoing additions to plant in service, and other taxes of $38 million;

•	higher operation and maintenance expenses of $8 million, primarily due to contract services and corporate services;

•	lower right-of-way revenues of $4 million; and

•	lower usage, net of the weather hedge, of $3 million, primarily due to milder weather.

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•	rate increases of $8 million;

•	rate stabilization of $7 million, reflecting adjustments from decoupling in Minnesota and Arkansas;

•	lower bad debt expense of $3 million;

•	lower sales and use tax of $3 million; and

•	customer growth of $1 million from the addition of approximately 35,000 new customers.

•	increased depreciation and amortization of $6 million, primarily due to ongoing additions to plant in service; and

•	increased labor and benefits expense of $5 million.

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•	rate increases of $34 million;

•	rate stabilization of $11 million, reflecting adjustments from decoupling in Minnesota and Arkansas; and

•	customer growth of $3 million from the addition of approximately 35,000 new customers.

•	higher depreciation and amortization of $15 million, primarily due to ongoing additions to plant in service; and

•	increased labor and benefits expense of $9 million.

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(1)	These amounts include our share of Enable’s impairment of goodwill and long-lived assets and the impairment of our equity method investment in Enable totaling $862 million during the three and nine months ended September 30, 2015 (see Note 8). This impairment is partially offset by $68 million and $163 million of earnings for the three and nine months ended September 30, 2015, respectively.

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•	capital expenditures of approximately $334 million;

•	scheduled principal payments on Securitization Bonds of $63 million;

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•	dividend payments on CenterPoint Energy, Inc. common stock; and

•	interest payments on debt.

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(1)	Based on the consolidated debt to capitalization covenant in our revolving credit facility and the revolving credit facility of each of Houston Electric and CERC Corp., we would have been permitted to utilize the full capacity of such revolving credit facilities, which aggregated $2.5 billion as of September 30, 2016.

(2)	Represents outstanding commercial paper of $480 million and outstanding letters of credit of $6 million.

(3)	Represents outstanding letters of credit.

(4)	Represents outstanding commercial paper of $375 million and outstanding letters of credit of $4 million.

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(1)	A Moody’s rating outlook is an opinion regarding the likely direction of an issuer’s rating over the medium term.

(2)	An S&P rating outlook assesses the potential direction of a long-term credit rating over the intermediate to longer term.

(3)	A Fitch rating outlook indicates the direction a rating is likely to move over a one- to two-year period.

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•	cash collateral requirements that could exist in connection with certain contracts, including our weather hedging arrangements, and gas purchases, gas price and gas storage activities of our Natural Gas Distribution and Energy Services business segments;

•	acceleration of payment dates on certain gas supply contracts, under certain circumstances, as a result of increased gas prices and concentration of natural gas suppliers;

•	increased costs related to the acquisition of natural gas;

•	increases in interest expense in connection with debt refinancings and borrowings under credit facilities;

•	various legislative or regulatory actions;

•	incremental collateral, if any, that may be required due to regulation of derivatives;

•	the ability of GenOn and its subsidiaries to satisfy their obligations in respect of GenOn’s indemnity obligations to us and our subsidiaries or in connection with the contractual obligations to a third party pursuant to which our subsidiary is their guarantor;

•	the ability of REPs, including REP affiliates of NRG and Energy Future Holdings Corp., to satisfy their obligations to us and our subsidiaries;

•	slower customer payments and increased write-offs of receivables due to higher gas prices or changing economic conditions;

•	the outcome of litigation brought by or against us;

•	contributions to pension and postretirement benefit plans;

•	restoration costs and revenue losses resulting from future natural disasters such as hurricanes and the timing of recovery of such restoration costs; and

•	various other risks identified in “Risk Factors” in Item 1A of Part I of our 2015 Form 10-K.

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Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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Item 4.	CONTROLS AND PROCEDURES

Item 1.	LEGAL PROCEEDINGS

Item 1A.	RISK FACTORS

Item 5.	OTHER INFORMATION

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Item 6.	EXHIBITS

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(8)	Not applicable.

(9)	Not applicable.

(10)	Not applicable.

(11)	Not applicable.

(12)	Not applicable.

(13)	See subsection (7) above.

(14)	Not applicable.

(15)	Not applicable.

(16)	Not applicable.

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(18)	Not applicable.

(19)	Not applicable.

(20)	For purposes of the Bonds, "Business Day" shall mean any day, other than Saturday or Sunday, on which commercial banks and foreign exchange markets are open for business, including dealings in deposits in U.S. dollars, in New York, New York.

(21)	Not applicable.

(22)	The Bonds shall have such other terms and provisions as are provided in the form thereof attached hereto as Exhibit A, and shall be issued in substantially such form.

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9.	The First Mortgage Collateralization Date has not occurred.

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(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.