CenterPoint Energy, Inc.
CENTERPOINT ENERGY INC (Form: 8-K, Received: 02/26/2010 08:55:44)
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 26, 2010
 
CENTERPOINT ENERGY, INC.
(Exact name of registrant as specified in its charter)
         
Texas   1-31447   74-0694415
(State or other jurisdiction   (Commission File Number)   (IRS Employer
of incorporation)       Identification No.)
     
1111 Louisiana    
Houston, Texas   77002
(Address of principal executive offices)   (Zip Code)
Registrant’s telephone number, including area code: ( 713) 207-1111
 
     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 


 

ITEM 2.02.   RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
     On February 26, 2010, CenterPoint Energy, Inc. (“CenterPoint Energy”) reported fourth quarter and full year 2009 earnings. For additional information regarding CenterPoint Energy’s fourth quarter and full year 2009 earnings, please refer to CenterPoint Energy’s press release attached to this report as Exhibit 99.1 (the “Press Release”) and the supplemental materials which are being posted on CenterPoint Energy’s website and are attached to this report as Exhibit 99.2 (the “Supplemental Materials”), which Press Release and Supplemental Materials are incorporated by reference herein. The information in the Press Release and Supplemental Materials is being furnished, not filed, pursuant to Item 2.02. Accordingly, the information in the Press Release and Supplemental Materials will not be incorporated by reference into any registration statement filed by CenterPoint Energy under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
ITEM 9.01.   FINANCIAL STATEMENTS AND EXHIBITS.
     The exhibit listed below is furnished pursuant to Item 2.02 of this Form 8-K.
  (d)   Exhibits.
 
  99.1   Press Release issued February 26, 2010 regarding CenterPoint Energy, Inc.’s fourth quarter and full year 2009 earnings.
 
  99.2   Supplemental Materials regarding CenterPoint Energy, Inc.’s fourth quarter and full year 2009 earnings.

 


 

SIGNATURE
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  CENTERPOINT ENERGY, INC.
 
 
Date: February 26, 2010  By:   /s/ Walter L. Fitzgerald    
    Walter L. Fitzgerald   
    Senior Vice President and
Chief Accounting Officer 
 

 


 

         
EXHIBIT INDEX
     
EXHIBIT    
NUMBER   EXHIBIT DESCRIPTION
 
   
99.1
  Press Release issued February 26, 2010 regarding CenterPoint Energy, Inc.’s fourth quarter and full year 2009 earnings
 
   
99.2
  Supplemental Materials regarding CenterPoint Energy, Inc.’s fourth quarter and full year 2009 earnings

 

Exhibit 99.1

(CENTER POINT LOGO)
For more information contact
Media:
Leticia Lowe

Phone 713.207.7702
Investors:
Marianne Paulsen

Phone 713.207.6500


For Immediate Release
    Page 1 of 5
CENTERPOINT ENERGY REPORTS FOURTH QUARTER
AND FULL YEAR 2009 EARNINGS
Houston, TX — February 26, 2010 - CenterPoint Energy, Inc. (NYSE: CNP) today reported net income of $105 million, or $0.27 per diluted share, for the fourth quarter of 2009 compared to $87 million, or $0.25 per diluted share, for the same period of 2008. Operating income for the fourth quarter of 2009 was $299 million compared to $303 million for the same period of 2008.
For the year ended December 31, 2009, net income was $372 million, or $1.01 per diluted share, compared to $446 million, or $1.30 per diluted share, for the same period of 2008. Operating income for the year ended December 31, 2009, was $1.1 billion compared to $1.3 billion for the same period of 2008.
“Our company performed well in 2009 in the face of a weak economy and challenging energy markets,” said David M. McClanahan, president and chief executive officer of CenterPoint Energy. “Our regulated electric and natural gas utilities turned in solid operating and financial performances. The company’s interstate pipelines and field services businesses expanded their systems and increased throughput, but lower natural gas and natural gas liquids prices adversely affected their financial performances. Additionally, results of the competitive natural gas sales unit were adversely affected by substantially reduced locational and seasonal price differentials. As the economy improves and stronger energy markets emerge, our regulated utilities and natural gas businesses are well positioned to benefit.”
OPERATING INCOME BY SEGMENT
Electric Transmission & Distribution
The electric transmission & distribution segment reported operating income of $95 million for the fourth quarter of 2009, consisting of $61 million from the regulated electric transmission & distribution utility operations (TDU) and $34 million related to transition and system restoration bonds. Operating income for the fourth quarter of 2008 was $88 million, consisting of $55 million from the TDU and $33 million related to transition bonds. Operating income for the TDU benefited from growth of over 29,000 metered customers since December 2008, higher net transmission revenues and income associated with the company’s investment in an advanced metering system (AMS). These benefits were partially offset by reduced energy demand as well as higher operation and maintenance expenses. In addition, the fourth quarter of 2008 reflected lower operating expenses as resources were devoted to recovery from Hurricane Ike.
-more-

 


 

(CENTER POINT LOGO)
For more information contact
Media:
Leticia Lowe

Phone 713.207.7702
Investors:
Marianne Paulsen

Phone 713.207.6500


For Immediate Release
    Page 2 of 5
Operating income for the year ended December 31, 2009, was $545 million, consisting of $414 million from the TDU and $131 million related to transition and system restoration bonds. Operating income for the same period of 2008 was $545 million, consisting of $407 million from the TDU, $133 million related to transition bonds and $5 million from the competition transition charge (CTC). The CTC was discontinued in February 2008 when the company securitized the remaining authorized true-up balance. Operating income for the TDU benefited from customer growth, higher net transmission revenues and income associated with the company’s investment in AMS, partially offset by reduced energy demand and increased operation and maintenance expenses, primarily employee-related. In addition, 2008 included a gain from a land sale, lower net revenues related to Hurricane Ike and a refund of prior years’ state franchise taxes.
Natural Gas Distribution
The natural gas distribution segment reported operating income of $99 million for the fourth quarter of 2009 compared to $96 million for the same period of 2008. Operating income increased from higher rates, other miscellaneous revenues and lower bad debt expense, partially offset by higher pension expense of $11 million.
Operating income for the year ended December 31, 2009, was $204 million compared to $215 million for the same period of 2008. The decline in operating income was primarily due to higher pension expense of $37 million and other operating expenses, partially offset by higher rates and lower bad debt expense.
Interstate Pipelines
The interstate pipelines segment reported operating income of $62 million for the fourth quarter of 2009 compared to $66 million for the same period of 2008. The decline in operating income was primarily due to higher pension and other operating expenses. Higher revenue from new firm contracts was offset by lower revenue from off-system sales.
In addition to operating income, this segment recorded equity income of $5 million for the fourth quarter of 2009 primarily from its 50 percent interest in the Southeast Supply Header (SESH), which went into service in September 2008, compared to equity income of $2 million for the same period of 2008.
Operating income for the year ended December 31, 2009, was $256 million compared to $293 million for the same period of 2008. The decline in operating income was primarily due to higher pension and other operating expenses. Higher revenue from new firm contracts was partially offset by lower revenue from ancillary services and off-system sales. Operating income for the year ended
-more-

 


 

(CENTER POINT LOGO)
For more information contact
Media:
Leticia Lowe

Phone 713.207.7702
Investors:
Marianne Paulsen

Phone 713.207.6500


For Immediate Release
    Page 3 of 5
December 31, 2008, included a net gain of $11 million associated with the sale of two storage development projects and a write-down of pipeline assets removed from service.
In addition to operating income, this segment had equity income of $7 million for the year ended December 31, 2009, primarily from its interest in SESH, which included non-cash charges of $16 million to reflect SESH’s discontinued use of regulatory accounting. For the year ended December 31, 2008, equity income was $36 million primarily from allowance for funds used during construction.
Field Services
The field services segment reported operating income of $22 million for the fourth quarter of 2009 compared to $26 million for the same period of 2008. The decline in operating income was primarily the result of commodity prices that were higher in 2008 than in 2009, partially offset by growth in core gathering throughput.
In addition to operating income, this segment recorded equity income of $2 million in the fourth quarter of 2009 compared to $3 million in the fourth quarter of 2008 from its 50 percent interest in a gas processing plant. The decline was primarily due to lower natural gas liquids prices.
Operating income for the year ended December 31, 2009, was $94 million compared to $147 million for the same period of 2008. The decline in operating income was primarily the result of commodity prices that were significantly lower in 2009 than in 2008, partially offset by growth in core gathering throughput. Operating income for the year ended December 31, 2008, included gains of $17 million associated with the sale of non-strategic assets and the settlement of a contractual dispute. Equity income from the jointly-owned gas processing plant was $8 million for the year ended December 31, 2009, compared to $15 million for the same period of 2008.
Competitive Natural Gas Sales and Services
The competitive natural gas sales and services segment reported operating income of $21 million for the fourth quarter of 2009 compared to $26 million for the same period of 2008. The decline in operating income was due to reduced locational and seasonal price differentials, partially offset by lower operation and maintenance expenses. In addition, operating income for the fourth quarter of 2009 included charges of $1 million resulting from mark-to-market accounting for derivatives associated with certain forward natural gas purchases and sales used to lock in economic margins. The fourth quarter of 2008 included a $6 million write-down of natural gas inventory to the lower of average cost or market.
-more-

 


 

(CENTER POINT LOGO)
For more information contact
Media:
Leticia Lowe

Phone 713.207.7702
Investors:
Marianne Paulsen

Phone 713.207.6500


For Immediate Release
    Page 4 of 5
Operating income for the year ended December 31, 2009, was $21 million compared to $62 million for the same period of 2008. The decline in operating income was due to substantially reduced locational and seasonal price differentials. In addition, operating income for the year ended December 31, 2009, included charges of $23 million resulting from mark-to-market accounting compared to gains of $13 million for the same period of 2008. The year ended December 31, 2009, also included $6 million in inventory write-downs compared to $30 million in inventory write-downs for the same period of 2008.
DIVIDEND DECLARATION
On January 21, 2010, CenterPoint Energy’s board of directors declared a regular quarterly cash dividend of $0.195 per share of common stock payable on March 10, 2010, to shareholders of record as of the close of business on February 16, 2010. This represents more than a 2.6 percent increase over the $0.19 per share of common stock quarterly dividends paid by the company in 2009.
OUTLOOK FOR 2010
CenterPoint Energy expects earnings for 2010 to be in the range of $1.02 to $1.12 per diluted share. 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 timing and cost of certain financing activities and the impact to earnings of various regulatory proceedings. In providing this guidance, the company has not included the impact of any changes in accounting standards, any impact from acquisitions or divestitures, the timing effects of mark-to-market or inventory accounting in the company’s competitive natural gas sales and services business, or the outcome of the TDU’s true-up appeal. The company has also excluded any impact to income from the change in value of Time Warner stocks and the related ZENS securities. For the impact of these factors on 2009 earnings, see the attached reconciliation.
FILING OF FORM 10-K FOR CENTERPOINT ENERGY, INC.
Today, CenterPoint Energy, Inc. filed with the Securities and Exchange Commission (SEC) its Annual Report on Form 10-K for the period ended December 31, 2009. 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 with the SEC and other documents relating to its corporate governance can also be found on that site.
-more-

 


 

(CENTER POINT LOGO)
For more information contact
Media:
Leticia Lowe

Phone 713.207.7702
Investors:
Marianne Paulsen

Phone 713.207.6500


For Immediate Release
    Page 5 of 5
WEBCAST OF EARNINGS CONFERENCE CALL
CenterPoint Energy’s management will host an earnings conference call on Friday, February 26, 2010, 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. 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. Supplemental materials are also available on the company’s Web site.
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 nearly $20 billion. With about 8,800 employees, CenterPoint Energy and its predecessor companies have been in business for more than 135 years. For more information, visit the Web site at www.CenterPointEnergy.com.
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 natural gas and natural gas liquids prices, the impact of unplanned facility outages, and other factors discussed in CenterPoint Energy’s Form 10-K for the fiscal year ended December 31, 2009, and other filings with the SEC.
###

 


 

CenterPoint Energy, Inc. and Subsidiaries
Reconciliation of reported Net Income and diluted EPS to the basis used in providing earnings guidance
                 
    Full Year Ended December 31, 2009  
    Net Income     EPS  
    (in millions)          
As reported
  $ 372     $ 1.01  
Timing effects impacting CES*:
               
Mark-to-market (gains) losses — natural gas derivative contracts
    15       0.04  
Natural gas inventory write-downs
    4       0.01  
ZENS-related mark-to-market (gains) losses:
               
Marketable securities**
    (53 )     (0.15 )
Indexed debt securities
    44       0.12  
Accounting change***
    10       0.03  
 
           
Per earnings guidance
  $ 392     $ 1.06  
 
           
 
*   Competitive natural gas sales and services
 
**   Time Warner Inc., Time Warner Cable Inc. and AOL Inc.
 
***   Non-cash charge to reflect SESH’s discontinued use of regulatory accounting

 


 

CenterPoint Energy, Inc. and Subsidiaries
Statements of Consolidated Income
(Millions of Dollars)
(Unaudited)
                                 
    Quarter Ended     Year Ended  
    December 31,     December 31,  
    2008     2009     2008     2009  
Revenues:
                               
Electric Transmission & Distribution
  $ 445     $ 472     $ 1,916     $ 2,013  
Natural Gas Distribution
    1,250       1,043       4,226       3,384  
Competitive Natural Gas Sales and Services
    896       634       4,528       2,230  
Interstate Pipelines
    182       137       650       598  
Field Services
    61       65       252       241  
Other Operations
    3       2       11       11  
Eliminations
    (63 )     (54 )     (261 )     (196 )
 
                       
Total
    2,774       2,299       11,322       8,281  
 
                       
 
                               
Expenses:
                               
Natural gas
    1,791       1,290       7,466       4,371  
Operation and maintenance
    424       438       1,502       1,664  
Depreciation and amortization
    168       181       708       743  
Taxes other than income taxes
    88       91       373       379  
 
                       
Total
    2,471       2,000       10,049       7,157  
 
                       
Operating Income
    303       299       1,273       1,124  
 
                       
 
                               
Other Income (Expense) :
                               
Gain (loss) on marketable securities
    (66 )     14       (139 )     82  
Gain (loss) on indexed debt securities
    62       (14 )     128       (68 )
Interest and other finance charges
    (122 )     (129 )     (468 )     (513 )
Interest on transition and system restoration bonds
    (34 )     (33 )     (136 )     (131 )
Distribution from AOL Time Warner litigation settlement
          3             3  
Additional distribution to ZENS holders
          (3 )           (3 )
Equity in earnings of unconsolidated affiliates
    5       7       51       15  
Other — net
    4       8       14       39  
 
                       
Total
    (151 )     (147 )     (550 )     (576 )
 
                       
 
                               
Income Before Income Taxes
    152       152       723       548  
 
                               
Income Tax Expense
    (65 )     (47 )     (277 )     (176 )
 
                       
 
                               
Net Income
  $ 87     $ 105     $ 446     $ 372  
 
                       
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K 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     Year Ended  
    December 31,     December 31,  
    2008     2009     2008     2009  
Basic Earnings Per Common Share
  $ 0.25     $ 0.27     $ 1.32     $ 1.02  
 
                       
 
                               
Diluted Earnings Per Common Share
  $ 0.25     $ 0.27     $ 1.30     $ 1.01  
 
                       
 
                               
Dividends Declared per Common Share
  $ 0.1825     $ 0.19     $ 0.73     $ 0.76  
 
                               
Weighted Average Common Shares Outstanding (000):
                               
-Basic
    344,536       390,922       336,387       365,229  
-Diluted
    346,839       393,472       343,555       367,681  
 
                               
Operating Income (Loss) by Segment
                               
 
                               
Electric Transmission & Distribution:
                               
Electric Transmission and Distribution Operations
  $ 55     $ 61     $ 407     $ 414  
Competition Transition Charge
                5        
 
                       
Total Electric Transmission and Distribution Utility
    55       61       412       414  
Transition and System Restoration Bond Companies
    33       34       133       131  
 
                       
Total Electric Transmission & Distribution
    88       95       545       545  
Natural Gas Distribution
    96       99       215       204  
Competitive Natural Gas Sales and Services
    26       21       62       21  
Interstate Pipelines
    66       62       293       256  
Field Services
    26       22       147       94  
Other Operations
    1             11       4  
 
                       
 
                               
Total
  $ 303     $ 299     $ 1,273     $ 1,124  
 
                       
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.

 


 

CenterPoint Energy, Inc. and Subsidiaries
Results of Operations by Segment
(Millions of Dollars)
(Unaudited)
                                                 
    Electric Transmission & Distribution  
    Quarter Ended             Year Ended        
    December 31,     % Diff     December 31,     % Diff  
    2008     2009     Fav/(Unfav)     2008     2009     Fav/(Unfav)  
Results of Operations:
                                               
Revenues:
                                               
Electric transmission and distribution utility
  $ 373     $ 392       5 %   $ 1,593     $ 1,673       5 %
Transition and system restoration bond companies
    72       80       11 %     323       340       5 %
 
                                       
Total
    445       472       6 %     1,916       2,013       5 %
 
                                       
 
                                               
Expenses:
                                               
Operation and maintenance
    201       211       (5 %)     703       774       (10 %)
Depreciation and amortization
    69       70       (1 %)     277       277        
Taxes other than income taxes
    48       50       (4 %)     201       208       (3 %)
Transition and system restoration bond companies
    39       46       (18 %)     190       209       (10 %)
 
                                       
Total
    357       377       (6 %)     1,371       1,468       (7 %)
 
                                       
Operating Income
  $ 88     $ 95       8 %   $ 545     $ 545        
 
                                       
 
                                               
Operating Income:
                                               
Electric transmission and distribution operations
  $ 55     $ 61       11 %   $ 407     $ 414       2 %
Competition transition charge
                      5             (100 %)
Transition and system restoration bond companies
    33       34       3 %     133       131       (2 %)
 
                                       
Total Segment Operating Income
  $ 88     $ 95       8 %   $ 545     $ 545        
 
                                       
 
                                               
Electric Transmission & Distribution Operating Data:
                                               
Actual MWH Delivered
                                               
Residential
    4,635,129       4,774,799       3 %     24,258,254       24,815,397       2 %
Total
    16,316,691       16,632,601       2 %     74,839,972       74,579,298        
 
                                               
Weather (average for service area):
                                               
Percentage of 10-year average:
                                               
Cooling degree days
    88 %     82 %     (6 %)     102 %     105 %     3 %
Heating degree days
    88 %     122 %     34 %     92 %     103 %     11 %
 
                                               
Number of metered customers - end of period:
                                               
Residential
    1,821,267       1,849,019       2 %     1,821,267       1,849,019       2 %
Total
    2,064,854       2,094,210       1 %     2,064,854       2,094,210       1 %
                                                 
    Natural Gas Distribution  
    Quarter Ended             Year Ended        
    December 31,     % Diff     December 31,     % Diff  
    2008     2009     Fav/(Unfav)     2008     2009     Fav/(Unfav)  
Results of Operations:
                                               
Revenues
  $ 1,250     $ 1,043       (17 %)   $ 4,226     $ 3,384       (20 %)
 
                                       
Expenses:
                                               
Natural gas
    928       713       23 %     3,124       2,251       28 %
Operation and maintenance
    153       161       (5 %)     589       639       (8 %)
Depreciation and amortization
    39       40       (3 %)     157       161       (3 %)
Taxes other than income taxes
    34       30       12 %     141       129       9 %
 
                                       
Total
    1,154       944       18 %     4,011       3,180       21 %
 
                                       
Operating Income
  $ 96     $ 99       3 %   $ 215     $ 204       (5 %)
 
                                       
 
                                               
Natural Gas Distribution Operating Data:
                                               
Throughput data in BCF
                                               
Residential
    58       62       7 %     175       173       (1 %)
Commercial and Industrial
    65       69       6 %     236       233       (1 %)
 
                                       
Total Throughput
    123       131       7 %     411       406       (1 %)
 
                                       
 
                                               
Weather (average for service area)
                                               
Percentage of 10-year average:
                                               
Heating degree days
    102 %     110 %     8 %     104 %     105 %     1 %
 
                                               
Number of customers — end of period:
                                               
Residential
    2,987,222       3,002,114             2,987,222       3,002,114        
Commercial and Industrial
    248,476       244,101       (2 %)     248,476       244,101       (2 %)
 
                                       
Total
    3,235,698       3,246,215             3,235,698       3,246,215        
 
                                       
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K 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             Year Ended        
    December 31,     % Diff     December 31,     % Diff  
    2008     2009     Fav/(Unfav)     2008     2009     Fav/(Unfav)  
Results of Operations:
                                               
Revenues
  $ 896     $ 634       (29 %)   $ 4,528     $ 2,230       (51 %)
 
                                       
Expenses:
                                               
Natural gas
    856       603       30 %     4,423       2,165       51 %
Operation and maintenance
    13       9       31 %     39       39        
Depreciation and amortization
    1       1             3       4       (33 %)
Taxes other than income taxes
                      1       1        
 
                                       
Total
    870       613       30 %     4,466       2,209       51 %
 
                                       
Operating Income
  $ 26     $ 21       (19 %)   $ 62     $ 21       (66 %)
 
                                       
 
                                               
Competitive Natural Gas Sales and Services Operating Data:
                                               
Throughput data in BCF
    136       134       (1 %)     528       504       (5 %)
 
                                       
 
                                               
Number of customers — end of period
    9,771       11,168       14 %     9,771       11,168       14 %
 
                                       
                                                 
    Interstate Pipelines  
    Quarter Ended             Year Ended        
    December 31,     % Diff     December 31,     % Diff  
    2008     2009     Fav/(Unfav)     2008     2009     Fav/(Unfav)  
Results of Operations:
                                               
Revenues
  $ 182     $ 137       (25 %)   $ 650     $ 598       (8 %)
 
                                       
Expenses:
                                               
Natural gas
    58       12       79 %     155       97       37 %
Operation and maintenance
    40       43       (8 %)     133       166       (25 %)
Depreciation and amortization
    12       12             46       48       (4 %)
Taxes other than income taxes
    6       8       (33 %)     23       31       (35 %)
 
                                       
Total
    116       75       35 %     357       342       4 %
 
                                       
Operating Income
  $ 66     $ 62       (6 %)   $ 293     $ 256       (13 %)
 
                                       
 
                                               
Pipelines Operating Data:
                                               
Throughput data in BCF
                                               
Transportation
    393       357       (9 %)     1,538       1,592       4 %
 
                                       
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.

 


 

CenterPoint Energy, Inc. and Subsidiaries
Results of Operations by Segment
(Millions of Dollars)
(Unaudited)
                                                 
    Field Services  
    Quarter Ended             Year Ended        
    December 31,     % Diff     December 31,     % Diff  
    2008     2009     Fav/(Unfav)     2008     2009     Fav/(Unfav)  
Results of Operations:
                                               
Revenues
  $ 61     $ 65       7 %   $ 252     $ 241       (4 %)
 
                                       
Expenses:
                                               
Natural gas
    10       15       (50 %)     21       51       (143 %)
Operation and maintenance
    21       23       (10 %)     69       77       (12 %)
Depreciation and amortization
    3       4       (33 %)     12       15       (25 %)
Taxes other than income taxes
    1       1             3       4       (33 %)
 
                                       
Total
    35       43       (23 %)     105       147       (40 %)
 
                                       
Operating Income
  $ 26     $ 22       (15 %)   $ 147     $ 94       (36 %)
 
                                       
 
                                               
Field Services Operating Data:
                                               
Throughput data in BCF
                                               
Gathering
    110       114       4 %     421       426       1 %
 
                                       
                                                 
    Other Operations  
    Quarter Ended             Year Ended        
    December 31,     % Diff     December 31,     % Diff  
    2008     2009     Fav/(Unfav)     2008     2009     Fav/(Unfav)  
Results of Operations:
                                               
Revenues
  $ 3     $ 2       (33 %)   $ 11     $ 11        
Expenses
    2       2                   7        
 
                                       
Operating Income
  $ 1     $       (100 %)   $ 11     $ 4       (64 %)
 
                                       
Capital Expenditures by Segment
(Millions of Dollars)
(Unaudited)
                                 
    Quarter Ended     Year Ended  
    December 31,     December 31,  
    2008     2009     2008     2009  
Capital Expenditures by Segment
                               
Electric Transmission & Distribution
  $ 80     $ 114     $ 336     $ 402  
Hurricane Ike
    4             145       26  
 
                       
Total Electric Transmission & Distribution
    84       114       481       428  
Natural Gas Distribution
    63       44       214       165  
Competitive Natural Gas Sales and Services
    5             8       2  
Interstate Pipelines
    59       58       189       176  
Field Services
    45       131       122       348  
Other Operations
    21       11       39       29  
 
                       
Total
  $ 277     $ 358     $ 1,053     $ 1,148  
 
                       
Interest Expense Detail
(Millions of Dollars)
(Unaudited)
                                 
    Quarter Ended     Year Ended  
    December 31,     December 31,  
    2008     2009     2008     2009  
Interest Expense Detail
                               
Amortization of Deferred Financing Cost
  $ 7     $ 7     $ 25     $ 34  
Capitalization of Interest Cost
    (2 )           (12 )     (4 )
Transition and System Restoration Bond Interest Expense
    34       33       136       131  
Other Interest Expense
    117       122       455       483  
 
                       
Total Interest Expense
  $ 156     $ 162     $ 604     $ 644  
 
                       
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.

 


 

CenterPoint Energy, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Millions of Dollars)
(Unaudited)
                 
    December 31,     December 31,  
    2008     2009  
ASSETS
               
Current Assets:
               
Cash and cash equivalents
  $ 167     $ 740  
Other current assets
    2,868       2,164  
 
           
Total current assets
    3,035       2,904  
 
           
 
               
Property, Plant and Equipment, net
    10,296       10,788  
 
           
 
               
Other Assets:
               
Goodwill
    1,696       1,696  
Regulatory assets
    3,684       3,677  
Other non-current assets
    965       708  
 
           
Total other assets
    6,345       6,081  
 
           
Total Assets
  $ 19,676     $ 19,773  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
 
               
Current Liabilities:
               
Short-term borrowings
  $ 153     $ 55  
Current portion of transition and system restoration bonds long-term debt
    208       241  
Current portion of other long-term debt
    125       662  
Other current liabilities
    2,362       2,080  
 
           
Total current liabilities
    2,848       3,038  
 
           
 
               
Other Liabilities:
               
Accumulated deferred income taxes, net and investment tax credit
    2,632       2,792  
Regulatory liabilities
    821       921  
Other non-current liabilities
    1,172       1,264  
 
           
Total other liabilities
    4,625       4,977  
 
           
 
               
Long-term Debt:
               
Transition and system restoration bonds
    2,381       2,805  
Other
    7,800       6,314  
 
           
Total long-term debt
    10,181       9,119  
 
           
 
               
Shareholders’ Equity
    2,022       2,639  
 
           
Total Liabilities and Shareholders’ Equity
  $ 19,676     $ 19,773  
 
           
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.

 


 

CenterPoint Energy, Inc. and Subsidiaries
Condensed Statements of Consolidated Cash Flows
(Millions of Dollars)
(Unaudited)
                 
    Year Ended December 31,  
    2008     2009  
Cash Flows from Operating Activities:
               
Net income
  $ 446     $ 372  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
    737       780  
Deferred income taxes
    487       269  
Write-down of natural gas inventory
    30       6  
Changes in net regulatory assets
    (366 )      
Changes in other assets and liabilities
    (450 )     398  
Other, net
    (33 )     16  
 
           
Net Cash Provided by Operating Activities
    851       1,841  
 
               
Net Cash Used in Investing Activities
    (1,368 )     (896 )
 
               
Net Cash Provided by (Used in) Financing Activities
    555       (372 )
 
           
 
               
Net Increase in Cash and Cash Equivalents
    38       573  
 
               
Cash and Cash Equivalents at Beginning of Period
    129       167  
 
               
 
           
Cash and Cash Equivalents at End of Period
  $ 167     $ 740  
 
           

 

Exhibit 99.2
 
NYSE: CNP www.CenterPointEnergy.com Fourth Quarter and Full Year 2009 Supplemental Materials February 26, 2010 RIGHT STRATEGY. RIGHT ASSETS. RIGHT PEOPLE.


 

Cautionary Statement Regarding Forward-Looking Information This presentation contains statements concerning our expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied by these statements. You can generally identify our forward-looking statements by the words "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "objective," "plan," "potential," "predict," "projection," "should," "will," or other similar words. We have based our forward-looking statements on our management's beliefs and assumptions based on information currently available to our management at the time the statements are made. We caution you that assumptions, beliefs, expectations, intentions, and projections about future events may and often do vary materially from actual results. Therefore, we cannot assure you that actual results will not differ materially from those expressed or implied by our forward-looking statements. Some of the factors that could cause actual results to differ from those expressed or implied by our forward- looking statements include the timing and amount of our recovery of the true-up components, including, in particular, the results of appeals to the courts of determination on rulings obtained to date, the timing and impact of future regulatory, legislative and IRS decisions, financial market conditions and other factors described in CenterPoint Energy, Inc.'s Form 10-K for the period ended December 31, 2009, under "Risk Factors" and under "Management's Discussion and Analysis of Financial Condition and Results of Operations - Certain Factors Affecting Future Earnings" and in other filings with the SEC by CenterPoint Energy and its subsidiaries. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of this presentation, and we undertake no obligation to publicly update or revise any forward- looking statements.


 

Fourth Quarter 2009 Operating Income Drivers 3 months ended December 31, 2009 (in millions) Interstate Pipelines $(4) Field Services $(4) Other $(1) Competitive Natural Gas Sales & Service $(5) Rate increases Lower bad debt expense Partially offset by: Higher pension expense Lower miscellaneous revenues Higher pension expense and other operating expenses Lower revenue from off- system sales Partially offset by: Higher revenue from new firm contracts Natural Gas Distribution $3 Electric TDU $6 Lower commodity prices Partially offset by: Growth in core gathering throughput 4Q 2008 Customer growth Higher net transmission revenues Earnings on AMS investment Partially offset by: Reduced energy demand Higher O&M 4Q 2009 Lower optimization opportunities around pipeline and storage assets Partially offset by: Lower O&M 2008 inventory write-down $270 $265 Total Operating Income $303 Total Operating Income $299 Securitization Bonds $33 Securitization Bonds $34


 

Full Year 2009 Operating Income Drivers 12 months ended December 31, 2009 Interstate Pipelines $(37) Field Services $(53) Other $(7) Competitive Natural Gas Sales & Service $(41) Higher pension expense Higher other operating expenses Partially offset by: Rate increases Lower bad debt expense Lower revenue from ancillary services and other transportation margins Higher pension expense and other operating expenses 2008 sale of two storage development projects Partially offset by: New firm contracts 2008 write- down of pipeline assets removed from service Natural Gas Distribution $(11) Electric TDU $7 Lower commodity prices 2008 gains from a contract settlement and sale of assets Partially offset by: Growth in core gathering services Higher net transmission revenues Customer growth Earnings on AMS investment Lower net revenues in 2008 due to Hurricane Ike Partially offset by: Reduced energy demand Higher O&M 2008 land sale 2008 refund of prior years' state franchise taxes Lower optimization opportunities around pipeline and storage assets Negative mark- to-market in 2009 versus positive in 2008 Partially offset by: Lower inventory write-downs $1,135 $993 (in millions) 2008 2009 Total Operating Income $1,273 Total Operating Income $1,124 Securitization Bonds & CTC: $133 & $5 Securitization Bonds $131


 

Electric Transmission & Distribution 2009 Operating Income* Drivers Reduced energy demand (in millions) Higher net transmission revenues Earnings on AMS investment Customer growth Other, primarily higher O&M 2008 Impacts: Gain on land sale $9 Franchise tax refund $5 Net reduction from Hurricane Ike $7 2008 2009 * Excludes operating income from transition bonds and competition transition charge of $133 and $5, respectively, for 2008 and operating income from transition and system restoration bonds of $131 for 2009


 

Natural Gas Distribution 2009 Operating Income Drivers Rate increases Lower bad debt expense Higher pension expense Other, primarily higher O&M Higher depreciation and taxes other than income taxes (in millions) 2008 2009


 

Competitive Natural Gas Sales & Services 2009 Operating Income Drivers Mark-to-market: 2009: $23 loss 2008: $13 gain Lower inventory write-downs: 2009: $6 2008: $30 Lower optimization opportunities around pipeline and storage assets (in millions) Other 2008 2009


 

(in millions) Interstate Pipelines 2009 Operating Income Drivers * Margin equals revenues minus natural gas expense Increased margin* from firm contracts, primarily: New Carthage to Perryville contracts New power generation customers Higher pension expense Lower revenues from ancillary services and other transportation margins Higher other operating expenses primarily from new facilities placed into service 2008 impacts: Gain on sale of storage development assets $18 Loss on pipeline abandonment $7 2008 2009


 

Field Services 2009 Operating Income Drivers (in millions) Growth in core gathering services 2008 impacts: Gain from a contract settlement $11 Sale of assets $6 Other, including higher pension expense of $2 2008 2009


 

* Margin equals revenues minus natural gas expense ** Excludes $11 related to a 2008 contract settlement (in millions) $501 $190 Interstate Pipelines Field Services $495 $220** 9% 23%


 

Balance Sheet Improvement Debt Reduction (in millions) Cash from operating activities Construction loan repayment from SESH System restoration bond proceeds Equity Capital expenditures Dividends Other Net Debt* * Excludes transition and system restoration bond companies, also see "Net Debt Reconciliation" and "2009 Transition and System Restoration Bond Cash Flows" on pages 13 and 14, respectively 2008 2009


 

Credit Metrics Credit Ratings * Calculated per CNP's interpretation of S&P methodology; actual calculations may include other adjustments not anticipated ** Black line indicates S&P's target metrics for CNP (in order for the current ratings to be affirmed during the 12-18 month period following publication date) as set forth in S&P's report "Research Update: CenterPoint Energy Inc. Outlook Revised To Negative, Short -Term Rating Lowered to 'A-3'," dated April 30, 2009 3.0x** 13%**


 

Net Debt Reconciliation


 

2009 Transition and System Restoration Bond Cash Flows


 

Equity issued in 2009