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): AUGUST 3, 2006
----------
CENTERPOINT ENERGY, INC.
(Exact name of registrant as specified in its charter)
TEXAS 1-31447 74-0694415
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) 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):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] 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 August 3, 2006, CenterPoint Energy, Inc. ("CenterPoint Energy") reported
second quarter 2006 earnings. For additional information regarding CenterPoint
Energy's second quarter 2006 earnings, please refer to CenterPoint Energy's
press release attached to this report as Exhibit 99.1 (the "Press Release"),
which Press Release is incorporated by reference herein. The information in the
Press Release is being furnished, not filed, pursuant to Item 2.02. Accordingly,
the information in the Press Release 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 August 3, 2006 regarding CenterPoint Energy,
Inc.'s second quarter 2006 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: August 3, 2006 By: /s/ James S. Brian
------------------------------------
James S. Brian
Senior Vice President and
Chief Accounting Officer
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- ------- -------------------
99.1 Press Release issued August 3, 2006 regarding CenterPoint Energy,
Inc.'s second quarter 2006 earnings
EXHIBIT 99.1
(CENTERPOINT ENERGY 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 6
- --------------------------------------------------------------------------------
CENTERPOINT ENERGY REPORTS SECOND QUARTER 2006 EARNINGS
HOUSTON, TX -- AUGUST 3, 2006 - CenterPoint Energy, Inc. (NYSE: CNP)
today reported net income of $194 million, or $0.61 per diluted share, for the
second quarter of 2006 compared to $54 million, or $0.16 per diluted share, for
the same period of 2005. Income from continuing operations before extraordinary
item for the second quarter of 2006 was also $194 million, or $0.61 per diluted
share, compared to $27 million, or $0.09 per diluted share, for the second
quarter of 2005.
Agreements have been reached on the terms of two settlements that had
an impact on net income for the second quarter of 2006. The first was an
agreement with the Internal Revenue Service (IRS) on terms of a settlement
regarding the tax treatment of the company's Zero Premium Exchangeable
Subordinated Notes (ZENS) and its former Automatic Common Exchange Securities
(ACES). This agreement, which is subject to approval by the Joint Committee on
Taxation of the U. S. Congress, resulted in a reduction to the company's
previously accrued tax and related interest reserves, adding $119 million ($0.38
per diluted share) to income. The second was an agreement settling all issues
related to the remand to the Texas Public Utility Commission (PUC) of the
company's 2001 unbundled cost of service order (UCOS) which reduced income by
$21 million after-tax, or $0.07 per diluted share.
Net income for the second quarter of 2005 included an extraordinary
gain of $30 million, or $0.08 per diluted share, reflecting an adjustment to the
extraordinary loss recorded in the second half of 2004 to write down
generation-related regulatory assets. In addition, net income for the second
quarter of 2005 included a loss of $3 million, or $0.01 per diluted share, from
discontinued operations.
For the six months ended June 30, 2006, net income was $282 million, or
$0.89 per diluted share, compared to $121 million, or $0.35 per diluted share,
for the same period of 2005. Income from continuing operations before
extraordinary item for the six months ended June 30, 2006, was $282 million, or
$0.89 per diluted share, compared to $94 million, or $0.28 per diluted share,
for the same period of 2005. The same factors described above for the second
quarter periods impacted the six-month periods for 2006 and 2005.
"I'm very pleased with the overall performance of our business and the
progress we are achieving," said David M. McClanahan, president and chief
executive officer of CenterPoint Energy. "This continued strong performance,
combined with the resolution of a number of legacy issues, including our recent
settlements of certain tax and regulatory matters, positions the company well
for the future."
-more-
(CENTERPOINT ENERGY 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 6
- --------------------------------------------------------------------------------
OPERATING INCOME BY SEGMENT DETAILED
ELECTRIC TRANSMISSION & DISTRIBUTION
The electric transmission & distribution segment reported operating
income of $151 million in the second quarter of 2006, consisting of $119 million
for the regulated electric transmission & distribution utility (TDU) and $32
million related to transition bonds, which is an amount sufficient to pay
interest on the bonds. Operating income for the second quarter of 2005 totaled
$122 million, consisting of $113 million for the TDU and $9 million related to
transition bonds.
The TDU's revenues continued to benefit from solid customer growth,
with nearly 60,000 metered customers added since June 2005. Revenues also
increased due to the competition transition charge (CTC) implemented in
September of 2005, and favorable weather. More than offsetting the TDU's revenue
growth was the impact related to the resolution of the 2001 UCOS order, which
was recorded as a reduction to revenues of $32 million. Operation and
maintenance expenses decreased primarily due to lower employee benefit expenses.
Operating income for the six months ended June 30, 2006, was $261
million, consisting of $197 million for the TDU, which includes the $32 million
adverse impact related to the resolution of the 2001 UCOS order, and $64 million
related to transition bonds. Operating income for the same period of 2005
totaled $202 million, consisting of $184 million for the TDU and $18 million
related to transition bonds.
NATURAL GAS DISTRIBUTION
The natural gas distribution segment reported an operating loss of $2
million for the second quarter of 2006 compared to operating income of $9
million for the same period of 2005. Higher revenues from rate increases and
rate design changes, along with the addition of nearly 32,000 customers since
June 2005, were partially offset by decreased customer usage. Operation and
maintenance expenses increased primarily due to costs associated with staff
reductions, increased bad debt expense due to high natural gas prices, and a
write-off of certain rate case expenses.
Operating income for the six months ended June 30, 2006, was $101
million compared to $132 million for the same period of 2005. In addition to the
factors noted above, operating income for the six months ended June 30, 2006,
was adversely affected by unfavorable weather.
-more-
(CENTERPOINT ENERGY 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 6
- --------------------------------------------------------------------------------
COMPETITIVE NATURAL GAS SALES AND SERVICES
The competitive natural gas sales and services segment reported
operating income of $7 million for the second quarter of 2006 compared to $10
million for the same period of 2005. Operating income from higher sales to
utilities and favorable basis differentials across the pipeline capacity that
the company controls was more than offset by a charge of $17 million to reflect
the write-down of natural gas inventory to the lower of average cost or market.
The company purchases and stores natural gas to meet certain future sales
requirements and enters into derivative contracts to hedge the economic value of
the future sales. Therefore, operating income in the future periods, when these
sales occur, is expected to be higher as a result of the inventory write-downs
taken in the first two quarters of this year.
Operating income for the six months ended June 30, 2006, was $32
million compared to $26 million for the same period of 2005.
PIPELINES AND FIELD SERVICES
The pipelines and field services segment reported operating income of
$61 million for the second quarter of 2006 compared to $52 million for the same
period of 2005. This segment's businesses continue to benefit from favorable
dynamics in the markets for natural gas gathering and transportation services
along the Gulf Coast and Mid-Continent regions where they operate. Within this
segment, the pipeline business achieved higher operating income ($40 million vs.
$35 million) resulting from increased demand for transportation due to favorable
basis differentials across the system and higher demand for ancillary services.
The field services business achieved higher operating income ($21 million vs.
$17 million) driven by increased throughput, greater demand for ancillary
services and higher commodity prices. In addition, this business recorded equity
income of $2 million in the second quarter of 2006 ($1 million for the same
period in 2005) from its 50 percent interest in a jointly-owned gas processing
plant. These amounts are included in Other -- net under the Other Income
(Expense) caption.
Operating income for the six months ended June 30, 2006, was $134
million compared to $116 million for the same period of 2005. The pipeline
business achieved operating income of $89 million for the six months ended June
30, 2006, compared to $83 million for the same period of 2005. The field
services business achieved operating income of $45 million for the six months
ended June 30, 2006, compared to $33 million for the same period of 2005. Equity
income from the jointly-owned gas processing plant was $5 million for the six
months ended June 30, 2006, compared to $3 million for the same period of 2005.
-more-
(CENTERPOINT ENERGY 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 6
- --------------------------------------------------------------------------------
OTHER OPERATIONS
The company's other operations reported operating income of $3 million
for the second quarter of 2006 compared to an operating loss of $7 million for
the same period of 2005.
For the six months ended June 30, 2006, other operations reported an
operating loss of $2 million compared to an operating loss of $14 million for
the same period of 2005.
OTHER SECOND QUARTER 2006 EVENTS
SETTLEMENT OF ZENS AND ACES
During the second quarter of 2006, the company reached agreement with
the IRS on a settlement regarding the ZENS and ACES issues and signed a Closing
Agreement on July 17, 2006, for the tax years 1999 through 2029 with respect to
the ZENS. The settlement and Closing Agreement are subject to approval by the
Joint Committee on Taxation of the U.S. Congress. Under the terms of the
settlement, the company will pay approximately $64 million in previously accrued
taxes associated with the ACES and the ZENS and will reduce its future interest
deductions associated with the ZENS.
As a result of the agreement, the company reduced its previously
accrued tax and related interest reserves by $119 million in the second quarter
of 2006, and will no longer accrue a quarterly reserve.
SETTLEMENT OF CENTERPOINT ENERGY HOUSTON ELECTRIC (CEHE) RATE CASE AND 2001
UCOS REMAND
On July 31, 2006, CEHE entered into a settlement agreement with parties
to its pending rate case. Under the terms of the settlement, which must be
approved by the PUC, CEHE's base rate revenues will be reduced by approximately
$58 million per year. In addition, CEHE will increase its spending on energy
efficiency programs by $10 million per year and will fund $10 million per year
for programs providing financial assistance to qualified low-income customers in
its service territory. The settlement includes a base rate freeze through June
of 2010.
The settlement also resolved all issues related to the remand of the
PUC's order in CEHE's 2001 UCOS case. Under the terms of the settlement, CEHE
agreed to provide rate credits of approximately $8 million per year to retail
and wholesale customers until a total of $32 million has been credited. This
impact was recorded in the second quarter of 2006.
-more-
(CENTERPOINT ENERGY 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 6
- --------------------------------------------------------------------------------
DIVIDEND DECLARATION
On July 27, 2006, CenterPoint Energy's board of directors declared a
regular quarterly cash dividend of $0.15 per share of common stock payable on
September 8, 2006, to shareholders of record as of the close of business on
August 16, 2006.
OUTLOOK FOR 2006
CenterPoint Energy continues to expect diluted earnings per share for
2006 to be in the range of $0.90 to $1.00. This guidance includes an estimated
impact of the settlement of CEHE's rate case but excludes the one-time impact of
$0.38 per diluted share related to the company's settlement regarding the tax
treatment of the ZENS and ACES and the one-time impact of $0.07 per diluted
share related to the settlement of the 2001 UCOS order. This guidance takes into
consideration various economic and operational assumptions related to the
business segments in which the company operates. In particular, the company has
made certain assumptions regarding the impact to earnings of various other
regulatory proceedings but cannot predict the ultimate outcome of any of those
proceedings. In providing this guidance, the company has not projected the
impact of any potential changes in accounting standards, any impact from
acquisitions or divestitures, or the outcomes of pending legal proceedings
related to CEHE's true-up appeal.
WEBCAST OF EARNINGS CONFERENCE CALL
CenterPoint Energy's management will host an earnings conference call
on Thursday, August 3, 2006, at 10:30 a.m. Central time or 11:30 a.m. Eastern
time. Interested parties may listen to a live audio broadcast of the conference
call at www.CenterPointEnergy.com/investors/events. A replay of the call can be
accessed approximately two hours after the completion of the call and will be
archived on the web site for at least one year.
CenterPoint Energy, Inc., headquartered in Houston, Texas, is a
domestic energy delivery company that includes electric transmission &
distribution, natural gas distribution, competitive natural gas sales and
services, and pipeline and field services operations. The company serves more
than five million metered customers primarily in Arkansas, Louisiana, Minnesota,
Mississippi, Oklahoma, and Texas. Assets total approximately $16 billion. With
about 9,000 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.
-more-
(CENTERPOINT ENERGY LOGO) For more information contact
MEDIA:
LETICIA LOWE
Phone 713.207.7702
INVESTORS:
MARIANNE PAULSEN
Phone 713.207.6500
FOR IMMEDIATE RELEASE Page 6 of 6
- --------------------------------------------------------------------------------
This news release includes forward-looking statements. Actual events
and results may differ materially from those projected. The statements in this
news release regarding future financial performance and results of operations
and other statements that are not historical facts are forward-looking
statements. Factors that could affect actual results include the timing and
outcome of appeals from the true-up proceedings, the timing and impact of future
regulatory, legislative and IRS decisions, effects of competition, weather
variations, changes in CenterPoint Energy's or its subsidiaries' business plans,
financial market conditions, the timing and extent of changes in commodity
prices, particularly natural gas, the impact of unplanned facility outages, and
other factors discussed in CenterPoint Energy's and its subsidiaries' Form 10-Ks
for the period ended December 31, 2005, Form 10-Qs for the periods ended March
31, 2006, and June 30, 2006, and other filings with the Securities and Exchange
Commission.
###
CenterPoint Energy, Inc. and Subsidiaries
Statements of Consolidated Income
(Millions of Dollars)
(Unaudited)
Quarter Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2005 2006 2005 2006
------- ------- ------- -------
Revenues:
Electric Transmission & Distribution $ 414 $ 456 $ 759 $ 841
Natural Gas Distribution 541 549 1,870 2,029
Competitive Natural Gas Sales and Services 845 750 1,770 1,913
Pipelines and Field Services 125 135 246 260
Other Operations 4 5 11 9
Eliminations (87) (52) (219) (132)
------- ------- ------- -------
Total 1,842 1,843 4,437 4,920
------- ------- ------- -------
Expenses:
Natural gas 1,103 1,035 2,884 3,228
Operation and maintenance 325 340 638 671
Depreciation and amortization 136 153 266 293
Taxes other than income taxes 92 95 187 202
------- ------- ------- -------
Total 1,656 1,623 3,975 4,394
------- ------- ------- -------
Operating Income 186 220 462 526
------- ------- ------- -------
Other Income (Expense):
Gain (Loss) on Time Warner investment (18) 11 (59) (3)
Gain (Loss) on indexed debt securities 24 (11) 63 (1)
Interest and other finance charges (180) (118) (353) (233)
Interest on transition bonds (9) (33) (18) (66)
Return on true-up balance 35 -- 69 --
Other - net 7 9 11 15
------- ------- ------- -------
Total (141) (142) (287) (288)
------- ------- ------- -------
Income from Continuing Operations Before
Income Taxes and Extraordinary Item 45 78 175 238
Income Tax (Expense) Benefit (18) 116 (81) 44
------- ------- ------- -------
Income from Continuing Operations Before
Extraordinary Item 27 194 94 282
------- ------- ------- -------
Discontinued Operations:
Income (Loss) from Texas Genco, net of tax (3) -- 11 --
Loss on Disposal of Texas Genco, net of tax -- -- (14) --
------- ------- ------- -------
Total (3) -- (3) --
------- ------- ------- -------
Income Before Extraordinary Item 24 194 91 282
Extraordinary Item, net of tax 30 -- 30 --
------- ------- ------- -------
Net Income $ 54 $ 194 $ 121 $ 282
======= ======= ======= =======
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 Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2005 2006 2005 2006
--------- --------- --------- ---------
Basic Earnings Per Common Share:
Income from Continuing Operations $ 0.09 $ 0.62 $ 0.30 $ 0.91
Loss from Discontinued Operations (0.01) -- (0.01) --
Extraordinary item, net of tax 0.10 -- 0.10 --
Net Income $ 0.18 $ 0.62 $ 0.39 $ 0.91
========= ========= ========= =========
Diluted Earnings Per Common Share:
Income from Continuing Operations $ 0.09 $ 0.61 $ 0.28 $ 0.89
Loss from Discontinued Operations (0.01) -- (0.01) --
Extraordinary item, net of tax 0.08 -- 0.08 --
Net Income $ 0.16 $ 0.61 $ 0.35 $ 0.89
========= ========= ========= =========
Dividends Declared per Common Share $ 0.07 $ 0.15 $ 0.27 $ 0.30
Weighted Average Common Shares Outstanding (000):
- Basic 309,098 311,440 308,786 311,145
- Diluted 361,436 316,816 361,076 317,744
OPERATING INCOME (LOSS) BY SEGMENT
- ----------------------------------
Electric Transmission & Distribution:
Transmission & Distribution Operations $ 113 $ 119 $ 184 $ 197
Transition Bond Companies 9 32 18 64
--------- --------- --------- ---------
Total Electric Transmission & Distribution 122 151 202 261
Natural Gas Distribution 9 (2) 132 101
Competitive Natural Gas Sales and Services 10 7 26 32
Pipelines and Field Services 52 61 116 134
Other Operations (7) 3 (14) (2)
--------- --------- --------- ---------
Total $ 186 $ 220 $ 462 $ 526
========= ========= ========= =========
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 Six Months Ended
June 30, June 30,
--------------------------- % Diff --------------------------- % Diff
2005 2006 Fav/(Unfav) 2005 2006 Fav/(Unfav)
----------- ----------- ----------- ----------- ----------- -----------
RESULTS OF OPERATIONS:
Revenues:
Electric transmission and
distribution utility $ 388 $ 386 (1%) $ 711 $ 717 1%
Transition bond companies 26 70 169% 48 124 158%
----------- ----------- ----------- -----------
Total 414 456 10% 759 841 11%
----------- ----------- ----------- -----------
Expenses:
Operation and maintenance 153 147 4% 291 281 3%
Depreciation and amortization 64 61 5% 128 124 3%
Taxes other than income taxes 58 59 (2%) 108 115 (6%)
Transition bond companies 17 38 (124%) 30 60 (100%)
----------- ----------- ----------- -----------
Total 292 305 (4%) 557 580 (4%)
----------- ----------- ----------- -----------
Operating Income $ 122 $ 151 24% $ 202 $ 261 29%
=========== =========== =========== ===========
Operating Income - Electric transmission
and distribution utility 113 119 5% 184 197 7%
Operating Income - Transition bond companies 9 32 256% 18 64 256%
----------- ----------- ----------- -----------
Total Segment Operating Income $ 122 $ 151 24% $ 202 $ 261 29%
=========== =========== =========== ===========
ELECTRIC TRANSMISSION & DISTRIBUTION
OPERATING DATA:
ACTUAL MWH DELIVERED
Residential 6,593,895 6,807,984 3% 10,735,559 10,794,374 1%
Total 18,956,313 20,422,341 8% 34,782,627 36,409,221 5%
WEATHER (AVERAGE FOR SERVICE AREA):
Percentage of normal:
Cooling degree days 103% 111% 8% 105% 114% 9%
Heating degree days 47% -- -- 76% 60% (16%)
AVERAGE NUMBER OF METERED CUSTOMERS:
Residential 1,675,573 1,703,130 2% 1,668,447 1,723,983 3%
Total 1,904,090 1,965,180 3% 1,895,556 1,958,005 3%
NATURAL GAS DISTRIBUTION
----------------------------------------------------------------------------------
Quarter Ended Six Months Ended
June 30, June 30,
--------------------------- % Diff --------------------------- % Diff
2005 2006 Fav/(Unfav) 2005 2006 Fav/(Unfav)
----------- ----------- ----------- ----------- ----------- -----------
RESULTS OF OPERATIONS:
Revenues $ 541 $ 549 1% $ 1,870 $ 2,029 9%
---------- ----------- ---------- ----------
Expenses:
Natural gas 341 343 (1%) 1,338 1,489 (11%)
Operation and maintenance 126 142 (13%) 261 292 (12%)
Depreciation and amortization 39 37 5% 76 75 1%
Taxes other than income taxes 26 29 (12%) 63 72 (14%)
---------- ----------- ---------- ----------
Total 532 551 (4%) 1,738 1,928 (11%)
---------- ----------- ---------- ----------
Operating Income (Loss) $ 9 $ (2) (122%) $ 132 $ 101 (23%)
========== =========== ========== ==========
NATURAL GAS DISTRIBUTION OPERATING DATA:
THROUGHPUT DATA IN BCF
Residential 21 17 (19%) 98 84 (14%)
Commercial and Industrial 43 44 2% 120 116 (3%)
---------- ----------- ---------- ----------
Total Throughput 64 61 (5%) 218 200 (8%)
========== =========== ========== ==========
WEATHER (AVERAGE FOR SERVICE AREA)
Percentage of normal:
Heating degree days 86% 60% (26%) 91% 81% (10%)
AVERAGE NUMBER OF CUSTOMERS:
Residential 2,833,773 2,860,802 1% 2,842,645 2,872,978 1%
Commercial and Industrial 246,032 253,725 3% 247,429 253,505 2%
---------- ----------- ---------- ----------
Total 3,079,805 3,114,527 1% 3,090,074 3,126,483 1%
========== =========== ========== ==========
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 Six Months Ended
June 30, June 30,
------------------- % Diff ------------------- % Diff
2005 2006 Fav/(Unfav) 2005 2006 Fav/(Unfav)
------- ------- ----------- ------- ------- -----------
RESULTS OF OPERATIONS:
Revenues $ 845 $ 750 (11%) $ 1,770 $ 1,913 8%
------- ------- ------- -------
Expenses:
Natural gas 828 735 11% 1,730 1,864 (8%)
Operation and maintenance 7 7 -- 12 15 (25%)
Depreciation and amortization -- 1 -- 1 1 --
Taxes other than income taxes -- -- -- 1 1 --
------- ------- ------- -------
Total 835 743 11% 1,744 1,881 (8%)
------- ------- ------- -------
Operating Income $ 10 $ 7 (30%) $ 26 $ 32 23%
======= ======= ======= =======
COMPETITIVE NATURAL GAS SALES AND SERVICES
OPERATING DATA:
THROUGHPUT DATA IN BCF
Wholesale - third parties 72 72 -- 154 161 5%
Wholesale - affiliates 21 8 (62%) 35 19 (46%)
Retail 34 31 (9%) 81 79 (2%)
Pipeline 12 10 (17%) 31 20 (35%)
------- ------- ------- -------
Total Throughput 139 121 (13%) 301 279 (7%)
======= ======= ======= =======
AVERAGE NUMBER OF CUSTOMERS:
Wholesale 135 132 (2%) 130 138 6%
Retail 6,237 6,468 4% 6,207 6,501 5%
Pipeline 145 136 (6%) 151 138 (9%)
------- ------- ------- -------
Total 6,517 6,736 3% 6,488 6,777 4%
======= ======= ======= =======
PIPELINES AND FIELD SERVICES
------------------------------------------------------------------
Quarter Ended Six Months Ended
June 30, June 30,
------------------- % Diff ------------------- % Diff
2005 2006 Fav/(Unfav) 2005 2006 Fav/(Unfav)
------- ------- ----------- ------- ------- -----------
RESULTS OF OPERATIONS:
Revenues $ 125 $ 135 8% $ 246 $ 260 6%
------- ------- ------- -------
Expenses:
Natural gas 18 7 61% 25 3 88%
Operation and maintenance 40 50 (25%) 74 89 (20%)
Depreciation and amortization 11 12 (9%) 22 24 (9%)
Taxes other than income taxes 4 5 (25%) 9 10 (11%)
------- ------- ------- -------
Total 73 74 (1%) 130 126 3%
------- ------- ------- -------
Operating Income $ 52 $ 61 17% $ 116 $ 134 16%
======= ======= ======= =======
Operating Income - Pipeline business 35 40 14% 83 89 7%
Operating Income - Field Services business 17 21 24% 33 45 36%
------- ------- ------- -------
Total Segment Operating Income $ 52 $ 61 17% $ 116 $ 134 16%
======= ======= ======= =======
PIPELINES AND FIELD SERVICES OPERATING DATA:
THROUGHPUT DATA IN BCF
Natural Gas Sales 3 2 (33%) 4 2 (50%)
Transportation 230 240 4% 501 514 3%
Gathering 87 94 8% 170 182 7%
Elimination (2) (1) 50% (3) (1) 67%
------- ------- ------- -------
Total Throughput 318 335 5% 672 697 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)
OTHER OPERATIONS
----------------------------------------------------------------------
Quarter Ended Six Months Ended
June 30, June 30,
------------------ % Diff ------------------ % Diff
2005 2006 Fav/(Unfav) 2005 2006 Fav/(Unfav)
----- ----- ----------- ----- ----- -----------
RESULTS OF OPERATIONS:
Revenues $ 4 $ 5 25% $ 11 $ 9 (18%)
Expenses 11 2 82% 25 11 56%
----- ----- ----- -----
Operating Income (Loss) $ (7) $ 3 143% $ (14) $ (2) 86%
===== ===== ===== =====
Capital Expenditures by Segment
(Millions of Dollars)
(Unaudited)
------------------ ------------------
Quarter Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2005 2006 2005 2006
----- ----- ----- -----
CAPITAL EXPENDITURES BY SEGMENT
Electric Transmission & Distribution $ 87 $ 111 $ 142 $ 190
Natural Gas Distribution 56 45 96 85
Competitive Natural Gas Sales and Services -- 4 -- 10
Pipelines and Field Services 31 54 53 84
Other Operations 5 4 10 14
----- ----- ----- -----
Total $ 179 $ 218 $ 301 $ 383
===== ===== ===== =====
Interest Expense Detail
(Millions of Dollars)
(Unaudited)
------------------ ------------------
Quarter Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2005 2006 2005 2006
----- ----- ----- -----
INTEREST EXPENSE DETAIL
Amortization of Deferred Financing Cost $ 19 $ 14 $ 39 $ 28
Capitalization of Interest Cost (1) (2) (2) (3)
Transition Bond Interest Expense 9 32 18 64
Other Interest Expense 162 107 316 210
----- ----- ----- -----
Total Interest Expense $ 189 $ 151 $ 371 $ 299
===== ===== ===== =====
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, June 30,
2005 2006
------------ --------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 74 $ 397
Other current assets
2,817 2,000
------- -------
Total current assets 2,891 2,397
------- -------
PROPERTY, PLANT AND EQUIPMENT, NET 8,492 8,675
------- -------
OTHER ASSETS:
Goodwill 1,709 1,709
Regulatory assets 2,955 2,890
Other non-current assets 1,069 1,038
------- -------
Total other assets 5,733 5,637
------- -------
TOTAL ASSETS $17,116 $16,709
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of transition bond long-term debt $ 73 $ 126
Current portion of other long-term debt 266 519
Other current liabilities 2,675 1,931
------- -------
Total current liabilities 3,014 2,576
------- -------
OTHER LIABILITIES:
Accumulated deferred income taxes, net and investment tax credit 2,520 2,442
Regulatory liabilities 728 822
Other non-current liabilities 990 810
------- -------
Total other liabilities 4,238 4,074
------- -------
LONG-TERM DEBT:
Transition bond 2,407 2,335
Other 6,161 6,220
------- -------
Total long-term debt 8,568 8,555
------- -------
SHAREHOLDERS' EQUITY 1,296 1,504
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $17,116 $16,709
======= =======
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)
Six Months Ended
June 30,
---------------------
2005 2006
----- -----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 121 $ 282
Discontinued operations, net of tax 3 --
Extraordinary item, net of tax (30) --
----- -----
Income from continuing operations 94 282
Adjustments to reconcile income from continuing operations to net
cash provided by operating activities:
Depreciation and amortization 306 321
Deferred income taxes and investment tax credit 44 (109)
Tax and interest reserves reductions related to ZENS and ACES -- (119)
Changes in net regulatory assets and liabilities (133) 54
Changes in other assets and liabilities (262) 73
Other, net 5 15
----- -----
NET CASH PROVIDED BY OPERATING ACTIVITIES OF CONTINUING OPERATIONS 54 517
NET CASH USED IN OPERATING ACTIVITIES OF DISCONTINUED OPERATIONS (38) --
----- -----
NET CASH PROVIDED BY OPERATING ACTIVITIES 16 517
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 412 (396)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (185) 202
----- -----
NET INCREASE IN CASH AND CASH EQUIVALENTS 243 323
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 165 74
----- -----
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 408 $ 397
===== =====
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.
