CenterPoint Energy Reports First Quarter 2009 Earnings
HOUSTON, April 29, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- CenterPoint Energy, Inc. (NYSE: CNP) today reported net income of $67 million, or $0.19 per diluted share, for the first quarter of 2009 compared to $122 million, or $0.36 per diluted share, for the same period of 2008. Operating income for the first quarter of 2009 was $285 million compared to $336 million for the same period of 2008.
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"A number of charges recorded this quarter masked what would have otherwise been good operating performance by our businesses given the current economic conditions," said David M. McClanahan, president and chief executive officer of CenterPoint Energy. "We expect that these charges will effectively turn around as the year progresses. While reduced deliveries at our electric utility also had a negative impact on our first quarter earnings, our gas utilities, interstate pipelines, field services and competitive gas sales and services units turned in solid performances. We continue to believe that the overall fundamentals of our balanced portfolio of electric and natural gas businesses remain strong and position us well for the future."
OPERATING INCOME BY SEGMENT
Electric Transmission & Distribution
The electric transmission & distribution segment reported operating income of $70 million for the first quarter of 2009, consisting of $37 million from the regulated electric transmission & distribution utility operations (TDU) and $33 million related to transition bonds. Operating income for the first quarter of 2008 was $91 million, consisting of $54 million from the TDU, $32 million related to transition bonds, and $5 million from the competition transition charge (CTC). The CTC was discontinued in February 2008 when the company monetized the remaining true-up balance. Operating income for the TDU benefited from growth of nearly 35,000 metered customers since March 2008 and higher net transmission revenues, which were more than offset by reduced usage due to milder winter weather and customer conservation.
Natural Gas Distribution
The natural gas distribution segment reported operating income of $118 million for the first quarter of 2009 compared to $121 million for the same period of 2008. Operating income benefited from rate increases and higher miscellaneous revenues, offset by higher pension expense and reduced sales as a result of the economic downturn and customer conservation.
Interstate Pipelines
The interstate pipelines segment reported operating income of $69 million for the first quarter of 2009 compared to $71 million for the same period of 2008. Higher revenue from the Carthage to Perryville pipeline was offset by higher operation and maintenance expenses in part related to increased pension expense.
In addition to operating income, this business had an equity loss of $2 million for the first quarter of 2009 from its 50 percent interest in the Southeast Supply Header (SESH), a new pipeline that went into service in September 2008. The company recorded a non-cash charge of $5 million during the quarter to reflect SESH's decision to discontinue the use of Statement of Financial Accounting Standards No.71 - Accounting for the Effects of Certain Types of Regulation. The loss more than offset the equity income of $3 million from SESH's operations. In the first quarter of 2008, equity income was $5 million from pre-operating allowance for funds used during construction.
Field Services
The field services segment reported operating income of $26 million for the first quarter of 2009 compared to $45 million for the same period of 2008. Operating income for the first quarter of 2008 included gains of $17 million associated with the settlement of a contractual dispute and the sale of non-strategic assets. Excluding these prior year gains, operating income for the first quarter of 2009 declined slightly.
In addition to operating income, this business had equity income of $2 million in the first quarter of 2009 compared to $4 million in the first quarter of 2008 from its 50 percent interest in a gas processing plant. The decline was due primarily to lower natural gas liquids prices.
Competitive Natural Gas Sales and Services
The competitive natural gas sales and services segment reported operating income of $2 million for the first quarter of 2009 compared to $6 million for the same period of 2008. The decline in operating income was due primarily to an inventory write-down to the lower of average cost or market in the first quarter of 2009. In addition, operating income for the first quarter of 2009 included charges of $19 million resulting from mark-to-market accounting for derivatives used to lock in economic margins of certain forward natural gas sales compared to charges of $22 million for the same period of 2008.
DIVIDEND DECLARATION
On April 23, 2009, CenterPoint Energy's board of directors declared a regular quarterly cash dividend of $0.19 per share of common stock payable on June 10, 2009, to shareholders of record as of the close of business on May 15, 2009.
OUTLOOK REAFFIRMED FOR 2009
CenterPoint Energy reaffirmed its 2009 earnings guidance of $1.05 to $1.15 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, including recovery of costs associated with Hurricane Ike. The company 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, the timing effects of mark-to-market or inventory accounting in our 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.
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 March 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 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 Wednesday, April 29, 2009, 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.
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 $19 billion. With about 8,800 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.
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 fiscal year ended December 31, 2008, CenterPoint Energy's Form 10-Q for the period ended March 31, 2009, and other filings with the SEC.
For more information contact
Media:
Leticia Lowe
Phone 713.207.7702
Investors:
Marianne Paulsen
Phone 713.207.6500
CenterPoint Energy, Inc. and Subsidiaries
Statements of Consolidated Income
(Millions of Dollars)
(Unaudited)
Quarter Ended
March 31,
-----------
2008 2009
---- ----
Revenues:
Electric Transmission & Distribution $409 $412
Natural Gas Distribution 1,700 1,421
Competitive Natural Gas Sales and Services 1,120 765
Interstate Pipelines 133 153
Field Services 58 57
Other Operations 3 3
Eliminations (60) (45)
--- ---
Total 3,363 2,766
----- -----
Expenses:
Natural gas 2,393 1,789
Operation and maintenance 365 413
Depreciation and amortization 158 166
Taxes other than income taxes 111 113
--- ---
Total 3,027 2,481
----- -----
Operating Income 336 285
--- ---
Other Income (Expense) :
Loss on marketable securities (54) (34)
Gain on indexed debt securities 50 22
Interest and other finance charges (116) (129)
Interest on transition bonds (33) (33)
Equity in earnings of unconsolidated affiliates 9 -
Other - net 4 4
- -
Total (140) (170)
---- ----
Income Before Income Taxes 196 115
Income Tax Expense (74) (48)
--- ---
Net Income $122 $67
==== ===
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
March 31,
------------
2008 2009
---- ----
Basic Earnings Per Common Share $0.37 $0.19
===== =====
Diluted Earnings Per Common Share $0.36 $0.19
===== =====
Dividends Declared per Common Share $0.1825 $0.19
Weighted Average Common Shares Outstanding (000):
- Basic 327,279 347,496
- Diluted 339,448 349,157
Operating Income by Segment
----------------------------
Electric Transmission & Distribution:
Electric Transmission and Distribution Operations $54 $37
Competition Transition Charge 5 -
--- ---
Total Electric Transmission and Distribution
Utility 59 37
Transition Bond Companies 32 33
--- ---
Total Electric Transmission & Distribution 91 70
Natural Gas Distribution 121 118
Competitive Natural Gas Sales and Services 6 2
Interstate Pipelines 71 69
Field Services 45 26
Other Operations 2 -
--- ---
Total $336 $285
==== ====
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
March 31,
---------------- % Diff
2008 2009 Fav/(Unfav)
---- ---- -----------
Results of Operations:
Revenues:
Electric transmission and
distribution utility $346 $346 -
Transition bond companies 63 66 5%
--- ---
Total 409 412 1%
--- ---
Expenses:
Operation and maintenance 168 188 (12%)
Depreciation and
amortization 66 68 (3%)
Taxes other than income
taxes 53 53 -
Transition bond companies 31 33 (6%)
--- ---
Total 318 342 (8%)
--- ---
Operating Income $91 $70 (23%)
=== ===
Operating Income:
Electric transmission and
distribution operations $54 $37 (31%)
Competition transition
charge 5 - (100%)
Transition bond companies 32 33 3%
--- ---
Total Segment Operating
Income $91 $70 (23%)
=== ===
Electric Transmission &
Distribution
Operating Data:
Actual MWH Delivered
Residential 4,403,312 3,966,519 (10%)
Total 16,569,691 15,142,308 (9%)
Weather (average for service
area):
Percentage of 10-year
average:
Cooling degree days 124% 120% (4%)
Heating degree days 96% 89% (7%)
Number of metered
customers - end of period:
Residential 1,806,542 1,838,766 2%
Total 2,048,316 2,082,930 2%
Natural Gas Distribution
------------------------
Quarter Ended
March 31,
--------- % Diff
2008 2009 Fav/(Unfav)
---- ---- -----------
Results of Operations:
Revenues $1,700 $1,421 (16%)
------ ------
Expenses:
Natural gas 1,333 1,045 22%
Operation and maintenance 156 169 (8%)
Depreciation and
amortization 39 40 (3%)
Taxes other than income
taxes 51 49 4%
--- ---
Total 1,579 1,303 17%
----- -----
Operating Income $121 $118 (2%)
==== ====
Natural Gas Distribution
Operating Data:
Throughput data in BCF
Residential 84 78 (7%)
Commercial and Industrial 83 73 (12%)
--- ---
Total Throughput 167 151 (10%)
=== ===
Weather (average for
service area)
Percentage of 10-year
average:
Heating degree days 106% 102% (4%)
Number of customers - end of
period:
Residential 2,974,411 2,996,455 1%
Commercial and Industrial 251,612 246,405 (2%)
------- -------
Total 3,226,023 3,242,860 1%
========= =========
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
March 31,
--------- % Diff
2008 2009 Fav/(Unfav)
---- ---- -----------
Results of Operations:
Revenues $1,120 $765 (32%)
------ ----
Expenses:
Natural gas 1,105 752 32%
Operation and maintenance 8 10 (25%)
Depreciation and amortization 1 1 -
Taxes other than income taxes - - -
--- ---
Total 1,114 763 32%
----- ---
Operating Income $6 $2 (67%)
=== ===
Competitive Natural Gas Sales and Services
Operating Data:
Throughput data in BCF 138 141 2%
=== ===
Number of customers - end of period 8,751 10,862 24%
===== ======
Interstate Pipelines
--------------------
Quarter
Ended
March 31,
--------- % Diff
2008 2009 Fav/(Unfav)
---- ---- -----------
Results of Operations:
Revenues $133 $153 15%
---- ----
Expenses:
Natural gas 15 29 (93%)
Operation and maintenance 30 35 (17%)
Depreciation and amortization 12 12 -
Taxes other than income taxes 5 8 (60%)
--- ---
Total 62 84 (35%)
-- --
Operating Income $71 $69 (3%)
=== ===
Pipelines Operating Data:
Throughput data in BCF
Transportation 424 467 10%
=== ===
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
March 31,
--------- % Diff
2008 2009 Fav/(Unfav)
---- ---- -----------
Results of Operations:
Revenues $58 $57 (2%)
--- ---
Expenses:
Natural gas (2) 7 (450%)
Operation and maintenance 11 19 (73%)
Depreciation and amortization 3 4 (33%)
Taxes other than income taxes 1 1 -
--- ---
Total 13 31 (138%)
--- ---
Operating Income $45 $26 (42%)
=== ===
Field Services Operating Data:
Throughput data in BCF
Gathering 98 104 6%
=== ===
Other Operations
----------------
Quarter
Ended
March 31,
--------- % Diff
2008 2009 Fav/(Unfav)
---- ---- -----------
Results of Operations:
Revenues $3 $3 -
Expenses 1 3 (200%)
--- ---
Operating Income $2 $- (100%)
=== ===
Capital Expenditures by Segment
(Millions of Dollars)
(Unaudited)
Quarter
Ended
March 31,
---------
2008 2009
---- ----
Capital Expenditures by Segment
Electric Transmission & Distribution $89 $81
Hurricane Ike - 16
--- ---
Total Electric Transmission & Distribution 89 97
Natural Gas Distribution 38 34
Competitive Natural Gas Sales and Services 1 1
Interstate Pipelines 28 47
Field Services 18 38
Other Operations 8 7
--- ---
Total $182 $224
==== ====
Interest Expense Detail
(Millions of Dollars)
(Unaudited)
Quarter
Ended
March 31,
---------
2008 2009
---- ----
Interest Expense Detail
Amortization of Deferred Financing Cost $6 $9
Capitalization of Interest Cost (3) (2)
Transition Bond Interest Expense 33 33
Other Interest Expense 113 122
--- ---
Total Interest Expense $149 $162
==== ====
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, March 31,
2008 2009
---- ----
ASSETS
Current Assets:
Cash and cash equivalents $167 $65
Other current assets 2,868 2,009
----- -----
Total current
assets 3,035 2,074
----- -----
Property, Plant and Equipment, net 10,296 10,400
------ ------
Other Assets:
Goodwill 1,696 1,696
Regulatory assets 3,684 3,643
Other non-current assets 965 997
--- ---
Total other assets 6,345 6,336
----- -----
Total Assets $19,676 $18,810
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings $153 $215
Current portion of transition bond
long-term debt 208 211
Current portion of other long-term debt 125 133
Other current liabilities 2,362 1,636
----- -----
Total current liabilities 2,848 2,195
----- -----
Other Liabilities:
Accumulated deferred income taxes, net and
investment tax credit 2,633 2,608
Regulatory liabilities 821 847
Other non-current liabilities 1,156 1,216
----- -----
Total other liabilities 4,610 4,671
----- -----
Long-term Debt:
Transition bond 2,381 2,274
Other 7,800 7,601
----- -----
Total long-term debt 10,181 9,875
------ -----
Shareholders' Equity 2,037 2,069
----- -----
Total Liabilities and
Shareholders' Equity $19,676 $18,810
======= =======
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)
Three
Months
Ended
March 31,
----------
2008 2009
---- ----
Cash Flows from Operating Activities:
Net income $122 $67
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 166 176
Deferred income taxes 27 30
Write-down of natural gas inventory - 6
Changes in net regulatory assets 14 21
Changes in other assets and liabilities 226 132
Other, net 12 1
--- ---
Net Cash Provided by Operating Activities 567 433
Net Cash Used in Investing Activities (312) (261)
Net Cash Used in Financing Activities (314) (274)
---- ----
Net Decrease in Cash and Cash Equivalents (59) (102)
Cash and Cash Equivalents at Beginning of Period 129 167
--- ---
Cash and Cash Equivalents at End of Period $70 $65
=== ===
Reference is made to the Notes to the Consolidated Financial
Statements contained in the Quarterly Report on Form 10-Q of
CenterPoint Energy, Inc.
SOURCE CenterPoint Energy, Inc.
http://www.centerpointenergy.com
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