CenterPoint Energy Reports Third Quarter 2007 Earnings
HOUSTON, Nov 2, 2007 (PrimeNewswire via COMTEX News Network) -- CenterPoint Energy, Inc. (NYSE:CNP) today reported net income of $91 million, or $0.27 per diluted share, for the third quarter of 2007 compared to $83 million, or $0.26 per diluted share, for the same period of 2006.
"I am pleased with our financial results this quarter," said David M. McClanahan, president and chief executive officer of CenterPoint Energy. "Our performance is consistent with our overall expectations for this year. We experienced solid earnings growth from our investments in our interstate pipelines and field services segments, and our electric and natural gas utilities also continued to demonstrate significant progress."
For the nine months ended September 30, 2007, net income was $291 million, or $0.85 per diluted share, compared to $365 million, or $1.14 per diluted share, for the same period of 2006. Results for the nine months ended September 30, 2006, were favorably impacted by $126 million, or $0.40 per diluted share, due to the resolution of certain legacy tax issues but were negatively impacted by $21 million, or $0.07 per diluted share, from a settlement related to the company's 2001 unbundled cost of service order (UCOS) issued by the Texas Public Utility Commission. Excluding the net effect of these items, net income for the nine months ended September 30, 2006, would have been $260 million, or $0.81 per diluted share, compared to $291 million, or $0.85 per diluted share, for the nine months ended September 30, 2007.
OPERATING INCOME BY SEGMENT
Electric Transmission & Distribution
The electric transmission & distribution segment reported operating income of $196 million in the third quarter of 2007, consisting of $155 million from the regulated electric transmission & distribution utility operations (TDU), $11 million from the competition transition charge (CTC), and $30 million related to transition bonds. Operating income for the third quarter of 2006 was $219 million, consisting of $173 million from the TDU, $14 million from the CTC, and $32 million related to transition bonds.
Operating income for the TDU for the third quarter of 2007 was negatively impacted by a rate settlement implemented in October of 2006, partially offset by customer growth of over 47,000 metered customers since September 2006.
Operating income for the nine months ended September 30, 2007, was $457 million, consisting of $335 million from the TDU, $32 million from the CTC, and $90 million related to transition bonds. Operating income for the same period of 2006 was $480 million, consisting of $340 million from the TDU, $44 million from the CTC, and $96 million related to transition bonds.
Natural Gas Distribution
The natural gas distribution segment reported an operating loss of $8 million for the third quarter of 2007 compared to an operating loss of $11 million for the same period of 2006. Due to seasonal impacts, the third quarter for this segment is typically the weakest of the year. The third quarter of 2007 benefited from customer growth with the addition of nearly 48,000 customers since September 2006.
Operating income for the nine months ended September 30, 2007, was $129 million compared to $90 million for the same period of 2006.
Competitive Natural Gas Sales and Services
The competitive natural gas sales and services segment reported operating income of $4 million for the third quarter of 2007 compared to $12 million for the same period of 2006. The decrease in operating income was primarily due to a reduction in locational and seasonal natural gas price differentials. In addition, the third quarter of 2007 included a $2 million gain resulting from mark-to-market accounting for non-trading financial derivatives and a $5 million write-down of natural gas inventory to the lower of average cost or market, compared to a $21 million gain resulting from mark-to-market accounting and a $26 million inventory write-down for the same period of 2006.
Operating income for the nine months ended September 30, 2007, was $56 million compared to $44 million for the same period of 2006.
Interstate Pipelines
The interstate pipelines segment reported operating income of $70 million for the third quarter of 2007 compared to $48 million for the same period of 2006. The increase in operating income was driven primarily by the new Carthage to Perryville pipeline, which went into commercial service in May 2007, increased ancillary services, and settlements of certain state tax issues. The third quarter of 2006 included a gain from the sale of excess gas no longer required following improvements to a storage facility.
Operating income for the nine months ended September 30, 2007, was $166 million compared to $137 million for the same period of 2006.
Field Services
The field services segment reported operating income of $26 million for the third quarter of 2007 compared to $21 million for the same period of 2006. Operating income increased from higher throughput and increased ancillary services, partially offset by lower commodity prices. In addition, this business recorded equity income of $2 million in each of the third quarters of 2007 and 2006 from its 50 percent interest in a jointly-owned gas processing plant. These amounts are included in Other - net under the Other Income (Expense) caption.
Operating income for the nine months ended September 30, 2007, was $75 million compared to $66 million for the same period of 2006. Equity income from the jointly-owned gas processing plant was $6 million for the nine months ended September 30, 2007, compared to $7 million for the nine months ended September 30, 2006.
DIVIDEND DECLARATION
On October 25, 2007, CenterPoint Energy's board of directors declared a regular quarterly cash dividend of $0.17 per share of common stock payable on December 10, 2007, to shareholders of record as of the close of business on November 16, 2007.
OUTLOOK FOR 2007
CenterPoint Energy expects diluted earnings per share for 2007 to be at the high end of its previously provided range of $1.02 to $1.12. This guidance takes into consideration various economic and operational assumptions related to the business segments in which the company operates. The company has made certain assumptions regarding the impact to earnings of various regulatory proceedings but cannot predict the ultimate outcome of any of those proceedings. In providing this guidance, the company has not projected the impact of any changes in accounting standards, any impact from acquisitions or divestitures, or the outcome of the TDU's true-up appeal.
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 period ended September 30, 2007. A copy of that report is available on the company's web site, www.CenterPointEnergy.com, under the "Investors" section. Other filings the company makes at the SEC and other documents relating to its corporate governance can also be found on that site.
WEBCAST OF EARNINGS CONFERENCE CALL
CenterPoint Energy's management will host an earnings conference call on Friday, November 2, 2007, at 10:30 a.m. Central time or 11:30 a.m. Eastern time. Interested parties may listen to a live audio broadcast of the conference call at www.CenterPointEnergy.com/investors/events. A replay of the call can be accessed approximately two hours after the completion of the call and will be archived on the Web site for at least one year.
CenterPoint Energy, Inc., headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission & distribution, natural gas distribution, competitive natural gas sales and services, interstate pipelines and field services operations. The company serves more than five million metered customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas. Assets total over $17 billion. With about 8,600 employees, CenterPoint Energy and its predecessor companies have been in business for more than 130 years. For more information, visit the Web site at www.CenterPointEnergy.com.
The CenterPoint Energy logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3588
This news release includes forward-looking statements. Actual events and results may differ materially from those projected. The statements in this news release regarding future financial performance and results of operations and other statements that are not historical facts are forward-looking statements. Factors that could affect actual results include the timing and outcome of appeals from the true-up proceedings, the timing and impact of future regulatory, legislative and IRS decisions, effects of competition, weather variations, changes in CenterPoint Energy's or its subsidiaries' business plans, financial market conditions, the timing and extent of changes in commodity prices, particularly natural gas, the impact of unplanned facility outages, and other factors discussed in CenterPoint Energy's and its subsidiaries' Form 10-Ks for the period ended December 31, 2006, CenterPoint Energy's and its subsidiaries' Form 10-Qs for the periods ended March 31, 2007, and June 30, 2007, CenterPoint Energy's Form 10-Q for the period ended September 30, 2007, and other filings with the Securities and Exchange Commission.
CenterPoint Energy, Inc. and Subsidiaries
Statements of Consolidated Income
(Millions of Dollars)
(Unaudited)
Quarter Ended Nine Months Ended
September 30, September 30,
-------------- -----------------
2006 2007 2006 2007
------- ----- ------- -------
Revenues:
Electric Transmission
& Distribution $ 533 $ 528 $1,374 $1,399
Natural Gas Distribution 485 458 2,514 2,601
Competitive Natural Gas Sales
and Services 830 770 2,743 2,715
Interstate Pipelines 106 137 299 348
Field Services 39 44 114 125
Other Operations 3 3 12 8
Eliminations (61) (58) (201) (175)
----- ----- ------ ------
Total 1,935 1,882 6,855 7,021
----- ----- ------ ------
Expenses:
Natural gas 1,058 991 4,286 4,349
Operation and maintenance 347 349 1,018 1,031
Depreciation and amortization 159 170 452 475
Taxes other than income taxes 87 85 289 284
----- ----- ------ ------
Total 1,651 1,595 6,045 6,139
----- ----- ------ ------
Operating Income 284 287 810 882
----- ----- ------ ------
Other Income (Expense):
Gain (Loss) on Time Warner
investment 20 (58) 17 (74)
Gain (Loss) on indexed debt
securities (12) 56 (13) 70
Interest and other finance charges (120) (126) (353) (368)
Interest on transition bonds (32) (30) (98) (93)
Distribution from AOL Time Warner
litigation settlement -- 32 -- 32
Additional distribution to ZENS
holders -- (27) -- (27)
Other - net 12 11 27 23
----- ----- ------ ------
Total (132) (142) (420) (437)
----- ----- ------ ------
Income from Before Income Taxes 152 145 390 445
Income Tax Expense (69) (54) (25) (154)
----- ----- ------ ------
Net Income $ 83 $ 91 $ 365 $ 291
===== ===== ====== ======
Reference is made to the Notes to the Consolidated Financial
Statements contained in the Quarterly Report on Form 10-Q of
CenterPoint Energy, Inc.
CenterPoint Energy, Inc. and Subsidiaries
Selected Data From Statements of Consolidated Income
(Millions of Dollars, Except Share and Per Share Amounts)
(Unaudited)
Quarter Ended Nine Months Ended
September 30, September 30,
2006 2007 2006 2007
------- ------- ------- -------
Basic Earnings Per Common Share:
Net Income $ 0.27 $ 0.29 $ 1.17 $ 0.91
======= ======= ======= =======
Diluted Earnings Per Common Share:
Net Income $ 0.26 $ 0.27 $ 1.14 $ 0.85
======= ======= ======= =======
Dividends Declared per Common
Share $ 0.15 $ 0.17 $ 0.45 $ 0.51
Weighted Average Common Shares
Outstanding (000):
- Basic 311,945 321,192 311,414 320,071
- Diluted 324,716 340,974 319,974 342,222
Operating Income (Loss) by Segment
----------------------------------
Electric Transmission
& Distribution:
Electric Transmission and
Distribution Operations $ 173 $ 155 $ 340 $ 335
Competition Transition Charge 14 11 44 32
------- ------- ------- -------
Total Electric Transmission
and Distribution Utility 187 166 384 367
Transition Bond Companies 32 30 96 90
------- ------- ------- -------
Total Electric Transmission
& Distribution 219 196 480 457
Natural Gas Distribution (11) (8) 90 129
Competitive Natural Gas Sales and
Services 12 4 44 56
Interstate Pipelines 48 70 137 166
Field Services 21 26 66 75
Other Operations (5) (1) (7) (1)
------- ------- ------- -------
Total $ 284 $ 287 $ 810 $ 882
======= ======= ======= =======
Reference is made to the Notes to the Consolidated Financial
Statements contained in the Quarterly Report on Form 10-Q of
CenterPoint Energy, Inc.
CenterPoint Energy, Inc. and Subsidiaries
Results of Operations by Segment
(Millions of Dollars)
(Unaudited)
Electric Transmission & Distribution
---------------------------------------------------------------------
Quarter Ended Nine Months Ended
September 30, September 30,
------------- % Diff ---------------- % Diff
2006 2007 Fav/(Unfav) 2006 2007 Fav/(Unfav)
---- ---- ---------- ---- ---- ----------
Results of
Operations:
Revenues:
Electric
transmission
and
distribution
utility $ 453 $ 445 (2%) $ 1,170 $ 1,187 1%
Transition
bond
companies 80 83 4% 204 212 4%
------- ------- ------- -------
Total 533 528 (1%) 1,374 1,399 2%
------- ------- ------- -------
Expenses:
Operation and
maintenance 155 163 (5%) 436 467 (7%)
Depreciation
and
amortization 58 58 -- 182 182 --
Taxes other
than income
taxes 53 58 (9%) 168 171 (2%)
Transition
bond
companies 48 53 (10%) 108 122 (13%)
------- ------- ------- -------
Total 314 332 (6%) 894 942 (5%)
------- ------- ------- -------
Operating
Income $ 219 $ 196 (11%) $ 480 $ 457 (5%)
======= ======= ======= =======
Operating
Income:
Electric
transmission
and
distribution
operations $ 173 $ 155 (10%) $ 340 $ 335 (1%)
Competition
transition
charge 14 11 (21%) 44 32 (27%)
Transition bond
companies 32 30 (6%) 96 90 (6%)
------- ------- ------- -------
Total Segment
Operating
Income $ 219 $ 196 (11%) $ 480 $ 457 (5%)
======= ======= ======= =======
Electric
Transmission
& Distribution
Operating Data:
Actual MWH
Delivered
Residential 8,522,786 8,381,258 (2%) 19,317,160 19,060,031 (1%)
Total 22,829,685 22,725,500 -- 59,238,907 58,560,692 (1%)
Weather
(average
for service
area):
Percentage
of normal:
Cooling
degree
days 100% 102% 2% 105% 100% (5%)
Heating
degree
days 0% 0% 0% 60% 114% 54%
Average
number of
metered
customers:
Residential 1,740,079 1,782,281 2% 1,729,348 1,767,431 2%
Total 1,976,559 2,022,448 2% 1,964,189 2,006,344 2%
Natural Gas Distribution
---------------------------------------------------------------------
Quarter Ended Nine Months Ended
September 30, September 30,
------------- % Diff ---------------- % Diff
2006 2007 Fav/(Unfav) 2006 2007 Fav/(Unfav)
---- ---- ---------- ---- ---- ----------
Results of
Operations:
Revenues $ 485 $ 458 (6%) $ 2,514 $ 2,601 3%
------- ------- ------- -------
Expenses:
Natural gas 298 267 10% 1,787 1,845 (3%)
Operation and
maintenance 137 139 (1%) 429 421 2%
Depreciation
and
amortization 38 38 -- 113 114 (1%)
Taxes other than
income taxes 23 22 4% 95 92 3%
------- ------- ------- -------
Total 496 466 6% 2,424 2,472 (2%)
------- ------- ------- -------
Operating
Income
(Loss) $ (11) $ (8) 27% $ 90 $ 129 43%
======= ======= ======= =======
Natural Gas
Distribution
Operating Data:
Throughput data
in BCF
Residential 14 12 (14%) 98 118 20%
Commercial
and
Industrial 44 42 (5%) 160 168 5%
------- ------- ------- -------
Total
Throughput 58 54 (7%) 258 286 11%
======= ======= ======= =======
Weather
(average
for service
area)
Percentage
of normal:
Heating
degree
days 104% 75% (29%) 81% 98% 17%
Average
number of
customers:
Residential 2,862,020 2,910,041 2% 2,875,345 2,927,122 2%
Commercial
and
Industrial 240,083 246,021 2% 243,011 246,382 1%
------- ------- ------- -------
Total 3,102,103 3,156,062 2% 3,118,356 3,173,504 2%
======= ======= ======= =======
Reference is made to the Notes to the Consolidated Financial
Statements contained in the Quarterly Report on Form 10-Q of
CenterPoint Energy, Inc.
CenterPoint Energy, Inc. and Subsidiaries
Results of Operations by Segment
(Millions of Dollars)
(Unaudited)
Competitive Natural Gas Sales and Services
---------------------------------------------------------------------
Quarter Ended Nine Months Ended
September 30, September 30,
-------------- % Diff -------------- % Diff
Fav/ Fav/
2006 2007 (Unfav) 2006 2007 (Unfav)
------ ------ ------ ------ ------ ------
Results of
Operations:
Revenues $ 830 $ 770 (7%) $2,743 $2,715 (1%)
------ ------ ------ ------
Expenses:
Natural gas 809 756 7% 2,673 2,631 2%
Operation and
maintenance 8 7 13% 23 23 --
Depreciation and
amortization -- 3 -- 1 4 (300%)
Taxes other than
income taxes 1 -- -- 2 1 50%
------ ------ ------ ------
Total 818 766 6% 2,699 2,659 1%
------ ------ ------ ------
Operating Income $ 12 $ 4 (67%) $ 44 $ 56 27%
====== ====== ====== ======
Competitive Natural
Gas Sales and
Services
Operating Data:
Throughput data in BCF
Wholesale -
third parties 90 74 (18%) 251 241 (4%)
Wholesale -
affiliates 8 2 (75%) 27 7 (74%)
Retail & Pipeline 40 43 8% 138 145 5%
------ ------ ------ ------
Total Throughput 138 119 (14%) 416 393 (6%)
====== ====== ====== ======
Average number of
customers:
Wholesale 140 233 66% 140 235 68%
Retail & Pipeline 6,351 6,743 6% 6,554 6,779 3%
------ ------ ------ ------
Total 6,491 6,976 7% 6,694 7,014 5%
====== ====== ====== ======
Interstate Pipelines
---------------------------------------------------------------------
Quarter Ended Nine Months Ended
September 30, September 30,
-------------- % Diff -------------- % Diff
Fav/ Fav/
2006 2007 (Unfav) 2006 2007 (Unfav)
------ ------ ------ ------ ------ ------
Results of
Operations:
Revenues $ 106 $ 137 29% $ 299 $ 348 16%
------ ------ ------ ------
Expenses:
Natural gas 10 27 (170%) 22 55 (150%)
Operation and
maintenance 33 29 12% 98 85 13%
Depreciation and
amortization 10 11 (10%) 28 32 (14%)
Taxes other than
income taxes 5 -- -- 14 10 29%
------ ------ ------ ------
Total 58 67 (16%) 162 182 (12%)
------ ------ ------ ------
Operating Income $ 48 $ 70 46% $ 137 $ 166 21%
====== ====== ====== ======
Pipelines Operating
Data:
Throughput data in BCF
Transportation 204 312 53% 718 880 23%
------ ------ ------ ------
Total Throughput 204 312 53% 718 880 23%
====== ====== ====== ======
Reference is made to the Notes to the Consolidated Financial
Statements contained in the Quarterly Report on Form 10-Q of
CenterPoint Energy, Inc.
CenterPoint Energy, Inc. and Subsidiaries
Results of Operations by Segment
(Millions of Dollars)
(Unaudited)
Field Services
---------------------------------------------------------------------
Quarter Ended Nine Months Ended
September 30, September 30,
-------------- % Diff -------------- % Diff
Fav/ Fav/
2006 2007 (Unfav) 2006 2007 (Unfav)
------ ------ ------ ------ ------ ------
Results of
Operations:
Revenues $ 39 $ 44 13% $ 114 $ 125 10%
------ ------ ------ ------
Expenses:
Natural gas (1) (2) (100%) (4) (9) 125%
Operation and
maintenance 15 17 (13%) 42 49 (17%)
Depreciation and
amortization 3 2 33% 8 8 --
Taxes other than
income taxes 1 1 -- 2 2 --
------ ------ ------ ------
Total 18 18 -- 48 50 (4%)
------ ------ ------ ------
Operating Income $ 21 $ 26 24% $ 66 $ 75 14%
====== ====== ====== ======
Field Services
Operating Data:
Throughput data in BCF
Gathering 97 104 7% 279 297 6%
------ ------ ------ ------
Total Throughput 97 104 7% 279 297 6%
====== ====== ====== ======
Other Operations
---------------------------------------------------------------------
Quarter Ended Nine Months Ended
September 30, September 30,
-------------- % Diff -------------- % Diff
Fav/ Fav/
2006 2007 (Unfav) 2006 2007 (Unfav)
------ ------ ------ ------ ------ ------
Results of
Operations:
Revenues $ 3 $ 3 -- $ 12 $ 8 (33%)
Expenses 8 4 50% 19 9 53%
------ ------ ------ ------
Operating Loss $ (5) $ (1) 80% $ (7) $ (1) 86%
====== ====== ====== ======
Capital Expenditures by Segment
(Millions of Dollars)
(Unaudited)
-------------- --------------
Quarter Ended Nine Months Ended
September 30, September 30,
-------------- --------------
2006 2007 2006 2007
------ ------ ------ ------
Capital Expenditures by Segment
Electric Transmission &
Distribution $ 88 $ 83 $ 278 $ 304
Natural Gas Distribution 48 58 133 135
Competitive Natural Gas Sales
and Services 4 1 14 5
Interstate Pipelines 117 39 178 253
Field Services 18 15 41 55
Other Operations 4 5 18 22
------ ------ ------ ------
Total $ 279 $ 201 $ 662 $ 774
====== ====== ====== ======
Interest Expense Detail
(Millions of Dollars)
(Unaudited)
-------------- --------------
Quarter Ended Nine Months Ended
September 30, September 30,
-------------- --------------
2006 2007 2006 2007
------ ------ ------ ------
Interest Expense Detail
Amortization of Deferred
Financing Cost $ 14 $ 11 $ 40 $ 42
Capitalization of
Interest Cost (3) (3) (6) (18)
Transition Bond
Interest Expense 32 30 98 93
Other Interest Expense 109 118 319 344
------ ------ ------ ------
Total Interest Expense $ 152 $ 156 $ 451 $ 461
====== ====== ====== ======
Reference is made to the Notes to the Consolidated Financial
Statements contained in the Quarterly Report on Form 10-Q of
CenterPoint Energy, Inc.
CenterPoint Energy, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Millions of Dollars)
(Unaudited)
December 31, September 30,
2006 2007
------------ -------------
ASSETS
Current Assets:
Cash and cash equivalents $ 127 $ 54
Other current assets 2,868 2,296
------------ -------------
Total current assets 2,995 2,350
------------ -------------
Property, Plant and Equipment, net 9,204 9,629
------------ -------------
Other Assets:
Goodwill 1,705 1,705
Regulatory assets 3,290 3,139
Other non-current assets 439 480
------------ -------------
Total other assets 5,434 5,324
------------ -------------
Total Assets $ 17,633 $ 17,303
============ =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings $ 187 $ 150
Current portion of transition bond
long-term debt 147 159
Current portion of other long-term debt 1,051 1,195
Other current liabilities 2,836 1,881
------------ -------------
Total current liabilities 4,221 3,385
------------ -------------
Other Liabilities:
Accumulated deferred income taxes, net
and investment tax credit 2,362 2,295
Regulatory liabilities 792 825
Other non-current liabilities 900 871
------------ -------------
Total other liabilities 4,054 3,991
------------ -------------
Long-term Debt:
Transition bond 2,260 2,101
Other 5,542 6,090
------------ -------------
Total long-term debt 7,802 8,191
------------ -------------
Shareholders' Equity 1,556 1,736
------------ -------------
Total Liabilities and Shareholders'
Equity $ 17,633 $ 17,303
============ =============
Reference is made to the Notes to the Consolidated Financial
Statements contained in the Quarterly Report on Form 10-Q of CenterPoint
Energy, Inc.
CenterPoint Energy, Inc. and Subsidiaries
Condensed Statements of Consolidated Cash Flows
(Millions of Dollars)
(Unaudited)
Nine Months Ended
September 30,
-------------------
2006 2007
----- -----
Cash Flows from Operating Activities:
Net income $ 365 $ 291
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 489 519
Deferred income taxes and investment tax credit (87) 23
Tax and interest reserves reductions
related to ZENS and ACES (119) --
Changes in net regulatory assets 65 57
Changes in other assets and liabilities 8 (410)
Other, net 7 12
----- -----
Net Cash Provided by Operating Activities 728 492
Net Cash Used in Investing Activities (626) (933)
Net Cash Provided by Financing Activities 109 368
----- -----
Net Increase (Decrease) in Cash and Cash Equivalents 211 (73)
Cash and Cash Equivalents at Beginning of Period 74 127
----- -----
Cash and Cash Equivalents at End of Period $ 285 $ 54
===== =====
Reference is made to the Notes to the Consolidated Financial
Statements contained in the Quarterly Report on Form 10-Q of
CenterPoint Energy, Inc.
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SOURCE: CenterPoint Energy, Inc.
CenterPoint Energy, Inc.
Media:
Leticia Lowe
713.207.7702
Investors:
Marianne Paulsen
713.207.6500
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