News Release

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Nov 07, 2019

CenterPoint Energy Reports Third Quarter 2019 Earnings of $0.47 Per Diluted Share; $0.53 Earnings Per Diluted Share on a Guidance Basis, Excluding Certain Impacts Associated With the Vectren Merger

• Reiterate full-year 2019 EPS guidance, anticipate achieving near the upper end of the $1.60 - $1.70 range

• Utilities led company to a strong third quarter performance

HOUSTON--(BUSINESS WIRE)--Nov. 7, 2019-- CenterPoint Energy, Inc. (NYSE: CNP) today reported income available to common shareholders of $241 million, or $0.47 per diluted share, for the third quarter of 2019, compared with $153 million, or $0.35 per diluted share for the third quarter of 2018. On a guidance basis, third quarter 2019 earnings were $0.53 per diluted share, excluding certain impacts associated with the Vectren merger (the merger). Third quarter 2018 earnings, on a guidance basis and excluding certain impacts associated with the merger, were $0.39 per diluted share.

“Our utilities delivered another strong performance this quarter, driven by solid customer growth, disciplined cost management and favorable weather,” said Scott M. Prochazka, president and chief executive officer of CenterPoint Energy. “This strong performance is expected to drive our anticipated 2019 full year results towards the upper end of our guidance range.”

Business Segments

Houston Electric - Transmission & Distribution

The Houston electric - transmission & distribution segment reported operating income of $269 million for the third quarter of 2019, consisting of $261 million from the regulated electric transmission and distribution utility operations (TDU) and $8 million related to securitization bonds. Operating income for the third quarter of 2018 was $227 million, consisting of $214 million from the TDU and $13 million related to securitization bonds. Operating income for the TDU benefited primarily from lower operation and maintenance expenses, higher usage primarily due to warmer than normal weather, customer growth and rate relief. These benefits were partially offset by increased depreciation and amortization expense, lower equity return, primarily related to the annual true-up of transition charges, and lower revenues related to the Tax Cuts and Jobs Act (TCJA).

Indiana Electric – Integrated

The Indiana electric – integrated segment reported operating income of $48 million for the third quarter of 2019. These results are not comparable to the third quarter of 2018 as this segment was acquired in the merger in February 2019.

Natural Gas Distribution

The natural gas distribution segment reported operating income of $27 million for the third quarter of 2019, compared with $3 million for the third quarter of 2018. Operating income increased $7 million due to the gas utilities acquired in the merger in February 2019. The remaining increase is primarily due to lower operation and maintenance expenses, rate relief and customer growth. These increases were partially offset by the timing of a decoupling mechanism in Minnesota and lower revenues related to the TCJA.

Energy Services

The energy services segment reported operating income of $2 million for the third quarter of 2019, which included a mark-to-market loss of $2 million, compared with an operating loss of $9 million for the third quarter of 2018, which included a mark-to-market gain of $1 million. Excluding mark-to-market adjustments, operating income was $4 million for the third quarter of 2019 compared with an operating loss of $10 million for the third quarter of 2018. Operating income, excluding mark-to-market adjustments, increased primarily as a result of an increase in margin due to fewer opportunities to optimize natural gas supply costs in the third quarter of 2018 and decreased operation and maintenance expenses.

Infrastructure Services

The infrastructure services segment reported operating income of $42 million for the third quarter of 2019. Operating income includes $6 million of merger-related expenses. These results are not comparable to the third quarter of 2018 as this segment was acquired in the merger in February 2019.

Midstream Investments

The midstream investments segment reported $77 million of equity income for the third quarter of 2019, compared with $81 million in the third quarter of 2018. For further detail, please refer to Enable's investor materials provided during its 3rd quarter earnings call on November 6, 2019.

Corporate and Other

The corporate and other segment reported operating income of $4 million for the third quarter of 2019, compared with $5 million for the third quarter of 2018. Operating income for the third quarter of 2019 included $19 million of merger-related expenses. Operating income for the third quarter of 2018 included $5 million of merger-related expenses.

Earnings Outlook

  • Anticipate delivering full year 2019 guidance basis EPS near the upper end of our guidance range of $1.60 - $1.70. This guidance excludes:
    • Certain impacts associated with the merger:
      • Integration and transaction-related fees and expenses, including severance and other costs to achieve the anticipated cost savings as a result of the merger
      • Merger financing impacts in January, prior to the completion of the merger, due to the issuance of debt and equity securities to fund the merger that resulted in higher net interest expense, preferred stock dividend requirements and higher common stock share count
    • Potential impacts of the pending Houston Electric rate case
  • 2020 guidance range and EPS growth target to be provided on fourth quarter 2019 earnings call following normal annual financial planning process

The 2019 guidance range considers operations performance to date and assumptions for certain significant variables that may impact earnings, such as customer growth (approximately 2% for electric operations and 1% for natural gas distribution) and usage including normal weather, throughput, commodity prices, recovery of capital invested through rate cases and other rate filings (excluding potential impacts of the pending Houston Electric rate case), effective tax rates, financing activities and related interest rates, and regulatory and judicial proceedings as well as the volume of work contracted in our infrastructure services business. The range also considers anticipated cost savings as a result of the merger. The range assumes the lower end of Enable Midstream Partners, LP’s (Enable) 2019 guidance range for net income attributable to common units, provided on Enable’s 3rd quarter earnings call on November 6, 2019.

In providing this guidance, CenterPoint Energy uses a non-GAAP measure of adjusted diluted earnings per share that does not consider other potential impacts, such as changes in accounting standards or unusual items, including those from Enable, earnings or losses from the change in the value of ZENS and related securities, or the timing effects of mark-to-market accounting in the company’s Energy Services business, which, along with the certain excluded impacts associated with the merger and potential impacts of the pending Houston Electric rate case, could have a material impact on GAAP reported results for the applicable guidance period. CenterPoint Energy is unable to present a quantitative reconciliation of forward looking adjusted diluted earnings per share because changes in the value of ZENS and related securities and mark-to-market gains or losses resulting from the company’s Energy Services business are not estimable as they are highly variable and difficult to predict due to various factors outside of management’s control.

 

Quarter Ended

 

September 30, 2019

 

September 30, 2018

 

Dollars
in millions

 

Diluted

EPS(1)

 

Dollars
in millions

 

Diluted
EPS(1)

Consolidated income available to common shareholders and diluted EPS

$

241

 

 

$

0.47

 

 

$

153

 

 

$

0.35

 

Timing effects impacting CES (2):

 

 

 

 

 

 

 

Mark-to-market (gains) losses (net of taxes of $1 and $0) (3)

1

 

 

 

 

(1

)

 

 

ZENS-related mark-to-market (gains) losses:

 

 

 

 

 

 

 

Marketable securities (net of taxes of $12 and $9) (3)(4)

(47

)

 

(0.09

)

 

(34

)

 

(0.08

)

Indexed debt securities (net of taxes of $12 and $10) (3)

50

 

 

0.10

 

 

34

 

 

0.08

 

Consolidated on a guidance basis

$

245

 

 

$

0.48

 

 

$

152

 

 

$

0.35

 

Impacts associated with the Vectren merger:

 

 

 

 

 

 

 

Impacts associated with the Vectren merger (net of taxes of $5 and $2) (3)

20

 

 

0.05

 

 

18

 

 

0.04

 

Consolidated on a guidance basis, excluding impacts associated with the Vectren merger

$

265

 

 

$

0.53

 

 

$

170

 

 

$

0.39

 

(1)

Quarterly diluted EPS on both a GAAP and guidance basis are based on the weighted average number of shares outstanding during the quarter, and the sum of the quarters may not equal year-to-date diluted EPS

(2)

Energy Services segment

(3)

Taxes are computed based on the impact removing such item would have on tax expense

(4)

Comprised of common stock of AT&T Inc. and Charter Communications, Inc.

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 quarter ended September 30, 2019. A copy of that report is available on the company’s website, under the Investors section. Investors and others should note that we may announce material information using SEC filings, press releases, public conference calls, webcasts, and the Investor Relations page of our website. In the future, we will continue to use these channels to distribute material information about the company and to communicate important information about the company, key personnel, corporate initiatives, regulatory updates and other matters. Information that we post on our website could be deemed material; therefore we encourage investors, the media, our customers, business partners and others interested in our company to review the information we post on our website.

Webcast of Earnings Conference Call

CenterPoint Energy’s management will host an earnings conference call on Thursday, November 7, 2019, at 9:00 a.m. Central time/10:00 a.m. Eastern time. Interested parties may listen to a live audio broadcast of the conference call on the company’s website under the Investors section. A replay of the call can be accessed approximately two hours after the completion of the call and will be archived on the website for at least one year.

Headquartered in Houston, Texas, CenterPoint Energy, Inc. is an energy delivery company with regulated utility businesses in eight states and a competitive energy businesses footprint in nearly 40 states. Through its electric transmission & distribution, power generation and natural gas distribution businesses, the company serves more than 7 million metered customers in Arkansas, Indiana, Louisiana, Minnesota, Mississippi, Ohio, Oklahoma and Texas. CenterPoint Energy’s competitive energy businesses include natural gas marketing and energy-related services; energy efficiency, sustainability and infrastructure modernization solutions; and construction and repair services for pipeline systems, primarily natural gas. The company also owns 53.7 percent of the common units representing limited partner interests in Enable Midstream Partners, LP, a publicly traded master limited partnership that owns, operates and develops strategically located natural gas and crude oil infrastructure assets. With approximately 14,000 employees and approximately $35 billion in assets, CenterPoint Energy and its predecessor companies have been in business for more than 150 years. For more information, visit CenterPointEnergy.com.

This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements 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 earnings, and future financial performance and results of operations, including, but not limited to earnings guidance, targeted dividend growth rate and any other statements 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.

Risks Related to CenterPoint Energy

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 performance of Enable Midstream Partners, LP (Enable), the amount of cash distributions CenterPoint Energy receives from Enable, Enable’s ability to redeem the Enable Series A Preferred Units in certain circumstances and the value of CenterPoint Energy’s interest in Enable, and factors that may have a material impact on such performance, cash distributions and value, including factors such as: (A) 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; (B) the timing and extent of changes in the supply of natural gas and associated commodity prices, particularly prices of natural gas and natural gas liquids (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; (C) the demand for crude oil, natural gas, NGLs and transportation and storage services; (D) environmental and other governmental regulations, including the availability of drilling permits and the regulation of hydraulic fracturing; (E) recording of goodwill, long-lived asset or other than temporary impairment charges by or related to Enable; (F) the timing of payments from Enable’s customers in existing contracts, including minimum volume commitment payments; (G) changes in tax status; and (H) access to debt and equity capital; (2) CenterPoint Energy’s expected benefits of the merger with Vectren Corporation (Vectren) and integration, including the outcome of shareholder litigation filed against Vectren that could reduce anticipated benefits of the merger, as well as the ability to successfully integrate the Vectren businesses and to realize anticipated benefits and commercial opportunities; (3) industrial, commercial and residential growth in CenterPoint Energy’s service territories and changes in market demand, including the demand for CenterPoint Energy’s non-utility products and services and effects of energy efficiency measures and demographic patterns; (4) the outcome of the pending Houston Electric rate case; (5) timely and appropriate rate actions that allow recovery of costs and a reasonable return on investment; (6) future economic conditions in regional and national markets and their effect on sales, prices and costs; (7) weather variations and other natural phenomena, including the impact of severe weather events on operations and capital; (8) state and federal legislative and regulatory actions or developments affecting various aspects of CenterPoint Energy’s and Enable’s businesses, including, among others, energy deregulation or re-regulation, pipeline integrity and safety and changes in regulation and legislation pertaining to trade, health care, finance and actions regarding the rates charged by our regulated businesses; (9) tax legislation, including the effects of the comprehensive tax reform legislation informally referred to as the Tax Cuts and Jobs Act (which includes any potential changes to interest deductibility) and uncertainties involving state commissions’ and local municipalities’ regulatory requirements and determinations regarding the treatment of excess deferred income taxes and CenterPoint Energy’s rates; (10) CenterPoint Energy’s ability to mitigate weather impacts through normalization or rate mechanisms, and the effectiveness of such mechanisms; (11) the timing and extent of changes in commodity prices, particularly natural gas and coal, and the effects of geographic and seasonal commodity price differentials; (12) the ability of CenterPoint Energy’s and CERC’s non-utility business operating in the Energy Services reportable segment to effectively optimize opportunities related to natural gas price volatility and storage activities, including weather-related impacts; (13) actions by credit rating agencies, including any potential downgrades to credit ratings; (14) changes in interest rates and their impact on CenterPoint Energy’s costs of borrowing and the valuation of its pension benefit obligation; (15) problems with regulatory approval, legislative actions, 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; (16) the availability and prices of raw materials and services and changes in labor for current and future construction projects; (17) local, state and federal legislative and regulatory actions or developments relating to the environment, including those related to global climate change, air emissions, carbon, waste water discharges and the handling and disposal of coal combustion residuals (CCR) that could impact the continued operation, and/or cost recovery of generation plant costs and related assets; (18) the impact of unplanned facility outages or other closures; (19) any direct or indirect effects on CenterPoint Energy’s or Enable’s facilities, operations and financial condition resulting from terrorism, cyber-attacks, data security breaches or other attempts to disrupt CenterPoint Energy’s businesses or the businesses of third parties, or other catastrophic events such as fires, ice, earthquakes, explosions, leaks, floods, droughts, hurricanes, tornadoes, pandemic health events or other occurrences; (20) CenterPoint Energy’s ability to invest planned capital and the timely recovery of CenterPoint Energy’s investments, including those related to the generation transition plan; (21) CenterPoint Energy’s ability to successfully construct and operate electric generating facilities, including complying with applicable environmental standards and the implementation of a well-balanced energy and resource mix, as appropriate; (22) CenterPoint Energy’s ability to control operation and maintenance costs; (23) the sufficiency of CenterPoint Energy’s insurance coverage, including availability, cost, coverage and terms and ability to recover claims; (24) the investment performance of CenterPoint Energy’s pension and postretirement benefit plans; (25) commercial bank and financial market conditions, CenterPoint Energy’s access to capital, the cost of such capital, and the results of CenterPoint Energy’s financing and refinancing efforts, including availability of funds in the debt capital markets; (26) changes in rates of inflation; (27) inability of various counterparties to meet their obligations to CenterPoint Energy; (28) non-payment for CenterPoint Energy’s services due to financial distress of its customers; (29) the extent and effectiveness of CenterPoint Energy’s and Enable’s risk management and hedging activities, including but not limited to, financial and weather hedges and commodity risk management activities; (30) timely and appropriate regulatory actions, which include actions allowing securitization, for any future hurricanes or natural disasters or other recovery of costs, including costs associated with Hurricane Harvey; (31) CenterPoint Energy’s or Enable’s potential business strategies and strategic initiatives, including restructurings, joint ventures and acquisitions or dispositions of assets or businesses, which CenterPoint Energy and Enable cannot assure will be completed or will have the anticipated benefits to CenterPoint Energy or Enable; (32) the performance of projects undertaken by CenterPoint Energy’s non-utility businesses and the success of efforts to realize value from, invest in and develop new opportunities and other factors affecting those non-utility businesses, including, but not limited to, the level of success in bidding contracts, fluctuations in volume and mix of contracted work, mix of projects received under blanket contracts, failure to properly estimate cost to construct projects or unanticipated cost increases in completion of the contracted work, changes in energy prices that affect demand for construction services and projects and cancellation and/or reductions in the scope of projects by customers and obligations related to warranties and guarantees; (33) acquisition and merger activities involving CenterPoint Energy or its competitors, including the ability to successfully complete merger, acquisition and divestiture plans; (34) CenterPoint Energy’s or Enable’s ability to recruit, effectively transition and retain management and key employees and maintain good labor relations; (35) the outcome of litigation; (36) the ability of retail electric providers (REPs), including REP affiliates of NRG Energy, Inc. and Vistra Energy Corp., formerly known as TCEH Corp., to satisfy their obligations to CenterPoint Energy and its subsidiaries; (37) changes in technology, particularly with respect to efficient battery storage or the emergence or growth of new, developing or alternative sources of generation; (38) the impact of alternate energy sources on the demand for natural gas; (39) the timing and outcome of any audits, disputes and other proceedings related to taxes; (40) the effective tax rates; (41) the transition to a replacement for the LIBOR benchmark interest rate; (42) the effect of changes in and application of accounting standards and pronouncements; and (43) other factors discussed in CenterPoint Energy’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, CenterPoint Energy’s Quarterly Report on Form 10-Q for the quarters ended March 31, 2019, June 30, 2019 and September 30, 2019 and other reports CenterPoint Energy or its subsidiaries may file from time to time with the Securities and Exchange Commission.

Use of Non-GAAP Financial Measures by CenterPoint Energy in Providing Guidance

In addition to presenting its financial results in accordance with generally accepted accounting principles (GAAP), including presentation of income available to common shareholders and diluted earnings per share, CenterPoint Energy also provides guidance based on adjusted income and adjusted diluted earnings per share, which are non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance that excludes or includes amounts that are not normally excluded or included in the most directly comparable GAAP financial measure. CenterPoint Energy’s adjusted income and adjusted diluted earnings per share calculation excludes from income available to common shareholders and diluted earnings per share, respectively, the impact of ZENS and related securities and mark-to-market gains or losses resulting from the company’s Energy Services business. CenterPoint Energy’s guidance for 2019 also does not reflect (a) certain impacts associated with the Vectren merger, which are integration and transaction-related fees and expenses, including severance and other costs to achieve anticipated cost savings as a result of the merger and merger financing impacts in January, prior to the completion of the merger due to the issuance of debt and equity securities to fund the merger that resulted in higher net interest expense, preferred stock dividend requirements and higher common stock share count and (b) potential impacts of the pending Houston Electric rate case. CenterPoint Energy is unable to present a quantitative reconciliation of forward-looking adjusted income and adjusted diluted earnings per share because changes in the value of ZENS and related securities and mark-to-market gains or losses resulting from the company’s Energy Services business are not estimable as they are highly variable and difficult to predict due to various factors outside of management’s control. These excluded items, along with the excluded impacts associated with the merger and potential impacts of the pending Houston Electric rate case, could have a material impact on GAAP reported results for the applicable guidance period.

Management evaluates the company’s financial performance in part based on adjusted income and adjusted diluted earnings per share. Management believes that presenting these non-GAAP financial measures enhances an investor’s understanding of CenterPoint Energy’s overall financial performance by providing them with an additional meaningful and relevant comparison of current and anticipated future results across periods. The adjustments made in these non-GAAP financial measures exclude items that Management believes does not most accurately reflect the company’s fundamental business performance. These excluded items are reflected in the reconciliation tables of this news release, where applicable. CenterPoint Energy’s adjusted income and adjusted diluted earnings per share non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, income available to common shareholders and diluted earnings per share, which respectively are the most directly comparable GAAP financial measures. These non-GAAP financial measures also may be different than non-GAAP financial measures used by other companies.

CenterPoint Energy, Inc. and Subsidiaries

Condensed Statements of Consolidated Income

(Millions of Dollars)

(Unaudited)

 

Quarter Ended September 30,

 

Nine Months Ended September 30,

 

2019

 

2018

 

2019

 

2018

Revenues:

 

 

 

 

 

 

 

Utility revenues

$

1,539

 

 

$

1,299

 

 

$

5,255

 

 

$

4,534

 

Non-utility revenues

1,203

 

 

913

 

 

3,816

 

 

3,019

 

Total

2,742

 

 

2,212

 

 

9,071

 

 

7,553

 

Expenses:

 

 

 

 

 

 

 

Utility natural gas, fuel and purchased power

 

179

 

 

134

 

 

1,178

 

 

959

 

Non-utility cost of revenues, including natural gas

 

852

 

 

864

 

 

3,013

 

 

2,927

 

Operation and maintenance

871

 

 

567

 

 

2,616

 

 

1,714

 

Depreciation and amortization

334

 

 

326

 

 

987

 

 

982

 

Taxes other than income taxes

114

 

 

95

 

 

353

 

 

307

 

Total

2,350

 

 

1,986

 

 

8,147

 

 

6,889

 

Operating Income

392

 

 

226

 

 

924

 

 

664

 

Other Income (Expense):

 

 

 

 

 

 

 

Gain on marketable securities

59

 

 

43

 

 

206

 

 

66

 

Loss on indexed debt securities

(62

)

 

(44

)

 

(216

)

 

(316

)

Interest and other finance charges

(134

)

 

(90

)

 

(389

)

 

(259

)

Interest on Securitization Bonds

(9

)

 

(16

)

 

(31

)

 

(46

)

Equity in earnings of unconsolidated affiliates, net

77

 

 

81

 

 

213

 

 

208

 

Other income, net

9

 

 

9

 

 

40

 

 

16

 

Total

(60

)

 

(17

)

 

(177

)

 

(331

)

Income Before Income Taxes

332

 

 

209

 

 

747

 

 

333

 

Income tax expense

62

 

 

51

 

 

113

 

 

85

 

Net Income

270

 

 

158

 

 

634

 

 

248

 

Preferred stock dividend requirement

29

 

 

5

 

 

88

 

 

5

 

Income Available to Common Shareholders

$

241

 

 

$

153

 

 

$

546

 

 

$

243

 

Reference is made to the Combined Notes to Unaudited Condensed 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

(Million of Dollars, Except Share and Per Share Amounts)

(Unaudited)

 

Quarter Ended September 30,

 

Nine Months Ended September 30,

 

2019

 

2018

 

2019

 

2018

Basic Earnings Per Common Share

$

0.48

 

 

$

0.35

 

 

$

1.09

 

 

$

0.56

 

Diluted Earnings Per Common Share

$

0.47

 

 

$

0.35

 

 

$

1.08

 

 

$

0.56

 

Dividends Declared per Common Share

$

0.2875

 

 

$

0.2775

 

 

$

0.5750

 

 

$

0.5550

 

Dividends Paid per Common Share

$

0.2875

 

 

$

0.2775

 

 

$

0.8625

 

 

$

0.8325

 

Weighted Average Common Shares Outstanding (000):

 

 

 

 

 

 

 

- Basic

502,228

 

 

431,554

 

 

501,986

 

 

431,437

 

- Diluted

505,080

 

 

434,891

 

 

504,838

 

 

434,774

 

 

 

 

 

 

 

 

 

Operating Income (Loss) by Reportable Segment

 

 

 

 

 

 

 

Houston Electric T&D:

 

 

 

 

 

 

 

TDU

$

261

 

 

$

214

 

 

$

495

 

 

$

480

 

Bond Companies

8

 

 

13

 

 

27

 

 

43

 

Total Houston Electric T&D

269

 

 

227

 

 

522

 

 

523

 

Indiana Electric Integrated

48

 

 

 

 

64

 

 

 

Natural Gas Distribution

27

 

 

3

 

 

241

 

 

166

 

Energy Services

2

 

 

(9

)

 

64

 

 

(20

)

Infrastructure Services

42

 

 

 

 

50

 

 

 

Corporate and Other

4

 

 

5

 

 

(17

)

 

(5

)

Total

$

392

 

 

$

226

 

 

$

924

 

 

$

664

 

Reference is made to the Combined Notes to Unaudited Condensed 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, Except Throughput and Customer Data)

(Unaudited)

Houston Electric T&D

 

Quarter Ended September 30,

 

% Diff

 

Nine Months Ended September 30,

 

% Diff

 

2019

 

2018

 

Fav/Unfav

 

2019

 

2018

 

Fav/Unfav

Revenues:

 

 

 

 

 

 

 

 

 

 

 

TDU

$

776

 

 

$

735

 

 

6

%

 

$

2,043

 

 

$

2,009

 

 

2

%

Bond Companies

 

83

 

 

 

162

 

 

(49

)%

 

 

270

 

 

 

493

 

 

(45

)%

Total

 

859

 

 

 

897

 

 

(4

)%

 

 

2,313

 

 

 

2,502

 

 

(8

)%

Expenses:

 

 

 

 

 

 

 

 

 

 

 

Operation and maintenance, excluding Bond Companies

 

357

 

 

 

367

 

 

3

%

 

 

1,080

 

 

 

1,056

 

 

(2

)%

Depreciation and amortization, excluding Bond Companies

 

95

 

 

 

95

 

 

 

 

 

282

 

 

 

293

 

 

4

%

Taxes other than income taxes

 

63

 

 

 

59

 

 

(7

)%

 

 

186

 

 

 

180

 

 

(3

)%

Bond Companies

 

75

 

 

 

149

 

 

50

%

 

 

243

 

 

 

450

 

 

46

%

Total expenses

 

590

 

 

 

670

 

 

12

%

 

 

1,791

 

 

 

1,979

 

 

9

%

Operating Income

$

269

 

 

$

227

 

 

19

%

 

$

522

 

 

$

523

 

 

 

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

TDU

$

261

 

 

$

214

 

 

22

%

 

$

495

 

 

$

480

 

 

3

%

Bond Companies

 

8

 

 

 

13

 

 

(38

)%

 

 

27

 

 

 

43

 

 

(37

)%

Total Segment Operating Income

$

269

 

 

$

227

 

 

19

%

 

$

522

 

 

$

523

 

 

 

Actual MWH Delivered

 

 

 

 

 

 

 

 

 

 

 

Residential

 

11,224,256

 

 

 

10,554,656

 

 

6

%

 

 

24,392,141

 

 

 

24,486,317

 

 

 

Total

 

28,379,262

 

 

 

27,014,925

 

 

5

%

 

 

71,416,612

 

 

 

70,346,601

 

 

2

%

Weather (percentage of 10-year average for service area):

 

 

 

 

 

 

 

 

 

 

 

Cooling degree days

 

110

%

 

 

101

%

 

9

%

 

 

106

%

 

 

104

%

 

2

%

Heating degree days

%

 

%

 

%

 

 

93

%

 

 

95

%

 

(2

)%

Number of metered customers - end of period:

 

 

 

 

 

 

 

 

 

 

 

Residential

 

2,232,740

 

 

 

2,188,211

 

 

2

%

 

 

2,232,740

 

 

 

2,188,211

 

 

2

%

Total

 

2,523,450

 

 

 

2,475,018

 

 

2

%

 

 

2,523,450

 

 

 

2,475,018

 

 

2

%

Indiana Electric Integrated (1)

 

Quarter Ended
September 30, 2019

 

Nine Months Ended
September 30, 2019 (1)

Revenues

$

165

 

$

388

Utility natural gas, fuel and purchased power

 

46

 

 

112

Revenues less Utility natural gas, fuel and purchased power

 

119

 

 

276

Expenses:

 

 

 

Operation and maintenance

 

42

 

 

136

Depreciation and amortization

 

25

 

 

66

Taxes other than income taxes

 

4

 

 

10

Total expenses

 

71

 

 

212

Operating Income

$

48

 

$

64

Actual MWH Delivered

 

 

 

Retail

 

1,416

 

 

3,277

Wholesale

 

139

 

 

291

Total

 

1,555

 

 

3,568

Number of metered customers - end of period:

 

 

 

Residential

 

128,381

 

 

128,381

Total

 

147,337

 

 

147,337

 

 

 

 

(1) Represents February 1, 2019 through September 30, 2019 results only due to the Merger.

Reference is made to the Combined Notes to Unaudited Condensed 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, Except Throughput and Customer Data)

(Unaudited)

 

Natural Gas Distribution (1)

 

Quarter Ended September 30,

 

% Diff

 

Nine Months Ended September 30,

 

% Diff

 

2019

 

2018

 

Fav/Unfav

 

2019 (1)

 

2018

 

Fav/Unfav

Revenues

$

524

 

 

$

410

 

 

28

%

 

$

2,583

 

 

$

2,058

 

 

26

%

Utility natural gas, fuel and purchased power

 

125

 

 

 

120

 

 

(4

)%

 

 

1,118

 

 

 

972

 

 

(15

)%

Revenues less Utility natural gas, fuel and purchased power

 

399

 

 

 

290

 

 

38

%

 

 

1,465

 

 

 

1,086

 

 

35

%

Expenses:

 

 

 

 

 

 

 

 

 

 

 

Operation and maintenance

 

221

 

 

 

183

 

 

(21

)%

 

 

767

 

 

 

592

 

 

(30

)%

Depreciation and amortization

 

108

 

 

 

73

 

 

(48

)%

 

 

308

 

 

 

210

 

 

(47

)%

Taxes other than income taxes

 

43

 

 

 

31

 

 

(39

)%

 

 

149

 

 

 

118

 

 

(26

)%

Total expenses

 

372

 

 

 

287

 

 

(30

)%

 

 

1,224

 

 

 

920

 

 

(33

)%

Operating Income

$

27

 

 

$

3

 

 

800

%

 

$

241

 

 

$

166

 

 

45

%

Throughput data in BCF

 

 

 

 

 

 

 

 

 

 

 

Residential

 

16

 

 

13

 

 

23

%

 

 

160

 

 

 

123

 

 

30

%

Commercial and Industrial

 

88

 

 

53

 

 

66

%

 

 

326

 

 

 

208

 

 

57

%

Total Throughput

 

104

 

 

66

 

 

58

%

 

 

486

 

 

 

331

 

 

47

%

Weather (average for service area)

 

 

 

 

 

 

 

 

 

 

 

Percentage of 10-year average:

 

 

 

 

 

 

 

 

 

 

 

Heating degree days

 

18

%

 

 

119

%

 

(101

)%

 

 

100

%

 

 

103

%

 

(3

)%

Number of customers - end of period:

 

 

 

 

 

 

 

 

 

 

 

Residential

 

4,194,232

 

 

 

3,205,916

 

 

31

%

 

 

4,194,232

 

 

 

3,205,916

 

 

31

%

Commercial and Industrial

 

344,858

 

 

 

255,244

 

 

35

%

 

 

344,858

 

 

 

255,244

 

 

35

%

Total

 

4,539,090

 

 

 

3,461,160

 

 

31

%

 

 

4,539,090

 

 

 

3,461,160

 

 

31

%

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes acquired natural gas operations February 1, 2019 through September 30, 2019 results only due to the Merger.

 

 

 

Energy Services

 

Quarter Ended September 30,

 

% Diff

 

Nine Months Ended September 30,

 

% Diff

 

2019

 

2018

 

Fav/Unfav

 

2019

 

 

2018

 

Fav/Unfav

Revenues

$

745

 

 

$

920

 

 

(19

)%

 

$

2,846

 

 

$

3,065

 

 

(7

)%

Non-utility cost of revenues, including natural gas

 

716

 

 

 

897

 

 

20

%

 

 

2,696

 

 

 

2,998

 

 

10

%

Revenues less Non-utility cost of revenues, including natural gas

 

29

 

 

 

23

 

 

26

%

 

 

150

 

 

 

67

 

 

124

%

Expenses:

 

 

 

 

 

 

 

 

 

 

 

Operation and maintenance

 

23

 

 

 

28

 

 

18

%

 

 

73

 

 

 

74

 

 

1

%

Depreciation and amortization

 

4

 

 

 

4

 

 

 

 

 

12

 

 

 

12

 

 

 

Taxes other than income taxes

 

 

 

 

 

 

 

1

 

 

 

1

 

 

 

Total expenses

 

27

 

 

 

32

 

 

16

%

 

 

86

 

 

 

87

 

 

1

%

Operating Income (Loss)

$

2

 

 

$

(9

)

 

122

%

 

$

64

 

 

$

(20

)

 

420

%

Timing impacts of mark-to-market gain (loss)

$

(2

)

 

$

1

 

 

(300

)%

 

$

47

 

 

$

(71

)

 

166

%

Throughput data in BCF

 

283

 

 

 

307

 

 

(8

)%

 

 

960

 

 

 

993

 

 

(3

)%

Number of customers - end of period

 

31,000

 

 

 

30,000

 

 

3

%

 

 

31,000

 

 

 

30,000

 

 

3

%

Reference is made to the Combined Notes to Unaudited Condensed 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, Except Throughput and Customer Data)

(Unaudited)

Infrastructure Services (1)

 

Quarter Ended
September 30, 2019

 

Nine Months Ended
September 30, 2019 (1)

Revenues

$

377

 

$

849

Non-utility cost of revenues, including natural gas

 

96

 

 

228

Revenues less Non-utility cost of revenues, including natural gas

 

281

 

 

621

Expenses:

 

 

 

Operation and maintenance

 

223

 

 

530

Depreciation and amortization

 

15

 

 

39

Taxes other than income taxes

 

1

 

 

2

Total expenses

 

239

 

 

571

Operating Income

$

42

 

$

50

Backlog at period end:

 

 

 

Blanket contracts

$

637

 

$

637

Bid contracts

 

301

 

 

301

Total

$

938

 

$

938

 

 

 

 

(1) Represents February 1, 2019 through September 30, 2019 results only due to the Merger.

 

Corporate and Other

 

Quarter Ended September 30,

 

% Diff

 

Nine Months Ended September 30,

 

% Diff

 

2019

 

2018

 

Fav/Unfav

 

2019 (1)

 

2018

 

Fav/Unfav

Revenues

$

93

 

 

$

3

 

 

3,000

%

 

$

215

 

 

$

11

 

 

1,855

%

Non-utility cost of revenues, including natural gas

68

 

 

 

 

 

 

158

 

 

 

 

 

Revenues less Non-utility cost of revenues, including natural gas

25

 

 

3

 

 

733

%

 

57

 

 

11

 

 

418

%

Expenses:

 

 

 

 

 

 

 

 

 

 

 

Operation and maintenance

2

 

 

(13

)

 

(115

)%

 

25

 

 

(14

)

 

(279

)%

Depreciation and amortization

16

 

 

9

 

 

(78

)%

 

44

 

 

24

 

 

(83

)%

Taxes other than income taxes

3

 

 

2

 

 

(50

)%

 

5

 

 

6

 

 

17

%

Total expenses

21

 

 

(2

)

 

(1,150

)%

 

74

 

 

16

 

 

(363

)%

Operating Income (Loss)

$

4

 

 

$

5

 

 

(20

)%

 

$

(17

)

 

$

(5

)

 

(240

)%

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes acquired corporate and other operations February 1, 2019 through September 30, 2019 results only due to the Merger.

Reference is made to the Combined Notes to Unaudited Condensed 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, Except Throughput and Customer Data)

(Unaudited)

Capital Expenditures by Segment

 

Quarter Ended September 30,

 

Nine Months Ended September 30,

 

2019

 

2018

 

2019 (1)

 

2018

Houston Electric T & D

$

239

 

 

$

252

 

 

$

722

 

 

$

669

 

Indiana Electric Integrated

46

 

 

 

 

135

 

 

 

Natural Gas Distribution

324

 

 

170

 

 

773

 

 

409

 

Energy Services

 

 

5

 

 

9

 

 

13

 

Infrastructure Services

14

 

 

 

 

52

 

 

 

Corporate and Other

43

 

 

7

 

 

137

 

 

35

 

Total

$

666

 

 

$

434

 

 

$

1,828

 

 

$

1,126

 

 

 

 

 

 

 

 

 

(1) Includes capital expenditures of acquired businesses from February 1, 2019 through September 30, 2019 only due to the Merger.

 

 

 

 

 

 

 

 

 

Interest Expense Detail

 

Quarter Ended September 30,

 

Nine Months Ended September 30,

 

2019

 

2018

 

2019

 

2018

Amortization of Deferred Financing Cost

$

8

 

 

$

16

 

 

$

22

 

 

$

34

 

Capitalization of Interest Cost

(10

)

 

(2

)

 

(29

)

 

(6

)

Securitization Bonds Interest Expense

9

 

 

16

 

 

31

 

 

46

 

Other Interest Expense

136

 

 

76

 

 

396

 

 

231

 

Total Interest Expense

$

143

 

 

$

106

 

 

$

420

 

 

$

305

 

Reference is made to the Combined Notes to Unaudited Condensed 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)

 

 

September 30,
2019

 

December 31,
2018

ASSETS

Current Assets:

 

 

 

Cash and cash equivalents

$

259

 

 

$

4,231

 

Other current assets

3,157

 

 

2,794

 

Total current assets

3,416

 

 

7,025

 

 

 

 

 

Property, Plant and Equipment, net

20,328

 

 

14,044

 

 

 

 

 

Other Assets:

 

 

 

Goodwill

5,179

 

 

867

 

Regulatory assets

2,194

 

 

1,967

 

Investment in unconsolidated affiliates

2,469

 

 

2,482

 

Preferred units – unconsolidated affiliate

363

 

 

363

 

Other non-current assets

693

 

 

261

 

Total other assets

10,898

 

 

5,940

 

Total Assets

$

34,642

 

 

$

27,009

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:

 

 

 

Current portion of securitization bonds long-term debt

229

 

 

458

 

Indexed debt

21

 

 

24

 

Current portion of other long-term debt

618

 

 

 

Other current liabilities

2,566

 

 

2,820

 

Total current liabilities

3,434

 

 

3,302

 

 

 

 

 

Other Liabilities:

 

 

 

Accumulated deferred income taxes, net

3,851

 

 

3,239

 

Regulatory liabilities

3,481

 

 

2,525

 

Other non-current liabilities

1,516

 

 

1,203

 

Total other liabilities

8,848

 

 

6,967

 

 

 

 

 

Long-term Debt:

 

 

 

Securitization bonds

817

 

 

977

 

Other

13,197

 

 

7,705

 

Total long-term debt

14,014

 

 

8,682

 

 

 

 

 

Shareholders' Equity

8,346

 

 

8,058

 

Total Liabilities and Shareholders' Equity

$

34,642

 

 

$

27,009

 

Reference is made to the Combined Notes to Unaudited Condensed 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,

 

2019

 

2018

Net income

$

634

 

 

$

248

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

1,028

 

 

1,016

 

Deferred income taxes

8

 

 

33

 

Write-down of natural gas inventory

5

 

 

2

 

Equity in earnings of unconsolidated affiliates, net of distributions

13

 

 

(15

)

Changes in net regulatory assets and liabilities

(101

)

 

44

 

Changes in other assets and liabilities

(511

)

 

341

 

Other, net

10

 

 

10

 

Net cash provided by operating activities

1,086

 

 

1,679

 

 

 

 

 

Net cash used in investing activities

(7,775

)

 

(674

)

 

 

 

 

Net cash provided by (used in) financing activities

2,708

 

 

(970

)

 

 

 

 

Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash

(3,981

)

 

35

 

 

 

 

 

Cash, Cash Equivalents and Restricted Cash at Beginning of Period

4,278

 

 

296

 

 

 

 

 

Cash, Cash Equivalents and Restricted Cash at End of Period

$

297

 

 

$

331

 

Reference is made to the Combined Notes to Unaudited Condensed Consolidated Financial Statements contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc.

Source: CenterPoint Energy, Inc.

Media:
Alicia Dixon

Phone 713.825.9107

Investors:
David Mordy
Phone 713.207.6500

Copyright West LLC. Minimum 15 minutes delayed.